Investor Presentaiton
CORPORATE GOVERNANCE STATEMENT
in terms of financial or operating performance and financial
management policies are identified, communicated and
reacted upon efficiently, in a harmonized and timely manner.
KONE's financial statements are based on this management
reporting process.
Financial control tasks are built into the business
processes of KONE as well as into the management's
ongoing business supervision and monitoring. KONE has
established Financial Control Models for the new equipment
and service businesses as well as for treasury and tax
matters. The models have been defined to ensure that the
financial control covers the relevant tasks in an efficient and
timely manner.
The interpretation, application and monitoring of the
compliance of accounting standards is centralized in the
Global Finance and Control function, which maintains, under
the supervision of the Audit Committee, the KONE Accounting
Standards. Reporting and forecasting contents are defined in
the KONE Accounting and Reporting Instructions. These
standards and instructions are maintained and updated
centrally by the Global Finance and Control function and
applied uniformly throughout KONE.
KONE has a global enterprise resource planning (ERP)
system which is built to reflect the KONE Accounting
Standards and the KONE Accounting and Reporting
Instructions. KONE applies a controlled change management
process ensuring that no changes to the financial reporting
logic of the ERP system can be made without approval from
the Global Finance and Control function. Automatic interfaces
between different systems are principally applied in the
period-end financial reporting process of KONE. Transactional
processing is increasingly automated and centralized in
dedicated shared service centers.
Effective internal control over record to report processes,
from business processes and systems to the financial
statements, is important in ensuring the correctness of
financial reporting. This is driven by the identification of key
data elements of the business and the quality of the data to
ensure correct financial reporting and forecasting ability.
Internal audit
The Corporation has an internal audit function, which is
separate from the management. The KONE Assurance
function is responsible for auditing both the internal control
system and the management of business risks. It reports its
findings to the Audit Committee. The Head of Assurance
reports to the Vice Chairman of the Board.
Related party transactions
KONE evaluates and monitors related party transactions
between the company and its related parties. KONE maintains
a list of related parties. KONE's related parties comprise its
subsidiaries as well as the Board of Directors, the President
and CEO, the Executive Board including any companies
controlled or significantly influenced by them. KONE's Board
of Directors has approved guidelines for how to recognize,
handle, approve, monitor and report related party
transactions. According to the guidelines, the Corporate
Controlling function follows and monitors related party
transactions as part of KONE's normal reporting and control
procedures and reports related party transactions to the Audit
Committee annually.
KONE's Board of Directors decides on any related party
transactions which are not considered normal business
activities or differ from market terms. KONE reports relevant
and material related party transactions annually in the notes of
consolidated financial statements.
External audit
The objective of a statutory audit is to express an opinion on
whether the consolidated financial statements give a true and
fair view of the financial position, financial performance and
cash flows of the group, as well as whether the parent
company's financial statements give a true and fair view of the
parent company's financial performance and financial
position. Statutory audit also encompasses the audit of the
accounting and governance in the company. The auditor
considers whether the information in the Board of Directors'
report is consistent with the information in the financial
statements and the report of the Board of Directors has been
prepared in accordance with the applicable legal
requirements.
According to the Articles of Association, the company must
have a minimum of one and a maximum of three Auditors.
The Auditors must be public accountants or public accounting
firms authorized by Finland's Central Chamber of Commerce.
The Auditor is elected at the Annual General Meeting for a
term which expires at the end of the following Annual General
Meeting.
INSIDERS
KONE Corporation adheres to the insider guidelines of the
Nasdaq Helsinki Ltd, which have been supplemented with
internal insider guidelines approved by the Board of Directors.
In compliance with the Market Abuse Regulation, the person
discharging managerial responsibilities in KONE Corporation
(managers) include the members and deputy members of the
Board of Directors, the President and CEO and the members
of the Executive Board. Managers are permitted to trade in
KONE shares and other financial instruments of KONE during
a six-week period after the release of interim reports and
financial statements releases. KONE does not maintain a list
of permanent insiders. KONE has resolved to maintain the
insider list with respect to each quarter and year-end financial
reporting. The company also maintains other project-specific
insider lists when necessary. Project-specific insiders are
prohibited from trading with financial instruments of KONE
until the termination of the project.
The person in charge of KONE's insider issues is the
Secretary to the Board of Directors.
CORPORATE GOVERNANCE IN 2021
Annual General Meeting
The Annual General Meeting was held in Helsinki, Finland on
March 2, 2021. The meeting was held based on the so-called
temporary act so that shareholders participated in the meeting
and exercised their shareholder rights only by voting in
advance and by submitting counterproposals and asking
questions in advance.
Board of Directors and committees
The Annual General Meeting elected eight members to
KONE's Board of Directors. The Chairman of the Board of
Directors of KONE Corporation is Antti Herlin. Jussi Herlin is
the executive Vice Chairman of the Board. The other
members of the Board are Matti Alahuhta, Susan Duinhoven,
liris Herlin, Ravi Kant, Juhani Kaskeala and Jennifer Xin-Zhe
Li. Out of the eight Board Members, five are male and three
females.
Of the Board members, Matti Alahuhta, Susan Duinhoven,
liris Herlin, Ravi Kant, Juhani Kaskeala and Jennifer Xin-Zhe
Li are independent of the Corporation. With the exception of
Antti Herlin, liris Herlin and Jussi Herlin, the other Board
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