Structure of OP Financial Group

Established in 1902, OP Financial Group is a cooperative financial services group formed by independent cooperative banks and the Group's central cooperative with its subsidiaries operating under the principle of joint and several liability.

OP Financial Group

OP Financial Group's success lies in a strong foundation of promoting the prosperity, well-being and security of its owner-customers, customers and business partners. Being a Finnish Group is an important part of its identity.

OP Financial Group consists of 156 member cooperative banks as of 31 December 2018 and their central cooperative, OP Cooperative, with its subsidiaries and affiliates. The Group's operations are based on the cooperative principle – cooperation and sharing the fruits of success with everyone. Based on its mission, OP Financial Group creates sustainable prosperity, security and wellbeing for its owner-customers and in its operating region by means of its strong capital base and efficiency. 

OP Financial Group's business is divided into three segments valid until the end of 2018: Banking, Non-life Insurance, and Wealth Management. The structure of the new business segments took effect on 1 January 2019. These new business segments are Banking for private and SME customers, Banking for Corporate and Institutional Customers, and Insurance Customers.

OP Financial Group consists of the following two parts:
1. Amalgamation of OP Financial Group cooperative banks
2. Other entities and organisations of OP Financial Group.

The amalgamation is formed by OP Cooperative (central cooperative), companies belonging to its consolidation group, the central cooperative's member credit institutions and companies belonging to their consolidation groups, and credit institutions, financial institutions and service companies in which the abovementioned institutions jointly hold more than half of the voting rights form the amalgamation.

OP Financial Group is comprised of the amalgamation and those non-amalgamation entities of which entities belonging to the amalgamation hold more than half of the total votes. The extent of OP Financial Group differs from that of the amalgamation in that OP Financial Group subsumes companies other than credit and financial institutions or service companies. The most important of these are the insurance companies with which the amalgamation forms a financial and insurance conglomerate. In addition, Pohjola Health Ltd, a hospital, belongs to OP Financial Group.

More detailed information on the legal structure of OP Financial Group's amalgamation can be found in the Financial Statements of OP Financial Group. The amalgamation does not form a corporate group, as referred to in the Accounting Act, or a consolidation group, as referred to in the Act on Credit Institutions. The central cooperative prepares consolidated financial statements as referred to in Section 9 of the Act on the Amalgamation of Deposit Banks.

OP cooperative banks

OP cooperative banks are independent, local deposit banks engaged in retail banking. They provide modern and competitive banking services to households, SMEs, agricultural and forestry customers and public-sector entities. Helsinki Area Cooperative Bank, which belongs to the central cooperative consolidated and whose governance model and structure differs from that of other OP cooperative banks, engages in corresponding retail banking in the Helsinki Metropolitan Area.

In terms of the type of their business organisation, the member cooperative banks are cooperatives whose basic values underlying decision-making include the one member, one vote principle. Within the OP cooperative banks, the owner-customers' decision-making power is exercised by the Representative Assembly comprising owner-customers or the cooperative meeting, which elects a supervisory board for the bank. The supervisory board in turn elects a board of directors for the bank.

The central cooperative’s Supervisory Board has confirmed the Principles of Good Corporate Governance for the Group. 

Cooperative bank federations

The cooperative bank federations are regional cooperation bodies for the member cooperative banks. Finland has six (6) cooperative bank federations.

The meeting of a cooperative bank federation comprising member cooperative banks elects the board of directors to represent the federation and attend to its affairs.

OP Cooperative and its responsibilities

The central cooperative of OP Financial Group is OP Cooperative in English and OP Andelslag in Swedish and is domiciled in Helsinki.

Within the central cooperative, the decision-making powers of member cooperative banks rest with the Cooperative Meeting and the Supervisory Board elected by it, and operational decision-making powers are exercised by the Executive Board acting as the board of directors elected by the Supervisory Board and being made up of management executives. The central cooperative's member banks own OP Cooperative.

The central cooperative's members may include credit institutions, as referred to in the Act on the Amalgamation of Deposit Banks, whose Bylaws or Articles of Association have been approved by the central cooperative. The Supervisory Board takes decisions on admitting new members.

The purpose of the central cooperative as the central cooperative of the amalgamation and as the company heading the financial and insurance conglomerate formed by OP Financial Group is to equitably contribute to and support the development of, and cooperation between, its member credit institutions, other OP Financial Group companies and entities and the entire Group. To that end, the central cooperative controls the Group's centralised services, develops the Group’s business, manages the Group's strategic control and lobbying and manages control and supervision duties belonging to the central cooperative of the amalgamation and the company heading the financial and insurance conglomerate. Furthermore, the central cooperative acts as OP Financial Group's strategic owner institution.

Governance diversity

OP Financial Group has a long-term approach to planning the composition of administrative bodies. Effective work in administrative bodies requires that their members have sufficiently diverse expertise, skills and experience.

In preparing the selection of members of the administrative bodies, attention is paid to the person’s added value to the body's composition in terms, for example, of fostering adequate diversity. Diversity is fostered by ensuring that the candidates have a wide range of knowledge, skills and experience, as well as the comprehensive representation of various regions and the balanced representation of genders and age groups on the administrative bodies.   

The aim is that in the central cooperative's Supervisory Board and member cooperative banks' supervisory boards and boards of directors, both genders are represented in proportion of 60/40. To that end, the Group seeks to ensure on a long-term basis that of the candidates with equal strengths in terms of skills and experience is nominated a member of a governing body who represents a gender that is minority on the governing body.