Election, members and term of the Supervisory Board
In accordance with the Bylaws, the central cooperative's Supervisory Board has a minimum of 32 and a maximum of 36 members elected by the Cooperative Meeting. Sixteen (16) Supervisory Board members shall be elected from the regions of the Federations of Cooperative Banks in such a way that three (3) members shall be elected from each Federation of Cooperative Banks in Pohjois-Suomi, Pohjanmaa-Österbotten, Itä-Suomi and Länsi-Suomi-Sydkusten and two (2) from each Federation of Cooperative Banks in Sisä-Suomi and Etelä-Suomi. In addition, sixteen (16) members representing the Federations of Cooperative Banks are elected in such way that their seats among the Federations are determined in proportion to the total number of the owner-customers in the member banks of the Federation of Cooperative Banks in respect of all OP Financial Group's owner-customers.
A minimum of four (4) of the Supervisory Board members must be persons who are not members of a governing body of an OP Financial Group company, their managing directors or have no employment contract with such a company.
The Supervisory Board members' term of office is three years. However, the term of office of the members elected based on the number of owner-customers terminates earlier if the allotment of seats among the Federations of Cooperative Banks changes on the basis of the number of owner-customers.
A person known as honest and reliable is an eligible Supervisory Board member who, based on his/her professional experience, can be assessed to be qualified to work efficiently on the Supervisory Board and who fulfils other requirements set in OP Financial Group's internal guidelines.
Responsibilities of the Supervisory Board
The Supervisory Board is tasked with confirming OP Financial Group's strategy and risk tolerances as well as other strategic targets and objectives as well as supervising the central cooperative's governance within the remit of the Executive Board and CEO, and ensuring that the central cooperative's operations are managed in an expert and prudent manner in accordance with the Co-operatives Act, the Act on the Amalgamation of Deposit Banks, other regulations and regulatory requirements, the central cooperative Bylaws and in the best interests of the central cooperative and OP Financial Group.
To fulfil its statutory supervisory duties, the Supervisory Board is tasked with:
- monitoring the implementation of OP Financial Group's strategy and ensuring reliable supervision of compliance with OP Financial Group's strategy and risk tolerances as well as other strategic statements and principles
- ensuring that OP Financial Group's internal control systems are reliable
- regularly assessing the effectiveness of OP Financial Group's corporate governance
- taking any necessary measures to remedy shortcomings observed through its supervision.
By law, the Supervisory Board is also tasked with:
- approving OP Financial Group's operating principles aimed at promoting the diversity of the composition of the governing bodies and having the objective of equal gender representation in the governing bodies and drawing up the principles applied to achieve and maintain the objective;
- deciding on the general principles of OP Financial Group's remuneration schemes
- appointing and discharging the President and Group Executive Chair, acting as the Executive Board Chair, and his deputy and other Executive Board members as well as deciding on their emoluments and pension benefits and the division of responsibilities
- issuing to the Annual Cooperative Meeting an opinion on the financial statements, the consolidated financial statements and the Report by the Executive Board
- deciding on convening a Cooperative Meeting.
The Supervisory Board Charter stipulates other Supervisory Board responsibilities.
Supervisory Board Chair and Vice Chairs (presiding officers)
At its first meeting after the Annual Cooperative Meeting, the Supervisory Board shall elect from among its members a Chair and two Vice Chairs until the closing of the next Annual Cooperative Meeting. The Supervisory Board Chair and at least one of the Vice Chairs must be a person who is not the managing director of an OP Financial Group company or has an employment contract with such a company.
The presiding officers of the Supervisory Board comprise the Chair and both Vice Chairs of the Supervisory Board. The presiding officers communicate to the Executive Board Chair and Vice Chair in respect of important and far-reaching strategic issues relevant to OP Financial Group and the central cooperative consolidated as well as to OP Financial Group's HR directors in HR issues in which the Executive Board is disqualified.
Supervisory Board's meeting and decision-making procedures
Convened by the Chair or, whenever he is prevented, the Vice Chair, the Supervisory Board meeting is primarily held 6–7 times a year. The Supervisory Board meeting has a quorum when more than half of its members are present. Items on the Supervisory Board meeting agenda are discussed in advance by the Supervisory Board Working Committee or by other Supervisory Board committees.
Those who have the right to be present and speak at the meetings include members of OP Cooperative's Executive Board, Chief Risk Officer, Chief Compliance Officer, Chief Audit Executive and other persons reporting to the President and Group Executive Chair as well as five specifically appointed employee representatives or their deputies, if any.
The Supervisory Board has adopted, for example, the following charters and instructions:
- The charter for the Supervisory Board
- The charter for the Supervisory Board presiding officers
- The charter for OP Financial Group's Nomination Committee
- The charter for the Supervisory Board's Working Committee
- The charter for the Supervisory Board's Audit Committee
- The charter for the Supervisory Board's Remuneration Committee
- The charter for the Supervisory Board's Risk Management Committee
- The charter for the central cooperative consolidated's Executive Nomination Committee
- The charter for the Executive Board
- Principles of good corporate governance
- Principles of internal control
- Risk-taking and Risk Appetite Framework
- Accounting policies and the principles of capital adequacy measurement.
In addition, the Supervisory Board confirms operating principles regarding OP Financial Group.
Supervisory Board committees
At its regrouping meeting in spring 2018, the Supervisory Board elected from among its members five committees for a term of one year: Working Committee, Audit Committee, Remuneration Committee and Risk Management Committee as well as the central cooperative consolidated's Nomination Committee. In addition, the presiding officers have a status comparable with a committee. Acting as bodies supporting the Supervisory Board, as a rule the committees have no independent decision-making powers.
The Supervisory Board also appoints, from among its members, members of the committees reporting to it and the Chair and Vice Chairs of the Audit Committee and the Risk Management Committee, and confirms the rules of procedure for the committees. By the end of each June, the Supervisory Board appoints the Chair and Vice Chair of OP Financial Group's Nomination Committee.