In accordance with the external framework and in order to increase the effectiveness of the Board work, the Board has established separate working committees to assist the Board in preparing matters, belonging to the competence of the Board and to decide in matters delegated by the Board. The duties of the Board Committees, as well as working procedures, are defined in the Committee Charters. In general, the Board Committees do not have autonomous decision-making powers and each Board Committee regularly reports on its work to the Board.
The Board has four Committees: the Board Audit Committee (BAC), the Board Risk Committee (BRIC), the Board Remuneration Committee (BRC) and the Board Operations and Sustainability Committee (BOSC).
The Board Audit Committee
The Board Audit Committee (“BAC”) assists the Board in fulfilling its oversight responsibilities,(4) for instance by monitoring the Nordea Group’s financial reporting process and system, and providing recommendations or proposals to ensure their reliability (including efficiency of the internal control and risk management systems), monitoring the effectiveness of Group Internal Audit (GIA), keeping itself informed as to the statutory audit of the annual and consolidated accounts, and by reviewing and monitoring the impartiality and independence of the external auditors, including the offering of services other than auditing services by the auditors, prepares a recommendation of appointment of the Company's auditor, as well as by taking care of the responsibilities of the audit committee pursuant to applicable legal requirements.
Furthermore, the BAC assists the Board in monitoring and assessing related party transactions. Further information is presented in the separate section “Principles for related party transactions”.
Members of the BAC are Sarah Russell (Chair), Pernille Erenbjerg, Petra van Hoeken and Torbjörn Magnusson. Generally, the Chief Audit Executive (CAE) and the Group Chief Financial Officer (CFO) as well as the external auditors of the Company are present at the meetings of the BAC with the right to participate in discussions but not in decisions.
The Board annually appoints the members and the Chair of the BAC. The BAC must have at least three committee members who are members of the Board. The Chair of the BAC may not be the Chair of the Board or of any other Board Committee. None of the members of the BAC may be employed within the Nordea Group or participates in the day to-day management of the Company or a company in the Nordea Group. The majority of the members of the BAC are to be independent of the Company. At least one of the members of the BAC who is independent of the Company shall also be independent of the Company’s significant shareholders and have sufficient expertise in accounting and/or auditing. The committee members must have sufficient expertise and experience required for the performance of the responsibilities of the BAC.
4) The BAC has applied and complied with the duties in accordance with the Code during 2019 and applies and complies with the duties in accordance with the New Code as of 1 January 2020.
For more information on independence of the board members.
Updated: February 2020
The Board Risk Committee
The Board Risk Committee (“BRIC”) assists the Board in fulfilling its oversight responsibilities concerning management and control of the risks, risk frameworks, controls and processes associated with the Nordea Group’s activities, including credit, market, liquidity, business, life and operational risks, conduct and compliance, as well as related frameworks and processes.
The duties of the BRIC include reviewing and, where required, making recommendations on the Nordea Group’s risk and compliance governance, and reviewing the development of the Group’s internal control framework, including the risk management framework, in reference to the development of the Group’s risk profile and changes in the regulatory framework. In addition, the BRIC reviews and makes recommendations regarding the Group’s risk appetite and market and liquidity risks. Furthermore, the BRIC reviews resolutions made by a Group entity concerning credit or credit limit above certain amounts, as well as strategic credit policy matters and the development of the credit portfolio.
Members of the BRIC are Nigel Hinshelwood (Chair), Petra van Hoeken, John Maltby, Birger Steen and Maria Varsellona. The Chief Risk Officer, the Chief Compliance Officer, the Chief Audit Executive and the President and Group CEO, are regular attendees at the meetings, with the right to participate in discussions but not in decisions.
The Board annually appoints the Chair and members of the BRIC. The BRIC must have at least three committee members, who are members of the Board. The Chair of the BRIC may not be the Chair of the Board or of any other Board Committee. The BRIC shall be composed of members of the Board who are not employed within the Nordea Group. The majority of the members of the BRIC, including the Chair, are to be independent. Members of the BRIC shall have, individually and collectively, appropriate knowledge, skills and expertise concerning risk management and control practices. Nordea follows the legal requirements and complies with the Code and the New Code.
Updated: February 2020
The Board Remuneration Committee
The Board Remuneration Committee (“BRC”) is responsible for preparing and presenting proposals to the Board on remuneration issues. When preparing the proposals, the long-term interests of shareholders, investors and other stakeholders in Nordea shall be considered.
At least annually, the BRC follows up on the application of Nordea’s remuneration directive, including the use of variable pay adjustments, through an independent review by GIA and assesses Nordea’s remuneration directive and remuneration system with the participation of appropriate control functions. The BRC also has the duty of annually monitoring, evaluating and reporting to the Board on the programmes for variable remuneration for the members of GLT and the heads of control functions. At the request of the Board, the BRC also prepares other issues of principle for the Board's consideration.
Members of the BRC are Robin Lawther (Chair), Kari Jordan, Torbjörn Magnusson and Gerhard Olsson (employee representative). Generally, the Chief People Officer & Head of Group People and, when deemed important and to the extent possible, the President and Group CEO are present at meetings with the right to participate in discussions but not in decisions. Neither the Chief People Officer nor the President and Group CEO participates in considerations regarding his or her respective employment terms and conditions.
The Board annually appoints the Chair and members of the BRC. The BRC must have at least three committee members. The Chair and the majority of the members of the BRC shall be Board members who are independent of the Company, and not employed by the Nordea Group. The President and Group CEO or the other executives may not be members of the BRC. However, if employee representatives are appointed to the Board, at least one of them shall be appointed as a member of the BRC pursuant to the Finnish Credit Institutions Act. The members of BRC shall have collectively sufficient knowledge, expertise and experience in issues relating to risk management and remuneration.
Updated: February 2020
Board Operations and Sustainability Committee
With effect as of 1 January 2019, a new Group Risk & Compliance function was established at Nordea, consolidating the earlier second line of defence functions, Group Compliance and Group Risk Management & Control into one organisational unit. To align the Board committee structure with the operational risk set-up, the Board decided on 28 March 2019 to allocate compliance-related matters, which belonged within the scope of the Board Operations and Compliance Committee (“BOCC”), to the Board Risk Committee in order to have one common Board committee for the second line of defence. To reflect the changes in the scope of activities, the BOCC was renamed the Board Operations Committee (“BOC”). In December 2019, the Board decided to change the name of BOC to Board Operations and Sustainability Committee (“BOSC”) to better reflect its charter.
The BOSC assists, without prejudice to the tasks of the other Board Committees, the Board in fulfilling its oversight responsibilities concerning sustainability, operations/systems and operational resilience (including cyber resilience) as well as related frameworks and processes. The duties of the BOSC include advising the Board on the Nordea Group’s overall strategy as to the mentioned areas and assisting the Board in overseeing the implementation of that strategy by senior management.
Members of the BOSC are Birger Steen (Chair), Pernille Erenbjerg, John Maltby and Nigel Hinshelwood. To the extent possible, the Head of Group Operational Risk attends when the committee deals with operational risks related to data and IT. The Chief Audit Executive may also participate in meetings to the extent possible and deemed suitable. All have the right to participate in discussions but not in decisions. Furthermore, other senior executives also attend meetings when deemed relevant.
The Board annually appoints the Chair and members of the BOSC. The BOSC must have at least three committee members, who are members of the Board. The BOSC shall be composed of members of the Board who do not perform any executive function in the Nordea Group. Members of the BOSC shall have sufficient collective knowledge, expertise and experience in issues relating to the work of the committee, including sustainability and operations/systems. Nordea follows the legal requirements and complies with the Code and the New Code.