Board’s Committees

Kesko’s Board of Directors has established an Audit Committee and a Remuneration Committee to support the Board’s work and prepare matters the Board is responsible for. Each Committee is composed of three (3) Board members. At the close of the Annual General meeting, the Board elects from among its members the Committee Chairs, Deputy Chairs and members. In the election of committee members, the independence and competence requirements for the committee in question are to be taken into account.

The Committees have no independent decision-making power. Instead, the Board makes decisions on matters based on the Committees' preparatory work. The Board has confirmed written charters for the Committees detailing the Committees’ duties and operating principles. Each Committee Chair reports on the Committee's work at the Board meeting following the Committee's meeting. Minutes of the Committee meetings are submitted for the information of the Board members. The actions and working practices of the Committees are assessed annually in conjunction with the Board evaluation.
 

Audit Committee

The Board elected in its organisational meeting, held after the Annual General Meeting on 26 March 2024, the following Board members as the Audit Committee members:

• Jannica Fagerholm (Chair)
• Timo Ritakallio (Deputy Chair)
• Piia Karhu

 
All members of the Audit Committee are independent of the Company and of the Company's significant shareholder. In the election of the Audit Committee members, the competence requirements for Audit Committee members have been taken into account.

In accordance with its charter, the Audit Committee:

Financial and sustainability reporting and related processes

• monitors Kesko Group’s financial position and funding
• monitors and assesses Kesko’s financial and sustainability
• reporting system, including the processes for financial statements reporting and sustainability reporting
• monitors procedures in financial reporting and sustainability reporting and digital reporting and in identifying information to be reported in compliance with sustainability reporting standards
• monitors the statutory financial audit and sustainability reporting assurance
• discusses, where necessary, matters that emerge in connection with the financial audit or sustainability reporting assurance or otherwise in relation to the Committee’s duties with the Auditor and/or Authorised Sustainability Auditor
• reviews the Auditor’s Report and possible audit minutes and reports presented by the Auditor to the Committee
• reviews the assurance report by the Authorised Sustainability Auditor and possible other reports presented by the Authorised Sustainability Auditor to the Committee
• presents to the Board the results of the financial audit and sustainability reporting assurance, the Committee’s opinion on how the financial audit and sustainability reporting assurance have increased reporting reliability, and its view on the Committee’s role during the financial audit and sustainability reporting assurance related procedure
• discusses financial reporting, sustainability reporting, outlook and forecast updates with the Company’s management
• prepares recommendations to the Board regarding the review of interim reports, the half-year financial report, and the financial statement, including the Report by the Board of Directors containing sustainability reporting data
• reviews the Company’s Corporate Governance Statement

Auditor and Authorised Sustainability Auditor

• monitors and evaluates the independence of the Company’s Auditor and Authorised Sustainability Auditor, and in particular, acceptability of such services offered by the Auditor and Authorised Sustainability Auditor to Kesko that are not related to financial audit or sustainability reporting assurance
• organises the election process for the Auditor and the Authorised Sustainability Auditor and their tendering at necessary intervals, and provides  recommendations to the Board on the Auditor and Authorised Sustainability Auditor and their remuneration

Internal control, internal audit, and risk management

• monitors and assesses the effectiveness of Kesko’s internal control, internal audit, and risk management systems
• approves the operating instructions for the Company’s internal audit and annually assesses the need for changes, approves the annual audit plan, budget and resources and related material changes
• reviews reports concerning internal audit, risk management, cyber security, financing, taxation, insurance and other matters within the Committee’s purview

Compliance

• monitors and assesses how agreements and other legal acts between the Company and its related parties meet the requirements for operations that are part of ordinary course of business and for under arms-length terms
• monitors and assesses the scope and efficiency of Kesko’s compliance system, and reviews reports submitted to the Committee
• supervises that the Company employs processes for receiving and handling complaints and notifications concerning financial and sustainability reporting, financial audit and sustainability reporting assurance, internal control, legislation, the K Code of Conduct and policies

Other duties

• reviews the K Code of Conduct and other Group policies within the scope of its duties before they are approved by the Board
• prepares and reviews other tasks given by the Board to the Committee, and at its discretion, other necessary tasks related to the duties and responsibilities of the Committee

 
Operation in 2024

In 2024, the Audit Committee held six (6) meetings. The attendance rate of the Committee members at the meetings was 100%. The Group’s Chief Financial Officer, the Group Controller, the Chief Audit and Risk Officer, and the Executive Vice President for Legal and Sustainability regularly reported on their areas of responsibility to the Committee at the meetings. The Auditor and the Authorised Sustainability Auditor are present at the Committee meetings and present their audit plan and report to the Audit Committee.

During the year, the Committee reviewed reports on the Group’s financial situation, including the financial statements release, the half-year financial report and the interim reports and updated forecasts, and made a recommendation to the Board on the review of the reports and the financial statements release. A significant new agenda item for the Audit Committee was the regular monitoring of the implementation of the EU Corporate Sustainability Reporting Directive (CSRD) at Kesko. The regulation applies to Kesko as of the 2024 financial year. The Audit Committee reviewed Kesko’s double materiality assessment in a meeting solely dedicated to the topic. In addition, measures related to the implementation of sustainability reporting, the progress made in relation to them, and the risks related to the implementation were reviewed in five of the six Audit Committee meetings.

The Committee reviewed reports on the Group’s external and internal audits, risk management, cyber security, compliance and ethics, the report on related party transactions, and the Corporate Governance Statement. The Committee furthermore reviewed reports related to the Company’s financing, taxation and insurance. In terms of risk management, the Audit Committee concentrated in particular on the challenging operating environment, the inflation trend, other general economic developments, geopolitical risks and cyber security, and business risks related to these. The Audit Committee approved the Group’s internal audit plan, personnel resources and budget for 2025. The Committee also reviewed the results of goodwill impairment testing. For the purposes of the proposal to be submitted to the Annual General Meeting, the Committee gave recommendations to the Board regarding the Auditor, the Authorised Sustainability Auditor, and their remuneration. The Committee monitored and assessed the independence of the Auditor and the Authorised Sustainability Auditor, and the additional services provided by them and other auditing firms to Kesko. The Audit Committee presented an updated version of its charter to the Board of Directors for approval.

The work of the Audit Committee was assessed as part of the evaluation of Kesko’s Board work.
 

Remuneration Committee