Corporate Governance Statement

General issues


Digia's corporate governance system is based on the Companies Act, the Securities Markets Act, general corporate governance recommendations, and the company's Articles of Association and in-company rules and regulations on corporate governance.

Digia's corporate governance principles are integrity, accountability, fairness and transparency. This means that:

  • The company complies with the applicable laws, rules and regulations.
  • The company organises, plans and manages its operations, and does business abiding by the applicable professional requirements approved by Board members, who demonstrate due care and responsibility in performing their duties.
  • The company demonstrates special prudence with respect to the management of its capital and assets.
  • The company's policy is to keep all market participants actively, openly and equitably informed of its business operations.
  • The company's management, administration and personnel are subject to the appropriate internal and external audits and supervision.

Adherence to the Governance Code


Digia adheres to the Governance Code for Listed Finnish Companies, issued on 28 October 2008 by the Finnish Securities Market Association, with the following exceptions:

According to recommendation 29 of the Governance Code, the majority of the members of the Board's Nomination Committee must be independent of the company. Of the two members of Digia Plc's Nomination Committee, the Chairman of the Board, Pekka Sivonen, is employed by the company, which means that the majority requirement is not literally fulfilled. The deviation is minor, however, being due to the relatively small size of the Board of Directors and the fact that membership of the various committees has been distributed among Board members as evenly as possible, taking account of their specialist competencies in relation to the committees' remit.

Shareholders' Meeting


Digia's highest decision-making body is the Shareholders' Meeting at which shareholders exercise their voting rights regarding company matters. Each company share entitles the holder to one vote at the Shareholders' Meeting, which the holder can cast personally or by proxy. Proxies must present a dated power of attorney or otherwise reliably prove their entitlement to represent the shareholder in question. Shareholders and proxies may be joined at the AGM by an assistant. The right to speak at the AGM is reserved for shareholders and their legal representatives, proxies and assistants. Annual General Meetings are presided over by a chairman, who does not have to be a shareholder or a representative of shareholders. The language used in the Shareholders' Meetings is Finnish.

As specified in the Limited Liability Companies Act, the AGM must be held annually within six months of the end of the financial year. Digia aims to convene its AGM within three months of the end of the financial year. An Extraordinary General Meeting must be held if the Board of Directors deems it necessary or if requested in writing by a company auditor or shareholders holding a minimum of 10 per cent of the company's shares, for the purpose of discussing a specific issue.

The Finnish Limited Liability Companies Act and Digia's Articles of Association define the responsibilities and duties of the Shareholders' Meeting. The chairman of the AGM is elected by the attendees. Unless the matter in hand requires a qualified majority, decisions are made in accordance with the view drawing the support of more than half of the votes cast. If the votes are equal, the chairman casts the deciding vote. In elections, the person receiving the most votes is elected.

In line with the Articles of Association, the AGM's functions are the election of Board members and auditors, the adoption of the financial statements, the discharge of Board members and the Managing Director from liability, as well as profit distribution. On a case-by-case basis, the AGM may handle matters not listed in the Articles of Association.

For corporate governance purposes, the AGM's two major roles include the election of Board members and auditors. The Nomination Committee of the Board of Directors makes a proposal regarding the make-up of the new Board of Directors to the AGM. When necessary, the Board or the Audit Committee can also make a proposal regarding the appointment of the auditor. The AGM may approve these proposals as such or make a different decision. All those appointed as Board members or auditors must provide prior written acceptance of the position.

Extraordinary General Meetings decide on the matters for which they have been specifically convened.

Board of Directors


Operations and duties

Elected by the Shareholders' Meeting, the Board of Directors is in charge of company administration and the appropriate organisation of company operations. Under the Articles of Association, the Board of Directors must consist of a minimum of five and a maximum of eight members. The Nomination Committee prepares a proposal for the Shareholders' Meeting regarding the composition of the new Board of Directors to be appointed.

The majority of Board members must be independent of the company and a minimum of two of those members must also be independent of the company's major shareholders. The Managing Director or other company employees under the Managing Director's direction may not be elected members of the Board.

The term of all Board members expires at the end of the Annual General Meeting following their election. A Board member can be re-elected without limitations on the number of successive terms. The Board of Directors elects its Chairman and Vice Chairman from amongst its members. If the Board so decides, the position of Chairman of the Board may be a full-time job. The terms of employment must be agreed in a separate contract, as has been done with the current Chairman, Pekka Sivonen.

The Board has prepared and approved a written agenda for its work. In addition to Board duties prescribed by the Companies Act and other rules and regulations, Digia's Board of Directors is responsible for issues on its agenda, observing the following guidelines:

  • Good board practices require that the Board of Directors, instead of needlessly interfering in the details involved in day-to-day operations, concentrate on elaborating the company's short- and long-term strategies.
  • The Board's general duty is to steer the company's business with a view to maximizing shareholder value in the long term, while taking account of expectations set by various stakeholder groups; and
  • Board members are required to perform on the basis of sufficient, relevant and updated information, in order to serve the company's interests.

In addition, the Board's agenda:

  • Defines the Board's annual action plan and provides a preliminary meeting schedule and framework agenda for each meeting;
  • Provides guidelines for the Board's annual self-assessment;
  • Provides guidelines for distributing notices of meetings and advance information to the Board and procedures for keeping and adopting minutes;
  • Defines job descriptions for the Chairman, members and secretary of the Board of Directors (the secretary is the Company's Director for Legal Affairs or, if absent, the CEO); and
  • Defines the frameworks within which the Board may set up special committees or working groups.

During the 2009 financial year, the Board convened 21 times. The meeting attendance rate averaged 97 per cent.

The Board evaluates its activities and working methods annually, employing an external consultant for this evaluation, if necessary.

Board Members

In 2009, the Digia Plc Board of Directors comprised:

Pekka Sivonen, b. 1961, Secondary school graduate in Political Science
Full-time Chairman of the Board of Directors since 2005. Founding shareholder of Digia Inc., Board member (1997-2005) and Chairman (2000-2005). CEO of Digia Inc (1997-2000). Chair of the National Emergency Supply Agency's Technology Pool since 2007. Currently also Chairman of the Board at BlueWhite Resorts Ltd and Comma Group Ltd. Member of the Finnish Association of Professional Board Members since 2005.

Pertti Kyttälä, b. 1950, M.Sc. (Econ.)
Vice Chairman of the Board. Board member since 2005. Currently Managing Director of Peranit Ltd. His previous posts include CEO of Radiolinja Ltd (1999-2003), IT Director of Helsinki Telephone Company (1997-1999), Managing Director of Samlink Ltd (1994-1997), and Managing Director and Deputy Managing Director of Sp-palvelu Ltd (1991-1994). Previously, he has held various positions at SKOP Bank (1985-1990) and OKO Bank (1973-1985). Moreover, he is a Chairman of the Board of Directors at ASAN Security Technologies Ltd.

Kari Karvinen, b. 1959, MA
Board member since 1990. Co-founder of SysOpen Plc. Chairman of the Board (2002-2005) and Vice Chairman (1999-2002) of Sysopen. Vice Chairman of the Board at Digia Plc (2005-2007). Board professional and independent investor. At SysOpen Plc, held the posts of deputy Managing Director (1990-1999), Director of Planning (1999-2000) and full-time Chairman of the Board (2002-2004). His previous posts include Managing Director and Product Manager at Helsingin PC-Konsultit Ltd (1988-1990), and various IT industry posts at Sycon Ltd (1982-1988). Board member of Oy Drumsö Utveckling Ab. Member of the Finnish Association of Professional Board Members since 2003.

Martti Mehtälä, b. 1957, M.Sc. (Tech.)
Board member since 2007. Until June 2007, served as Managing Director of Microsoft Oy for 12 years. Previously held managerial sales and marketing positions at Nokia Data and ICL Data Oy, as well as serving as Dava Oy's Managing Director and Country Director of Computervision Inc. Over 25 years' experience of IT implementation and of sales and marketing in various industries, and broad experience of working in cooperation with Finland's most extensive IT partner network and various international partners. Positions of trust have included membership of the National Information Security Advisory Board established by the Ministry of Transport and Communications and of the National Board of Economic Defense.

Heikki Mäkijärvi, b. 1959, M.Sc. (Eng.)
Board member since 2009. Currently holds the post of Vice President of Business Development at Openwave Systems. Previously he has worked at Accel Partners (2002-2009) and as Technology Director at Cisco Systems Finland, participating in development tasks related to European business operations (1999-2001). Prior to Cisco, Mäkijärvi worked for 15 years at Nokia Corporation's product development organisation and held various managerial positions in international marketing and business development organisations (1983-1998). No other Board memberships.

Jari Pasanen, b. 1960, Licentiate of Technology
Digia Board member since 2009. Currently Vice President, Strategic Renewal at SITRA, and Independent Consultant at Pointtia Oy, his assignments there including acting as a consultant for CapMan Plc's funds. Previously held various positions at Nokia Corporation (1993-2008). No other Board memberships.

Of the aforementioned members of the Board, Pertti Kyttälä, Martti Mehtälä, Kari Karvinen, Jari Pasanen and Heikki Mäkijärvi are independent of the company and its major shareholders.

Committees of the Board of Directors

The Digia Board of Directors had three committees in 2009: the Compensation Committee, the Audit Committee, and the Nomination Committee.

These committees do not hold powers of decision or execution. They assist the Board in decision-making concerning their own areas of expertise. The committees report regularly on their work to the Board, which governs and assumes collegiate responsibility for the committees' work.

According to an agenda approved by the Board, the purpose of Digia's Compensation Committee is to prepare and follow up compensation and remuneration schemes in order to ensure that the company's targets are met, to guarantee the objectivity of decision-making, and to see to it that the schemes are transparent and systematic. In 2009, the members of the Compensation Committee were Martti Mehtälä (Chairman), Pertti Kyttälä and Jari Pasanen. In 2009, the committee convened three times, with full attendance by all members.

According to an agenda approved by the Board, the purpose of the Audit Committee is to assist the Board of Directors in ensuring that the company's financial reporting, accounting methods, financial statements and other reported financial information are legitimate, balanced, transparent and clear, as further specified in the agenda. In 2010 the Audit Committee was composed of Pertti Kyttälä (Chairman), Martti Mehtälä and Heikki Mäkijärvi. The committee convened five times in 2009, with full attendance by all members.

According to an agenda approved by the Board, the Nomination Committee's duty is to prepare proposals for the Annual General Meeting concerning the number of members of the Board of Directors, the members of the Board of Directors,  the remuneration of the Chairman, Vice Chairman and members of the Board and the remuneration of the chairmen and members of the committees of the Board of Directors. In 2009, the members of the Audit Committee were Pekka Sivonen (Chairman) and Kari Karvinen. The committee convened twice in 2009 prior to the AGM held in the spring, with full attendance by both members.

CEO


The company's Chief Executive Officer is appointed by the Board of Directors. The CEO is in charge of Digia's business operations and administration in accordance with the instructions and regulations issued by the Board of Directors, and as defined by the Finnish Limited Liability Companies Act. The CEO may take exceptional and far-reaching measures, in view of the nature and scope of the company's activities, only if so authorised by the Board of Directors. The CEO chairs the Group Management Team's meetings. Moreover, the CEO is not a member of the Board of Directors, but attends Board meetings.

The CEO's service contract, approved by the Board of Directors, defines the key terms and conditions which govern his/her employment, in writing.

Juha Varelius (b. 1963) has been the company's CEO since the beginning of 2008.

Group Management Team


Chaired by the CEO, the Group Management Team is in charge of the day-to-day management of the Group's operational business. The Management Team convenes regularly to discuss issues in accordance with the Group's management system. The Management Team has no official status based on the Limited Liability Companies Act or Digia's Articles of Association, i.e. it does not exercise legally endowed authority. In practice, the Management Team, led by the CEO, makes decisions on the company's day-to-day business operations.

The Management Team comprises the directors in charge of key functions. Its composition and the terms of its members' employment are confirmed by the Board of Directors, as proposed by the CEO.

In 2009, the Digia Plc Group Management Team comprised:

Juha Varelius, b. 1963, M.B.A.
Digia's President and CEO as from the beginning of 2008. Reporting to the Board of Directors, Varelius is responsible for the company's operative business. Previously, he has served as the President and CEO of the technology company Everypoint Inc of Boston (2006-2007). He has also held managerial positions at Yahoo! and Everypoint in London (2002-2006). Moreover, he has served in various managerial positions at Sonera (1993-2002), acting in his last years there as Managing Director of Sonera Zed and a member of the Sonera Management Team.

Asko Hakonen, b. 1961, vocational qualification in business and administration
Senior Vice President, software and service products, Management Team member since 2008. Responsible for software and service products as well as their development. Previously held managerial positions at the Digia Industry and Trade division (2007-2008). Prior to joining Digia, Hakonen worked as a project and unit manager at Sentera Plc (1998-2006), where he was in charge of internet, mobile and ERP systems. Previously also held the post of project manager at Solagem Oy (1990-1997). Hakonen has worked in the IT sector since 1985.

Tommi Laitinen, b. 1968, vocational qualification in business and administration
Senior Vice President, competencies and projects, Management Team member since 2005. Laitinen is responsible for the development and management of competencies as well as project resourcing. Previously, he has served as the SVP of Digia's Telecommunication division (2007-2008) and the SVP in charge of the company's strategy and development (2005-2007). His previous positions at Digia Inc. included Vice President, Engineering (2001-2004); Director, Quality and Processes (2001-2004); and Business Unit Manager (1999-2000). Prior to that (1991-1999), he was in charge of various project and product management duties and software development duties at Econocap Engineering Oy, Teemuaho Oy, Verkonmerkki Oy and HALT Ohjelmointi Oy.

Antti Lastunen, b. 1964, vocational qualification in business and administration
Senior Vice President, sales and marketing, Management Team member since 2008. Responsible for sales and marketing operations. Previously, he has been in charge of Business Operations at SAP Nordic (2005-2008), and Large Enterprise Sales (2003-2004) and Manufacturing Industry Sales (2000-2002) at SAP Finland. Prior to that, he held positions in international customer management at SAP and Computer Associates Finland (1995-1997) and sales at Inter Marketing (1988-1994), respectively.

Kjell Lindqvist, b. 1957, M.B.A.
Chief Financial Officer, Management Team member since 2005. Lindqvist is in charge of Group finances and administration. Previously, he has acted as Digia Inc.'s CFO (2000-2005). Prior to joining Digia, Lindqvist worked at KPMG (1982-2000) as Authorized Public Accountant while also being a Partner in the company. At KPMG, Lindqvist served as Authorized Public Accountant in charge of several international ICT subsidiaries and Finnish listed companies.

Mika Pälsi, born 1970, LL.M.
General Counsel, Management Team member since 2009. In charge of legal matters and stock exchange communications at the company. Trained on the bench, post-graduate LL.M studies at the Universities of Helsinki and Leicester (U.K.). Pälsi has over ten years' experience in international business law, both as an attorney and in-house counsel. Before joining Digia in 2009, Pälsi worked for Tieto Corporation, where he was in charge of providing legal counsel to one of their business units. Before moving into corporate practice, Pälsi worked as an attorney at Castrén & Snellman and as a lawyer at Allen & Gledhill Advocates & Solicitors (Singapore).

Until December 2009, the Group Management Team also included Juha Leinonkoski as SVP, International Business.

Management Emoluments


Board of Directors

The Shareholders' Meeting decides on emoluments payable to the Board of Directors and grounds for the compensation of expenses. The 2009 AGM decided to pay monthly emoluments of EUR 2,000 to Board members, EUR 3,000 to the Vice Chairman and EUR 5,000 to the Chairman for their work on the Board. In addition, the AGM approved EUR 400 in fees per Board or committee meeting. The aforementioned monthly and meeting-based emoluments do not apply to a full-time Chairman of the Board of Directors. Moreover, the Shareholders' Meeting decided that standard and reasonable costs resulting from work on the Board would be reimbursed.

In the 2009 financial year, a total of EUR 164,400 was paid in emoluments to the members of the Board of Directors for their work on the Board, as follows:

Pertti Kyttälä

EUR 45,200

     

Kari Karvinen

EUR 32,800

     

Martti Mehtälä

EUR 33,600

     

Jari Pasanen

EUR 26,400

     

Heikki Mäkijärvi

EUR 26,400

     

All emoluments were monetary. The company does not grant stock options or share-based remuneration for work on the Board.

Chairman of the Board

The remuneration of the full-time Chairman of the Board of Directors, Pekka Sivonen, is based on a separate fixed-term employment contract approved by the Board of Directors. From the 2010 AGM onwards, the AGM will set a maximum sum for emoluments paid to any full-time Chairman of the Board according to a separate contract. The Chairman did not receive further compensation for Board work.

In 2009, the Chairman received a total of EUR 209,088 in salary and other benefits. All emoluments were monetary.

The Chairman's fixed-term employment contract is valid until the end of the next AGM. The employment contract and full-time duties related to the Chairmanship can be terminated by the company with immediate effect and without severance pay. Should the Chairman of the Board continue in his or her duties part-time, he or she will receive the monthly and meeting-based remuneration approved by the AGM for work on the Board.

The Chairman does not have a supplementary pension agreement with the company.


CEO

The Board of Directors decides on the CEO's salary, and other remuneration and benefits.

CEO Varelius's remuneration package comprises a monthly salary in accordance with his contract, as well as a share-based remuneration plan linked to the company's share performance.

Of the CEO's pay, 85 per cent is fixed and a 15 per cent portion is linked to the company's profitability and revenue targets for each quarter.

Upon the authorisation of the AGM, the CEO's share-based remuneration plan was revised during 2009 by the Board, entirely replacing the incentive system previously implemented in 2007.

The new system covers the earning periods of 2009 and 2010, entitling the CEO to a maximum bonus equal to the value of 80,000 company shares for each earning period, representing a maximum total bonus equalling the value of 160,000 shares. This bonus will begin to accrue progressively when the EPS amounts to EUR 0.41, entitling the CEO to a value of 20,000 shares. The maximum bonus will become payable if the EPS amounts to EUR 0.69 for the earning period. The bonus will be paid in a 50/50 combination of shares and cash, without any disposition restrictions, after the adoption of the financial statements following the close of the respective earning period.

As part of the new remuneration scheme, the CEO received a one-off bonus equalling the value of 100,000 shares in the 2009 financial year. This bonus was paid in a 50/50 combination of shares and cash, without any disposition restrictions.

The remuneration received in 2009 by the CEO was also influenced by the Board's decision to rescind the use of share options as an incentive for management and key personnel, as a consequence of which the CEO and other key personnel with employment contracts were given the opportunity to exchange options they held according to the 2005 share option scheme for shares and monetary compensation equal in value. Through this option conversion scheme, the CEO received 31,250 shares in the company in October 2009, as well as monetary compensation equal to their value.

In total, CEO Varelius was paid EUR 846,431 in salary and benefits in 2009, of which salary and fringe benefits account for EUR 264,549 and bonuses for EUR 581,882.

The company may terminate the CEO's service contract with six months' notice. Upon such termination, he will receive remuneration for the notice period plus severance pay equalling 12 months' salary. The CEO's retirement age is as stipulated by law, and he has no supplementary pension agreement with the company.


Group Management Team

Based on a proposal submitted by the CEO, the Board of Directors decides on the salary, other remuneration and other benefits to be paid to members of the Group Management Team.

The total remuneration package comprises a monthly salary plus any share-based remuneration detailed in the incentive scheme approved for key personnel by the Board.

As with the CEO's pay, 85 per cent of Management Team members' pay is fixed and a 15 per cent portion is linked to the company's profitability and revenue targets for each quarter.

The share-based remuneration paid to the Management Team is based on an incentive scheme set by the Board upon the authorisation of the AGM. According to this scheme, the Board decides annually, upon a proposal submitted by the CEO, on the bonuses to be received by key personnel in relation to the company's performance and the fulfilment of certain targets set by the Board for each financial year. Bonuses paid according to the system are made available to the recipients as a four-year annuity, assuming that the recipient is still employed by the company on each payment date. These bonuses are paid together with January's salary payment as a 50/50 combination of shares and cash. During the 2009 financial year, no bonuses were paid to Management Team members in accordance with the new incentive scheme.

However, the members of the Team did make use of the opportunity given them to convert options they held, in accordance with the 2005 share option scheme, into shares and monetary compensation equal in value. As a consequence of the conversion scheme, members of the Management Team received a total of 17,750 shares in the company and equivalent monetary compensation in October 2009.

Each Management Team members' retirement age is stipulated by law, and no member has a supplementary pension agreement with the company.


Management ownership of options and shares


Board of Directors

On 31 December 2009, the members of the Board of Directors owned Digia Plc shares as follows:

Pekka Sivonen

2,997,613

     

Pertti Kyttälä

0

     

Kari Karvinen

1,586,309

     

Martti Mehtälä

0

     

Jari Pasanen

0

     

Heikki Mäkijärvi

0

     

Members of the Board of Directors do not hold any option certificates in Digia. The Group has not granted loans or guarantees to Board members.

Group Management Team

On 31 December 2009, members of the Group Management Team owned Digia Plc shares as follows:

Juha Varelius

91,250

     

Asko Hakonen

134,389

     

Tommi Laitinen

41,290

     

Antti Lastunen

8,250

     

Kjell Lindqvist  

20,623

     

Mika Pälsi

0

     

After the option conversion of October 2009, no Management Team members hold option certificates in Digia. The Group has not granted loans or guarantees to any members of the Group Management Team.

Internal control


Internal control is responsible for monitoring the management of the company, as well as the legality of its operations. The Board of Directors annually determines the principles and extent of internal control and may, if necessary, select an external party to perform internal control functions in the company by separate agreement. Internal control representatives have similar rights to obtain information within the company as Board members, stipulated in accordance with the Companies Act. The internal control function reports directly to the Board of Directors.

The company currently has no separate internal control function and has not appointed an external control party. Internal control operations are handled by the company's legal and financial functions.

Auditing


Under the Articles of Association, the company has one (1) ordinary auditor that must be an accounting firm approved by the Central Chamber of Commerce. No specific responsibilities are granted to the auditor; the auditor's duties are determined in accordance with the Auditing Act and other applicable laws and regulations. 

The selected accounting firm appoints a principal auditor to conduct the audit. The principal auditor must change at least every seven years. An auditor who has been the company's principal auditor for seven years may be reappointed as the company's principal auditor after an interval of two years.

During the 2009 financial year, Ernst & Young Oy Ab acted as the company's auditor, with Heikki Ilkka, Authorised Public Accountant, as the principal auditor.

Based on the decision of the 2009 AGM, auditors receive their remuneration and compensation for reasonable costs against an invoice. During 2009, remuneration paid to auditors for general auditing actions totalled EUR 96,557 and for other consulting services EUR 26,258.

Internal control and risk management related to financial reporting


Control functions and control environment

The company has a controller function tasked with verifying monthly reports. This controller function reports to the management, the Board of Directors and the Board's Audit Committee regarding the financial performance of the company and its divisions.

The company uses a reporting system which compiles separate subsidiaries' reports into the consolidated financial statements . There are written directives for completing the financial reports of subsidiaries. Compliance with these directives is monitored by the controller function. The company also has the necessary, separate reporting facilities for monitoring business operations and asset management.

The Group finance unit provides instructions for drawing up financial statements and interim financial statements, and compiles the consolidated financial statements. The finance unit has centralised control over the group's funding and asset management, and is in charge of managing interest rate risk.


Internal risk control

As a general principle, authorisation is distributed in Digia in such a way that no individual may independently perform measures unbeknown to at least one other individual. For example, the company's bookkeeping and asset management are managed by separate persons, and two authorised persons are needed to sign on behalf of the company.

The Group's business is divided into divisions whose Senior Vice Presidents report to the Chief Executive Officer. Reporting and supervision are based on annual budgets that are reviewed monthly, on monthly income reporting and on updates of the latest forecasts.

The SVPs in charge of the divisions report to the Group Management Team on development matters, strategic and annual planning, business and income monitoring, investments, potential acquisition targets and internal organisation matters related to their areas of responsibility. Each division has its own management team.

Digia's operational management and supervision take place according to the corporate governance system described above.

The Group's administration unit is in charge of HR management and policy, as well as properties and the viability of working conditions in each facility. The legal affairs unit provides instructions for and monitors contracts made by the company and ensures the legality of the Group's operations. 

Communications

The Group's General Counsel is in charge of the company's external communications and their correctness. External communications include financial reports and other stock exchange communications. The General Counsel is responsible for the publication of interim reports and financial statements, as well as for actions related to convening and holding Shareholders' Meetings. Most communications take place through the company's website and using stock exchange releases.

Risk management

The purpose of the company's risk management process is to identify and manage risks in such a way that the company is able to meet its strategic and financial targets. Risk management is a continuous process, by which the major risks are identified, listed and assessed, the key persons in charge of risk management are appointed and risks are prioritised according to an assessment scale in order to compare the effects and mutual significance of risks.

The main operational risks handled by Digia's risk management function are customer risk, personnel risk, project risk, data security risk and goodwill risk.

The company manages customer risk by actively developing its customer portfolio structure and avoiding any potential risk positions. Personnel risks are assessed and managed using a quarterly goal and development discussion process for key personnel. To improve personnel commitment, the company strives to improve the efficiency of internal communications systematically, using monthly personnel events and increasing the visibility of management. Key project audits are carried out with a view to enhancing project risk management and securing the success of project deliveries to customers. In addition, the Group's certified quality systems are regularly evaluated and the Group has increased the efficiency of its project delivery reporting practices in relation to corporate governance and finance. Data security risk is managed through data security audits and continuous development of working models, security practices and processes. Risks associated with the integration of businesses, shared operating models and best practices, as well as their integrated development, are managed according to plan under the supervision of the Group Management Team. With respect to IFRS-compliant accounting policies, the Group actively monitors goodwill and the related impairment tests, as part of prudent and proactive risk management practices within financial management.

In addition to operational risks, the company is subject to financial risks. Digia Plc's internal and external financing and the management of financial risks are coordinated by the finance function of the Group's parent company. This function is responsible for the Group's liquidity, sufficiency of financing, and the management of interest rate and currency risk. The Group is exposed to several financial risks during the normal course of its business. The objective of the Group's risk management is to minimise the adverse effects of changes in the financial markets on the Group's earnings. The primary types of financial risks are interest rate risk, credit risk and funding risk. The general principles of risk management are approved by the Board of Directors, and the Group's finance function is responsible for their practical implementation together with the business divisions.

Insider issues


Since 1 March 2000, Digia has adhered to the recommendation governing the insider rules of listed companies issued by HEX Plc.

Digia divides insiders into public and company-specific insiders. Public insiders include the members of the Board of Directors, auditors, the CEO, the deputy CEO, and the members of the Group Management Team. Information on public insiders' holdings and connections is published on the company's website.  The company-specific insider list comprises persons who, due to their position or duties or in any other way, regularly come into the possession of insider information, which in practice implies the members of the company's divisions' management teams, the finance unit and all personnel involved in legal affairs and communication.

The company also maintains project-specific insider registers for any corporate acquisition projects and other ventures that may have an impact on the company's share price.

The General Counsel is in charge of supervising compliance with insider rules and disclosure requirements pertaining to shareholding.