The Role of the Administrative, Management and Supervisory Bodies (GOV-1, G1 GOV-1)
Board of Directors and Audit Committee
The Board of Directors is responsible for the administration of the Group and the appropriate organization of its operations. The members of the Board of Directors are elected annually at the Annual General Meeting. During the financial year that ended on December 31, 2024, the Group’s Board of Directors had six members. The Board of Directors assesses the independence of its members annually. Of the members of the Board of Directors, 83.33% are independent. Of the members, only Raimo Jyväsjärvi is non-independent of the company. This is due to his previous position as an advisor to the company.
Men account for 83.33% of the Board members, while women account for 16.67%. The Board of Directors’ average gender ratio between women and men is 1/5: the members comprise one woman and five men. The Board of Directors’ self-assessment discussions have concluded that the Board members are diverse enough in terms of their special expertise, background, age and gender that the Board of Directors as a whole has been able to effectively support Bittium’s business and its development. The diversity of the Board of Directors is supported by the members’ experience in the international operating environment and different cultures, as well as taking the age and gender distribution into consideration. Bittium’s target is for both genders to be represented on the Board of Directors.
The company’s Board of Directors is responsible for the administration of the company and the appropriate organization of its operations. The Board of Directors has approved the principles applied by the Group’s with regard to internal control, risk management and internal auditing.
Bittium’s Board of Directors appoints the Chairman and members of the Audit Committee. At least one of the members of the committee must have expertise in accounting or auditing.
The members of the committee are independent of both the company and its significant shareholders, and they have extensive experience in the management of business operations. In addition to the members of the committee, the meetings of the committee are regularly attended by the CEO, the CFO and the CLO, who serves as the secretary to the committee, and, optionally, by the company’s auditors. In 2024, the focus areas of the Audit Committee were the near-term changes in sustainability reporting, the cash flow forecasting process and the development of working capital. The specification of tasks for the governance bodies or the Board of Directors’ assignments have not specified how each body’s responsibilities for impacts, risks and opportunities are taken into consideration.
The Board of Directors and the Audit Committee approve and review sustainability-related topics, commitments and targets annually. In 2024, the upcoming changes in sustainability reporting were one of the focus areas of the Audit Committee. The Audit Committee monitors the implementation of the company’s strategy and compliance with sustainability requirements, and makes proposals to the Board of Directors for approval. The specification of tasks for the governance bodies or the Board of Directors’ assignments have not specified how each body’s responsibilities for impacts, risks and opportunities are taken into consideration.
Meetings of the Board of Directors are attended by the CEO, CFO and CLO. Other members of the company’s senior management participate as necessary or when invited by the Board of Directors. The members of Bittium’s Board of Directors and Audit Committee are not employees of the company.
CEO and Management Group
The CEO is in charge of operational management in accordance with the Finnish Limited Liability Companies Act, the Articles of Association and the instructions and orders issued by the Board of Directors. The CEO is responsible for the preparation of Board meetings, the implementation of the Board’s decisions, the legality of accounting and the reliability of asset management. The CEO is responsible for the preparation of the company’s strategy, long-term plans, investments, mergers, acquisitions and divestments, and financing arrangements, and deciding on these to the extent that the decision-making power concerning the matter in question does not lie with the Board of Directors. The CEO is supported by the Management Group.
Bittium’s Management Group is responsible for approving and evaluating the principles, commitments and targets related to sustainability. The Management Group is responsible for the implementation of plans and targets, as well as the integration of sustainability topics and corporate responsibility into the company’s strategy. The Management Group is responsible for the realization of commitments and targets and monitors them on a monthly basis. The Management Group receives regular training on sustainability with regard to anti-corruption and anti-bribery measures, for example. The Management Group has received training on the CSRD and ESRS standards.
With the exception of the CEO, the members of the Management Group are employees of the company. More information on the number of members of the Management Group and their gender distribution is provided in section S1-9.
Sustainability Working Group
Bittium has a separate sustainability working group, which develops, monitors, and assesses key sustainability indicators and the achievement of targets. The tasks of the working group include participating in the management and assessment of sustainability risks and the Group’s sustainability reporting. The sustainability working group is led by the Vice President, Communications and Sustainability. The group has six (6) members: the CEO; Vice President, Communications and Sustainability; Chief Legal Officer; CFO; Director, Human Resources; and Head of Quality and Research. The sustainability working group is led by the Vice President, Communications and Sustainability. The sustainability working group meets on a regular basis.
Expertise with Regard to Sustainability Matters
The expertise of the Board of Directors and the Management Group with respect to good corporate governance and sustainability mainly consists of previous work experience in different companies and participation in training activities. For example, some of the Board members have participated in training related to business management, value chain management, financial management and board membership, which promotes good corporate governance. The members of the Board of Directors and the Management Group have also accumulated expertise from the company’s internal anti-corruption and anti-bribery training activities, as well as seminars on the ESRS standards and the CSRD Directive aimed at board professionals.
The Board of Directors and the Audit Committee have discussed with the CEO and the Vice President, Communications and Sustainability in regular ESG reviews the need to ensure sufficient expertise in sustainability issues relevant to the company and have strengthened expertise where necessary, for example in relation to climate change adaptation.
Information Provided to and Sustainability Matters Addressed by the Undertaking’s Administrative, Management and Supervisory Bodies (GOV-2)
Bittium’s Board of Directors approves sustainability reporting annually. Bittium’s Management Group discusses sustainability issues, monitors the effectiveness of sustainability measures, and sets sustainability targets in its twice-yearly management review. The Management Group is also responsible for implementing sustainability plans and actions in day-to-day operations.
The Audit Committee of Bittium Corporation’s Board of Directors discusses sustainability issues on a regular basis and as needed. The Audit Committee oversees the Group’s sustainability reporting process and reporting. The committee monitors the company’s sustainability reporting and the assurance thereof. The Board of Directors of Bittium Corporation addresses sustainability matters on the basis of the Management Group’s proposals and approves the company’s sustainability statement annually.
In 2024, Bittium reported to the administrative, management and supervisory bodies on material impacts, risks and opportunities in accordance with sustainability reporting in connection with the double materiality assessment. Bittium documented its due diligence process in accordance with the OECD guidelines in 2024, and the company will continue to establish related policies, actions, metrics and targets in 2025. Bittium will report on the results and effectiveness of the process to the administrative, management and supervisory bodies from 2025 onwards. As the impacts, risks and opportunities addressed in the manner described in this sustainability statement were established in 2024, they were not taken into account during 2024 in overseeing the strategy, decisions on major transactions and the risk management process. In the future, they will be taken into consideration on a regular basis as part of the Management Group’s normal reporting.
A list of the material impacts, risks and opportunities addressed by the administrative, management and supervisory bodies, or their relevant committees, during the reporting period.
| Impact, Risk and Opportunity (IRO) | Matters Addressed by the Administrative, Management and Supervisory Bodies |
|---|---|
| E1: Transitioning the company’s own business premises to renewable energy and improving energy efficiency through ecological product design, which reduces the in-use emissions of products. | Expanding the emissions calculation process to include Scope 1–3 emissions categories under the GHG Protocol for the first time. |
| E1: Growing regulation increases the need to allocate resources to monitoring, interpretation, the implementation of changes, and reporting. | Monitoring the adequacy of sustainability reporting resources and related competence. |
| E1: The growing demand for products and solutions that support the green transition and are energy efficient will contribute to the reduction of the in-use emissions of products and the reduction of customers’ emissions. | Monitoring and developing data collection for sustainability reporting. Creating a transition plan and monitoring its progress. Specifying the next steps of the plan for 2025. |
| E5: Engaging the commitment of manufacturing partners to production that is aligned with circular economy principles, material efficiency and regulatory compliance may reduce environmental impacts and improve stakeholder perceptions. | Monitoring the completion of sustainability reporting and the transition plan. |
| S1: Employee satisfaction improves the employer image, employee availability, retention and motivation, and contributes to the customer experience. | Monitoring of change negotiations concerning the personnel and the impacts of cultural change. |
| S4: Unclear or incomplete product information or labeling may affect customers’ understanding of the use of products and indirectly affect their safety, as well as reduce customer satisfaction. | Reviewing customer feedback and approving measures. |
| S4: Negative impacts on customer satisfaction, customer and stakeholder perceptions and, consequently, direct financial effects if perceived quality does not correspond to customer requirements. | Approval of measures that are planned on the basis of customer feedback. |
| S4: A significant reputational risk if information security deficiencies were to be detected in the company’s operations or products. Such deficiencies may also lead to legal consequences or the termination of customer relationships. | Regular monitoring of matters related to information security and data protection. |
| S4: The increase in information security threats and the tightening security climate increase the demand for secure products and lead to a situation where taking information security and data protection into consideration in product development is a key opportunity for Bittium in all of its businesses. | Assessing the company’s resilience and topics related to the implementation of requirements stipulated by the NIS2 Directive. |
| G1: Ensuring the sustainability of the supply chain through supplier requirements, audits and surveys of materials, engaging the personnel’s commitment to the principles of sustainable procurement, and also taking sustainability into account in the subcontracting of personnel. | Developing the quality of products and services. |
| G1: The potential to grow the business even in the short term due to the changed geopolitical climate and increased information security threats. | Assessing and understanding customer needs and integrating them even more closely into product strategies. |
Integration of Sustainability-Related Performance in Incentive Schemes (GOV-3)
The principles of Bittium’s remuneration policy guide the Group’s incentive structure and performance criteria. Bittium’s remuneration is designed to align the interests of employees and shareholders and to support remuneration based on the Group’s performance. The purpose of Bittium’s incentive schemes is to implement the Group’s strategy and develop long-term sustainable growth in line with increasing shareholder value.
Bittium’s remuneration policy does not include incentive and remuneration schemes linked to sustainability-related performance for the members of the administrative, management and supervisory bodies. Climate-related aspects are not taken into consideration in the remuneration of Bittium’s administrative, management or supervisory bodies.
Statement on Due Diligence Process (GOV-4)
An overview of the information on the due diligence process provided in Bittium’s sustainability statement:
| Core Elements of Due Diligence | Core Elements of Due Diligence |
|---|---|
| Embedding due diligence in governance, strategy and business model | ESRS2 GOV-2, ESRS2 SBM-3 |
| Engaging with affected stakeholders in all key steps of the due diligence | ESRS2 GOV-2, ESRS2 SBM-2, ESRS2 IRO-1, ESRS2 MDR-P (topical ESRS: reflecting the different stages and purposes of stakeholder engagement throughout the due diligence process) |
| Identifying and assessing adverse impacts | ESRS2 IRO-1, ESRS SBM-3 |
| Taking actions to address those adverse impacts | ESRS2 MDR-A (topical ESRS: reflecting the range of actions, including transition plans, through which impacts are addressed) |
| Tracking and communicating the effectiveness of these efforts | ESRS MRD-M, ESRS MDR-T and topical ESRS regarding metrics and targets |
Risk Management and Internal Controls Over Sustainability Reporting (GOV-5)
The aim of risk management is to secure the company’s profit performance and ensure business continuity by implementing risk management cost-efficiently and systematically in different business segments and support functions. Risk management is part of Bittium’s strategic and operational planning, the day-to-day decision-making process and internal control system. Risk management integrates business targets, risks and risk management measures into a single chain.
The company has a policy approved by the Board of Directors for risk management. Risk management covers all activities relating to target-setting, risk identification, measurement, evaluation, processing, reporting, monitoring, oversight and risk response.
Risks are assessed using a scale of severity and probability, which is used to calculate the risk level. The risk assessment framework places more emphasis on severity than probability. In addition, the risks are given a time dimension and the economic impact of the risk is assessed.
Bittium developed its risk management process during 2024. Criteria for identifying potential risks related to the environment, human rights and good corporate governance were added to the risk assessment. Bittium’s sustainability working group develops, monitors, and assesses key sustainability metrics and the achievement of set targets. The working group is also responsible for tasks related to the management and assessment of the Group’s sustainability risks and sustainability reporting.
The sustainability-related risks identified by Bittium consist of environmental, social and governance risks. The risks of environmental damage in office work are minor. The most material risks from an environmental perspective are related to climate change adaptation, such as the potential need to redesign products. Social risks include risks related to coping with the demands of work, which is caused by workload, as well as potential human rights violations in the value chain or risks related to health, safety or privacy with regard to consumers and end-users. Governance-related risks include risks related to the management of sustainability in the company’s own operations and value chain, as well as reputational risk related to corruption and bribery, mainly with regard to the value chain.
The risks identified in the sustainability reporting process included the adequacy of resources, the schedule of reporting, and sufficient compliance-related expertise. To ensure the availability of high-quality information on a tight schedule, the company developed a systematic process and regularly monitored its implementation. The company also decided to use external experts to strengthen expertise and ease resource pressure. Risks were reported regularly to the Audit Committee and the Board of Directors.
The key aspects of targets and requirements related to sustainable operations, good corporate governance, internal control and risk management are specified in policies separately approved by the Board of Directors and the internal control framework, which includes instructions, guidelines and principles concerning internal control and risk management.
Compliance processes are in place at every organization level in order to ensure compliance with the applicable laws, regulations, internal guidelines, ethical values, and sustainable business practices. The company’s management and businesses are responsible for monitoring the legislation and other regulation in their own areas and for communicating any changes to the organization. The company’s Chief Legal Officer coordinates the appropriateness of, and adherence to, compliance processes.