Governance

Regulatory Framework

As a limited liability company incorporated in Finland, Talvivaara is governed under the provisions of the Finnish Companies Act and its Articles of Association. Responsibility for the control and management of the Company is divided between the general meeting of shareholders, the Board of Directors and the Chief Executive Officer. The shareholders participate in the control and management of Talvivaara through actions taken at general meetings of shareholders.

Talvivaara complies with the Finnish Corporate Governance Code 2010 for listed companies (the "Finnish Code") and the Insider Guidelines issued by NASDAQ OMX Helsinki. In addition, in 2010 the Company followed the UK Combined Code on Corporate Governance dated July 2008 (the "UK Combined Code"). The UK Corporate Governance Code dated June 2010 will be followed from the beginning of the financial year 2011.  

The Finnish Code is available on the Securities Market Association's website at www.cgfinland.fi and the UK Combined Code on the Financial Reporting Council's website at www.frc.org.uk. Talvivaara's corporate governance and control system deviates from the following recommendations under the Finnish Code and the UK Corporate Governance Code:

Recommendation 43 and UK Corporate Governance Code provisions D.1.3 and B.1.1: Participation of the members of the Board of Directors in a share-related remuneration scheme

The Company granted options to the Non-Executive members of the Board as a part of the 2007 Option Scheme. The options were granted in 2007 prior to the listing of the Company's shares on the London Stock Exchange ("LSE"). The options granted were disclosed in the pathfinder and the final prospectus and published in connection with the listing of the Company's shares on the LSE Main Market. More details about the options can be found from the remuneration section of the Company's annual report or from the Company's annual accounts. Thereafter, no options have been granted to Non-Executive Directors, nor has the Company any intention to grant such options to Non-Executive Directors in the foreseeable future. Consequently, the Company also determines Mr. Haslam, Ms. Carr, Mr. Niiva and Mr. Titcombe as independent of the Company notwithstanding the options granted.

 UK Corporate Governance Code provision B.3.2: The terms and conditions of appointment of non-executive directors: 

All the members of the Board of Directors are appointed by the General Meeting of Shareholders. The term of the Directors shall end with the conclusion of the Annual General Meeting following the appointment of the Director. The annual remuneration payable for Board and Committee work and the basis for its determination are solely decided by the General Meeting of Shareholders. There are no contracts on notice periods, remuneration or any other terms of appointment relating to a person's status as a member of the Board.

 UK Corporate Governance Code provisions B.2.1,C.3.3 and D.2.1: The terms of reference of the Board Committees

The Nomination Committee, the Remuneration Committee and the Audit Committee each have a written charter. Instead of the full texts, the essential contents ofthe charters have been disclosed according to the Finnish Code Recommendation 20 on the Company's website.This way of presenting has been considered a clear and effective way to make the essential information available to the shareholders.