Control systems

The Board of Directors is responsible for the appropriate management and organization of operations. The Board of Directors has approved the principles of internal control, risk management, and internal auditing to be followed within the Group.

In practice, it is the responsibility of the President and CEO, together with the management, to put in place and oversee accounting and control mechanisms and other similar mechanisms.

The Risk Management function supports identification, evaluation, and management of risks that may threaten the achievement of Fiskars business goals.

Code of Conduct

Fiskars Group’s objective is to pursue long-term profitable business in an ethical and responsible manner. The way of operating for all Fiskars Group’s employees is defined in the Company’s Code of Conduct. The Code of Conduct shall be complied with by all companies belonging to Fiskars Group even when the Code requires a higher standard of behaviour than is required by national law and local regulation. All company rules, guidelines and practices in Fiskars Group’s companies must be in full compliance with the Code of Conduct.

All Fiskars Group’s employees participate in regular training on the Code of Conduct. The Legal & Compliance function monitors the compliance with the Code.

Internal Audit

Fiskars Group Internal Audit is established by the Board of Directors, and its responsibilities are defined by the Audit Committee of the Board of Directors as part of their oversight function. Internal Audit provides independent, objective assurance and consulting services designed to add value and improve the organization’s operations. Internal Audit helps Fiskars Group accomplish its business objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

To ensure the independence of the Internal Audit activity VP Group Internal Audit reports administratively to the CEO and functionally to the Audit Committee.

The direction of the work of the Internal Audit function is stated in the annual audit plan. In order to reflect the overall business objectives and risks, the audit plan is aligned with the group strategy and strategic focus areas. The audit plan determines priorities and resource allocation. It is approved by the Board of Directors’ Audit Committee on an annual basis. Within the audit plan, the detailed audit assignments are defined and updated on each Audit Committee meeting.

Internal Audit’s key activities and focus areas are annually discussed in Fiskars Group’s Corporate Governance Statements.

Related party transactions

According to the Code of Conduct policy all directors and employees must avoid conflicts of interest between themselves or their family members and Fiskars Corporation.

Persons belonging to Fiskars Group’s Related Party are defined in the Related Party Guidelines approved by the Fiskars Group’s Board of Directors in 2019.

According to the Guidelines the following persons belong to the Related Party in 2019:

• persons or entities that directly or indirectly:
  • exercise control in the Company, are controlled by the Company or are under the same control with the Company (including subsidiary companies of Fiskars Group), for example, through holding more than 50 percent of the Company’s shares or votes, or being entitled to appoint or dismiss a majority of the members of the Company’s Board of Directors
  • have a significant influence in the Company, for example, through holding at least 20 percent of the Company’s shares or votes or
  • exercise joint control in the Company with another person (each such a person, a “Controlling Person”)
• entities that are associate companies of the Company
• entities that are joint ventures to which the Company is a member
• each member of the Company’s Board of Directors, the Company’s President and CEO and the deputy CEO, each member of the Fiskars Group Leadership Team, each member of the Group’s Strategic Business Units’ and Global functions’ management teams, each country director of the Company, and other individuals as specified from time to time by the President and CEO, (each such an individual, a “Key Management Person”)
• close family members of Key Management Persons and/or Controlling Persons, respectively, who may be expected to influence, or be influenced by, the Key Management Person or the Controlling Person in the dealings with the Company, including:
  • children and dependents
  • spouse, common-law spouse
  • children and dependents of spouse or commonlaw spouse (each such a family member, a “Close Family Member”)
• entities where a Key Management Person or a Controlling Person or their Close Family Member exercises, directly or indirectly, control (individually or jointly) through holding a majority of the shares or votes in the entity, or being able to appoint or dismiss the majority of the members of the Board of Directors, or corresponding body, of the entity (each such an entity, a “Controlled Entity”)
• entities where a person exercising control in the Company has significant influence over the entity or is a member of the key management of such an entity or its parent entity (for exclusion of the sphere of Related Parties, see below)
• entities of a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company
• entities, or any member of a group of which it is a part, that provide key management personnel services to the Company.

According to the Related Party Guidelines, all Related Party Transactions shall be concluded on an arm’s length basis and Related Party Transactions must be approved in advance by the CFO of Fiskars. Related Party Transactions involving the President and CEO of Fiskars, other member of the Fiskars Group Leadership team or a member of the Board of Directors of Fiskars must be approved in advance by the Board of Directors of Fiskars Corporation.

Issues to be taken into consideration when reviewing the Related Party transactions:

• Whether the terms of the transaction are fair to Fiskars and would apply on the same basis with non-related third parties
• Whether there are compelling business reasons for Fiskars to enter into the transaction
• Whether the transaction would impair the independence of an independent director or present a conflict of interest for the related party.

Fiskars Corporation keeps a register of its related parties and collects information from them regarding the related party transactions once a year. Fiskars Group’s Internal Audit shall review the related party transactions annually and file a report thereof to the auditor and to the Audit Committee. Fiskars discloses the Related Party Transactions that are essential for the company and that depart from its normal business operations or that are not conducted in accordance with the normal market price, in its Financial Statement.

Updated May 14, 2020