Corporate Governance Statement

Corporate governance statement This corporate governance Regulatory framework compensation plans. Under Finnish law, stock option plans require shareholder approval at statement is prepared in Our corporate governance practices the time of their launch. All other plans that accordance with Chapter 7, comply with Finnish laws and regulations include the delivery of company stock in the as well as with our Articles of Association. form of newly issued shares or treasury Section 7 of the Finnish We also comply with the Finnish Corporate shares require shareholder approval at the Securities Markets Act (2012/746, Governance Code, available at time of the delivery of the shares, unless www.cgfinland.fi, with the following exception: as amended) and the Finnish shareholder approval has been granted In 2016, we complied with the Finnish through an authorization to the Board, a Corporate Governance Code Corporate Governance Code, with the maximum of five years earlier. The NYSE 2015 (the “Finnish Corporate exception that we were not in full compliance corporate governance standards require that Governance Code”). with recommendation 24, because our the equity compensation plans be approved restricted share plans did not include by a company’s shareholders. Nokia aims to performance criteria but were time-based minimize the necessity for, or consequences only. The restricted shares vest in three equal of, conflicts between the laws of Finland tranches on the first, second and third and applicable non-domestic corporate anniversary of the award subject to continued governance standards. employment with Nokia. Restricted shares The Board has also adopted corporate were to be granted on a highly limited basis governance guidelines (“Corporate and only in exceptional retention and Governance Guidelines”) to reflect our recruitment circumstances, primarily in the commitment to good corporate governance. United States, to ensure our ability to retain Our Corporate Governance Guidelines are and recruit talent vital to the future success available on our website at http://www.nokia. of the company. The restricted share plan com/en_int/investors/corporate-governance. for 2017 is designed in a similar manner, to be used on a limited basis for exceptional purposes related to retention and Main corporate governance recruitment, primarily in the United States. bodies of Nokia The Board approves, upon recommendation Pursuant to the provisions of the Finnish from the Board’s Personnel Committee, Limited Liability Companies Act (2006/624, any long-term incentive compensation as amended) (the “Finnish Companies Act”) and all equity plans, programs or similar and Nokia’s Articles of Association, the control arrangements of significance that the and management of Nokia are divided among company establishes for its employees. the shareholders at a general meeting, the We comply with the corporate governance Board, the President and CEO and the Group standards of Nasdaq Helsinki, which are Leadership Team, chaired by the President applicable due to the listing of our shares on and CEO. the exchange. Furthermore, as a result of the General meeting of shareholders listing of our American Depositary Shares on The shareholders may exercise their the New York Stock Exchange (the “NYSE”) decision-making power and their right and our registration under the U.S. Securities to speak and ask questions at the general Exchange Act of 1934, we must comply meeting of shareholders. Each Nokia share with the U.S. federal securities laws and entitles a shareholder to one vote at general regulations, including the Sarbanes-Oxley meetings of Nokia. Pursuant to the Finnish Act of 2002 as well as the rules of the NYSE, Companies Act, an Annual General Meeting in particular the corporate governance must convene annually by June 30. standards under Section 303A of the NYSE The Annual General Meeting decides, Listed Company Manual, which is available among other things, on the election and at http://nysemanual.nyse.com/lcm/. remuneration of the Board, the adoption of We comply with these standards to the extent the annual accounts, the distribution of profit such provisions are applicable to foreign shown on the balance sheet, and discharging private issuers. the members of the Board and the President To the extent any non-domestic rules would and CEO from liability, as well as on the require a violation of the laws of Finland, we election and fees of the external auditor. are obliged to comply with Finnish law. There In addition to the Annual General Meeting, are no significant differences in the corporate an Extraordinary General Meeting shall be governance practices applied by Nokia convened when the Board considers such compared to those applied by United States meeting to be necessary, or when the companies under the NYSE corporate provisions of the Finnish Companies Act governance standards, with the exception mandate that such a meeting must be held. that Nokia complies with Finnish law with respect to the approval of equity 78 NOKIA IN 2016 Corporate governance Corporate governance framework The Board has adopted principles concerning Board diversity describing (a) our commitment General Meeting of Shareholders to promoting diverse Board composition and (b) how diversity is embedded into our processes and practices when identifying and proposing new Board candidates as well as re-election of current Board members. At Nokia, Board diversity consists of a number of individual elements, including gender, Board of Directors age, nationality, cultural and educational Audit Committee backgrounds, skills and experience. At Nokia External Personnel Committee Internal diversity is not a static concept, but rather audit Corporate Governance and audit a relevant mix of required elements for the Nomination Committee Board as a whole that evolves with time based on, among other things, the relevant business objectives and future needs of Nokia. Board diversity is treated as a means of improvement and development rather than an end in itself. Nokia acknowledges and supports the resolution adopted by the Finnish Government Group Leadership Team on February 17, 2015 on gender equality on President and CEO the boards of directors of Finnish large and mid-cap listed companies. Accordingly, we aim to have representation of 40% of both Board of Directors Our Board’s leadership structure consists of genders in our Board by January 1, 2020 The operations of Nokia are managed a Chair and Vice Chair elected annually by the by proposing a corresponding Board under the direction of the Board, within the Board, and confirmed by the independent composition for shareholder approval in the framework set by the Finnish Companies Act directors of the Board, from among the Board Annual General Meeting of 2019, at the latest. and Nokia’s Articles of Association as well as members upon the recommendation of the At the Annual General Meeting on June 16, any complementary rules of procedure as Corporate Governance and Nomination 2016, Carla Smits-Nusteling was elected to defined by the Board, such as the Corporate Committee. On June 16, 2016, the Board the Board after which the gender balance of Governance Guidelines and the charters elected Risto Siilasmaa to continue to serve as the Board was 78% male and 22% female. of the Board’s committees. the Chair and Olivier Piou as the Vice Chair of After Vivek Badrinath’s resignation from the the Board. The Chair of the Board has certain Board on July 29, 2016, the gender balance Election and composition of the specific duties as stipulated by Finnish law and of the Board has been 75% male and 25% Board of Directors our Corporate Governance Guidelines. The female. We report annually our objectives Pursuant to the Articles of Association of Vice Chair of the Board assumes the duties of relating to both genders being represented Nokia Corporation, we have a Board that the Chair of the Board in the event he or she is on our Board, the means to achieve them, and is composed of a minimum of seven and prevented from performing his or her duties. the progress we have made in achieving them. a maximum of 12 members. The Board is elected at least annually at each Annual We do not have a policy concerning the General Meeting with a simple majority of combination or separation of the roles of the the shareholders’ votes cast at the meeting. Chair of the Board and the President and CEO, The term of a Board member shall begin at but the leadership structure is dependent the closing of the general meeting at which on our needs, shareholder value and other he or she was elected, or later as resolved by relevant factors applicable from time to time, the general meeting, and expire at the closing while respecting the highest corporate of the following Annual General Meeting. governance standards. In 2016, Rajeev Suri The Annual General Meeting convenes by served as the President and CEO, while Risto June 30 annually. Siilasmaa served as the Chair of the Board. The Annual General Meeting held on June 16, The current members of the Board are all 2016 elected the following nine members non-executive. For the term of the Board to the Board: Vivek Badrinath, Bruce Brown, that began at the Annual General Meeting on Louis R. Hughes, Jean C. Monty, Elizabeth June 16, 2016, all Board member candidates Nelson, Olivier Piou, Risto Siilasmaa, Carla were determined to be independent under Smits-Nusteling and Kari Stadigh. Vivek the Finnish corporate governance standards Badrinath subsequently resigned on July 29, and the rules of the NYSE. 2016 since when the Board has consisted of eight members. NOKIA IN 2016 79 Corporate governance statement continued Members of the Vice Chair Olivier Piou Louis Hughes Elizabeth Nelson Board of Directors b. 1958 b. 1949 b. 1960 Vice Chair of the Nokia Board. Nokia Board member since 2016.

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