CORPORATE GOVERNANCE STATEMENT | CORPORATE GOVERNANCE PRINCIPLES

Corporate governance statement | Corporate governance principles

Corporate governance statement

KONE’s general governance • the approval and confirmation of strate- In addition, the Audit Committee processes principles gic guidelines and the principles of risk the description of the main features of the The duties and responsibilities of KONE management internal control and risk management sys- Corporation’s various governing bodies • the ratification of annual budgets and tems pertaining to the financial reporting are determined by Finnish law and KONE’s plans process included in the company’s corpo- corporate governance principles. KONE • the appointment of a full-time Chair- rate governance statement. In addition, it complies with the Finnish Corporate Gover- man of the Board and a President and deals with the Corporation’s internal audit nance Code 2015 published by the Securi- CEO, and decisions on the terms and plans and reports. The Director of Internal ties Market Association, with the exception conditions of their employment Audit reports the internal audit results to of recommendations 16 (Independence of • decisions on the company’s corporate the Committee. the company of the members of the audit structure The Audit Committee evaluates the committee), 17 (Independence of the com- • decisions on major acquisitions and auditing of the Group’s companies and pany of the members of the remuneration investments the appropriateness of the related arrange- committee) and 18a (Independence of the • decisions on other matters falling under ments and auditing services, and considers company of the members of the nomina- the Board’s responsibility by law the auditors’ reports. Furthermore, the tion committee). The entire Code is avail- Committee formulates a proposal to the able on the Internet at www.cgfinland.fi. The Board has created rules of procedure Annual General Meeting regarding the These exceptions are due to the company’s stipulating the duties of the Board, its auditors to be selected for the Corporation. ownership structure. The company’s largest Chairman and its Committees. The Board The Nomination and Compensation shareholder, Antti Herlin, controls 62 per- of Directors holds six regular meetings a Committee prepares proposals to be made cent of the company’s voting rights and 22 year and additional meetings as required. to the Annual General Meeting regarding percent of its shares. The significant entre- The Board of Directors reviews its own the nomination of Board members and preneurial risk associated with ownership is performance and procedures once a year. their compensation and makes decisions considered to justify the main shareholder regarding senior management appoint- serving as either Chairman or Member of Members of the Board ments and compensation. The Committee the Board of Directors and of its Commit- The Annual General Meeting elects five also decides on the compensation systems tees and, in this capacity, overseeing the to ten members and no more than three to be used. shareholders’ interests. deputy members to the Board of Directors KONE’s administrative bodies and for one year at a time in accordance with Management officers with the greatest decision-making KONE Corporation’s Articles of Association. power are the General Meeting of Share- The Board of Directors elects a Chairman Full-time Chairman of the Board holders, the Board of Directors of KONE and Vice Chairman among its members. and the President and CEO Corporation, the full time Chairman of the The proposals for Board members are KONE Corporation’s Board of Directors Board and the President and CEO. At the prepared at the Nomination and Compen- appoints the full-time Chairman of the Annual General Meeting of Shareholders, sation Committee and under the steering Board and the President and CEO. The the shareholders approve the consolidated of the Chairman of the Board. During the Board determines the terms and conditions financial statements, decide on the distribu- preparation and in the proposal to the of employment of the full-time Chairman tion of profits, select the members of the General Meeting of Shareholders attention of the Board and the President and CEO, Board of Directors and the auditors and is paid to the board candidates’ broad and and these are defined in their respective determine their compensation. mutually complementary background, written contracts. The Chairman of the KONE Corporation’s Annual General experience, expertise, age, gender and Board prepares matters to be considered by Meeting is convened by the Board of Direc- views of both KONE’s business and other the Board together with the President and tors. According to the Articles of Associa- businesses so that the diversity of the board CEO and the corporate staff. The Chairman tion, the Annual General Meeting of Share- supports KONE’s business and its future in of the Board and the President and CEO are holders shall be held within three months the best available way. The independence responsible for the execution of the targets, of the closing of the financial year on a date of the members of the Board is assessed in plans, strategies and goals set by the Board decided by the Board of Directors. line with the independence criteria of the of Directors within the KONE Group. The Finnish Corporate Governance Code. President and CEO is responsible for opera- Board of Directors tional leadership within the scope of the Committees strategic plans, budgets, operational plans, Duties and responsibilities The Board of Directors has appointed two guidelines and orders approved by KONE The Board of Directors’ duties and responsi- committees consisting of its members: Corporation’s Board of Directors. The bilities are defined primarily by the Articles the Audit Committee and the Nomination President and CEO presents operational of Association and the Finnish Limited and Compensation Committee. The Board issues to the Board, and is responsible for Liability Companies’ Act. The Board’s duties has confirmed rules of procedure for both implementing the decisions of the Board. include: Committees. The Secretary to the Board • compiling of the Board of Directors’ acts as the Secretary of both Committees. Executive Board report, interim reports and financial The Audit Committee monitors the The Executive Board supports the President statements Group’s financial situation and supervises and CEO in executing the corporate strat- • ensuring the proper organization and reporting related to the financial state- egy. The Executive Board follows business surveillance of the accounting and asset ments and interim reports. The Audit Com- developments, initiates actions and defines management mittee monitors and assesses the adequacy operating principles and methods in accor- • the preparation of proposals for the and appropriateness of KONE’s internal dance with guidelines handed down by the General Meeting and the convocation control and risk management, as well as Board of Directors and the President and of the General Meetings the adherence to rules and regulations. It CEO. The Executive Board holds regular also monitors and oversees the financial monthly meetings and additional meetings statement and financial reporting process. as required.

1 KONE 2019 CORPORATE GOVERNANCE STATEMENT | CORPORATE GOVERNANCE PRINCIPLES

Corporate governance statement | Corporate governance principles

Risk Management, Internal The KONE internal control framework well as for treasury and tax matters. The Control, Related Party Trans­ is built and based on corporate values, models have been defined to ensure that actions and Internal and Code of Conduct, a culture of honesty and the financial control covers the relevant External Audit at KONE high ethical standards. Such framework is tasks in an efficient and timely manner. KONE Corporation’s Board of Directors has promoted by dedicated leadership, training The interpretation, application and ratified the principles of risk management, programs, positive and disciplined corpo- monitoring of the compliance of account- internal control and internal auditing to be rate culture and working environment as ing standards is centralized in the Global followed within the Group. well as by attracting and promoting dedi- Finance and Control function, which main- cated and competent employees. tains, under the supervision of the Audit Risk management KONE internal controls are designed Committee, the KONE Accounting Stan- KONE’s Risk Management function coor- to manage, eliminate and mitigate the dards. Reporting and forecasting contents dinates and develops a systematic assess- relevant operational, financial, and compli- are defined in the KONE Accounting and ment of risks and opportunities within core ance risks, and they are linked to KONE’s Reporting Instructions. These standards and business planning and decision-making processes and employee job roles. Controls instructions are maintained and updated processes together with the Strategy Devel- are supported by global and local policies centrally by the Global Finance and Control opment function. and principles, and control design is con- function and applied uniformly throughout KONE Risk Management function tinuously maintained by incorporating the KONE. oversees and facilitates the assessment of changes and development from the busi- KONE has a global enterprise resource risks and opportunities related to KONE’s ness operations and information systems. planning (ERP) system which is built to business environment, operations, assets KONE business units are responsible reflect the KONE Accounting Standards and financial performance in order to limit for implementing the control framework and KONE Accounting and Reporting unnecessary or excessive risks. KONE’s and for monitoring adherence of globally Instructions. KONE applies a controlled business units are responsible for identify- and locally agreed policies and principles. change management process ensuring that ing, assessing and managing risks that can Global Finance and Control has the over- no changes to the financial reporting logic threaten the achievement of their business sight responsibility of the overall frame- of the ERP system can be made without objectives as part of the strategic planning work. approval from the Global Finance and Con- and budgeting processes. Key risks are trol function. Automatic interfaces between reported to the Risk Management function, Internal control procedures different systems are principally applied which consolidates the risk information to over financial reporting in the period-end financial reporting pro- the Executive Board. The Board of Directors Correct financial reporting in KONE’s inter- cess of KONE. Transactional processing is reviews the KONE risk portfolio regularly nal control framework means that its finan- increasingly automated and centralized in based on the Executive Board’s assessment. cial statements give a true and fair view of dedicated shared service centers. The ownership of identified risk exposures the financial performance of the operations Effective internal control over record to is assigned to specific business units, and and the financial position of the group report processes, from business processes the Risk Management function facilitates and that such statements do not include and systems to the financial statements, and follows-up the execution of the identi- intentional or unintentional misstatements is important in ensuring the correctness fied actions. or omissions both in respect of the figures of financial reporting. This is driven by and level of disclosure. the identification of key data elements of Internal control Corporate-wide financial management the business and the quality of the data The goal of KONE’s internal control system and control of operations is coordinated to ensure correct financial reporting and is to ensure that the Group’s operations are by the Global Finance and Control function forecasting ability. efficient and profitable, risks are managed, and implemented by a network of subsid- eliminated or mitigated to an acceptable iary and business entity Controllers within Internal Audit level and that the financial and operational KONE. The Corporation has an Internal Audit reporting is reliable and in compliance with KONE’s monthly business planning Department, which is separate from the the applicable regulations, policies and and financial reporting process represents management. The Head of Internal Audit practices. a key control procedure within KONE in reports to the Chairman of the Board. The The Board’s Audit Committee moni- ensuring the effectiveness and efficiency of Internal Audit Department is responsible for tors the efficiency and functioning of the operations. This process includes in-depth auditing both the internal control system internal control process. The management analyses of deviations between actual and the management of business risks. It is responsible for establishing and main- performance, budgets, prior year perfor- reports its findings to the Audit Committee. taining adequate internal controls and mance and latest forecasts for the business for monitoring the effectiveness as part of on multiple levels of the organization. The Related party transactions operative management. This is supported process covers financial information as well KONE evaluates and monitors related party by dedicated Internal Controls function, as key performance indicators that measure transactions between the company and its which is responsible for facilitating and the operational performance on a busi- related parties. KONE maintains a list of coordinating the internal control design, ness unit and corporate level. The process related parties. KONE’s related parties com- implementation and monitoring across the is designed to ensure that any deviations prise its subsidiaries as well as the Board of organization. from plans, in terms of financial or operat- Directors, the President and CEO, the Exec- ing performance and financial manage- utive Board including any companies con- ment policies are identified, communicated trolled or significantly influenced by them. and reacted upon efficiently, in a harmo- KONE’s Board of Directors has approved More information nized and timely manner. KONE’s financial guidelines on how to recognize, handle, statements are based on this management approve, monitor and report related party Most significant risks and reporting process. transactions. According to the guidelines, uncertainties related to KONE’s Financial control tasks are built into the Corporate Controlling function follows business are described in the Board the business processes of KONE as well as and monitors related party transactions of Directors’ Report. Financial risk into the ongoing business supervision and as part of KONE’s normal reporting and management is described in note monitoring of the management. KONE has control procedures and reports related 2.4 and 5.3. established Financial Control Models for party transactions to the Audit Committee new equipment and service businesses as annually.

2 KONE 2019 CORPORATE GOVERNANCE STATEMENT | CORPORATE GOVERNANCE PRINCIPLES

Corporate governance statement | Corporate governance principles

KONE’s Board of Directors decides on Project-specific insiders are prohibited from Jussi Herlin, the other Board members are any related party transactions which are trading with financial instruments of KONE independent of the Corporation’s signifi- not considered normal business activities until the termination of the project. cant shareholders. or differ from market terms. KONE reports The person in charge of KONE’s insider In 2019, the Board of Directors con- relevant and material related party transac- issues is the Secretary to the Board of Direc- vened 9 times, with an average attendance tions annually in the notes of the consoli- tors. rate of 97%. Jukka Ala-Mello serves as Sec- dated financial statements. retary to the Board and to its Committees. Corporate governance in 2019 External Audit Audit committee The objective of a statutory audit is to Annual General Meeting The Board of Directors’ Audit Committee express an opinion whether the consoli- The Annual General Meeting was held in comprises Jussi Herlin (Chairman), Anne dated financial statements give a true and , on February 26, 2019. Brunila (independent member), Antti Her- fair view of the financial position, financial lin and Ravi Kant (independent member). performance and cash flows of the group, Board of Directors and committees The Audit Committee held 3 meetings as well as whether the parent company’s The Annual General Meeting elected eight in 2019, with an average attendance rate financial statements give a true and fair members to KONE’s Board of Directors. of 92%. view of the parent company’s financial The full-time Chairman of the Board of Caj Lövegren serves as the Head of performance and financial position. Statu- Directors of KONE Corporation is Antti Internal Audit. tory audit encompasses also the audit of Herlin. Jussi Herlin is the Vice Chairman the accounting and governance in the of the Board. The other members of the Nomination and compensation company. The auditor considers whether Board are Matti Alahuhta, Anne Brunila, committee the information in the Board of Directors’ Iiris Herlin, Ravi Kant, Juhani Kaskeala and The Nomination and Compensation Com- report is consistent with the information in Sirpa Pietikäinen. Out of the eight Board mittee comprises Antti Herlin (Chairman), the financial statements and the report of Members, five are male and three female. Matti Alahuhta (independent member), the Board of Directors has been prepared Of the Board members, Matti Ala- Jussi Herlin and Juhani Kaskeala (indepen- in accordance with the applicable legal huhta, Anne Brunila, Iiris Herlin, Ravi Kant, dent member). requirements. Juhani Kaskeala and Sirpa Pietikäinen are The Nomination and Compensation According to the Articles of Associa- independent of the Corporation. With the Committee held 3 meetings in 2019, with tion, the company must have a minimum exception of Antti Herlin, Iiris Herlin and an average attendance rate of 100%. of one and a maximum of three Auditors. The Auditors must be public accountants or public accounting firms authorized by Number of Board and Committee meetings in 2019 Finland’s Central Chamber of Commerce. and participant attendance: The Auditor is elected at the Annual Gen- eral Meeting for a term which expires at Nomination and the end of the following Annual General Audit Compensation Meeting. Board Committee Committee Antti Herlin 9/9 2/3 3/3 Insiders Jussi Herlin 9/9 3/3 3/3 KONE Corporation adheres to the insider guidelines of the Ltd, Matti Alahuhta 9/9 3/3 which have been supplemented with Anne Brunila 8/9 3/3 internal insider guidelines approved by Iiris Herlin 9/9 the Board of Directors. In compliance with Ravi Kant 9/9 3/3 the Market Abuse Regulation, the person Juhani Kaskeala 9/9 3/3 discharging managerial responsibilities in Sirpa Pietikäinen 8/9 KONE Corporation (managers) include the members and deputy members of the Board of Directors, the President and CEO Compensation and other benefits Compensation and other benefits and members of the Executive Board. Man- of the Board of Directors of the Chairman agers are permitted to trade in KONE shares The Annual General Meeting of KONE Cor- The compensation for Antti Herlin, full-time and other financial instruments of KONE poration in February 2019 confirmed the Chairman of the Board, consists of a basic during a six-week period after the release fees of the members of the Board as follows salary and a yearly bonus decided by the of interim reports and financial statements (annual fees in EUR): Board on the basis of the Group’s financial releases. KONE does not maintain a list of result. The yearly bonus may not exceed permanent insiders. KONE has resolved Chairman of the Board 55,000 100 percent of the recipient’s annual salary. to maintain the insider list with respect to Vice chairman 45,000 In 2019, Antti Herlin’s basic salary was EUR each quarter and year-end financial report- Member 40,000 468,488. In addition, his accrued bonus ing. The company also maintains other for 2019 totaled EUR 401,963. He was also project-specific insider lists when necessary. Of the annual remuneration, 40 percent paid EUR 61,000 as compensation for serv- was paid in class B shares of KONE Cor- ing as Chairman of the Board. Antti Herlin’s poration and the rest in cash. It was also holdings of shares are presented in the More information confirmed that a meeting fee of EUR 500 table on page 93. is paid for each meeting of the Board and The full-time Chairman’s retirement age This statement is available on its committees but anyhow EUR 2,000 fee and pension are determined in accordance the company’s web pages at per those Committee meetings for the with Finland’s Pensions Act. No separate www.kone.com and it has been members residing outside of Finland. Board agreement regarding early retirement has given separately of the Board of members’ travel expenses and daily allow- been made. Directors’ report. ances are compensated in accordance with the company’s travel expense policy.

3 KONE 2019 CORPORATE GOVERNANCE STATEMENT | CORPORATE GOVERNANCE PRINCIPLES

Corporate governance statement | Corporate governance principles

President and CEO on the basis of the incentive plan, the 2019 and the changes occurring in them Henrik Ehrnrooth serves as KONE Corpora- members of the Executive Board received during the financial year are presented in tion’s President and CEO. a reward 131,794 KONE class B shares the table below. together with a cash payment equal to the Compensation and other benefits amount required to cover taxes and similar Related party transactions of the President and CEO charges arising from the receipt of shares. Except for management remuneration, The President and CEO’s compensation The corresponding reward accrued from there have not been any material transac- consists of a basic salary and a yearly bonus 2019 and due for payment in April 2020 tions between KONE and its members determined annually by the Board on the is 194,169 KONE class B shares together of the Board of Directors, the President basis of the Corporation’s key targets. The with a cash payment equal to the amount & CEO, the Executive Board including yearly bonus may not exceed 100 percent of taxes and similar charges. No separate any companies controlled or significantly of the recipient’s annual salary. agreement regarding early retirement has influenced by them. Henrik Ehrnrooth’s annual base salary been made for the members of the Execu- is EUR 750,000. In addition, his accrued tive Board. The compensation for the ter- bonus for 2019 totaled EUR 727,500. mination of the employment contract prior Henrik Ehrnrooth’s holdings of shares are to retirement is a maximum of 15 months’ More information presented in the table below. salary, which includes the salary for a six- Henrik Ehrnrooth is included in the month term of notice. As of July 3, 2016, the trades of share-based incentive plan for the Group’s KONE Board and Management senior management. In April 2019, on the Auditing are published as stock exchange basis of the incentive plan for year 2018, KONE Corporation’s Auditors are Jouko releases. Henrik Ehrnrooth received a reward of Malinen, Authorized Public Accountant, EUR 2,579,150 which consisted of 25,344 and PricewaterhouseCoopers Oy, Autho- KONE class B shares together with a cash rized Public Accountants. The fees paid to payment arising from the receipt of shares. companies in the PricewaterhouseCoopers The corresponding reward accrued from chain for 2019 were EUR 3.8 million for More information 2019 and due for payment in April 2020 is auditing and EUR 2.6 million for other con- Board of Directors, page 94 32,531 KONE class B shares together with sulting services. Executive Board, page 95 a cash payment to cover taxes and similar charges arising from the receipt of shares. Insiders Henrik Ehrnrooth’s retirement age and The holdings of the Board of Directors and pension are determined in accordance with Management of KONE on December 31, Finland’s Pensions Act. No separate agree- ment regarding early retirement has been made. Should his employment contract be terminated before retirement, he has the Shareholdings of KONE Board and Management right to the equivalent of 18 months’ salary, on Dec 31, 2019 and changes in shareholding during the period which includes the salary for a six-month Jan 1–Dec 31, 2019 term of notice. Class A Class B Executive Board shares Change shares Change KONE’s Executive Board consists of Presi- Alahuhta Matti 753,943 +337 dent and CEO and 13 Members. Henrik Alfthan Max 58,875 +10,138 Ehrnrooth serves as President and CEO. The other members of Executive Board are Berkling Axel 48,911 +10,138 Max Alfthan, Axel Berkling, Klaus Cawén, Brunila Anne 2,983 +337 Hugues Delval, Ilkka Hara, Thomas Hinner- Cawén Klaus 355,299 +10,138 skov, William Johnson, Mikko Korte, Maciej Delval Hugues 49,186 +10,138 Kranz (from July 1, 2019), Pierre Liautaud, Ehrnrooth Henrik 338,741 +25,344 Tomio Pihkala, Susanne Skippari and Larry Wash. During the year, Executive Board Hara Ilkka 35,502 +10,138 members also included Heikki Leppänen Herlin Antti 70,561,608 - 46,936,478 +100,464 (until 30 June, 2019). Herlin Iiris 134,990 +337 Herlin Jussi 109,277 +380 Compensation and other benefits Hinnerskov Thomas 42,166 +10,138 of the Executive Board The compensation for the members of the Johnson William 126,109 +10,138 Executive Board comprises a base salary Kant Ravi 2,143 +337 and a yearly bonus, based on the Group’s Kaskeala Juhani 2,967 +337 annual result and the achievement of Korte Mikko 55,345 +10,138 personal targets, which can relate to, for Liautaud Pierre 69,283 -4,862 example, strategy execution, safety or qual- ity. The bonus amount is determined by Pietikäinen Sirpa 8,143 +337 the Nomination and Compensation Com- Pihkala Tomio 93,595 +10,138 mittee and may not exceed 50 percent Skippari Susanne 26,669 +10,138 of the annual salary. The Executive Board Wash Larry 69,035 +10,138 members’ holdings of shares are presented in the below table. Heikki Leppänen owned 206,099 KONE class B shares on June 30, 2019. The shares The members of the Executive Board owned by companies in which the Board Member or Management exercises controlling are included in the share-based incentive power and minor children are also included in these shareholdings. plan for senior management. In April 2019,

4 KONE 2019 CORPORATE GOVERNANCE STATEMENT | BOARD OF DIRECTORS

Corporate governance statement | Board of Directors Board of Directors Antti Herlin Anne Brunila Juhani Kaskeala Chairman of the Board b. 1957, D.Sc. (Econ.), D.Sc. (Econ.) h.c. b. 1946, Admiral. b. 1956, D.Sc. (Econ.) h.c., D.Arts h.c., D.Sc. Member of the Board since 2009. Member of the Board since 2009. (Tech) h.c. Previously served as Professor of Practice, Managing Director of Admiral Consulting Member of the Board since 1991. Hanken School of Economics 2014–2018, Oy since 2011. Previously served in the Has served as Chairman of the Board since as Executive Vice President, Corporate Finnish Defence Forces in several positions 2003. Previously served as CEO of KONE Relations and Strategy and Member of the 1965–2009, last as Commander of the Finn- Corporation 1996–2006 and as Deputy Management Team of 2009–2012, ish Defence Forces 2001–2009. Chairman 1996–2003. as President and CEO of the Finnish Forest Current key positions of trust are Member of Current key positions of trust are Chairman Industries Federation 2006–2009, in the the Board of Oy Forcit Ab, Member of the of the Board of Security Trading Oy, Chair- Finnish Ministry of Finance as Director Gen- Board of Nixu Oyj, Senior Advisor of Blic Oy man of the Board of Holding Manutas Oy, eral 2003–2006 and in several advisory and and Member of the European Leadership Chairman of the Board of the Tiina and Antti executive positions in the Bank of Finland Network. Herlin Foundation, Vice Chairman of the 1992–2000 and in the European Commis- Board of Corporation and Member sion 2000–2002. of the Board of Caverion Corporation. Current key positions of trust are Chair of Sirpa Pietikäinen the Board of the Finnish Film Foundation b. 1959, M.Sc. (Econ.) and Member of the Board of Sanoma Cor- Member of the Board since 2006. Jussi Herlin poration. Served as Member of the European Parlia- Vice Chairman of the Board ment since 2008 and as a negotiation theory b. 1984, M.Sc. (Econ) lecturer and consultant since 1999. Previ- Member of the Board since 2012. Iiris Herlin ously served as a Member of Finland’s Parlia- Strategy Development Manager, served at b. 1989, M.Soc.Sc. ment 1983–2003 and as Finland’s Minister Strategy Development at KONE Corporation Member of the Board since 2015. Deputy of the Environment 1991–1995. since 2016. Previously served as Consultant Member of the Board during the years Current key positions of trust are Chair of at Accenture between 2012–2014 and 2013–2014. GLOBE EU, Chair of the Board of the Martha Deputy Member of the Board of KONE Cor- Current key positions of trust are Member of Organisation, Vice Chair of the Board of poration during the years 2007–2012. the Board of Security Trading Oy and Mem- Lammi Savings Bank, Chair of the KVS Foun- Current key positions of trust are Member ber of the Board of the Tiina and Antti Herlin dation Advisory Board and Member of the of the Board of Security Trading Oy, Mem- Foundation. Board of Alzheimer Europe. ber of the Board of Holding Manutas Oy, Member of the Board of the Tiina and Antti Herlin Foundation, Member of the Board of Ravi Kant Kaskas Media Oy and Member of the Board b. 1944, B.Tech. (Hons.), M.Sc., D.Sc. (Hon) of Technology Industries of Finland. Member of the Board since 2014. Previously served in different positions in Tata Motors since 1999, and as Managing Matti Alahuhta Director and CEO from 2005 to 2009 and b. 1952, D. Sc. (Tech.), D.Sc. (Tech.) h.c. after that as the Vice Chairman of the Board Member of the Board since 2003. of Directors until 2014. Prior to that, he was Previously served as President of KONE Cor- Director, Consumer Electronics, Philips India; poration since 2005, and President & CEO Director (Marketing), LML Ltd. and Vice since 2006 to 2014, as Executive Vice Presi- President (Marketing), Titan Watches Ltd. dent of Corporation 2004, as Presi- Current key positions of trust are Member of dent of Nokia Mobile Phones 1998–2003 the Board of Hawkins Cookers Ltd, Member and as President of Nokia Telecommunica- of the Advisory Board of Accenture India and tions 1993–1998. Chairman of the Advisory Board of Akhand- Current key positions of trust are Chairman jyoti Eye Hospital. of the Board of DevCo Partners Corporation, Chairman of the Board of Outotec Corpora- tion, Member of the Board of AB Volvo and Member of the Board of ABB Ltd.

More information

Shareholdings of KONE Corpora- tion’s public insiders are available on page 93.

More information

Corporate governance, page 90.

5 KONE 2019 CORPORATE GOVERNANCE STATEMENT | EXECUTIVE BOARD

Corporate governance statement | Executive Board Executive Board Henrik Ehrnrooth Ilkka Hara Pierre Liautaud President and CEO CFO South Europe, Middle East and Africa b. 1969, M.Sc. (Econ). b. 1975, M. Sc. (Econ). b. 1958, M.Sc (Ecole Polytechnique, Ecole President & CEO of KONE Corporation Member of the Executive Board and Nationale Supérieure des Télécommunica- since 2014. Member of the Executive Board. employed by KONE Corporation since 2016. tions). Previously served as Chief Financial Officer Previously served as GM and CFO of Member of the Executive Board and of KONE Corporation 2009–2014. Earlier Microsoft Phones 2014–2016, in various employed by KONE Corporation since 2011. worked for Goldman Sachs from 1998– leadership roles at Nokia 2004–2014. Prior Previously served in KONE as EVP, West 2009, most recently as a Managing Director to Nokia worked at ABN AMRO 2003–2004 & South Europe, Africa, Customer Experi- in the Investment Banking Division and at and Morgan Stanley 2001–2003. Current ence 2011–2016, in Microsoft EMEA as UBS in various positions from 1994–1998. key positions of trust: member of the Board Vice President, Enterprise & Partner Group Current key position of trust: Member of of Directors at Hartili Oy. 2003–2006, then Area Vice President West- the Board of UPM-Kymmene Corporation, ern Europe 2006–2009. Was CEO at @viso Member of the Foundation Board of the Thomas Hinnerskov (Vivendi-Softbank, 1999–2001) and Activia International Institute of Management Central and North Europe Networks (2001–2003). Also served in IBM Development (IMD, Switzerland), Member b. 1971, M.Sc. (Finance and Accounting) Corporation 1982–1999, most recently as of the European Round Table for Industry Member of the Executive Board and Vice-President Marketing, Internet Division (ERT). employed by KONE Corporation since 2016. (1998) and General Manager, Global Elec- Previously served as Regional CEO for tronics Industry (1999). Max Alfthan ISS Western Europe (2016) and for ISS Marketing and Communications APAC (2012–2016), as well as serving in Tomio Pihkala b. 1961, M.Sc. (Econ.) various other leadership roles at ISS during New Equipment Business Member of the Executive Board and 2003–2012. Prior to ISS, he worked at TEMA b. 1975, M.Sc. (Mechanical Engineering) employed by KONE Corporation since 2014. Kapital 2002–2003, McKinsey & Company Member of the Executive Board since 2013. Previously served as Chief Strategy Officer 2001–2002 and Gudme Raaschou Invest- Employed by KONE Corporation since of Fiskars 2008–2014, Senior Vice President ment Bank from 1995–2000. Current key 2001. Previously served in KONE Corpo- for Communications of Amer Sports Cor- position of trust: Member of the Board of ration as Executive Vice President, Chief poration 2001–2008, Managing Director Caverion Corporation. Technology Officer 2015–2019, Operations of Lowe Lintas & Partners Oy 1998–2001 Development 2013–2015, Vice President, and Marketing Director of Sinebrychoff William B. Johnson Technology Finland 2011–2013, as Director, 1989–1998. Greater China Service Equipment Business, in KONE China b. 1958, MBA 2009–2010, as Director, Product Strategy Axel Berkling Member of the Executive Board since 2012, and Marketing, in KONE China 2007–2008. Asia-Pacific and employed by KONE Corporation since Current key positions of trust: Member of b. 1967, M.Sc. (Econ) 2004. the Board of Toshiba and Building Member of the Executive Board since 2016. Previously served as Managing Director Systems Corporation, and Member of the Employed by KONE Corporation since 1998. of KONE China since 2004, Service Vice Board of Vexve Oy. Previously served at KONE Corporation as President of Asia-Pacific, Carrier Interna- Managing Director of KONE Germany from tional Corporation (United Technologies) Susanne Skippari 2012–2016. Axel has held various regional 2002–2004, as Managing Director Australia, Human Resources commercial roles since 2007, including Carrier Air Conditioning Ltd. (United Tech- b. 1974, M.Sc. (Econ.) managing KONE’s service business in Ger- nologies) 2001–2002, and in various leader- Member of the Executive Board since 2017. many. Prior to joining KONE, he served as ship roles with Otis Elevator Company and Employed by KONE Corporation since 2007. Managing Director of Nass Magnet GmbH Trammell Crow Company. Previously served as Head of Human 1996–1998, and held different roles at Resources in New Equipment Business Arthur Andersen from 1992–1995. Mikko Korte (2015–2017), and Head of Talent Man- Operations Development agement (2007–2008 and 2011–2015). Klaus Cawén b. 1968. M.Sc. (Eng) Susanne has also worked as Area Human M&A and Strategic Alliances, Legal Affairs Member of the Executive Board since 2016, Resources Director for Europe, Middle- b. 1957, LL.M. and employed by KONE Corporation since East and Africa between 2009–2011. Prior Member of the Executive Board since 1991. 1995. to joining KONE, she served eight years Employed by KONE Corporation since 1983. Previously served as Head of New Equip- at Nokia and worked in many Human Previously served as General Counsel of ment Business for KONE Americas Resources roles in Finland and in Argentina. KONE Corporation 1991–2001. 2013–2015, Managing Director for KONE Current key positions of trust: Member of Finland and Baltics 2011–2013, Service Larry Wash the Board of Oy Karl Fazer Ab, Member of Director for KONE Central and North Europe Americas the Board of of Finnish Industries 2007–2011, Service Business Director for b. 1961, M.Sc. (Electrical Engineering), MBA Ltd, Member of the Board of Outotec Plc, KONE Scandinavia 2004–2007 and Service Member of the Executive Board and Member of the Board of Toshiba Elevator Operations Manager for KONE Finland employed by KONE Corporation since 2012. and Building Systems Corporation (Japan), 1999–2004. Previously worked as President of Global and Member of the Supervisory Board of Services for the Climate Solutions sector of Ilmarinen Mutual Pension Insurance Com- Maciej Kranz Ingersoll Rand, as Vice President of service pany. Chief Technology Officer and contracting business for Trane within b. 1964. MBA. Business Administration North and Latin America, and in various Hugues Delval Member of the Executive Board since July, leadership roles with Xerox and Eastman Service Business 2019. Employed by KONE Corporation since Kodak. b. 1971, M.Sc. (Commercial Engineering) July, 2019. Member of the Executive Board since 2017. Previously served at Cisco Systems as Vice Employed by KONE Corporation since 1994. President and General Manager of Corpo- In 2019, Heikki Leppänen served as Execu- Previously served as Senior Vice President, rate Strategic Innovation Group (2013– tive Vice President responsible for New Head of Global Maintenance, Service Busi- 2019), General Manager of the Connected Equipment Business until June 30. ness (2015–2017), Managing Director for Industries Group (2012–2013), Vice Presi- KONE France (2011–2015), and Managing dent of Borderless Networks (2009–2011), Director for KONE Belgium and Luxembourg Vice President of Wireless Networking (2009–2011). Since joining KONE, he has (2006–2009) and Vice President of Ethernet held various regional leadership positions Switching (1999–2006). and roles in several geographies. Current key positions of trust: member of the Board of IoTecha Corporation. 6 KONE 2019