Metsä Board Annual review 2023

METSÄ BOARD Annual review 2023

Attendance at Board and committee meetings by member

responsible for the direction and supervision of Metsä Board Group. Taking into account the scope and nature of the Company’s activities, the Board of Directors is responsible for matters that are economically, commercially or princi- pally significant and far-reaching and thus not part of the day-to-day management of the busi- ness. Among other things, the Board decides on the Company’s strategy, major investments, organisational structure and important financial matters. The Board of Directors ensures that the Company operates responsibly and takes the interests of the Company’s other stakeholders, as well as the collective interests of sharehold- ers, into account. Metsä Board’s Board of Directors has written rules of procedure for its activities. Accordingly, the Board of Directors shall, among other things: • nominate and dismiss the CEO and the deputy CEO and decide on the CEO’s terms of engagement; • organise the Company’s accounting, financial and risk management, and the supervision of the financial and sustainability reporting process, as well as analyse the risks that are the most significant for the group; • supervise the CEO’s management of the Company’s operative management in line with the Board’s instructions and orders; • adopt the Company’s values and the Board’s diversity policy; • monitor and guide the Company’s contribu- tion to sustainable development; • review and adopt the Company’s long-term action plan, strategy, annual action plan and budget; • decide on significant investments, corporate transactions, and take decisions on acquisi- tions, mergers, divestments and closures of business operations; • decide on significant financing arrange- ments, including debt financing, the provision of securities and subsidiary capitalisation; • decide on the assignment or pledging as securities of the Company’s significant fixed assets; • decide on the granting of donations to the extent that they do not fall within the compe- tence of the General Meeting; • decide on the delegation of its powers, subject to express limits of approval and rules of delegation, and the granting and revoking of representation rights;

• convene an Annual General Meeting and supervise the implementation of resolutions it passes; • sign and present to the Annual General Meeting the financial statements and the Board of Directors’ annual review, including the sustainability statement, and prepare a proposal for dividend distribution; • approve and publish a financial statement bulletin, half-year financial report and interim reports for each quarter; • adopt the key policies guiding the Company’s business operations; insider guidelines and disclosure policy governing communications, and supervise their application; • decide on remuneration schemes, their criteria and conditions, as well as monitor their implementation. The Board of Directors’ rules of procedure are available in their entirety on the Company’s website at https://www.metsagroup.com/glo- balassets/metsa-board/documents/investors/ corporate-governance/en/general/metsa-board- board-working-order.pdf . The Board of Directors may delegate within its general competence to the CEO and, conversely, may take a decision on a matter within the general competence of the CEO. On an annual basis, the Board of Directors assesses its own operation and the Company’s corporate governance principles and makes any necessary changes to them. Composition, diversity and independence of the Board of Directors The composition and number of members of the Board of Directors must enable it to carry out its duties effectively. The composition of the Board of Directors takes into account the stage of development of the Company, the ownership base, the specific requirements of the industry and the needs of the Company’s operations. The Board’s objective is to create a diverse Board, but with the proviso that those elected to the Board must have the necessary qualifications and be able to devote the time required to perform their duties. The Board of Directors is composed of female and male members. The Board of Directors has adopted a Diver- sity Policy, which is available on the Company’s website. The Board of Directors recognises the benefits that a diverse Board composition brings to the Company and its shareholders. Diversity

supports the Board’s open working atmosphere, independent role and decision making. The Board’s key role is also to proactively and con- sistently support and challenge the Company’s executive management from a wide range of perspectives. The successful performance of the duties of the Board and its Committees requires a diversity of composition, skills and experience, as well as consideration of the personal qualities of individual Board members. Furthermore, diversity must support the current stage of development of the Company and meet its future needs and business development. Metsä Board has identified experience in different industries and the international operating environment as essential for the diversity of the Board of Directors, in addition to knowledge of the Company’s industry. The Board members’ complementary educational backgrounds, management experience in different areas of the business, and diverse age and gender distribution have also been identified as factors contributing to diversity. Metsä Board’s objective is to have both women and men represented on the Board. The Nomination and HR Committee of the Board takes the diversity principles into account when proposing the composition of the Board to the Annual General Meeting each year. The achievement of the Board’s diversity objectives is monitored as part of the normal activities of the Board and its Nomination and HR Committee. According to the Articles of Association, the Board of Directors shall consist of at least five and at most ten ordinary members elected by the shareholders at the Annual General Meeting for a term of office starting from the end of the General Meeting that elected the member and continuing until the end of the next Annual General Meeting. There is no limit to the number of consecutive terms of office. The Board of Directors shall elect a Chair and Vice Chair from among its members. In 2023, the Board of Directors had nine (9) members, of whom 66.67% were men (6) and 33.33% were women (3). The age range of the Board members was 44–68 years. Of the nine (9) members of the Board of Directors, 88.89% of the members (8) were independent of the Company, and 66.67% (6) were independent of a major shareholder of the Company.

GENDER DISTRIBUTION %

Number of Board meetings

Independence from the Company

Independence from the major shareholder

Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6

Attendance rate (%)

Member of the Board of Directors

Ilkka Hämälä (Chair of the Board) Jussi Linnaranta

14/14

100

Men��67 Women��33

14/14 13/14 13/14 14/14 14/14 14/14 11/11

100

Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

No Yes Yes Yes Yes No Yes No Yes Yes

Hannu Anttila

92 92

Strategy and financial targets

Raija-Leena Hankonen-Nybom

Erja Hyrsky

100 100 100 100 100 100 100

Value creation

Mari Kiviniemi

AGE DISTRIBUTION %

Mikko Mäkimattila (as of 23 March 2023)

Financial development 10 Key figures 12

Jukka Moisio

Timo Saukkonen (until 23 March 2023) Veli Sundbäck (until 23 March 2023) Juha Vanhainen (as of 23 March 2023)

3/3 3/3

Report of the Board of Directors

40–50��11 51–60��33 61–65�� 44 >65��11

11/11

20 72

• Sustainability statement • Sustainability statement assurance report

Consolidated financial statements

Board of Directors’ Committees The Board of Directors may decide to set up committees, if necessary, to prepare and dis- cuss matters falling within its competence, with the assistance of the Board of Directors. The Board has appointed an Audit Committee and a Nomination and HR Committee from among its members. The Board of Directors appoints the chair and members of each committee annually after the Annual General Meeting. The Board and its committees may also be assisted by external advisors. Based on the proposals of the committees, the final decisions on matters within the scope of the committees’ duties are taken by the Board of Directors, with the exception of proposals on the composition and remuneration of the Board of Directors made directly to the General Meeting by the Nomination and HR Committee. Audit Committee The role of the Audit Committee is to assist the Board in ensuring the accuracy, balance, trans- parency and clarity of the Company’s financial reporting, accounting methods, financial state- ments, and other financial information as well as sustainability reporting disclosed by the Com- pany. The Audit Committee regularly reviews the internal control and governance systems and monitors the progress of the reporting of

No members of the Board of Directors are exec- utive officers of the Company. The representation of employees in the man- agement of the Company is organised so that the management team of each of the Company’s production facility includes one employee representative. The Board as a whole has extensive experience in good corporate governance, international business and management, either in operational or fiduciary positions in various industries, including the forest industry, forestry, engineering, the food industry and auditing. In addition, the majority of the Board members have experience in pulp, board and/or paper products. The Board also has years of expe- rience in managing sustainability issues and assessing the risks and opportunities involved. The composition of the Board of Directors and a summary of the Board members’ work history and positions of trust can be found below in the Board members’ introduction and on the Com- pany’s website, https://www.metsagroup.com/ metsaboard/investors/corporate-governance/ board-of-directors/ . In financial year 2023, the Board held a total of 14 meetings. Board members attended 97% of the meetings (97% attendance in 2022 and 99% in 2021).

financial and sustainability risks and the financial and sustainability audit. The Audit Committee assesses the effectiveness and scope of internal audit, the Company’s risk management, key risk areas, and compliance with laws and regulations. It assesses the independence of the auditor and audit firm and makes a recommendation to the Board on the election of the Company’s auditor. The Audit Committee also reviews the internal audit’s half-yearly action plans and reports on significant audits. The members of the committee must have sufficient expertise in accounting and financial reporting. The Audit Committee meets regularly, at least four times a year. In connection with its meetings, the committee shall consult the Company’s auditor. The Chair of the committee shall report to the Board of Directors on each meeting of the Audit Committee. The duties and responsibilities of the Audit Committee are set out in its charter, which is approved by the Board of Directors ( https://www.metsagroup.com/glo- balassets/metsa-board/documents/investors/ corporate-governance/en/general/metsa-board- rules-of-procedure-for-audit-committee.pdf ). The Company’s auditor, the CEO and CFO, as well as other management representatives and external advisors, are also represented at the Audit Committee meetings when invited by the committee.

78 Notes to the consolidated financial statements 126 Parent company financial statements 129 Notes to the parent company financial statements 142 The Board’s proposal to the Annual General Meeting for the distribution of funds 143 Auditor’s Report 147 Shares and shareholders 151 Ten years in figures 152 Taxes 153 Production capacities 155 Calculation of key ratios and comparable performance measures Corporate governance 157 Corporate governance statement 165 • Board of Directors of Metsä Board 168 • Corporate Management Team of Metsä Board

170 Remuneration report 174 Investor relations and investor information

158

159

Corporate governance statement | METSÄ BOARD ANNUAL REVIEW 2023