Corporate governance principles

SATO Group engages in housing investment activities. Areas of responsibility have been organised in the form of a matrix. The housing business has been divided into three areas of responsibility in SATO Group: rental house investments, home renting and maintenance, and business development. These functions are supported by marketing and communications, financial administration, data administration, procurement, HR management and legal affairs. The management of SATO Group is organised with an eye on clarity and effectiveness.

SATO's Board of Directors has approved the values defined by the personnel: aiming high, human to human, and joy and ease of expertise. Points of departure for all activities within SATO Group are regard for our shared values and activities consistent with them.

The governance of SATO Corporation is organised on the basis of the Limited Liability Companies Act and SATO Corporation's Articles of Association. In addition, the company observes the 2020 Finnish Corporate Governance Code issued by the Securities Market Association. SATO Corporation's shares are not available for public trading. A report on SATO Group's governance and resource management system, as well as a report on salaries and remuneration, are published along with the annual report. The report includes descriptions of risk management, internal auditing and internal supervision.

SATO Corporation has issued bonds listed on the stock exchanges of Finland or Ireland, and the company complies with their rules and regulations on listed bonds, Market Abuse Regulation (MAR), the Securities Markets Act and regulations of the supervisory authority. SATO Corporation is listed on the Nasdaq Helsinki.

The company's Board of Directors has approved an insider guideline concerning trading in SATO Corporation's shares and other financial instruments.

SATO Corporation prepares consolidated financial statements and interim reports according to International Financial Reporting Standards (IFRS) approved in the EU. The company's annual report and the parent company's financial statements have been prepared in accordance with the Finnish Accounting Act. Jones Lang LaSalle issues a statement on the appropriateness and value determination methods for SATO's housing assets and plot reserves.

The company's decision-making power and governance have been divided between the Annual General Meeting, the Board of Directors and the CEO. SATO Corporation's valid Articles of Association were registered on 19 April 2018.

The Annual General Meeting comprises the highest decision-making body in SATO Corporation, the parent company of SATO Group. The Annual General Meeting has established a nomination committee for shareholders and approved its rules. The task of the nomination committee is to prepare proposals to the Annual General Meeting concerning the composition of the Board of Directors and remuneration paid to members of the Board.

The Annual General Meeting elects at least five and at most nine members to the company's Board of Directors and its chair from among the members. The Board of Directors elects the deputy chair from among its members. The majority of members of the Board of Directors must be independent of the company, and at least two majority members must also be independent of significant shareholders. SATO Corporation's Board of Directors has approved rules concerning the tasks, meeting practices and decision-making procedures of the Board.

The Board of Directors appoints the nomination and remuneration committee at an organisation meeting to be held annually after the Annual General Meeting. The nomination and remuneration committee is formed of three to five members selected by the Board of Directors from among their number, one of whom acts as chair. The Board of Directors has confirmed the rules of the committee. The committee holds no independent decision-making power.

The Board of Directors appoints the company's CEO and, when necessary, the deputy CEO. The CEO's tasks are determined on the basis of legislation, the Articles of Association and guidelines issued by the Board of Directors. The CEO is responsible for the company's everyday administration in accordance with guidelines and regulations issued by the Board of Directors. The CEO is responsible for the Group's business operations, its planning and the fulfilment of objectives. The CEO acts as the chair of the Group's management team. The management team handles all matters significant for the management of the Group. The management team is responsible, as led by the CEO, for executing the decisions made by the Board of Directors. The management team holds no authority based on the legislation or the Articles of Association, and its task is to assist the CEO.