Corporate governance principles

SATO Corporation (below also “Company”) is a Finnish housing investment company. Its largest shareholders are institutional investors. The business of SATO Group has been divided into three areas of responsibility: Housing Business, Investments and Commercial Department. These functions are supported by Business Development, Marketing and Communications, Financial Administration, IT Management, Procurement, HR Management and Legal Affairs.

SATO’s values  Human to Human, Be Bold – Aim High, and Joy of Succeeding Together  have been defined by personnel and adopted by the Board of Directors. All activities within SATO Group start out with regard for our shared values and activities consistent with them.

The governance of SATO Corporation is based on the Finnish Limited Liability Companies Act and SATO Corporation's Articles of Association. The Company also complies with the 2020 Finnish Corporate Governance Code issued by the Securities Market Association. The shares of SATO Corporation are not publicly listed. SATO Group’s Corporate Governance Statement, which includes descriptions of risk management, internal control and internal management, and its Remuneration Statement are published at the same time as the Annual Report.

SATO has issued corporate bonds, which are listed on the Irish Stock Exchange, and the Company complies with the rules and regulations issued by this Exchange for listed bonds as well as with the EU Market Abuse Regulation, securities markets legislation and the regulations of supervisory authorities.

The Company’s Board of Directors has adopted a set of insider guidelines that cover trading in the shares and other financial instruments of SATO Corporation.

SATO Corporation prepares its consolidated financial statements and interim reports in accordance with the International Financial Reporting Standards (IFRS) approved in the EU. The report of the Company’s Board of Directors and the financial statements of the parent company are prepared in accordance with Finnish accounting legislation. An independent external appraiser is commissioned to issue a statement on the values of SATO's housing portfolio and plot reserves as well as the appropriateness of the methods used to assess the values.

Decision-making power and governance in the Company is divided among the general meeting of shareholders, the Board of Directors and the President and CEO. The currently valid Articles of Association of SATO Corporation were registered on 19 April 2018.

The general meeting of shareholders is the highest governing body of SATO Corporation, the parent company of SATO Group. The general meeting has established a Shareholders’ Nomination Committee and approved its rules of procedure. The duties of the Committee are to prepare proposals concerning the composition of the Board of Directors and the remuneration of Board members for the Annual General Meeting.

The general meeting appoints no fewer than five and no more than nine members to the Board of Directors and also appoints one member of the Board to serve as its Chair. The Board of Directors appoints one of its members to serve as Deputy Chair. The majority of Board members must be independent of the Company and at least two of the members in this majority must also be independent of the significant shareholders. The Board of Directors of SATO Corporation has adopted rules of procedure covering the duties, meeting procedures and decision-making practices of the Board of Directors.

At the organisational meeting held after the Annual General Meeting, the Board of Directors each year appoints the HR and Remuneration Committee. The HR and Remuneration Committee consists of between three and five members appointed by the Board of Directors from among its number. One of the members of the Committee serves as Chair. The Board of Directors has adopted rules of procedure for the Committee. The Committee has no independent decision-making authority.

The Board of Directors appoints the Company’s President and CEO and, where necessary, also his/her deputy. The duties of the President and CEO are determined on the basis of legislation, the Articles of Association and the instructions provided by the Board of Directors. The President and CEO attends to the executive management of the Company in accordance with the instructions and orders given by the Board of Directors. The President and CEO is responsible for the Group’s business operations and their planning and for the attainment of goals. He/she serves as Chair of the Corporate Management Group which deals with all matters central to Group management. The Corporate Management Group’s duties include the implementation of the decisions of the Board of Directors under the leadership of the President and CEO. The Corporate Management Group has no authority under law or the Articles of Association; it serves as a body to assist the President and CEO.