Stora Enso - Annual Report 2004 > Financials > Governance > Comparison to NYSE’s Rules

Comparison to NYSE's Rules

Comparison of Stora Enso’s Corporate Governance Policy to NYSE’s Corporate Governance Rules

Foreign private issuers listed on the New York Stock Exchange must disclose any significant ways in which their corporate governance practices differ from those
followed by US domestic companies under the NYSE listing standards.

As a result of a comparison of Stora Enso’s corporate governance practices to those requirements of Section 303A of the NYSE listing standards that are currently applicable to US domestic companies, the following significant differences have been identified:

Under the Finnish Companies Act, compensation plans based on the market price of the Company’s shares do not require shareholder approval prior to their introduction. The actual issuance of shares or delivery of shares repurchased pursuant to a share repurchase program or otherwise by the Company is, however, subject to shareholder approval. This also applies to option plans pursuant to which the Company intends to issue new shares or deliver its own shares. Section 303A.08 of the NYSE listing standards requires that all equity-compensation plans, with limited exemptions, are subject to approval by shareholders of the Company. Synthetic options issued under Stora Enso’s synthetic option programmes, which entitle the participants to receive a cash payment based on the price of Stora Enso’s Series R shares, do not constitute an equity-compensation plan and are not subject to shareholder approval.

Under the Finnish Companies Act, a general meeting of shareholders of a Finnish company appoints the independent auditor(s) of the Company. Similarly, only a general meeting of shareholders can remove the independent auditor(s) and appoint their successor. Section 303.06 of the NYSE listing standard requires pursuant to Rule 10A-3 of the US Securities Exchange Act of 1934 that the Audit Committee of the Company must be directly responsible for the appointment and retention of the independent auditor of the Company.