Bittium Oyj : Corporate Governance Statement 2023

Corporate

Governance Statement

Reporting Period

Jan. 1-Dec. 31, 2023

Contents

Corporate Governance	4
The Board of Directors	5
Description of Activities	5
Diversity Principles of the Board of Directors	6
The Board Committees	9
Chief Executive Officer	10
Management Group	12
Election and Remuneration of the Auditor	15
Main Features of Internal Control and
Risk Management Processes Related to
Financial Reporting Processes	15
Insider Guidelines	17
Related Party Transcations	18

4 Corporate Governance Statement

Corporate Governance

Bittium Annual Report 2023

Corporate Governance Statement

5

The governance of Bittium Corporation (hereinafter "Company") is determined by the Company's Articles of Association, the laws of Finland (such as the Finnish Limited Liability Companies Act and Securities Market Act) and the Company's Corporate Governance Code.The Company follows the Finnish Corporate Governance Code 2020 prepared by the Finnish Securities Market Association and entered into force on Jan- uary 1, 2020. The Governance Code may be viewed, inter alia, at the Finnish Securities Market Association website at www.cgfinland.fi.

This Statement is made separately from the Report by the Board. The Board's Audit Committee and the Company's auditor have reviewed this Statement. The statutory governing bodies of the Company are the Shareholders' meeting, Board of Directors, Chief Executive Officer and the Auditor. The Management Group supports the statutory governing bodies of the Company.The Com- pany's domicile is Oulu.

This Statement is publicly available on the Company's website at www.bittium.com.

The Board of Directors

The Board of Directors is responsible for the Company´s governance and proper organization of the operations. The Board of Directors comprises of three to seven (3-7) members, and in addition it may have one to three (1-3) deputy members. The Annual General Meeting elects the members of the Board of Directors for a term which expires at the end of the following Annual General

Meeting. The number of terms for the members of the Board of Directors is not limited. The Board of Directors selects a Chairman among its members.

The Board conducts an annual evaluation of the independence of its members in accordance with the recommendation 10. A member of the Board is required to submit to the Company the information necessary to conduct the evaluation of independence. A Board member is also required to notify the Company of any changes in information relating to independence.

The Annual General Meeting held on April 12, 2023, decided that the Board of Directors shall comprise five (5) members. Mr. Erkki Veikkolainen, Ms. Riitta Tiuraniemi, Mr. Veli-Pekka Paloranta, Mr. Petri Toljamo, and Mr. Pekka Kemppainen were re-elected as members of the Board of Directors for a term of office expiring at the end of the next Annual General Meeting. At its assembly meeting held on April 12, 2023, the Board of Directors elected Mr. Erkki Veikkolainen as the Chairman of the Board of Directors. Fur- ther, the Board has resolved to keep the Audit Committee. Ms. Riitta Tiuraniemi (Chair- man of the committee), Mr. Petri Toljamo, and Mr. Veli-Pekka Paloranta were elected as members of the Audit Committee.

Description

of Activities

The Board of Directors has defined a working order and evaluates its performance an- nually. The Board of Directors shall imple-

ment the decisions of the General Meeting. The Board of Directors supervises the operations and management. The Board of Directors makes decisions on the Company´s guiding principles for operation, strategy and budget. The Board of Directors decides on mergers and acquisitions and other strategic alliances as well as significant investments and significant matters regarding organization and finance. The Board of Directors supervises that the control of the Group companies´ accounting and financial affairs is duly organized. The Board of Directors appoints the CEO and possible Deputy for him or her as well as approves the Com- pany´s organizational structure.

The CEO, CFO, CDO and CLO (who acts as secretary of the Board of Directors) attend the meetings of the Board of Directors. Other management attends the meetings when necessary or upon invitation by the Board of Directors. The Chairman of the Board approves the agendas of the meetings of the Board of Directors. The agendas are prepared by the CEO and the CLO.

An annual clock, according to which the regular subjects to be handled are determined, is applied in the Board´s work. In addition to the regular subjects of the annual clock, the most important subjects of the Board during the year were the change of CEO, updating the strategy, lightening the cost structure and reforming the organization.

The Annual General Meeting decides on the compensation of the members of the Board of Directors and the compensations can be publicly reviewed on the Company's website at www.bittium.com.

In 2023 the Board convened 15 times.

The Board members attended the meetings as follows:

January 1-December 31, 2023	Board	Audit committee
Erkki Veikkolainen	15/15
Veli-Pekka Paloranta	14/15	6/6
Riitta Tiuraniemi	15/15	6/6
Pekka Kemppainen	15/15
Petri Toljamo	14/15	6/6

Bittium Annual Report 2023

6 Corporate Governance Statement

Diversity Principles	development and the competence require-	Diversity of the Board is considered from
of the Board of
ments of the Board committees are taken	different perspectives. From the Compa-
Directors	into account. In appointing members of the	ny´s point of view it is important to have
Board, the target is to ensure that the Board	Board members with diverse backgrounds
	as a whole supports the development of the	in terms of competence, training, and ex-
In the Company, diversity is seen as an es-	Company´s current and future business op-	perience of differing business operations,
sential part of corporate responsibility and	erations. Diversity plays a part in supporting	of varying stages of business development,
as a factor in success, that enables achieve-	this goal, so the Company aims to reach a	and of leadership as well as diverse personal
ment of strategic targets and continuous	situation where the facts supporting diver-	characteristics. Experience of international
improvement of customer intimacy.	sity are taken into account as significant	business environments and different cul-
	criteria in planning the composition of the	tures in addition to consideration of age
In planning the composition of the Board	Board of Directors.	and gender will support the diversity of the
of Directors, the requirements of the Com-		Board.The objective is that both genders are
pany´s business operations, the phases of		represented in the Board and the Company

Bittium Annual Report 2023

Corporate Governance Statement

7

aims to maintain a good and balanced dis-	amount of time for the duties required. In	are appointed annually at the Company´s
tribution of genders.	forming the composition of the Board long-	Annual General Meeting.
	term needs and successor planning will be
To fulfill the diversity principles, the diversity	taken into account.	During the financial period ending on De-
principles are taken into account in the pro-		cember 31, 2023, the Board of Directors has
cess to find and assess member candidates	According to the Articles of Association of	comprised five members. Four of the mem-
and representatives of both genders are	the Company, the Board of Directors com-	bers have been males and one female. The
looked for to the process. The status of di-	prises three to seven (3-7) members and in	self-assessment discussions of the Board
versity and progress of the goal mentioned	addition it may have one to three (1-3) dep-	have concluded that the members of the
above are monitored in the self-assessment	uty members. The composition of the Board	Board are so different in their special skills,
discussions of the Board. A person elected	and the number of members shall be such	backgrounds and age and gender that the
as a Board member of the Company must	that they enable the Board to perform its	Board as a whole has therefore been able
have the competence required for the po-	duties efficiently. The members of the Board	to effectively support the business of the
sition and be able to devote a sufficient		Company and its development.

Board of Directors' Annual Clock 2023

Key topics covered during the year

DECEMBER

JANUARY

• Monthly Business Review

• Monthly Business Review

• Business Plan and Budget Approval for the Next Year

• Meeting with Auditors

including Headcount/Recruitment Plan Approval

• Financial Statement Review and Proposals to Shareholders'

for the Next Year

Meeting

• Board Self-Assessment and Action Plan

• CEO's Last Year Performance Review

• Personnel Survey Results and Actions

• CEO's Target Setting for The Next Year

NOVEMBER

• Strategy Health Check and Kick-Off for Strategy Planning

• Monthly Business Review

FEBRUARY I

• Next Year Budget Snapshot for Comments

• Financial Statement Approval

• Compensation Policy and Structure Review

JM

FEBRUARY II

including Incentive and Reward System

FS

• Monthly Business Review

Structure Review

• Corporate Governance Statement

OCTOBER

12

1

Review

• Monthly Business Review

11

2

• Sustainability Review

BR

• Quarterly Business Review (3Q)

JM •

• Compliance Review

10

3

• Next Year Budget and Operational

MARCH

Target Setting

H2

H1

• Monthly Business Review

9

• Risk Management Assessment and

4

• Strategy Workshop

5

BR

Plan Review

8

APRIL I

• Management Successor Plan Review

7

6

• Board of Directors' Assembly Meeting

SEPTEMBER

HYR

APRIL II

• Monthly Business Review

• Monthly Business Review

• Strategy Theme 4

• Quarterly Business Review (3Q)

AUGUST II

• Customer Satisfaction Survey Results

• Monthly Business Review

and Action Plans

• Discussion about Next Year Targets

• Strategy Theme 1

• Investor Relation Strategy Review

MAY

• Bittium Values Review

• Monthly Business Review

AUGUST I

• Next Year Annual Calendar & Annual Clock Approval

• H1 Half Year Financial Report Approval

• Strategy Theme 2

JUNE

• Monthly Business Review

FS: Financial Statement HYR: Half Year Reports BR: Business Review

• Strategy Theme 3

JM: Joint Meeting with management team

Bittium Annual Report 2023

8 Corporate Governance Statement

Bittium Corporation

The Board of Directors

Erkki Veikkolainen

b. 1952, M.Sc. (EE), eMBA Full-time occupation: Mevita Invest Oy, CEO

Positions of trust:

• Bittium Corporation
  (prev. Elektrobit Corporation), Member of the Board 2008-2015, Chairman of the Board 2015-.
• KoskiRent Ltd,
  Member of the Board 2020-.
• Lumous lighting Ltd, Member of the Board 2019-.
• Elcoflex (Suzhou) Co. Ltd, Member of the Board 2007-.
• Elcoflex Ltd,
  Member of the Board 2015-, Chairman of the Board 2006-2015.
• Maustaja Ltd,
  Member of the Board 2006-.

Previous work history:

• Bittium Technologies Ltd
  (prev. Elektrobit Technologies Ltd.), Member of the Board 2011-2015.
• Elektrobit Corporation, Executive Vice President, Contract R&D and Test Business Units 2002-2003.
• Elektrobit Technologies Ltd., Managing Director 2001-2003.
• Elektrobit Ltd., Vice President, Business Development 1998-2001.
• Nokia Mobile Phones, various positions 1985-1998, latest Vice President.

Holdings Dec. 31, 2023:

Holds 1,822,112 Bittium Corporation shares.

Independent as regards both the Company and its significant shareholders.

Pekka Kemppainen

b. 1954, Lic.Sc. (Tech.) Full-time occupation: Professional Board Member

Positions of trust:

• Bittium Corporation, Member of the Board 2019-.
• Valmet Corporation, Member of the Board 2018-.
• Junttan Ltd,
  Member of the Board 2018-.

Previous work history:

• Nestor Cables Ltd, Member of the board, 2020, Chairman of the Board 2021-2022.
• KONE Corporation, Executive Vice President, Service business 2010-2017.
• KONE Corporation, Executive Vice President & Area Director Asia Pacific, 2004-2010.
• KONE Corporation, Senior Vice President, New Elevator and Escalator Business, 1999-2004.
• KONE Corporation, various positions 1984-1999, last R&D and Technology Director.

Holdings Dec. 31, 2023:

Holds 8,326 Bittium Corporation shares.

Independent as regards both the Company and its significant shareholders.

Veli-Pekka Paloranta

b. 1972, M.Sc, (Econ.) Full-time occupation:

Lehto Group Oyj, Chief Financial Officer

Positions of trust:

• Bittium Corporation, Member of the Board and
  Member of the Audit Committee 2020-.

Previous work history:

• Bittium Corporation
  (former Elektrobit Corporation), Chief Financial Officer, 2010-2015.
• Elektrobit Corporation, Director, Finance, 2008-2010.
• JOT Automation Ltd,
  Chief Financial Officer, 2007-2008.
• Elektrobit Group Corporation, Business Controller, 2000-2007.

Holdings Dec. 31, 2023:

Holds 8,562 Bittium Corporation shares.

Independent as regards both the Company and its significant shareholders.

Bittium Annual Report 2023

Riitta Tiuraniemi

b. 1962, M.Sc, Electrical Engineering Full-time occupation:

Professional Board Member

Positions of trust:

• Bittium Corporation,
  Member of the Board 2018-, Member of the Audit Committee 2018-2020, Chairman of the Audit Committee 2020-.
• Skoggi Ltd, Member of the Board 2022-.
• Gratis Finland Ltd, Founder and Chairman of the Board 2022-.
• Wamma Consultants Ltd,
  Founder and Member of the Board 2021-.

Previous work history:

• Skoggi Ltd, Operational Director, Founder and Chairman of the Board 2019-2022.
• HealthOperator Ltd., CEO, Founder and Member of the Board 2014-2019.
• DNA Ltd, CEO 2009-2013.
• DNA Finland Ltd, CEO 2005-2008.
• DNA Networks Ltd, CEO 2004-2005.
• DNA Networks Ltd, CTO, Member of Management Group 1999-2005.
• Omnitele Oy, Department Head, Mobile Communications Consultancy, Member of Management Group 1990-1999.
• Technology Development Centre, TEKES Finland, Senior Technical Adviser, Information Technology 1996-1997.
• Nokia Telecommunications, System Designer,
  Chief System Designer 1986-1990.

Holdings Dec. 31, 2023:

Holds 19,292 Bittium Corporation shares.

Independent as regards both the Company and its significant shareholders.

Petri Toljamo

b. 1974, M.Sc, Radio Engineering, eMBA Full-time occupation:

Professional Board Member

Positions of trust:

• Bittium Corporation, Member of the Board,
  Member of the Audit Committee, 2021-.
• Bittium Corporation,
  Member of the Board, 2018-2020.
• Greowave Oy, Chairman of the Board, 2023-.
• HT Growth Partners Oy, Founder, CEO, and Chairman of the Board, 2022-.
• Moontalk Oy,
  Member of the Board, 2020-2021, Chairman of the Board 2021-.
• Manea Capital Oy, Chairman of the Board, 2016-2023, Member of the Board, 2023-.

Previous work history:

• Keysight Technologies Inc., NEMO Wireless- Network Testing, Vice President and Keysight Technologies Finland Oy, Managing Director and Chairman of the Board, 2017-2022.
• Anite Finland Oy,
  Managing Director and Anite Network Testing Business Unit, Managing Director, 2013-2017.
• Pulse Electronics,
  Mobile Division Director and Pulse Finland, Managing Director 2011-2013.
• Elektrobit Wireless Communications Ltd, Vice President, Device and Network Solutions Business Area, 2010.
• Elektrobit Wireless Communications Ltd, Vice President, Mobile Device Solutions Business Area, 2008-2009.
• Elektrobit Wireless Communications Ltd, Cellular Terminal Solutions Business Area, Director, 2007-2008.
• Elektrobit Wireless Communications Ltd, Platform R&D and Head of Terminal Programs, Director, 2005-2006.
• Elektrobit GmbH, Business Development, Director, 2004-2005.
• Elektrobit Ltd, various product development, project management and business posi- tions, 1996-2004.

Holdings Dec. 31, 2023:

Holds 26,176 Bittium Corporation shares.

Independent as regards both the Company and its significant shareholders.

Corporate Governance Statement

9

The Board

Committees

The proper function of the corporate governance of a company requires that Board work is organized as efficiently as possible. For this reason, the Company has established an Audit Committee.

The Directors on the Committee can concentrate on the matters delegated to the Committee more extensively than the entire Board of Directors. The purpose of the Committee is to enhance the efficient preparation of matters within the competence of the Board, increase transparency and ensure the quality and efficiency of the decision -making of the Board.

The Committee assists the Board by preparing matters falling within the competence of the Board. The Board remains responsible for the duties assigned to the Com- mittee. The Committee has no autonomous decision-making power, and thus the Board makes the decisions within its competence collectively.

The Committee shall regularly report on its work to the Board. The reports shall include at least a summary of the matters, addresses and measures taken by the Committee.

The central duties and operating principles of the Audit Committee are described in the next chapter. The Annual General Meeting decides on the compensation of the members of the Board Committee and such compensations can be publicly viewed on the Company´s website at www.bittium.com.

Bittium Annual Report 2023

10 Corporate Governance Statement

Audit Committee	In addition to Committee members, oth-	Chief Executive
	er regular participants to the Committee	Officer (CEO)
The Audit Committee has the following du-	meetings are CEO, CFO and CLO who acts
ties:	as the Committee´s secretary and option-	The CEO is in charge of the operative man-
• to monitor and assess the reporting pro-	ally auditors. Further, the Committee mem-	agement of the Company in accordance
cess of financial statements;	bers may meet the auditors without the op-	with the Finnish Limited Liability Compa-
• to monitor and assess the financing re-	erative management being present in such	nies Act, the Articles of Association as well
porting system;	meetings. In 2023, the Audit Committee	as the instructions and orders given by the
• to supervise the financial reporting pro-	convened 6 times. The Committee has eval-	Board of Directors. The CEO is responsi-
cess and risk management process;	uated, prepared and reviewed, inter alia, the	ble for the preparation of the Board meet-
• to monitor and assess the efficiency of	following subject matters during the finan-	ings and implementation of any decisions
the Company´s internal control, internal	cial period of January 1, 2023-December	made therein. Further, the CEO is respon-
audit, if applicable, and risk management	31, 2023:	sible for ensuring that the Company´s ac-
systems;	• Financial Statements of 2022;	counting methods comply with the appli-
• to monitor and assess how agreements	• Business Reviews and Half Year Financial	cable law and that the financial matters
and other legal acts between the Compa-	Reports of 2023;	are being handled in a reliable manner. The
ny and its related parties meet the require-	• Annual audit plan for 2023;	CEO prepares strategy, long-term planning,
ments of the ordinary course of business	• Observations based on auditing during the	investments, mergers and acquisitions, fi-
and arm´s -length terms;	financial period;	nancing and makes decisions thereof to the
• to handle the Company´s corporate gover-	• Preparing the appointment of the Com-	extent that such decisions are not tasks of
nance statement and nonfinancial report;	pany´s auditor;	the Board of the Directors. The CEO is re-
• to monitor the Company´s auditing;	• Observations by the internal control;	sponsible for financial planning, the Group´s
• to monitor and evaluate the independence	• Cash flow monitoring and evaluation of	communications and investor relations.
of the auditor and, in particular, the offer-	sufficiency of financing;
ing of services other than auditing ser-	• M&A related issues and their effects on the	Lic.Sc. (Econ.), M.Sc (Tech.) Johan Wester-
vices by the auditor; and	result, balance sheet and financing status	marck is the Company's CEO. He has served
• to prepare the appointment of the Com-	of the Group;	the Company since April 1, 2023.
pany´s auditor.	• Group legal structure related questions;
	and	The Board of Directors defines and approves
The Chairman and the members of the Au-	• Impairment testing of the subsidiary	the essential terms of the service of the
dit Committee are appointed by the Board	shares and goodwill.	CEO, including the CEO´s remuneration, in
of Directors of the Company. At least one		the form of a written agreement. The CEO´s
member of the audit committee must	During 2024 the Committee´s focus areas	service contract is effective until further no-
have expertise in accounting or auditing.	are:	tice and can be terminated by the Company
The Board of Directors elected in the An-	• Near future changes in sustainability re-	with twelve (12) and by the CEO with six (6)
nual General Meeting held on April 12, 2023	porting;	months´ written notice.
decided in its assembly meeting held on	• Cashflow forecasting process; and
the same day to elect Ms. Riitta Tiuraniemi	• Development of working capital.	The pension security of CEO is statutory,
(Chairman of the Committee), Mr. Petri Tol-		and he does not have supplementary pen-
jamo and Mr. Veli-Pekka Paloranta as mem-		sion. According to the pension legislation,
bers of the Audit Committee. All members		the lowest limit of the pension age for CEO
of the Committee are independent from im-		is 65 years and 1 month at the moment.
mediate interest of both the Company and
its significant shareholders and they have
long term experience in business manage-
ment.

Bittium Annual Report 2023