The Nokia House, Nokia's head office in Keilaniemi, Espoo, Finland.

NOKIA’S
CORPORATE GOVERNANCE &
CORPORATE SOCIAL RESPONSIBILITY

1
 STUDENT UNDERTAKING

This is to certify that we have completed the Project titled

“Corporate Governance & CSR of Nokia” under the
guidance of Prof Sameer Virani in partial fulfillment of the
requirement for the award of degree of Bachelor of
Management Studies at Rizvi College of Arts, Seience &
commerce. This is an original piece of work & we have not
submitted it earlier elsewhere.

ROLL NO. NAME: SIGN

105 Jyoti Singh
86 Atul kumar Pandey
100 Muzaffar Shaikh
89 Asim Qureshi
71 Jangle Sanchit

2
 ACKNOWLEDGEMENT

We would like to thank my Project Guide Prof. Sameer Virani

for his immense guidance, valuable help and the opportunity
provided to us to complete the project under his guidance.
I would like to thank all faculty members of Rizvi College of
Arts, Science & Commerce for guiding and supporting me in
the completion of project from time to time.

Last but not the least, my gratitude to great almighty and my

parents without whose concerned and devoted support the
project would not have been the way it is today.

ROLL NO. NAME: SIGN

105 Jyoti Singh
86 Atul kumar Pandey
100 Muzaffar Shaikh
89 Asim Qureshi
71 Jangle Sanchit

SUBJECT PROFESSOR CO-ORDINATOR

(Prof. Sameer Virani) (Furkan Shaikh)

3
 CERTIFICATE

This is to certify that the project titled “corporate

governance & corporate social responsibility” is
an academic work done by the following student
submitted in the partial fulfillment of the requirement for the
award of the degree of bachelor of management studies
under my guidance & direction.

To the best of my knowledge and belief the data &

information presented by them in the project has not been
submitted earlier.

ROLL NO. NAME: SIGN

105 Jyoti Singh
86 Atul kumar Pandey
100 Muzaffar Shaikh
89 Asim Qureshi
71 Jangle Sanchit

(Prof. Sameer Virani) (Furkan Shaikh)

PROJECT CO-ORDINATOR CO-ORDINATOR

4
5
 INDEX

SR.NO CONTENT PG.NO

1. INTRODUCTION & HISTORY OF NOKIA 6-8

2 VISION, MISSION & STATEMENT & VALUE OF NOKIA 9-12

3 HOW NOKIA’SBUSINESS STANDS 13-15

4 SOCIAL & ECONOIMIC OBJECTIVE OF NOKIA 16-18

5. CORPORATE CULTURE, ETHICAL BUSINESS 19-24

PRACTICES & CSR

6 WHAT IS CORPORATE GOVERNANCE 26-30

7 PROBLEMS OF CORPORATE GOVERNANCE 31-32

8 CORPORATE STRUCTURE OF NOKIA 33-41

9. NOKIA CODE OF CONDUJCT 42-46

10 WHAT IS CSR:- DEFINATION 48-50

11. CSR OF NOKIA 51-54

12. CSR ACTIVITIES OF NOKIA 55-63

13. CASE STUDY ON NOKIA 64-67

12. BIBILIOGRAPHY 68

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 INTRODUCTION

Nokia is a world leader in mobile communications, driving the growth

and sustainability of the broader mobility industry. Nokia connects people to
each other and the information that matters to them with easy-to-use and
innovative products like mobile phones, devices and solutions for imaging,
games, media and businesses. Nokia provides equipment, solutions and services
for network operators and corporations. Nokia is a broadly held company with
listings on four major exchanges.

Nokia Corporation (Nokia) is a manufacturer of mobile devices and mobile

networks. Nokia connects people to each other and the information that matters
to them with mobile devices and solutions for voice, data, and imaging, games,
multimedia and business applications. The Company also provides equipment,
solutions and services for its operator and enterprise customers. Effective
January 1, 2004, Nokia reorganized its structure into four business groups:
Mobile Phones, Multimedia, Enterprise Solutions and Networks. During the year
ended December 31, 2004, Nokia announced a total of 36 new mobile devices in
a wide variety of designs and technologies for all segments and at all price
points. Of the products launched, 34 had color screens and 23 were camera
phones, including its first mega-pixel camera phone, the Nokia 7610. In 2004,
Nokia sold 10 million phones with integrated music players.

The company includes four business groups:

• Mobile Phones
• Multimedia
• Enterprise Solutions and
• Network.

Nokia also includes two horizontal groups that support the mobile device
business groups:

• Customer and Market Operations

• Technology Platforms.

Nokia, the Finnish telecom giant is today one of the world’s most admired
companies. Fortune magazine1 has referred to Nokia as the “least hierarchical
big company in the world". Nokia generates revenues of $19.9 billion and
employs about 55,000 people. Its shares are listed on the New York, Helsinki,
Stockholm, London, Frankfurt and Paris stock exchanges. Networks deals with
data, video and voice network solutions. Mobile Phones are the clear global

7
leader. Many of the standard features of today's mobile phones, such as large
graphic displays, signal and battery indicators, colored covers and ringing tones
were originally developed by Nokia. Communication products include
multimedia terminals for digital TV and interactive services via satellite, cable
and terrestrial networks.

HISTORY

Nokia was set up in 1865, when a Finnish mining engineer, Fredrik Idestam
established a wood pulp mill on the banks of the Nokia river in southern Finland
to manufacture paper. In 1967, three companies, the Nokia Forest Products
Company, Finnish Cable Works and Finnish Rubber Works merged. As Cable
Works had expertise in power transmission cables and phone lines, Nokia
decided to start an electronics division to diversify into telecom products in
1960.

The decision to move into electronics was well timed. Semi conductor
technology was just evolving and Nokia, despite being a newcomer, was not
seriously handicapped in any way. It was Bjorn Westerlund, president of Cable
Works who mooted the idea. Westerland tied up with colleges and universities
and hired technically competent people to implement the project.

CO-FOUNDER OF NOKIA FOUNDER OF NOKIA

Leo machelin Fredik Idestam

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In the early 1970s, Nokia began developing a switch equipped with computer
software and Intel's microprocessors. Called the DX 200, the switch evolved
into a multifaceted platform, still the basis of Nokia's network infrastructure.
The leadership of Kari Kairamo, who became Nokia’s CEO in 1977, played a
crucial role in Nokia’s evolution as a leader in mobile phones. Kairamo, himself
had little knowledge of the business, having been associated with the forest
products division. He, however, showed extraordinary initiative, by recruiting
outside talent and empowering the young engineers in the electronics division.

In 1981, the Scandinavian countries came together to set up a multinational

cellular network, called Nordic Mobile Telephony (NMT). Many other countries
also accepted NMT. The system offered competitive prices, and international
roaming facilities, and quickly gained popularity the world over. While Swedish
company Ericsson rapidly emerged as the global leader in the cellular network
equipment business, Nokia gradually strengthened its capabilities in the mobile
handsets segment. Soon mobile phones began to evolve as an affordable
communication medium even for the common man.

In the late 1980s, the European conference of Postal and Telecommunications

Administration (CEPT) decided to develop a common standard for digital
mobile telephony. This standard came to be known as GSM* (Global System
for Mobile Communications). Nokia committed itself to GSM technology very
early on and signed agreements to supply GSM networks to nine other European
countries.

The Nokia House, Nokia's head office located by the Gulf of Finland in Keilaniemi,
Espoo, was constructed between 1995 and 1997. It is the workplace of more than
1,000 Nokia employees.

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1. STATE ITS VISION, MISSION STATEMENT AND THE VALUE
SYSTEM PRACTICED BY THE ORGANISATION.

VISION
Ten years ago, nokia had a vision that seemed revolutionary for the times: Voice
Goes Mobile! As history shows, this vision became reality in an incredibly short
amount of time. With more than 1.6 billion mobile phone subscriptions globally
– and more mobile phones than fixed-line phones in use – nokia see that
mobility has transformed the way people live their lives.

Today, Nokia sees mobility expanding into new areas such as imaging, games,
entertainment, media and enterprises. There are new mobile services already
taking our industry forward and creating new opportunities. At the same time,
major opportunities still exist in bringing mobile voice to completely new users.

If it can go mobile – it will!

MISSION: CONNECTING PEOPLE

By connecting people, nokia help fulfill a fundamental human need for social
connections and contact. Nokia builds bridges between people – both when they
are far apart and face-to-face – and also bridges the gap between people and the
information they need.

THE NOKIA VALUE SYSTEM

Flat, networked organization, as well as speed and flexibility in decision-

making, characterize the Nokia Way of working. Equal opportunities and
openness towards people and new ideas are also key elements we want to
nourish. Nokia is straightforward when dealing with customers and suppliers
and always looks for innovative ways of creating and introducing products and
solutions to the market. We provide individuals with a platform for personal
growth in a challenging environment with a clear vision, goals and shared
management principles - the Nokia Way. The Nokia Way brings together
talented individuals who share these principles, and therefore share success.
Nokia’s values are key components of the Nokia Way. Believing in these core
values and living them every day is our common bond and shared philosophy.
These values drive Nokia colleagues, wherever they are in the world.

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 Reduction in size of Nokia mobile phones
The Nokia Booklet 3G mini laptop.

Evolution of the Nokia Communicator.

Models 9000, 9110, 9210 and 9500 shown.

The Mobira city man 150, Nokia’s NMT 900

Mobile from 1989 compared to Nokia 1100
From 2003

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Customer Satisfaction:

Creating customer satisfaction is the basis of our strategies and actions. Our
customers and end-users are the most important people for Nokia, and we need
to all understand how our work will benefit them. Customer satisfaction is about
meeting the existing needs of our customers, but even more important is the
ability to anticipate their emerging needs, and create solutions to fill them. We
should all be committed to producing high quality solutions, products and
services.

Respect:

Treating one another with trust and respect is a cornerstone of the Nokia values,
and essential for building an open and honest spirit at the workplace. Our culture
allows us to depend on each other, and communicate openly and honestly. Nokia
is a global and multi-cultural company. We seek diversity, because it is an
important asset that enables us to achieve extraordinary results. Respect also
describes our attitude to the surrounding world. In today's networked operational
mode, we are working with an increasing number of partners, and we should
care for and respect them. We also value the environment and communities
around us.

Achievement:

Nokia strategies and goals need to be inspirational and easily understandable,

but the drive to achieve can only start from within each of us. Everyone at Nokia
should genuinely say: "I care!" All have a responsibility to contribute to Nokia's
success. Professionalism is at the heart of everything we do, and it is understood
that everyone will strive to excel at his or her job. Still, no one can realize
company goals alone. That's why the Nokia Way aims to connect people in
teams, not for the sake of debating the goals, but for reaching them faster. We
recognize and celebrate our individual and shared achievements.

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Renewal:

Nokia has a willingness to change and develop. The environment in which we

do business is evolving continuously. To succeed, we must have the passion and
courage to look for new ideas beyond existing products, services and ways of
working. Only with truly innovative ideas will we be able to define the future
development of our industry and profoundly shape the way in which people
understand and use mobility in their everyday lives.

Management and Leadership

Nokia has a distinctive management and leadership approach based on the Nokia
Way at all levels. This creates commitment, passion and inspiration through
collaboration and coaching, and ensures focus and efficiency by setting targets,
fulfilling goals and reviewing results. Personal growth through self-leadership
provides the foundation for successful management and leadership practices.
Employees are encouraged to be responsible for their own development and to
take advantage of the various development opportunities available.

Employee Participation

Nokia encourages open discussion and debate. As an example, the annual

globally conducted ´Listening to You´ employee survey is a powerful way of
getting feedback from our employees on a range of important issues. We listen
to the views of our employees and act on them when designing our people
policies and practices.

Another example in addition to this annual survey, other issue-specific surveys

and focus group discussions, is the "Ask HR" feedback channel on our human
resources Intranet. There, every employee can comment or ask questions about
our people practices and processes, even anonymously, and receive a prompt
and openly published response.

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2. DEFINE HOW BUSINESS STANDS ON
• VALUES
• VIABILITY
• PUBLIC VISIBILITY

Ans.
 NOKIA VALUES

The Nokia values are a statement of how Nokia should operate as a cornerstone
of the company's corporate culture. They are the standards of behaviour
expected of all Nokia employees. The values form a common bond and language
as well as shared philosophy for working together. Nokia's values are customer
satisfaction, respect for the individual, achievement and continuous learning.
Customer satisfaction is the basis of all Nokia's operations. Respect for the
individual means that Nokia believes in the individual, whether she or he is an
employee, a business partner or a customer. It also means open and candid
communication, fairness, mutual trust and acceptance of diversity. Achieving
results requires that every Nokia employee is working according to a strategy
and well defined goals. Everyone in the company must know the goals of the
company as well as those set for him or her. To be a leader in the
telecommunications industry takes innovation, courage and a constant
willingness to learn. Continuous learning means that everyone is entitled to look
for ways to improve their performance.
Nokia wants to create an environment where employees, customers and
suppliers and other cooperation partners feel the empowerment to develop
and improve their relations through a common exchange and development of
ideas

 NOKIA WAY

Nokia is proud of its historical and current commitment to being a company

based on principles and values. A few fundamental and interrelated values and
principles unite the company across its locations and form the basis of Nokia's
distinctive culture as well as its business success. The values and principles will
continue to provide the foundation for our long term success also in the future
Today, Nokia is one of the most visible companies in the world. It sells its
mobile phones in more than 130 countries. Its GSM technology is used by 87
operators in 39 countries. Nokia has offices in more than 50 countries. Its R&D
centres are spread over 4 continents in 14 countries - Australia, Canada, China,
Denmark, Finland, Germany, Hungary, Italy, Japan, Malaysia, Korea, Sweden,
UK and the US. Nokia carries out manufacturing activities in 10 countries.

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15
Table below gives details of Nokia’s important markets.
Nokia: Important Markets
1999 1998
Sales in Sales in
Country Euro Million Euro Million
USA 3360
1996
China
2332 1753
UK 1855
1205
Germany
1679 1135
Italy 968 752
France 951 776
Brazil 600 250
Netherlands 544 269
Finland 479 465
Australia 437 293

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  PUBLIC VISIBILITY

Nokia’s Ventures Organization takes care of new business areas while its
research centre interacts closely with different business units to strengthen the
company's technological competitiveness. In 1999, Nokia had a commanding
27% share of the global mobile phones business, with Motorola coming a poor
second with 17%. According to brand consultancy firm Interbrand, Nokia was
the eleventh most valuable brand in the world in 1999. In early 2000, Nokia also
had the largest market capitalisation among European companies.

Nokia struggled in the late 1980s as the mobile phones business continued to
make losses. To worsen matters, the collapse of the Soviet Union in 1991
resulted in the loss of a strategically important market. Nokia also faced intense
competition from Motorola, which had much stronger manufacturing
capabilities. In 1991, as the situation looked gloomy, a bank which held the
largest shareholding in Nokia, made an unsuccessful attempt to sell its stake to
Ericsson. The turning point for Nokia came in February 1990, when Jormia
Ollila was put in charge of the mobile phones business. Ollila recalled the
instructions he had received from seniors in the company1: “Look, you get six
months to make a proposal on whether we sell it or what we do with this
business.” Ollila replied after four months that the business was worth
retaining.

Ollila streamlined Nokia’s R&D activities, divested non core operations and
invested heavily in brand building. The R&D centre in UK designed a phone
that was small and light and could compete with small analog phones already
available in Japan. Nokia also came up with a big screen and built several PC
like capabilities into its phones. Nokia’s 2100 series, shipped in 1993, became a
runaway success. Its digital technology was a big hit in the US2. The way Nokia
managed the project gave it tremendous confidence in its global capabilities.
Coordinated from UK, but with inputs from different parts of the world,
especially strategically important markets like Japan, the product development
efforts had a truly transnational approach. In 1994, Nokia became the first
manufacturer to launch mobile phones for all major digital systems: GSM, GSM
1800 (PCN), TDMA3 and Japan Digital. In 1997, Nokia also began to offer
phones conforming to CDMA4 and GSM 1900 standard.

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3. ELICIT THE SOCIAL AND ECONOMIC OBJECTIVES OF ITS
BUSINESS AND HOW THESE ARE RECONCILED AND BALANCED
TO ESTABLISH THE EQUILIBRIUM.

ANS.

By conducting business in a responsible way, Nokia can make a significant

contribution to sustainable development, at the same time building a strong
foundation for economic growth." Nokia Chairman and CEO, Jorma Ollila
Mobile communications is now an established force for social and economic
development. Corporate responsibility for Nokia means acknowledging and
responding to the impacts of our business on society and the environment. As
market leader and a global company, Nokia takes its responsibilities seriously.
Sound company ethics makes business sense by helping to minimize risk,
ensuring legal compliance, enhancing company efficiency and building
reputation amongst stakeholders.

• SOCIAL OBJECTIVES

Nokia with its mission to 'connect people' is the world leader in mobile
communications. The company is deeply concerned about ethical business
practices and believes that personal and organisational integrity is essential to
long term relationships- whether with customers, employees or stakeholders.
The organisation is committed to development initiatives and is supporting
numerous projects in partnership with several community and charitable
organizations worldwide.

1. The focus of its community initiatives are centered on education,

corporate giving and disaster relief.

2. Keeping in line with their international programmes of employee

volunteering called 'Helping Hands', Nokia India is involved with an NGO
working with children with disabilities in Delhi.

3. Nokia's employees provide support to the NGO in terms of help

and training in accounts, human resources, IT, working with children and
other activities. Environment is another issue that is high on the agenda of the
company.

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 4. The packagings of all their phones are made from recycled paper.
Clear instructions are also provided for correct disposal of used batteries with
every handset.

5. Nokia is also set to launch its volunteering programmes involving

all its employees.

A market leader in the cellular industry in Asia Pacific, Nokia provides

innovative, industry- leading and market relevant technology and products to
around 20 diverse markets in the region.

Backed by its experience, innovation, user-friendliness and reliable solutions,

the company has become the leading supplier of mobile phones and a major
supplier of broadband and IP networks. By adding mobility to the internet,
Nokia creates new opportunities for companies and further enriches the daily
lives of the people. Nokia is a broadly held company with listings on six major
exchanges.

• ECONOMIC OBJECTIVES

1. Economic Mission at Nokia is, foremostly, to drive a profitable and

growing business.
2. By conducting business in a responsible way, Nokia can make a
significant contribution to sustainable development, at the same time
building a strong foundation for economic growth.
3. Decreasing costs, and building reputation amongst stakeholders.

• PARITY BETWEEN SOCIAL AND ECONOMIC OBJECTIVES

Mission at Nokia is, foremostly, to drive a profitable and growing business, but
that does not mean business at any cost. Conducting our business in an
environmentally responsible way is one very important way to ensuring and
enhances long-term profitability.

 Sound environmental principles make business sense by helping minimize

risk, ensuring legal compliance, decreasing costs, and building reputation
amongst stakeholders.
 By conducting business in a responsible way, Nokia can make a
significant contribution to sustainable development, at the same time
building a strong foundation for economic growth.
 A strong spirit of cooperation, an ongoing open dialogue, and a
determination to learn from each other – be it the public sector, civil

19
 society or the private sector - is imperative in steering the best course of
action as we go forward.
 Nokia’s goal – responsibility – is to ensure that information and
communication technologies continue to create sustainable economic
growth, foster social cohesion and sustain free markets.
Just as the mobile communications industry has contributed to the wealth
creation in the industrialized countries over the last ten years, it is imperative
that we do not lose sight of the opportunity this offers for the rest of the world.
Through providing low-cost access to communication networks - offering
service at a substantially lower cost than fixed connectivity - the overall good
this will bring to the global community is immeasurable.

It is important for society that companies see the benefit themselves in being
responsible, so that they act proactively, integrate programs into core business
and make a sustainable effort. Doing business in a responsible way makes
business sense to Nokia. It helps to create a sustainable product life cycle,
sustainable employment, sustainable corporate reputation, ultimately sustainable
economic growth

4. WHAT IS ITS MODEL FOR BUILDING BLOCKS TO REPUTAION

OF CORPORATE REPUTATION?

ANS.

Nokia Corporation may be Europe’s most stunning example of how master

brand building unifies companies and multiplies value. Once a weak
conglomeration of rubber, wood, and cable companies, Nokia established a firm
foothold in the early cellular business in the 1980s. But before the company
could reach full stride in its new technology mode, Nokia lost its CEO to suicide
and its biggest customer with the fall of the Soviet Union. A few years later,
current CEO Jormia Ollila took over and began creating a master brand
company inside and out.

The people of Nokia think and work in harmony, thanks in part to The Nokia
Way, a series of internal meetings that somehow consistently yields just enough
centralized direction to enable its people to press forward in a sort of organized
creativity. Some of the moves that company leaders have taken to make Nokia a
very special master brand company:

• They have created products that have universal acceptance, such as

cellular phones that adhere to all three major protocol standards, but use
the same look and housing around the globe.

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 • They adopted a corporate culture that is both disciplined, yet creative, and
has been called “perhaps the least hierarchical company in the
world;”

• They studied the great global brands of the world (Nike, Daimler-Benz)
and adopted what they call a similar “holistic” approach to manufacturing
and marketing (we call it a master brand approach), which includes using
the Nokia brand meaning as a lens when designing, distributing,
marketing, and selling a product.

Nokia is now the world’s leading supplier of cellular phones and in a strong
position to compete effectively in a huge spectrum of technology sectors. As
ultimate proof of the wisdom of its master brand strategy, stockholder value has
multiplied +2,300% in the last five years.

5. ITS CORPORATE CULTURE, ETHICAL BUSINESS PRACTICES

AND CORPORATE SOCIAL RESPONSIBILTY.

CORPORATE CULTURE:-

A team of five senior executives is generally credited with Nokia’s success.

These are Pekka Ala Pietila, president, Matti Alahuta, head of Mobile phones,
Sari Baldant, head of Nokia Networks, Olli Pekka Kallasuvo, finance director
and Ollila himself. The team has been remarkably stable, having worked with
the company for more than 15 years.

Nokia’s informal work culture lays emphasis on the empowerment of frontline

employees. A production manager at Nokia’s factory in FortWorth, USA
remarks1: “That’s unique to Nokia – the freedom a group is allowed to take.
There are certain shared systems we keep as standard, but you’re allowed to be
creative.” A senior executive explains: “The objective is to always have
decisions made by the people who have the best knowledge.” Indeed, Nokia’s
organisation structure seems to be so loose and flexible that a human resource
manager at Nokia’s US headquarters in Texas has commented: “People who join
Nokia spend a few months trying to figure it out. You really have to figure out a
network of people to get things done.”

According to Nokia's 1999 Annual Report, "Despite our growing size, our
culture remains that of an independent, innovative and creative start-up. We aim
to maintain this culture no matter how large we may become. We believe that
the best way to achieve this is less through traditional management and more
through leadership." According to Industry Week, “At Nokia, there is a

21
palpable culture of tolerating mistakes and encouraging people to learn and
develop.”

Creative organisations promote entrepreneurship among frontline employees and

empower them. Yet, without discipline, an informal and flexible work culture
can easily degenerate into chaos. At Nokia, a few senior executives have been
given the responsibility for global coordination and ensuring that core standards
are uniformly imposed across subsidiaries.
For example, all new design ideas are scrutinized by the chief designer, Frank
Nuovo, who is responsible for the continuity – the ‘face and soul’ of the
product. Ollila himself believes in strong financial discipline and is prepared to
exit from businesses which are growing at a rate of less than 25% a year.

Besides these formal mechanisms, Nokia’s annual meetings, referred to as the

‘Nokia way,’ are used to exchange notes and set priorities. After a
brainstorming exercise, top managers define the company’s vision, which is
communicated to the lower layers of management through formal presentations.
These meetings also come up with appropriate slogans that help in conveying
the company’s corporate purpose across the organisation. In 1992, Nokia
declared that it would be in ‘telecom oriented, focused, global, value added’
businesses. Four years later, Nokia’s goal was to play ‘a leading, brand
recognized role in creating the mobile information society.' A more recent
slogan has been to “bring the Internet to everybody’s pocket.”

In mid 1998, Ollila shuffled his top team. In an interview with Business Week
he said: "I want to remove people from their comfort areas, to remove
stubbornness that gets built into the minds of the people. We want to build a
certain amount of chaos and a sense of urgency. Switching also helps people
learn from one another. Infrastructure can learn from handsets about the speed
and product life cycle of consumer electronics. And the phone people can learn
customer relations from infrastructure. It's cross fertilization."

Great leaders set Big Hairy Audacious Goals for their employees. To achieve
these goals, they are prepared to take big risks. In the early 1990s, Ollila bet
heavily on branding and consumer friendly designs to popularise the use of
mobile phones. Nokia also made major commitments ahead of time, in the wake
of the European Community’s attempts to deregulate the telecom industry. It
tied up with smaller players such as Orange in Britain and E-plus in Germany to
grab market share from traditional telecom suppliers.

As Nokia enters the new millennium, it faces new challenges in an industry

where technological change can be devastating. However, it can proudly look

22
back at its past achievements. As a report on its website mentions: “Nokia’s
history has shown that the right decisions made at the right time breed success.
We are confident that this vision and the courage to create new opportunities
will help us achieve our targets as we move into a new era in communications.”

ETHICAL BUSINESS PRACTICES:-

Nokia has been and continues to be deeply committed to being an ethically

sound business; no long term customer, employee or other stakeholder relation
can exist without organization and personal integrity. Nokia is committed to the
highest standards of ethical conduct and full compliance with all applicable
national and international laws. Nokia's goal is to be an industry leader in these
areas as well as a good corporate citizen wherever it does business.

Ethics and Law

Nokia is strongly committed to the highest standards of ethical conduct, and full
compliance with all applicable national and international laws. This includes, for
example, those relating to antitrust and promoting fair competition, corporate
governance, preventing bribery, illicit payments and corruption, publicly traded
securities, safety in the intended use of the products and services Nokia delivers
to customers, labor laws and practices, the environment, human rights laws and
internationally recognized standards, and protecting copyright, company assets
and other forms of intellectual property. Nokia's goal is not mere minimum legal
compliance, but as an industry leader to be among the world’s best in corporate
responsibility, practicing good corporate citizenship wherever it does business.

Nokia respects the privacy and integrity of its stakeholders and endeavors to
adhere to strict standards when processing personal data and product
information. All personal data collected and held by Nokia will be processed
fairly, lawfully and carefully and in a way that protects the privacy of
individuals.

Human Rights

Nokia respects and promotes human rights. Nokia recognizes that certain human
rights should be considered as fundamental and universal. Among those rights
are freedoms from discrimination based on race, colour, sex, language, religion,
political or other opinion, national or social origin, property or birth. Nokia will
not use child or forced labor. Nokia will not tolerate working conditions or
treatments that are in conflict with international laws and practices.

23
Conflicts of Interest. Gifts & Bribes

Nokia employees are strictly expected to avoid conflicts of interest. Nokia and
Nokia people do not pay or offer to pay bribes or illicit payments to obtain or
retain business.

This includes, but is not limited to acceptance and giving of personal gifts or
hospitality, to or from Nokia stakeholders, other than gifts of nominal value or
reasonable hospitality given in the ordinary course of business. Any agreement
or understanding regarding favors or benefits in exchange for the gifts must be
avoided. Gifts of other than nominal value may not be accepted without full
disclosure to and prior relevant clearance from the employee’s supervisor. Nokia
and its employees will not pay or offer to pay bribes or illicit payments to
government officials or candidates, or other parties, in order to obtain or retain
business. Nokia does not provide financial support to political parties or other
political groups.

Workplace Practices

Freedom of peaceful assembly and association as well as freedom of thought,

conscience and religion are respected in everyone's actions at Nokia. Freedom
of opinion and expression are very much in line with Nokia's open and
straightforward way of working and its corporate value, 'Respect for the
individual.'

Nokia employees must respect and encourage Nokia Values at work, promoting
teamwork, individual responsibility, and the strength that comes from diversity.
Nokia will strive to pay fair compensation, and provide a safe and healthy
workplace for employees. Nokia is committed to equality of opportunity in all
its employment practices, policies and procedures. Job requirements fulfilled, no
employee or potential employee will, therefore, receive less favorable treatment
due to their race, creed, colour, nationality, ethnic origin, age, religion, gender,
gender reassignment, sexual orientation, marital status, connections with a
national minority, opinion, disability, membership or non-membership of a trade
union. Nokia will continue to invest in the personal and professional learning
and growth of Nokia's employees. Nokia will encourage its employees to lead
balanced personal and professional lives.

24
Environment

Nokia’s environmental activities are based on life-cycle thinking. The goal is to

reduce environmental effects during our product life cycles. This is done by
managing our own operations and our supplier network, incorporating Design
for Environment (DfE) into our product development, processes and service
design and supporting sound End-of-life practices. Nokia does not use any
endangered species for any business purpose and furthermore requests that its
suppliers avoid raw material procurement from an origin where there are clear
human or animal rights abuse, or the method of procurement or distribution is
illegal. In marketing and other company activities, Nokia will depict animals in a
dignified manner.

Suppliers

Nokia will do its utmost to contract only with subcontractors or suppliers who
themselves adhere to international human rights and environmental laws and
practices. Nokia commits to monitoring the ethical performance of its suppliers
and to taking immediate and thorough steps in cases where the ethical
performance of its suppliers comes into question.

Implementation

The compliance commitment in this Code extends to all matters, including

decisions relating to trade, investment, subcontracting, supplying, business
development, and in all other business and employment relationships. Nokia's
approach to implementing this Code of Conduct will be active, open and
ethically sound. Although difficult questions of interpretation may arise in
specific instances, particularly regarding the need to sensitively balance local
customs and requirements with global standards and guidelines, Nokia
recognizes that the above commitment means that Nokia will do its utmost to
identify ethical, legal, environmental, employment, and human rights issues and
resolve matters consistent with this Code of Conduct.

25
To remain successful, Nokia respects and encourages teamwork and the strength
that comes from diversity. Working in a multicultural environment is
considered to be an advantage and privilege.

Equal opportunity is a key part of the Nokia way. Nokia invests in the personal
and professional learning of all its employees. Its target is to learn something
every day and to secure the continuous learning of the entire team. Nokia also
considers the balance of the personal and professional lives of its employees to
be important.

Everyone at Nokia is encouraged to follow strict ethical rules in their own work
environment. Discrimination, for example, can sometimes be hard to detect.
Whenever a problem in the workplace is detected, it is tackled immediately.

26
27
WHAT IS CORPORATE GOVERNANCE

The definition of corporate governance most widely used is "the system by

which companies are directed and controlled" (Cadbury Committee, 1992).
More specifically it is the framework by which the various stakeholder interests
are balanced, or, as the IFC states, "the relationships among the management,
Board of Directors, controlling shareholders, minority shareholders and other
stakeholders".

The OECD Principles of Corporate Governance states:

"Corporate governance involves a set of relationships between a company’s

management, its board, its shareholders and other stakeholders. Corporate
governance also provides the structure through which the objectives of the
company are set, and the means of attaining those objectives and monitoring
performance are determined."

While the conventional definition of corporate governance and acknowledges

the existence and importance of 'other stakeholders' they still focus on the
traditional debate on the relationship between disconnected owners
(shareholders) and often self-serving managers. Indeed it has been said, rather
ponderously, that corporate governance consists of two elements:

1. The long term relationship which has to deal with checks and balances,
incentives for manager and communications between management and
investors;
2. The transactional relationship which involves dealing with disclosure
and authority.

This implies an adversarial relationship between management and investors, and

an attitude of mutual suspicion. This was the basis for much of the rationale of
the Cadbury Report, and is one of the reasons why it prescribed in some detail
the way in which the board should conduct itself: consistency and transparency
towards shareholders are its watchwords.

As fundamentally important as these traits are, we prefer to take a rather broader

view, which places the Cadbury Code and other codes developed since
(Combined Code, Sarbanes-Oxley, King, etc) in a wider context and shows its
recommendations emerging naturally in the course of a company’s evolution. In
an early book on corporate governance, also published in 1992, one of the

28
creators of this website developed a definition of corporate governance as
consisting of five elements which the board must consider:

• long term strategic goals

• employees: past, present and future
• environment/community
• customers/suppliers
• compliance (legal/regulatory)

This definition was endorsed by Sir Adrian Cadbury in his foreword to another
of the author’s books on the subject, directed at the smaller company. A few
years later in a third book the definition was extended by describing Five Golden
Rules by which a system of good corporate governance should be operated, and
set out a practical methodology for implementing and monitoring (Real World
Corporate Governance - a Programme for Profit Enhancing Stewardship, FT
Pitman 1998). We now make this methodology, expert knowledge and research
available using modern internet technologies via this website.

Separation of Ownership and Control

The corporation, in contrast, for example, to a partnership, separates ownership
from operational control - this concept is, of course, fundamental to any
definition of corporate governance and is commonly referred to as the agency
issue, or Agency Theory. It is this separation which creates the need for systems
of independent monitoring and control. Historically, it was the freedom that this
separation created to take much bigger risks in order to expand that prevented
for so long the permission of such organisations to exist, with the potential
dangers it implied. And it is this freedom which has required mechanisms to be
constructed to try and prevent it being abused.

Different Countries, Different Models

This has led to different systems in different countries, depending on which
constituent or interested party in the company’s operations has been given the
most importance. In the Anglo-Saxon world, for example, there has always been
a single board of directors consisting of executive and non-executive, or
independent directors. Elsewhere, a two tier structure exists to balance the
executive board with representatives from other stakeholder groups like
employees and bankers (like the Aufsichtsrat or Supervisory Board in
Germany).

The Emperor has no clothes

29
Corporate Governance is not - or should not be - about debate and discussion on
executive compensation, shareholder protection, legislation and so on. In recent
times, the issue has become not only a subject of fierce debate and public outcry,
but also, as a result of this and arising legislation, a subject which wearies many
company directors. Put in other words, therefore, the phrase coined above means
that there is very little substance to modern corporate governance, in the view of
the authors. What is behind all the fracas is to a great extent common sense, like
many principles in business? Directors, for example, should naturally be
responsible in their role as fiduciaries of other people’s money. This is rarely
mentioned in the conventional, reporting-based definition of corporate
governance.

To use another metaphor, there is so much smoke, that we have lost sight of the
fire. This fire is the real message and definition of corporate governance, which
is undoubtedly beneficial to all, that we should be good directors. As the
previous chapter mentioned, Cadbury and Greenbury did not arise simply to
produce legislation, but to encourage self-regulation, with the ultimate goal that
in applying the recommendations, the company will become more efficient, gain
shareholder value, and hopefully increase market value as a result.

This is the bottom line. We all want to increase our value, and ‘Corporate
Governance’ is often seen as cost ineffective, bringing little or no benefits - the
smoke gets in our eyes, as it were. What we need to do is to apply the principles
of good governance to the whole corporation.

This could be described as: "looking at Management through Corporate

Governance-tinted glasses"

i.e. taking a fresh look at management structure taking into account all
interested parties and ensuring all the necessary monitoring and controls are in
place to ensure that shareholder value is always at the forefront.

Compare this with the definition of corporate governance in Director’s Monthly:

"Effective corporate governance ensures that long-term strategic objectives and
plans are established, and that the proper management and management
structure are in place to achieve those objectives, while at the same time making
sure that the structure functions to maintain the corporation’s integrity,
reputation, and accountability to its relevant constituencies."

Our definition of corporate governance

30
The discussion so far has illustrated that a proper definition of corporate
governance should not just describe directors’ obligations towards shareholders.
And we have mentioned that different countries have different ideas as to what
constitutes good corporate governance. Therefore any satisfactory definition, to
be applicable to a modern, global company, must synthesise best practice from
the biggest economic powers into something which can be applied across all
major countries. In essence we believe that good corporate governance consists
of a system of structuring, operating and controlling a company such as to
achieve the following:

• a culture based on a foundation of sound business ethics

• fulfilling the long-term strategic goal of the owners while taking into
account the expectations of all the key stakeholders, and in particular:
o consider and care for the interests of employees, past, present and
future
o work to maintain excellent relations with both customers and
suppliers
o take account of the needs of the environment and the local
community
• Maintaining proper compliance with all the applicable legal and
regulatory requirements under which the company is carrying out its
activities.

We believe that a well-run organization must be structured in such a way that all
the above requirements are catered for and can be seen to be operating
effectively by all the interest groups concerned. We develop this further in our
section on best corporate governance practice. Here we have set out our
assessment of how corporate governance is usually discussed and introduced our
own, which we hope you have found useful. This page serves as a hub to link to
a range of issues related to the definition of corporate governance.

Parties to corporate governance

Parties involved in corporate governance include the regulatory body (e.g. the
Chief Executive Officer, the board of directors, management, shareholders and
Auditors). Other stakeholders who take part include suppliers, employees,
creditors, customers and the community at large.

In corporations, the shareholder delegates decision rights to the manager to act

in the principal's best interests. This separation of ownership from control
implies a loss of effective control by shareholders over managerial decisions.
Partly as a result of this separation between the two parties, a system of

31
corporate governance controls is implemented to assist in aligning the incentives
of managers with those of shareholders. With the significant increase in equity
holdings of investors, there has been an opportunity for a reversal of the
separation of ownership and control problems because ownership is not so
diffuse.

A board of directors often plays a key role in corporate governance. It is their

responsibility to endorse the organisation's strategy, develop directional policy,
appoint, supervise and remunerate senior executives and to ensure accountability
of the organisation to its owners and authorities.

The Company Secretary, known as a Corporate Secretary in the US and often

referred to as a Chartered Secretary if qualified by the Institute of Chartered
Secretaries and Administrators (ICSA), is a high ranking professional who is
trained to uphold the highest standards of corporate governance, effective
operations, compliance and administration.

All parties to corporate governance have an interest, whether direct or indirect,

in the effective performance of the organization. Directors, workers and
management receive salaries, benefits and reputation, while shareholders receive
capital return. Customers receive goods and services; suppliers receive
compensation for their goods or services. In return these individuals provide
value in the form of natural, human, social and other forms of capital.

A key factor is an individual's decision to participate in an organisation e.g.

through providing financial capital and trust that they will receive a fair share of
the organisational returns. If some parties are receiving more than their fair
return then participants may choose to not continue participating leading to
organizational collapse.

32
Systemic problems of corporate governance

• Demand for information:

In order to influence the directors, the shareholders must combine with

others to form a significant voting group which can pose a real threat of
carrying resolutions or appointing directors at a general meeting.

• Monitoring costs:

A barrier to shareholders using good information is the cost of

processing it, especially to a small shareholder. The traditional answer to
this problem is the efficient market hypothesis (in finance, the efficient
market hypothesis (EMH) asserts that financial markets are efficient),
which suggests that the small shareholder will free ride on the judgements
of larger professional investors.

• Supply of accounting information:

Financial accounts form a crucial link in enabling providers of finance

to monitor directors. Imperfections in the financial reporting process will
cause imperfections in the effectiveness of corporate governance. This
should, ideally, be corrected by the working of the external auditing
process.

Corporate governance models around the world

Although the US model of corporate governance is the most notorious, there is a

considerable variation in corporate governance models around the world. The
intricated shareholding structures of keiretsus in Japan, the heavy presence of
banks in the equity of German firms , the chaebols in South Korea and many
others are examples of arrangements which try to respond to the same corporate
governance challenges as in the US.

In the United States, the main problem is the conflict of interest between widely-
dispersed shareholders and powerful managers. In Europe, the main problem is
that the voting ownership is tightly-held by families through pyramidal
ownership and dual shares (voting and nonvoting). This can lead to "self-
dealing", where the controlling families favor subsidiaries for which they have
higher cash flow rights.

33
Anglo-American Model

There are many different models of corporate governance around the world.
These differ according to the variety of capitalism in which they are embedded.
The liberal model that is common in Anglo-American countries tends to give
priority to the interests of shareholders. The coordinated model that one finds in
Continental Europe and Japan also recognizes the interests of workers,
managers, suppliers, customers, and the community. Each model has its own
distinct competitive advantage. The liberal model of corporate governance
encourages radical innovation and cost competition, whereas the coordinated
model of corporate governance facilitates incremental innovation and quality
competition. However, there are important differences between the U.S. recent
approach to governance issues and what has happened in the UK. In the United
States, a corporation is governed by a board of directors, which has the power to
choose an executive officer, usually known as the chief executive officer. The
CEO has broad power to manage the corporation on a daily basis, but needs to
get board approval for certain major actions, such as hiring his/her immediate
subordinates, raising money, acquiring another company, major capital
expansions, or other expensive projects. Other duties of the board may include
policy setting, decision making, monitoring management's performance, or
corporate control.

The board of directors is nominally selected by and responsible to the

shareholders, but the bylaws of many companies make it difficult for all but the
largest shareholders to have any influence over the makeup of the board;
normally, individual shareholders are not offered a choice of board nominees
among which to choose, but are merely asked to rubberstamp the nominees of
the sitting board. Perverse incentives have pervaded many corporate boards in
the developed world, with board members beholden to the chief executive whose
actions they are intended to oversee. Frequently, members of the boards of
directors are CEOs of other corporations, which some see as a conflict of
interest.

34
 CORPORATE STRUCTURE OF NOKIA

Divisions

Since October 1, 2009, Nokia comprises four business groups: Devices,

Services, Solutions and Markets. The four units receive operational support
from the Corporate Development Office, led by Mary T. McDowell, which is
also responsible for exploring corporate strategic and future growth
opportunities.

On April 1, 2007, Nokia’s Networks business group was combined with

Siemens’ carrier-related operations for fixed and mobile networks to form Nokia
Siemens Networks, jointly owned by Nokia and Siemens and consolidated by
Nokia.

Devices

The Nokia N900, a Maemo 5 Linux based mobile Internet device and
touchscreen smartphone from Nokia's Nseries portfolio.

The Devices division is responsible for developing and managing Nokia's

mobile device portfolio, including the sourcing of components, headed by Kai
Öistämö. The division consists of the previous mainline Mobile Phones division
with the separate subdivisions Multimedia (Nseries devices) and Enterprise
Solutions (Eseries devices) as well as formerly centralized core devices R&D –
called Technology Platforms.

This division provides the general public with mobile voice and data products
across a wide range of mobile devices, including high-volume, consumer
oriented mobile phones and devices, and more expensive multimedia and
enterprise-class devices. The devices are based on GSM/EDGE, 3G/W-CDMA
and CDMA cellular technologies. Nokia's Nseries Multimedia Computers
extensively uses Symbian OS.

35
In the first quarter of 2006 Nokia sold over 15 million MP3 capable mobile
phones, which means that Nokia is not only the world's leading supplier of
mobile phones and digital cameras (as most of Nokia's mobile telephones feature
digital cameras, it is also believed that Nokia has recently overtaken Kodak in
camera production making it the largest in the world), Nokia is now also the
leading supplier of digital audio players (MP3 players), outpacing sales of
devices such as the iPod from Apple. At the end of the year 2007, Nokia
managed to sell almost 440 million mobile phones which accounted for 40% of
all global mobile phones sales.

Services

The Services division operates in five areas of consumer Internet services:

music, maps, media, messaging and games. The division consists of the previous
enterprise and consumer driver services businesses previously hosted in
Multimedia and Enterprise Solutions divisions, as well as a number of new
acquisitions (Loudeye, Gate5, Enpocket, Intellisync, Avvenu and OZ
Communications), headed by Niklas Savander.

The group works with companies outside the telecommunications industry to

make advances in the technology and bring new applications and possibilities in
areas such as online services, optics, music synchronization and streaming
media.

Solutions

A solution is responsible for Nokia's offering of solutions, where the mobile

device, personalized services and content are integrated into a package for the
consumer. The unit is led by Alberto Torres.

Markets

The Markets division, the successor organization to Nokia's Customer and

Market Operations division, is responsible for the management of the supply
chains, sales channels, brand and marketing functions of the company, headed
by Anssi Vanjoki.[109]

36
Subsidiaries

The Nokia 5800 XpressMusic, a touchscreen

smartphone and portable entertainment
device which emphasizes music and
multimedia playback.

Nokia has several subsidiaries, of which the

two most significant as of 2009 are Nokia
Siemens Networks and Navteq.Other notable
subsidiaries include, but are not limited to
Vertu, a British-based manufacturer and
retailer of luxury mobile phones; Qt
Software, a Norwegian-based software
company, and OZ Communications, a
consumer e-mail and instant messaging
provider.

37
Until 2008 Nokia was the major shareholder in Symbian Limited, a software
development and licensing company that produced Symbian OS, a smartphone
operating system used by Nokia and other manufacturers. In 2008 Nokia
acquired Symbian Ltd and, along with a number of other companies, created the
Symbian Foundation to distribute the Symbian platform royalty free and as open
source.

Nokia Siemens Networks

Nokia Siemens Networks (previously Nokia Networks) provides wireless and

wired network infrastructure, communications and networks service platforms,
as well as professional services to operators and service providers.Nokia
Siemens Networks focuses in GSM, EDGE, 3G/W-CDMA and WiMAX radio
access networks; core networks with increasing IP and multiaccess capabilities;
and services.

On June 19, 2006 Nokia and Siemens AG announced the companies are to
merge their mobile and fixed-line phone network equipment businesses to create
one of the world's largest network firms, called Nokia Siemens Networks. The
Nokia Siemens Networks brand identity was subsequently launched at the
3GSM World Congress in Barcelona in February 2007.

As of March 2009, Nokia Siemens Networks serves more than 600 operator
customers in more than 150 countries, with over 1.5 billion people connected
through its networks.

Navteq

Navteq is a Chicago, Illinois-based provider of digital map data for automotive

navigation systems, mobile navigation devices, Internet-based mapping
applications, and government and business solutions.[109] Navteq was acquired by
Nokia on October 1, 2007.Navteq’s map data is part of the Nokia Maps online
service where users can download maps, use voice-guided navigation and other
context-aware web services. Nokia Maps is part of the Ovi brand of Nokia's
Internet based online services.

38
Corporate governance

The control and management of Nokia is divided among the shareholders at a

general meeting and the Group Executive Board (left), under the direction of the
Board of Directors (right).The Chairman and the rest of the Group Executive
Board members are appointed by the Board of Directors. Only the Chairman of
the Group Executive Board can belong to both, the Board of Directors and the
Group Executive Board. The Board of Directors' committees consist of the Audit
Committee, the Personnel Committee and the Corporate Governance and
Nomination Committee.

The operations of the company are managed within the framework set by the
Finnish Companies Act, Nokia's Articles of Association and Corporate
Governance Guidelines and related Board of Directors adopted charters.

39
Group Executive Board (July 2010) Board of Directors
Olli-Pekka Kallasvuo (Chairman), Jorma Ollila (Chairman), b. 1950
b. 1953 Board member since 1995, Chairman of
President, CEO and Group Executive the Board of Directors since 1999
Board Chairman of Nokia Corporation Chairman of the Board of Directors of
since June 1, 2006 Royal Dutch Shell PLC
Member of the Nokia Board of Dame Marjorie Scardino (Vice
Directors since May 3, 2007 Chairman), b. 1947
With Nokia 1980–1981, rejoined 1982, Board member since 2001
Group Executive Board member since Chairman of the Corporate Governance
1990 and Nomination Committee, Member of
Esko Aho, b. 1954 the Personnel Committee
Executive Vice President, Corporate Chief Executive Officer and member of
Relations and Responsibility the Board of Directors of Pearson PLC
Joined Nokia November 1, 2008, Lalita D. Gupte, b. 1948
Group Executive Board member since Board member since 2007, Member of
2009. the Audit Committee
Former Prime Minister of Finland Non-executive Chairman of the ICICI
(1991–1995). Venture Funds Management Co Ltd.
Timo Ihamuotila, b. 1966 Dr. Bengt Holmström, b. 1949
Executive Vice President, Chief Board member since 1999
Financial Officer Paul A. Samuelson Professor of
With Nokia 1993–1996, rejoined 1999, Economics at Massachusetts Institute of
Group Executive Board member since Technology,
2007 joint appointment at the MIT Sloan
Mary T. McDowell, b. 1964 School of Management
Executive Vice President, Mobile Dr. Henning Kagermann, b. 1947
Phones Board member since 2007, Member of
Joined Nokia 2004, Group Executive the Personnel Committee
Board member since 2004 CEO and Chairman of the Executive
Dr. Tero Ojanperä, b. 1966 Board of SAP AG
Executive Vice President, Services, Olli-Pekka Kallasvuo, b. 1953
Mobile Solutions Board member since 2007
Joined Nokia 1990, Group Executive President and CEO of Nokia Corporation
Board member since 2005
Niklas Savander, b. 1962
Executive Vice President, Markets
Joined Nokia 1997, Group Executive

40
Board member since 2006 Per Karlsson, b. 1955
Alberto Torres, b. 1965 Board member since 2002, Independent
Executive Vice President, MeeGo Corporate Advisor
Computers, Mobile Solutions Chairman of the Personnel Committee,
Joined Nokia 2004, Group Executive Member of the Corporate Governance
Board member since October 1, 2009 and Nomination Committee
Anssi Vanjoki, b. 1956 Isabel Marey-Semper, b. 1967
Executive Vice President, Mobile Board member since 2009, Member of
Solutions the Audit Committee
Joined Nokia 1991, Group Executive Chief Financial Officer, EVP in charge of
Board member since 1998 strategy of PSA Peugeot Citroën
Juha Äkräs, b. 1965 Risto Siilasmaa, b. 1966
Executive Vice President, Human Board member since 2008, Member of
Resources the Audit Committee
Joined Nokia 1993, Group Executive Founder and Chairman of F-Secure
Board member since 2010 Keijo Suila, b. 1945
Dr. Kai Öistämö, b. 1964 Board member since 2006, Member of the
Audit Committee
Executive Vice President, Chief
Development Officer
Joined Nokia 1991, Group Executive
Board member since 2005

Former corporate officers

Chief Executive Officers Chairmen of the Board of Directors [124]

1967– Lauri J.1967– Simo 1988–

Björn Westerlund
1977 Kivekäs 1977 Vuorilehto 1990

1977– Björn 1977– 1990–

Kari Kairamo Mika Tiivola
1988 Westerlund 1979 1992

1988– 1979– Casimir 1992–

Simo Vuorilehto Mika Tiivola
1992 1986 Ehrnrooth 1999

1992– 1986–
Jorma Ollila Kari Kairamo Jorma Ollila 1999–
2006 1988

Olli-Pekka
2006–
Kallasvuo

41
Logos

Nokia introduced its

"Connecting People"
advertising slogan,
The Nokia
coined by Ove
Corporation
Nokia CompanyThe brand logo of StrandberG. and used
"arrows" logo, used
logo. Founded inFinnish Rubberbefore since 1992.
the
Tampere in 1865,Works, founded in This earlier version
"Connecting
incorporated inHelsinki in 1898. of the slogan used
People" logo.
Nokia in 1871. Logo from 1965– Times Roman SC
1966. (Small Caps) font.

Nokia's current
logo used since Navteq logo.
2006, with theNokia SiemensFounded in 1985,
redesigned Networks logo.acquired by Nokia
"Connecting Founded in 2007. in 2007.
People"

Stock

Nokia, a public limited liability company, is the oldest company listed under the
same name on the Helsinki Stock Exchange (since 1915). Nokia’s shares are
also listed on the Frankfurt Stock Exchange (since 1988) and New York Stock
Exchange (since 1994).

42
Corporate culture

The Nokia House, Nokia's head office in

Keilaniemi,

Nokia's official corporate culture

manifesto, The Nokia Way, emphasizes
the speed and flexibility of decision-
making in a flat, networked
organization, although the corporation's
size necessarily imposes a certain
amount of bureaucracy.

The official business language of Nokia is English. All documentation is written

in English, and is used in official intra-company spoken communication and e-
mail.

Until May 2007, the Nokia Values were Customer Satisfaction, Respect,
Achievement, and Renewal. In May 2007, Nokia redefined its values after
initiating a series of discussions worldwide as to what the new values of the
company should be. Based on the employee suggestions, the new values were
defined as: Engaging You, Achieving Together, Passion for Innovation and Very
Human.

43
Nokia Code of Conduct

Setting the highest standards

Nokia has always recognized that its own long-term interests and those of its
various stakeholders depend on strict adherence to applicable regulation, the
Rule of Law and on following the highest standards of ethics. For Nokia, ethical
business conduct does not mean mere minimum legal compliance. As an
industry leader, we aspire to be among the best in the world in corporate
responsibility, actively promoting human rights and environmental protection
through our products and solutions. At Nokia this is everyone’s responsibility
and an integral part of managing Nokia’s business and brand.
Nokia Group Executive Board has approved and issued this Code of Conduct,
and it is shared and reinforced throughout the company. The Board periodically
reviews this Code and follows its implementation closely.
The Nokia Values are embedded in this Code. Every employee is expected to
conduct himself or herself, and his or her business, in line with this Code
without exception. Stricter guidelines or more detailed instructions may be
appropriate for certain regions, countries or functions, but they must not
contradict this Code.

Better communication leads to better life

Nokia will respect human dignity and promote human rights. Nokia recognizes,
with the international community, that certain human rights should be
considered fundamental and universal, based on accepted international
conventions and practices, such as those of the United Nations’ Universal
Declaration of Human Rights. Among those rights that Nokia views as
fundamental and universal are: freedom from discrimination on any grounds;
freedom from arbitrary detention, execution or torture; freedom of peaceful
assembly and association; freedom of thought, conscience and religion; and
freedom of opinion and expression.
Nokia’s products and technologies contribute positively to human rights, to the
environment and in the development of many societal areas. Nokia actively
seeks business opportunities for innovative solutions that enhance people’s lives
and wellbeing.

High ethics means success

Nokia is strongly committed to the highest standards of ethical conduct and full
compliance with all applicable national and international laws. This includes, for
example, labor conditions, antitrust and promoting fair competition, prevention
of bribery and corruption, good corporate governance, the protection and
recognition of copyright, company assets and other forms of intellectual
property.

44
Nokia places the safety in the intended use of its products and services and
consumer rights at the forefront, and conducts its marketing in a responsible
way.
Nokia respects the privacy and integrity of users of its products and services, and
other stakeholders. We endeavor to adhere to strict standards when processing
personal data and customers’ product and service information. We collect
personal data relating to our products and services in an open and transparent
fashion and provide fair and reasonable choices on its collection and use. All
personal data collected and held by Nokia will be processed fairly, lawfully and
carefully and in a way that protects the privacy and rights of individuals.

Environmentally aware in all we do

Nokia’s environmental targets go beyond mere legal compliance. We achieve
these targets through an environmental strategy based on global standards,
processes and practices, relating both to our products and services and also to
our management of facilities and production sites.
Nokia’s environmental activities are based on life cycle thinking. The goal is to
reduce the environmental impact of our products, services and operations
throughout the whole product life cycle. Environmental considerations are
incorporated into our product development, processes and service design, our
own operations and managing sound take-back and recycling of materials and
used products. Nokia does not use endangered species for any business purpose,
and furthermore insists that its suppliers avoid raw material procurement from
an origin where there is animal rights abuse or a potential negative impact on the
environment which is not being addressed properly.

Our people build the future

Nokia employees must respect and encourage Nokia Values at work, promoting
teamwork, individual responsibility, and the strength that comes from diversity.
Nokia will strive to pay fair compensation and provide a safe and healthy
workplace for employees. Nokia is committed to equality of opportunity in all
its employment practices, policies and procedures. Job requirements fulfilled, no
employee or potential employee will receive less favorable treatment due to any
reason whatsoever.Nokia will not use child or forced labor. Nokia will not
tolerate treatment or working conditions that are in conflict with international
conventions and practices. Nokia will continue to invest in the personal and
professional learning and growth of Nokia employees. Nokia will encourage its
employees to lead balanced personal and professional lives.

45
No tolerance on corruption
Nokia employees must avoid any activity that can lead to a conflict of interest.
This includes, but is not limited to acceptance and giving of personal gifts or
hospitality to or from Nokia stakeholders, other than gifts of nominal value of
less than EUR 100 or reasonable hospitality given in the ordinary course of
business. Local and national laws take precedent if stricter.
Nokia and its employees will not pay nor offer to pay bribes or illicit payments
to government officials or candidates, or other parties, in order to obtain or
retain business. Nokia does not provide financial support to political parties or
other political groups.
Nokia employees must not profit, nor assist others to profit, from opportunities
that are discovered through the use of corporate information or position. Nokia
employees must not use corporate assets for other than legitimate business or
other authorized purposes. Nokia employees must also not engage in any activity
which competes with the business of the company.

We and our partners

Nokia requires its business partners, subcontractors, or suppliers to comply with
applicable laws and regulations. Nokia encourages its partners, subcontractors,
or suppliers to strive beyond legal compliance in areas such as governance,
human rights and the environment. Nokia incorporates ethical, social and
environmental criteria in its procurement agreements and commits to monitoring
the performance of its partners and to taking immediate and thorough remedial
steps in cases where the ethical performance of its business partners comes into
question.

Implementation
Nokia’s compliance commitment in this Code extends to all matters, including
decisions relating to trade, investment, subcontracting, supplying, business
development, and in all other business and employment relationships. Nokia’s
approach to implementing this Code of Conduct is active, open and ethically
sound.
Although difficult questions of interpretation may arise, Nokia will do its utmost
to resolve any identified ethical, legal, environmental, employment, and human
rights issues consistent with this Code of Conduct.

It is the responsibility of each Nokia employee to promote this Code of Conduct.

The Nokia Ethics Office exists to support employees in all questions relating to
this Code. Nokia employees are always encouraged, when possible and feasible,
to raise questions and report issues relating to the Code of Conduct with their
superiors. It is the responsibility of all Nokia superiors to support their teams in

46
matters relating to the Code. It is the responsibility of each Nokia employee to
report on violations of this Code:

Nokia employees may report violations of the Code to their superior. It is the
responsibility of all Nokia superiors to give advice on the proper procedure in
case of violations. Any issue involving a potential violation of the ‘No tolerance
of corruption’ section in the Code, or any applicable legal rules or regulations,
should be reported to the employee’s Legal or Business Controller, with a copy
being sent to the Assistant General Counsel. The Assistant General Counsel can
also be contacted directly.
Furthermore, the employee may report an issue directly, confidentially and
anonymously to the Nokia Board of Directors, its non-executive members or
subcommittees through an electronic channel and a physical mailing address,
both available on the company’s website. In particular, issues related to Nokia’s
accounting, internal controls, or auditing matters are to be addressed to the Audit
Committee/Nokia Board of Directors.
Regardless of the reporting channel, all allegations of potential violations of this
Code made in good faith will receive a fair and comprehensive investigation
conducted with the relevant internal and/or external assistance.
Acts inconsistent with this Code must be promptly corrected and are subject to
disciplinary action, up to and including termination of employment. Nokia will
ensure that there will be no adverse work-related consequences for any
employee making complaints of violations of this Code.

Sustainability governance
We believe that corporate responsibility extends to all areas of our operations,
with all Nokia employees playing a part. Sustainability is not a separate activity
at Nokia but a perspective of business and everything we do as a company.

Corporate responsibility is everyone’s responsibility in the Nokia community.

Esko Aho, Executive Vice President, Corporate Relations and Responsibility,
drives corporate responsibility at the Executive Board level. He is supported by
the Corporate Responsibility Steering Group, which identifies and oversees
industry and Nokia-specific issues related to the whole notion of sustainability.
This cluster of management members from business units and corporate
functions supports sustainability initiatives across the business as well as
encouraging open communication and cooperation, both internally and
externally at all levels.

The Steering Group supports our corporate structures in helping to integrate

sustainability into our core business, for instance, through approving the work of

47
the Nokia Sustainability Management Team (NSMT). The NSMT represents all
relevant Nokia units, develops and agrees the group-wide sustainability
framework containing strategy, targets and priorities.

Our sustainability network acts as a virtual team across the organization and is
led by Kirsi Sormunen, Vice President, Head of Sustainability Operations. Our
sustainability teams drive environmental and social responsibility initiatives
within the business and monitor performance across our operations. Each of the
key business functions have people responsible for building and implementing
processes to achieve our environmental and social targets.

Our approach stems from the belief that real progress is made only when
policies and programs are implemented throughout the company. Acting
responsibly is one of the cornerstones of our ability to be competitive and has
helped shape our company culture into what it is today.

48
49
CORPORATE SOCIAL RESPONSIBILITY - WHAT DOES IT
MEAN?

Different organizations have framed different definitions - although there is

considerable common ground between them. My own definition is that CSR is
about how companies manage the business processes to produce an overall
positive impact on society.

Take the following illustration:

Companies need to answer to two aspects of their operations. 1. The quality of their
management - both in terms of people and processes (the inner circle). 2. The
nature of, and quantity of their impact on society in the various areas.

Outside stakeholders are taking an increasing interest in the activity of the

company. Most look to the outer circle - what the company has actually done, good
or bad, in terms of its products and services, in terms of its impact on the

50
environment and on local communities, or in how it treats and develops its
workforce. Out of the various stakeholders, it is financial analysts who are
predominantly focused - as well as past financial performance - on quality of
management as an indicator of likely future performance.

Other definitions

The World Business Council for Sustainable Development in its publication

"Making Good Business Sense" by Lord Holme and Richard Watts, used the
following definition. "Corporate Social Responsibility is the continuing
commitment by business to behave ethically and contribute to economic
development while improving the quality of life of the workforce and their
families as well as of the local community and society at large"

The same report gave some evidence of the different perceptions of what this
should mean from a number of different societies across the world. Definitions as
different as "CSR is about capacity building for sustainable livelihoods. It
respects cultural differences and finds the business opportunities in building the
skills of employees, the community and the government" from Ghana, through to
"CSR is about business giving back to society" from the Phillipines.

Traditionally in the United States, CSR has been defined much more in terms of a
philanphropic model. Companies make profits, unhindered except by fulfilling their
duty to pay taxes. Then they donate a certain share of the profits to charitable
causes. It is seen as tainting the act for the company to receive any benefit from the
giving.

The European model is much more focused on operating the core business in a
socially responsible way, complemented by investment in communities for solid
business case reasons. Personally, I believe this model is more sustainable because:

1. Social responsibility becomes an integral part of the wealth creation

process - which if managed properly should enhance the competitiveness
of business and maximise the value of wealth creation to society.
2. When times get hard, there is the incentive to practice CSR more and
better - if it is a philanphropic exercise which is peripheral to the main
business, it will always be the first thing to go when push comes to shove.

But as with any process based on the collective activities of communities of human
beings (as companies are) there is no "one size fits all". In different countries, there
will be different priorities, and values that will shape how business act. And even
the observations above are changing over time. The US has growing numbers of
people looking towards core business issues.

51
For instance, the CSR definition used by Business for Social Responsibility is:
"Operating a business in a manner that meets or exceeds the ethical, legal,
commercial and public expectations that society has of business.

On the other hand, the European Commission hedges its bets with two definitions
wrapped into one: "A concept whereby companies decide voluntarily to contribute
to a better society and a cleaner environment. A concept whereby companies
integrate social and environmental concerns in their business operations and in
their interaction with their stakeholders on a voluntary basis".

Why Corporate Social Responsibility is Necessary

Corporate social responsibility may come across as a highly idealistic endeavor but
it actually produces highly favorable and observable results. Recent research studies
reveal that companies that are perceived by the public to adopt more socially
responsible business practices and ethics are more likely to perform financially
better than those companies who don’t.

52
CORPORATE SOCIAL RESPONSIBILITY OF NOKIA
Corporate responsibility reflects the way in which companies impact on the world
around them; economically, socially, and environmentally.Corporate responsibility
for Nokia means acknowledging and responding to the impacts of our business on
society and the environment. As market leader and a global company, Nokia takes
its responsibilities seriously. Sound company ethics makes business sense by
helping to minimize risk, ensuring legal compliance, enhancing company efficiency
and building reputation amongst stakeholders.

By conducting business in a responsible way, Nokia can make a significant

contribution to sustainable development, at the same time building a strong
foundation for economic growth." Nokia Chairman and CEO, Jorma Ollila Mobile
communications is now an established force for social and economic development.

Corporate responsibility for Nokia means :-

 Acknowledging and responding to the impacts of our business on society

and the environment.
 As market leader and a global company, Nokia takes its responsibilities
seriously.
 Sound company ethics makes business sense by helping to minimize risk,
ensuring legal compliance, enhancing company efficiency and building
reputation amongst stakeholders.

Nokia believes that:-

 Economic, social and environmental responsibilities are not distinctly

separate issues. In addition to providing technology, products and services
that have as little environmental impact as possible.
 Nokia respects and promotes human rights and acts as a responsible member
of the society.
 Nokia sees ethical conduct and corporate citizenship issues as an integral
part of environmental thinking. This includes supporting charitable,
educational, human rights and community activities through donations and
other resources.

53
• PARTICIPATION IN INDUSTRY COOPERATION

Aiming to develop closer cooperation between businesses, governments and other

organizations concerned with the environment and sustainable development, Nokia
participates actively in association work both at national and international level.
Nokia cooperates in creating a framework that allows businesses to contribute
effectively to sustainable development, to demonstrate progress in environmental
and resource management and to share best practices.
Membership in associations is a channel to contribute to the development of
legislative requirements and voluntary agreements. Nokia is e.g. a member of the
European Association of Consumer Electronic Manufactures (EACEM). It has also
participated in the pilot project of ECTEL for the take back of mobile phones. In
Finland, Nokia has a representative in an environmental working group under the
Co-federation of Finnish Industry and Employers. Nokia participated in a pilot
project for take back of electronic products arranged by the Federation of Finnish
Electrical and Electronics Industry during 1997 - 1998. This project has progressed
to its second phase to developing the take back scheme further. In addition, a
number of individual Nokia employees participate actively in various associations
and forums within in the
industry.

• LIFE CYCLE THINKING

Life cycle thinking is a holistic approach to map a product’s environmental aspects.

The manufacturing phase is just one of the many stages the product goes through
during its life cycle. The product life cycle starts when raw materials are extracted
and ends with waste treatment. In every stage of the product life cycle there are
emissions causing impact on air, water or soil. Life cycle thinking covering all the
environmentally significant impacts of a product from the cradle to the grave is the
basis for all Nokia’s environmental activities and provides the framework for
action.

• ENVIRONMENTAL POLICY

The commitment to continuous improvement in environmental issues is stated in

Nokia’s Environmental Policy, published in 1994. The line organizations of
Nokia’s business groups and divisions are in charge of implementing the policy.

54
Basic principles in Nokia’s environmental policy include:

• A successful business requires solid product life cycle-based environmental

performance.

• The Nokia Way means an active, open and ethically sound approach to
environmental
protection.

• The objective of Nokia’s environmental policy is sustainable development

inaccordance with the ICC (International Chamber of Commerce) business charter.

To implement these, Nokia applies the following principles:

• The environmental policy is a part of the general management process.

• Line organizations plan and implement the action programs by using

environmental specialists and the best available technology.

• The action programs are based on a thorough understanding of the environmental

impacts of a product throughout its life cycle.

• Minimizing the environmental impacts requires continuous efforts and follow-up

of the results; it is thereby a part of the total quality improvement process. Nokia
uses the international environmental management standard, ISO 14000 series, as
guidelines for environmental management. The results of environmental work are
reviewed on an annual basis, plans are updated and special goals are set where
needed.

Goal areas within Nokia’s environmental management are :-

• Design for Environment is integrated into Nokia’s product development.

• Environmental management systems of all main Nokia production sites have to.
Meet the requirements of ISO 14001 by the end of year 2000.

• Environmental aspects are integrated into supply chain management.

• End-of-life practices are supported.

55
Corporate social responsibility involves:-

 Acknowledging the company’s range of opportunities to be realized and

risks to be minimized.
 Acting responsibly brings us improvements in risk management, legal
compliance, enhanced reputation and improvement in company efficiency
issues like productivity, quality and costs.
 The Nokia brand is one of the most valuable in the world, so a good
reputation is vital in order to maintain our standing among employees,
investors, network operators and consumers.

Nokia believes that it makes business sense to look after the markets we operate in,
to anticipate risks, demonstrate company values, work at increasing employee
satisfaction, enhance corporate governance principles, protect the Nokia brand and
build a reputation for citizenship.

The most obvious link to Nokia’s strategy can be found in the strategic intent,
where "trusted brand" clearly demands a good reputation. But there are other
areas where corporate responsibility directly supports company strategy. The
"license to do business" begins with legal compliance and good practice, to which
environmental work and employee programs contribute. Increased mobility and
new marketing opportunities are served by nurturing diverse, innovative teams,
catering for accessibility in use of mobile phones, digital bridging work and
including developing countries in our market scope; innovative and high-quality
products cannot be created without attracting, retaining and motivating employees,
and efficient supply chain management; good reputation is helped by, among other
things, community involvement. Acting in a responsible way also facilitates
extensive cooperation across the industry and demonstrates the company values,
corporate transparency and responsiveness to stakeholder expectation.

Our future success demands responsible business. By acting responsibly in those

issues over which we have most influence, Nokia will make a positive difference to
society, while standing a better chance of achieving sustainable growth. In the long
run, as the World Council for Sustainable Business aptly puts it, "companies cannot
succeed in societies that fail".

56
 CSR ACTIVITIES OF NOKIA

• Nokia’s CSR can be understood as an entity with four aspects: 1) employees, 2)

supply chain, 3) environment, and 4) community. First, as a part of its CSR agenda
Nokia looks after its employees through various employee programmes and ethical
labour practises.

• The company strives to act as a world-class example of a truly diverse and inclusive
working environment. (Nokia 2009g) Second, Nokia expects that its suppliers also
take a similar ethical business approach, and through close-up supply chain reviews
and rigid partner selection Nokia aims to ensure that environmental, ethical as well
as health and safety issues and ethical labour practices are embedded in all Nokia’s
sourcing processes including supplier selection and relationship development.
Nokia has developed a comprehensive set of global Nokia Supplier Requirements
(NSR) that include specific environmental and social requirements based on
international standards ISO 14001, SA 8000, OHSAS18001, PCMM and ILO, and
UN conventions. As another part of responsible supply chain management Nokia
engages in industry collaboration initiatives such as GeSi and RosettaNet. Nokia
joined GeSi (the Global e- Sustainability Initiative) Supply Chain working group in
2004, and the aim of the group is to promote good conduct and to develop tools,
management practices, processes and systems to assist all group members in
dealing with CSR supply chain issues.

RosettaNet, on the other hand, is a voluntary initiative of over 500 major

information technology and electronics manufacturers worldwide committed to
developing solutions for standardised exchange of information. As a part of its
supplier cooperation development, Nokia utilises a web-based RosettaNet
information exchange solution in its product information exchange with suppliers.
Third, environmental initiatives can be understood as a part of Nokia’s CSR even
though it is separated as its own entity on the corporate website instead of including
it as a component under CSR (Nokia 2009j). The reason for this separation might
be
Nokia’s commitment to fully integrating environmental issues in its business
activities.

Taking care of the environment is considered everyone’s responsibility within the

company and part of everything Nokia does, with global perspectives and approach.
(Nokia 2009k) Nokia’s aim is to be a leader in environmental performance, and the
goal is not only to improve the environmental performance of its operations on a
continuous basis but also to make a positive impact through products and services
that enable people to make more sustainable choices. The corporate approach to

57
environmental management is based on the idea of product life-cycle,
encompassing measures to reduce environmental impacts of operations throughout
the entire life-cycle, ending with proper treatment and recycling. Environmental
management priorities include energy efficiency, managing substance of products,
and take-back of used devices for proper recycling. Nokia also collaborates with
stakeholders in the industry and beyond in order to maximise contribution in the
environmental management field. For example, in 2007 Nokia initiated supplier
collaboration to work on energy efficiency targets that go beyond Nokia’s current
environmental supplier requirements. (Nokia 2007a) Nokia has also worked closely
together with World Wide Fund for Nature (WWF), a global conservation
organisation, from 2003 in order to find new ways of enhancing Nokia’s
environmental performance and increasing the environmental awareness of all
Nokia employees while at the same time supporting nature conservation. Since
January 2008 Nokia has also been a member of WWF’s programme “Climate
Savers” that works to reduce greenhouse gas emissions. Moreover, Nokia also
supports Connect2Earth, a green on-line community launched by WWF and the
International Union for Conservation of Nature (IUCN) in 2008 enabling young
people to express their views on the environment by uploading videos, pictures, and
comments. Finally, Nokia has also supported WWF’s project “Operation Mermaid”
in the Baltic Sea as well as various other local WWF projects world wide.

The fourth area of Nokia’s corporate responsibility encompassing community

programmes is of major interest for the thesis at hand and is discussed in more
detail in the following sections.

Nokia’s Community CSR

Nokia’s community CSR programmes include everything from donations and
sponsored programs to partnerships specifically supporting organisations and
projects that reflect the company’s core values, thus linking CSR more closely into
the corporate culture. Many of the programs are targeted at young people and youth
development. For example, Nokia collaborates with the International Youth
Foundation (IYF) on a number of youth programmes, and the company has also
signed a cooperative agreement with the international children’s organisation Plan
in order to utilise modern communication technologies in Africa to raise the
children’s awareness of their rights and opportunities. During the first stage of the
effort Nokia has been focusing on supporting Plan’s existing media and
communications technology projects in Africa. These kinds of cooperation
programs are important because they not only benefit the youth themselves but they
also tend to have spark off wider societal impacts through benefiting parents,
teachers and other members of the community. In addition to youth development,
Nokia engages in three other types of societal CSR, namely employee volunteering,
corporate giving, and a cluster of programmes coined under the heading Mobile
Technologies for Development Programmes in this area mirror the company’s

58
dedication to bridge communication gaps around the world through providing
universal access to communications technology. Nokia believes that mobile
technologies can provide both social and economic improvements such as better
access to information, enhanced business opportunities and increased potential to
network with others in the community and beyond, making the technologies a
powerful weapon in the fight against social exclusion. BridgeIT is one example of
an innovative program that seeks to bridge the digital divide by bringing interactive,
multi-media learning materials and enhanced teaching skills to classrooms in
developing countries through utilising existing mobile products and satellite
technologies and the 3G network.
Village Phone provides another example of a programme targeting universal access,
providing rural areas in developing countries with access to affordable
telecommunications services and in this way boosting economic development in
rural communities. (Nokia 2009q) Accessibility is another cluster of CSR projects
that target universal access through providing accessibility features specifically
designed for people with disabilities and cognitive, sensory and physical
limitations.
Moreover, Nokia Data Gathering is yet another example of a CSR programme that
utilises Nokia’s own expertise in mobile technologies to do good things for society.
Thesoftware allows different organisations to collect data using mobile phones
instead ofmore laborious paper forms, PDAs or laptops. Since mobile phones can
send data from remote locations, the data collected can be transmitted for analysis
in near real-time.

In addition to BridgeIT, Village Phone and Nokia Data Gathering, Nokia is

developing a fourth project under the heading of Mobile Communications for
Development that is supposed to remind people to take their HIV/AIDS medicines
on time. This is crucial for if taking medicines is ignored, the virus will mutate and
cause not only health problems but it will also require a more expensive set of
medicines. Nokia has been looking for a way to remind people on their phones in a
way that would be culturally appropriate as well as discreet, and possibly even have
them confirm that they have taken the medicine. This would allow for better
monitoring and control from the side of health organisations all around the world.
The system is also valid for other conditions such as asthma or hypotension, and
Nokia hopes that insurance companies will see the potential the system has in the
Western world, where it is ultimately the insurance companies that will pay the
costs of a person spending a night in a hospital at a thousand dollars when the
alternative could be to give this person a hundred dollar phone with the software to
remind of the medications.

59
 The six programmes researched for this thesis will be discussed in more detail in
the
following sections.

• Corporate giving

Nokia’s main objective for corporate donations is to target issues directly involving
children and to invest in preventive programs bringing together expertise from
private and public sectors as well as from the civil society. In addition to supporting
schools and kindergartens, donating hospital equipment and providing charity for
children with disabilities Nokia makes charitable contributions in support of
disaster relief efforts. Nokia cooperates with organisations such as the International
Federation of Red Cross and Red Crescent Societies to provide financial assistance
to disaster areas but also takes part in the long-term reconstruction efforts. For
example, the company’s response to the 2004 Southeast Asian tsunami included an
immediate cash donation and a thousand mobile phones given to the rescue teams
and operator customer teams working to restore and expand the network capacity.
In addition, Nokia developed a long-term recovery proposal with a Reconstruction
Fund of EUR 2,5 million managed by the IYF, supporting the revival of traditional
handicrafts, diversifying the sources of income of the people involved, providing
access to capital and training to help people affected by the crisis to create their
own business or to develop new skills, and promoting a larger scale of production.

• Nokia Helping Hands

Nokia Helping Hands is an employee volunteerism program functioning globally as
a part of the company’s corporate responsibility scheme, allowing employees
dedicate a maximum of two working days per year to volunteer work of their
choice. In 2007, Nokia employees participated in 32 000 hours of volunteer work in
32 different countries. The program creates connections between people, fosters
Nokia’s corporate values and facilitates employee participation. The program aims
at building on the corporate culture in a sustainable way. (Nokia 2009u) The
volunteer work conducted includes building schools, cleaning beaches, collecting
toys, clothes and other supplies for people in need and arranging activities for
children and the elderly.
Nokia sees it as important to support and encourage employees who want to make a
difference with their own actions. Through helping others it is possible to learn new
skills and find new perspectives. Volunteerism can also further improve the balance
between work and personal life.

60
• BridgeIT
BridgeIT was the first project under the broad category of Mobile Technologies for
Development at Nokia, and it is the result of a unique partnership between Nokia,
IYF, Pearson, SEAMO Innotech and the United Nations Development Program
(UNDP). The program uses existing information and communication technologies
to facilitate access to quality education everywhere in the world. (Nokia 2007d) The
idea is to offer young people the opportunity to education and skills development
that will enable them to lead successful life and to become productive members of
the society. The programme supports the youth’s development during their critical
years and the objective is to develop an inexpensive way to deliver educational
material of high quality to developing country schools through wireless
technologies. (Nokia 2009y) Nokia supplies mobile phones and monthly prepaid
credit to the participating schools. The text message technology used in the
programme enables teachers and students to request and download materials from a
digital library, allowing for an access to over 900 multimedia educational resources
such as lesson plans an videos. In practice, the teacher connects to the library with a
mobile phone, selects a video and then downloads it into a digital video-recorder
connected to a TV-set of a class room. In this way, BridgeIT brings global
educational materials into the immediate reach of teachers and students in
developing countries who would not otherwise have access to these.
The program was launched in 2003 in the Philippines, reaching 240 schools and
900000 pupils across the country. The University of Philippines conducted an
impact assessment project showing a significant increase in average academic
scores and decrease in absenteeism in the participating schools. (Nokia 2007d) The
societal outcomes evaluation project will be discussed in detail in section 4.4.2.1.

• Nokia Data Gathering

Nokia Data Gathering is a fairly new software solution developed by Nokia and
Instituto Nokia de Tecnologia (INdT), a non-profit research and development centre
in Brazil, to help the public sector and NGOs quickly and accurately collect data
even in the remotest parts of the world (Nokia 2009aa). The solution enables the
use of mobile phones to collect data instead of using paper forms, PDAs or laptops,
therefore allowing for immediate sending out of the data for analysis.
The software will be available for public sector organisations and NGOs free of
charge. It can be used to create tailored questionnaires and distribute them to
multiple mobile phones using a normal mobile network, which makes it quick and
easy for the field personnel to complete the surveys and then transmit their findings
back to a central database for analysis. The system also allows organisations to geo-
tag with GPS location information to build a more detailed picture. The Amazonas
State Health Department in Brazil will be the first to use the solution as a part of the
fight against dengue fever in the city of Manaus in Northern Brazil.

61
• Village Phone
In 2006, Nokia joined forces with the US-based Grameen Foundation to build on
the pioneering work of Professor Muhammad Yunus and the Grameen Bank in
Bangladesh awarded the Nobel Peace Prize in 2006. The consequent Village
Phone-project follows the concept of Grameen Phone, a successful program being
now operated in Uganda and Rwanda. The concept uses microfinance as an
innovative tool to create entrepreneurship and to boost network connections in areas
with poor infrastructure. A microfinance loan of approximately USD 200 is
provided for a female villager willing to start business as a Village Phone operator.
With the loan provided the operator purchases a mobile phone kit comprising of a
Nokia handset, a SIM card preloaded with prepaid airtime, an external antenna set
(including a booster antenna, a coupler, and a cable), and marketing materials. The
loan is usually for a period of up to nine months, at an interest rate of less than four
per cent. Village Phone operators typically pay back the loan in six months’ time
from their income from operating the Village Phone, that is, from selling airtime for
other villagers who typically have no other access to communications technology.
The extra income earned from the micro-business can then be used to things still
rare in the developing world, such as educating one’s children or paying for one’s
own housing. For example, in Uganda five thousand new businesses have been
created since 2003 and the number continues to grow. Nokia considers the Village
Phone –project to be an excellent example of today’s collaborative efforts to make
universal access a reality.

• Make a Connection
As mentioned earlier, Nokia supports various youth development programmes and
for many years, the company has been cooperating with the International Youth
Foundation (IYF). IYF, established in 1990, is a global non-profit organisation
working to empower young people to be healthy, productive and engaged citizens
with a presence in close to 70 countries worldwide. IYF’s programmes help youth
obtain quality education, gain employability skills, make healthy choices, and work
to improve their communities. Together with its numerous partners IYF has reached
millions of young people around the world. (IYF 2009b) Instead of developing
completely new programmes from scratch, IYF strives to identify those of its
programmes that are working and bringing the expected benefits for participants,
expand their reach and strengthen their impact so that more young people can
benefit. All IYF’s programmes are built around four themes: Education,
Employability, Leadership and Engagement, and Health Education and Awareness.
IYF organises its programmes through a global network of local partners that are
highly respected, innovative, and independent organisations rooted to address youth
issues at a local level. IYF also serves to create strategic alliances between the
corporate, public, and civil society sectors through a multi-sector approach in order
to maximise both the reach and the impact of its youth development programmes.

62
The multi-sector collaborations are usually three to five years, multi-million dollar
initiatives carried out in numerous countries. IYF also partners with multilateral
institutions such as the United States Agency for International Development
(USAID) and the Multilateral Investment Fund of the Inter-American Development
Bank (IDB).

In 2000, Nokia and the IYF launched a global youth development initiative called
Make a Connection to strengthen the life skills of young people and prepare them
for the future. To date, Nokia as invested USD 26 million in 24 countries and
directly benefited more than 330 000 young people. The country programmes,
implemented by local NGOs, provide a means for achieving important youth
development outcomes such as improved performance at school, increased literacy,
job placement, and active citizenship. Examples of the different country
programmes include Conéctate (providing Colombian youth with training in
information technology, at the same time developing their self-esteem, creative and
critical thinking, and communication skills), Kapcsolodj be (supporting the efforts
of young community volunteers in Hungary and equipping them with project
management and budget planning skills), and Mudando a Historía (training
Brazilian youth to serve as reading mentors to disadvantaged children).

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• Nokia provides over € 6 million to China's rural children

The largest corporate investment in preschool care and education in rural China
was announced by mobile technology leader Nokia and leading international
children's organization, Plan. In a landmark partnership, Nokia will provide funds
of over EUR 6 million to enable Plan to dramatically increase its preschool and
early childhood care and development programmes throughout the country.

The Heart to Heart, Hand to Hand Project will initially be piloted in six designated
impoverished counties across the country and then expanded to include a further
eighteen counties. By the end of the project, more than 1,200 early childhood care
and development centers will have been established throughout China offering care
to more than 70,000 children.

This initial phase of Heart to Heart, Hand to Hand Project will run for three years.
Nokia's goal is to make Heart to Heart, Hand to Hand Project a long term
sustainable programme under which several different projects can be executed
over years to come.

"Education is a core component of our corporate social responsibility programme,"

said Colin Giles, President of Nokia China. "Children are our future, and success
lies in investing in the future. The success that Nokia enjoys today comes from the
support of Chinese consumers. As a responsible corporate citizen, Nokia is pleased
to contribute to the care and education of disadvantaged children in China in
collaboration with Plan China. Our goal is to create a better environment for rural
preschool children. The Heart to Heart, Hand to Hand Project will improve the care
and education system for disadvantaged children in rural China and create a more
healthy and harmonious environment for them."

"This is a great day for children in rural China," said James Murray, Director of
Plan China. "Currently, hundreds of thousands of rural Chinese children are
missing out on opportunities because they have limited access to preschool
education and care. Education has many benefits for the development of children

64
 in later life. This pioneering partnership will ensure a bright future for tens of
thousands of children and stand as a shining example to others."

Statistics show that less then 35% of children in rural China receive preschool care
and education, and most of them have no access to child-rearing programs. "Child-
rearing programs and preschool care and education not only benefit the children but
also have a positive impact on society. With Nokia's initiation of the Heart to Heart,
Hand to Hand Project, a model of cooperation has been established in the area of
China's rural preschool care and education We would like to call upon more
companies and groups to contribute," said Zheng Xinrong, Head of Education
Department, Beijing Normal University.

Jorma Ollila, Chairman of Nokia Group, in China for the launch of the
partnership, added, "Everyone deserves the best possible start in life. This project
will help open up new opportunities and experiences for many thousands of
children in China. Connecting young people to care, a stimulating learning
environment, and education in this way can have a very powerful impact and is
something Nokia is proud to play a role in."

The landmark announcement was made at a signing ceremony in Beijing attended

by Jorma Ollila, Chairman of Nokia Group, Colin Giles, President of Nokia
China and James Murray, Director of Plan China.

• Nokia launches green programme in New Zealand

Cell phone manufacturer Nokia has launched "The Future is in Your Hands", which
is a recycling scheme. The programme encourages customers to use special Nokia
recycling bins for the disposal of old mobile phones and batteries. The phones will
then be properly recycled.

The move comes in addition to Nokia's existing "take-back" scheme launched last
year, which operates in Singapore, Malaysia, Phillipines, Hong Kong, Taiwan and
China - with more planned for later this year.

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 CASE STUDY ON NOKIA

Nokia case in brief

Nokia, one of today’s most highly valued electronics brands in the world with its
conglomerate roots in Finnish paper, cable and rubber industries, decided to focus
on the telecommunications sector in 1992. This decision taken by the then new
CEO Jorma Ollila can be considered the most important strategic decision for the
company throughout its entire history, and at the end of the 1990s Nokia was
already the world leader in the mobile telephone industry.
Also today, Nokia remains the world’s leading manufacturer of mobile devices by
market share (estimated at 39% in 2008) and a leader in the converging Internet and
communication industries. Nokia manufactures a wide range of mobile devices for
all major consumer segments and offers Internet services that enable people to
experience music, maps, media, messaging, and games.

Pursuant to the provisions of the Finnish Companies Act and our articles of
association, the control and management of Nokia is divided among the
shareholders in a general meeting, the Board of Directors and the Group Executive
Board. Our Articles of Association provide for a Group Executive Board, which is
responsible for the operative management of Nokia. The Chairman and the
members of the Group Executive Board are elected by the Board of Directors. Only
the Chairman of the Group Executive Board can be a member of both the Board of
Directors and the Group Executive Board.

Board of Directors
The Board decides on matters that, in relation to the Group's activities, are
significant in nature. Such matters include confirmation of the strategic guidelines,
approval of the periodic plans and decisions on major investments and divestments.
The Board appoints the CEO, the President, the Chairman and the members of
Nokia's Group Executive Board. The Board also confirms the remuneration of the
CEO and the President.
The roles and responsibilities of the Board and its committees are defined in the
Corporate Governance Guidelines and the committee charters. The Board's
committees consist of the Audit Committee, the Personnel Committee and the
Corporate Governance and Nomination Committee. The Board regularly reviews
these guidelines and charters in order to ensure that they appropriately comply with
what the Board believes to be best practices of corporate governance. The Board
and each of its committees conduct annual performance self-evaluations.

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Group Executive Board
Nokia's articles of association provide for a Group Executive Board, which is
responsible for managing the operations of Nokia. The Chairman and the members
of the Group Executive Board are elected by the Board of Directors. Only the
Chairman of the Group Executive Board can be a member of both the Board of
Directors and the Group Executive Board.

Annual General Meeting

The shareholders of Nokia use their decision-making power in Nokia's general
meetings. The Annual General Meeting is usually held in each March, April or
May.

Auditor
The auditor is elected annually by the Annual General Meeting.
PricewaterhouseCoopers Oy was elected as the auditor for 2006 in the Annual
General. Meeting held on March 30, 2006.

Corporate Governance Practices

Nokia follows rules and recommendations of the Helsinki, New York, Stockholm
and Frankfurt stock exchanges, where applicable. Nokia's corporate governance
practices comply with the Corporate Governance Recommendation for Listed
Companies approved by the Helsinki Exchanges in December 2003, effective as of
July 1, 2004. The Recommendation recommends accompany to describe the
manner in which the internal audit function of the company is organized. As Nokia
has comprehensive risk management and internal control processes in place, there
is no separate internal audit function at Nokia.
Under the New York Stock Exchange's corporate governance listing standards,
listed foreign private issuers, like Nokia, must disclose any significant ways in
which their corporate governance practices differ from those followed by US
domestic companies under the NYSE listing standards. There are no significant
differences in the corporate governance practices followed by Nokia as compared to
those followed by US domestic companies under the NYSE listing standards,
except that Nokia follows the requirements of Finnish law with respect to the
internal audit function and the approval of equity compensation plans. Under
Finnish law, stock option plans require shareholder approval at the time of their
launch. All other plans that include the delivery of company stock in the form of
newly issued shares or treasury shares require shareholder approval at the time of
the delivery of the shares or, if shareholder approval is granted through an
authorization to the Board of Directors, not earlier than one year in advance of the
delivery of the shares. The NYSE listing standards require that equity compensation
plans be approved.

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The Nokia’s strategy continues to focus on three activities to expand mobile
communications in terms of volume and value:
. Expand mobile voice;
. Drive consumer multimedia;
. Bring extended mobility to enterprises.

Expand mobile voice: Nokia can further develop the mobile voice market - both in
markets where mobile telephony is just taking off as well as in more mature
markets.
Nokia estimates the number of mobile subscriptions to surpass three billion in 2008.
Nokia’s position in mobile voice is strong thanks to their key assets and excellent
logistics capabilities.

Drive consumer multimedia: Nokia is playing a key role in shaping this emerging
complex market by focusing on the fastest growth areas: imaging, music, and
games, to name a few.

Bring extended mobility to enterprises: Nokia will provide a range of

competitive, specifically targeted handsets, platforms, and connectivity solutions so
enterprises can boost productivity through the power of mobility.

On January 1, 2004, Nokia restructured into four business groups – Mobile

Phones, Multimedia, Enterprise, Solutions and Networks - to better focus and
capitalize on the opportunities in each of these areas. Throughout all these, the
Networks business group provides the infrastructure backbone and enables end-to-
end communications.

Corporate Governance Practices

Nokia follows rules and recommendations of the Helsinki, New York,
Stockholm and Frankfurt stock exchanges, where applicable.

Nokia's corporate governance practices comply with the Corporate Governance

Recommendation for Listed Companies approved by the Helsinki Exchanges in
December 2003, effective as of July 1, 2004.The Recommendation recommends a
company to describe the manner in which the internal audit function of the
company is organized. As Nokia has comprehensive risk management and internal
control processes in place, there is no separate internal audit function at Nokia.

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Under the New York Stock Exchange's corporate governance listing standards,
listed foreign private issuers, like Nokia, must disclose any significant ways in
which their corporate governance practices differ from those followed by US
domestic companies under the NYSE listing standards. There are no significant
differences in the corporate governance practices followed by Nokia as compared to
those followed by US domestic companies under the NYSE listing standards,
except that Nokia follows the requirements of Finnish law with respect to the
internal audit function and the approval of equity compensation plans.

Under Finnish law, stock option plans require shareholder approval at the time of
their launch. All other plans that include the delivery of company stock in the form
of newly issued shares or treasury shares require shareholder approval at the time of
the delivery of the shares or, if shareholder approval is granted through an
authorization to the Board of Directors, not earlier than one year in advance of the
delivery of the shares. The NYSE listing standards require that equity compensation
plans be approved.

CONCLUSIONS
I concluded that company shows the corporate governance components according
to their core business and their environmental business.

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 BIBILIOGRAPHY
 Information from internet website are
www.google.co.in (search engine)

www.wikeipedia.org

www.nokia.com

 Information from book

Business Ethics & Corporate Social Resposibility
Author: - Anita Bobade
Publicatons: - Vipul prakashan
Edition: - First Edition

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