Stora Enso's Shareholders’ Nomination Board and Governance Dynamics: A Blueprint for Long-Term Value Creation

In the evolving landscape of corporate governance, the interplay between board composition, nomination processes, and long-term value creation has become a critical focal point for investors. Stora Enso, the Finnish-Swedish forest industry giant, offers a compelling case study. By examining its 2025 board composition and governance frameworks, we uncover how deliberate structural choices and shareholder-aligned processes are driving profitability, sustainability, and strategic coherence.

The Shareholders’ Nomination Board: A Pillar of Accountability

Stora Enso’s 2025 board, comprising nine members, was approved by the Annual General Meeting (AGM) following proposals from the Shareholders’ Nomination Board. This process ensures that board appointments are not solely dictated by internal stakeholders but reflect broader shareholder interests. The inclusion of two directors independent of significant shareholders—a requirement under the company’s governance framework—creates a checks-and-balances system that mitigates short-termism and aligns decision-making with long-term value creation [1].

The re-election of seasoned directors like Kari Jordan (Chair) and Håkan Buskhe (Vice Chair), alongside the addition of Elena Scaltritti and Antti Vasara, underscores a balance between continuity and fresh perspectives. This hybrid approach allows the board to leverage institutional knowledge while integrating new insights, a dynamic critical for navigating the volatile markets Stora Enso operates in [3].

Governance Committees: Specialization as a Strategic Advantage

Stora Enso’s board operates through three specialized committees, each addressing a core pillar of corporate governance:
1. Financial and Audit Committee: Oversees financial integrity and sustainability reporting, chaired by Richard Nilsson.
2. Sustainability and Ethics Committee: Focuses on ESG alignment, chaired by Christiane Kuehne.
3. People and Culture Committee: Manages talent and succession planning, chaired by Kari Jordan [2].

This compartmentalization of responsibilities ensures that complex issues—such as decarbonization, cost optimization, and talent retention—are addressed with technical expertise. For instance, the Sustainability and Ethics Committee’s oversight of ESG initiatives directly supports Stora Enso’s positioning as a leader in renewable packaging, a sector projected to grow significantly in the coming decade [2].

Strategic Execution: From Governance to Performance

The board’s governance framework has translated into tangible financial outcomes. The profit improvement program launched in February 2024—targeting fixed cost savings and operational efficiency—resulted in a 75% surge in adjusted EBIT for the year. This was achieved through measures like reducing 1,000 employees and retaining strategic assets such as the Beihai production site, which aligns with the company’s sustainable packaging ambitions [1].

In 2025, the board further solidified its strategic focus by divesting 12.4% of Swedish forest assets and streamlining operations to prioritize renewable packaging. These moves reflect a disciplined approach to capital allocation, a trait often absent in firms with fragmented governance structures. The updated remuneration policy and dividend approval at the 2025 AGM also signal a commitment to rewarding shareholders while incentivizing long-term performance [3].

Shareholder Alignment: A Governance-Driven Imperative

The board’s emphasis on independence and transparency fosters trust among investors. By mandating regular meetings (minimum five annually) and rigorous conflict-of-interest disclosures, Stora Enso minimizes the risk of misaligned incentives. The Shareholders’ Nomination Board’s role in proposing candidates further ensures that governance remains responsive to investor priorities, such as ESG compliance and profitability [1].

However, challenges persist. The board’s one-year term, while promoting agility, could risk short-term strategic myopia if not balanced with multi-year planning. Yet, Stora Enso’s 2024–2025 actions—such as its leaner organizational structure and focus on renewable materials—suggest that the board is effectively navigating this tension [2].

Conclusion: A Model for Governance-Driven Growth

Stora Enso’s governance model exemplifies how structured board composition, shareholder engagement, and specialized committees can catalyze long-term value creation. By embedding independence, transparency, and strategic specialization into its DNA, the company is not only enhancing profitability but also positioning itself as a resilient player in a decarbonizing global economy. For investors, this represents a compelling case for how corporate governance can be a competitive advantage.

Source:
[1] Composition, responsibilities and duties of the board, https://www.storaenso.com/en/investors/governance/board-of-directors/bod-composition-responsibilities-and-duties
[2] Board of Directors Committees - Investors, https://www.storaenso.com/en/investors/governance/board-of-directors/board-of-directors-committees
[3] Annual General Meeting - Investors, https://www.storaenso.com/en/investors/governance/annual-general-meeting