The renewed Finnish Corporate Governance Code: Advancing greater diversity in boardrooms

The updated code superseded the 2020 version and introduced some changes, particularly in promoting diversity and transparency of diversity principles within corporate boards. The code’s release is timely, aligning with the national implementation of the European Union’s directive on gender balance and the related amendments in the Finnish Companies Act, which entered into force on December 28, 2024.

Besides the more substantial changes discussed below, the Corporate Governance Code 2025 also contains a couple of other minor updates. The applicability of the code is expanded to include companies listed on the Nasdaq First North Premier Growth Market, in addition to those on the main market of Nasdaq Helsinki. Furthermore, the presentation of the corporate governance statement as a stand-alone report is no longer recommended, and companies may therefore present the corporate governance statement as a separate section in the annual report.

Latest Updates in a Nutshell

The most significant change in the code is the updated recommendation on gender representation. The previous recommendation for both genders to be represented on boards is now replaced with a mandate for ‘balanced’ representation, to be achieved by June 30, 2026.

The balance of representation is assessed in the same way as under the Finnish Companies Act, although the code applies its standard to all companies within its scope, not just those covered by the relevant provision of the Companies Act (i.e., stock exchange listed companies with an average number of employees of over 250, and a reported balance sheet of over 43 million euros or a reported turnover of over 50 million in the last financial year and the immediately preceding financial year).

The code also enhances the reporting requirements. Companies must now include detailed descriptions of the implementation of the board’s diversity principles and data on the gender distribution in their corporate governance statements.

Way Forward

The changes necessitate an updated approach to planning board composition and governance reporting. If companies haven’t already begun evaluating their current board structures and diversity policies to ensure compliance by the 2026 deadline, they should do that now. This may involve revisiting recruitment and nomination processes to foster a more diverse board.

Additionally, the enhanced reporting recommendations mean that companies must be prepared to provide detailed disclosures on diversity and gender representation.

Looking ahead, further updates in the Corporate Governance Code are expected in the next couple of years, since the second phase of renewing the code has started. The second phase will focus, in particular, on incorporating sustainability considerations and recent sustainability regulation into the Code. Additionally, the functioning of the code’s recommendations on remuneration reporting will be assessed and updated where necessary.