Part of Veidekke’s core competence is the ability to plan, structure, implement and evaluate construction processes. Efficient governance is one of the company’s primary critical factors of success and an integrated part of business management. With almost a thousand ongoing projects at any time, the company requires systematic reporting from each project to each division and from there to the corporate management and board of directors. Reports are submitted ten times a year and cover both financial and non-financial parameters, in which the focus is on profitability and risk associated with each project and follow-up of injuries and absence.
The Group is governed by clear financial objectives, which include a return on equity of approximately 20 per cent. These objectives are broken down and operationalised to the different companies, divisions and projects. The projects have clear requirements regarding profitability and cash flow. In construction operations, requirements are set for the projects’ profit margins, including financial items. Property and Industry are capital-intensive areas, and the projects are measured by return on employed capital and/or equity.
The management monitors the overall portfolio of projects to ensure anacceptable level of risk exposure and a sound basis for profitability. Orders-on-hand is a regular item on the agenda at meetings of the divisional management, group management and board of directors. Veidekke’s financial policy provides guidelines for the entities’ financial activities. Its purpose is to avoid, limit, control and measure financial risk, promote capital rationalisation and optimise the Group’s financial resources.
Read more about Corporate Governance in Veidekke's annual report 2010.
The planning wheel
The planning wheel forms the core of Veidekke’s economic, financial andstrategic planning. It defines a fixed agenda throughout the year for the preparation of strategic plans, budgets and ongoing supervision of the divisions. Veidekke has a management system for site managers, which provides clear guidelines for how projects are to be carried out with reference to quality, progress, cost-effectiveness, health, safety and environment. This tool plays an important part in ensuring a uniformly high standard in the execution of projects.
