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The ability to plan, structure, implement and evaluate construction processes is one of Veidekke’s core competencies. Efficient governance is a primary critical factor of success for the company and an integrated part of its business management. The company has, at all times, a large number of ongoing projects in its three business areas (construction, property and industry), and therefore 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. For every project, the focus is on profitability, risk, injuries, absence and environment.
Internal control
Veidekke’s management monitors the overall portfolio of projects to ensure an acceptable level of risk exposure and a sound basis for profitability. The management systems for the different entities provide clear guidelines for how projects are to be carried out with reference to quality, progress, cost-effectiveness, health, safety and environment. These tools play an important part in ensuring quality in orders-on-hand and a uniformly high standard in the execution of projects. Status and profitability of orders-on-hand is a fixed item on the agenda for the divisional managements, corporate management and the Board of Directors.
Risk exposure in the Property Division, through unsold units under production and any completed units, is measured continuously. The start-up of new property development projects will be postponed if the risk for Veidekke’s own account is deemed to be too high. The Board's property committee helps to ensure good internal control with regard to starting any new self-directed projects and site acquisitions.
Veidekke’s financial policy provides guidelines for the different entities’ financial management and activities. The object of the guidelines is to avoid, limit, control and measure financial risk, promote capital rationalisation and optimise the Group’s financial resources.
Planning
Veidekke’s planning wheel forms the core of the company’s economic, financial and strategic planning. It defines a fixed agenda throughout the year for the preparation of framework documents, strategic plans, budgets and ongoing super-vision of the divisions.
Financial management and control
The Group is governed by clear financial objectives, linked with operating margins, capital yield and capital structure. 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’ operating margins, including financial items. Property and Industry are capital-intensive areas, and these projects are also measured by return on invested capital.
Ethical guidelines
With reference to the company’s core values – professional, honest, enthusiastic and ground-breaking – Veidekke has, in collaboration with the Confederation of Norwegian Business and Industry, drawn up ethical guidelines in which the basic principle is employee freedom with responsibility. The implementation of these guidelines relies to a great extent on the active participation of the employee in the process, the discussions and involvement around the ethical issues that the company’s activities raise. The company’s ethical guidelines are accessible on Veidekke’s intranet and web site.
Reporting irregular activities
In-house rules have been drawn up for reporting irregular activities in the company, and an external ombudsman has been appointed. These guidelines are accessible on Veidekke’s intranet.
Compliance with competition law
Veidekke has a comprehensive compliance programme which gives relevant employees an insight into the basic rules of competition law that apply to Veidekke’s activities. The purpose of the programme is to increase understanding of and ensure compliance with relevant laws and regulations. This compliance programme is accessible on Veidekke’s intranet and web site.