The Group has an established governance framework including Group policies, Group procedures and other steering documentation to govern the way it conducts its business.
We aim to ensure efficient and value-creating decision-making by clearly defining the division of roles and responsibilities among shareholders, the Board of Directors and the Group Executive Management. All decision-making is supported by the Group's management systems.
Corporate governance is based on applicable legislation, the rules and regulations of Nasdaq Stockholm, the Swedish Corporate Governance Code and internal policies and procedures. All shareholders are entitled to exercise their voting rights in the highest decision-making body, the Annual General Meeting of Shareholders.
Sandvik’s employees are given the opportunity to gain insight into and exert an influence over the company’s operations through their union representatives, since they are entitled to union representation on the Board under Swedish legislation.
Sandvik's corporate governance is managed through the governance framework, The Sandvik Way, which is based on four layers:
1. Oversight and directional
Shareholders Meeting and Board of Directors, CEO and Group Executive Management, Business Areas and Group Functions, Group Councils and Country Organization.
2. Culture and enabling structure
Sandvik's vision, core values, Code of Conduct and leadership model.
3. Operational system
Risk assessment, strategic planning, performance management, policies and procedures, compliance system and internal control, monitoring, Speak Up whistleblowing system and investigation process, internal and external auditing.
4. Business Area governance
Complementary steering based on business activities.
To be able to leverage the full potential of our company, we need to foster a culture of high performance. A number of key initiatives have been undertaken to secure this, including improved performance management training in alignment with our target setting and a better focus on business advantages.
We develop objectives and targets, both financial and non-financial, which are regularly followed up and reported on. Some of these objectives and targets are disclosed in the Annual Report.
We seek to achieve a balance between economic growth and the responsible use of both natural and human resources. Our financial objectives are based on assessments of the company's strengths and how well positioned we are for future challenges. The targets should contribute to retaining and strengthening the Group's leading global position and create long-term value for shareholders and other stakeholders.
Major sites with production, services and warehouses have certified management systems according to ISO 14001 (98%) and OSHAS 18001 (96%). 25 energy-intensive sites are also certified according to ISO 50001.
Integrated risk management
The Sandvik Group applies a comprehensive risk management program, Enterprise Risk Management (ERM). The program covers both business areas and Group functions. ERM is an integral part of Sandvik's operational and strategic management and assists the company in taking action when it encounters change, whether triggered by internal or external factors.
The main components of risk management are identification, evaluation, treatment, monitoring and reporting. An action plan is established to accept, reduce, eliminate or transfer the risk or leverage the potential opportunities identified. Formal procedures and processes have been established for the reporting, monitoring and control of risks.