Business planning and risk management
Hydro's overall goal is to create shareholder value through satisfied customers and motivated and competent employees. We have defined two main processes to ensure that short and long-term targets are achieved.
The portfolio, strategy and business planning process involves strategic and operative planning and results monitoring. The planning, which reflects our ambitions and values, is the basis for the strategies and measures that form the business plans at all levels of our organization. We have defined key performance indicators for each unit, including financial, human resource, ethical and HSE objectives, in addition to unit-specific operating targets.
The people process is designed to assess and develop our human resources, and is an integral part of our annual business planning. Its aim is to promote the potential of individual employees and of our organization as a whole.
Risk management is also an integrated part of our planning and reporting process. Risk management deals with all aspects of value creation, including strategy, finance, commercial matters, organization, HSE, reputation, corporate responsibility, regulatory and legal matters. Hydro's board of directors regularly reviews and evaluates the overall risk management systems and environment within Hydro. We carry out risk assessments for defined exposure areas. Exposure to certain risks, particularly those threatening life and health, has been consistently reduced to very low levels.
Corporate directives and Code of Conduct
The Hydro Way represents our framework for leadership, organization and culture and is the foundation of our governance system. Our system is based on the delegation of responsibility to our business areas and to corporate functions whose duties include finance, tax and accounting. In order to maintain uniformly high standards, we set common requirements in the form of corporate directives that are mandatory for all parts of our organization. The directives address, among other things, strategy and business planning, finance, risk management, organizational and employee development, health, security, safety and environment (HSE), ethics and social responsibility. This information is made available to all employees.
The board of directors has approved our code of conduct, which applies to all employees throughout the world, as well as to board members of Hydro and its subsidiaries. Training in Hydro's steering documents is available to all employees through the You and Hydro e-learning program.
In Hydro, compliance is defined as adherence to applicable laws and regulations worldwide as well as Hydro's steering documents. Guidelines have been established to assist line management to adhere to Hydro's compliance requirements. Special emphasis is made on reducing the risk of non-compliance within anti-corruption, competition, and health, security, safety and environment. An extensive compliance audit of the robustness of the HSE system was performed in 2009. Self-assessments were carried through for all business sectors in 2009 in the four compliance areas: integrity and human rights, competition, finance and HSE.
These corporate directives shall ensure that everyone in the company discharges his or her activities in an ethical manner and in accordance with current legislation and Hydro’s standards. Employees are encouraged to discuss their complaints, and concerns regarding possible breaches of Hydro’s requirements, with their immediate supervisor. When this is not considered to be appropriate, then employees have recourse through an AlerLine handled by an external company to secure confidentiality and independent advice. All concerns reported through the AlertLine is handled by the company’s internal audit function with a reporting line to the Board’s audit committee. Reports may be given anonymously. Employees can not be criticized or penalized if they in good faith arecontacting a relevant function in Hydro about a perceived breach of the law or the company’s guidelines.
Our code of conduct is approved by the Board of Directors and is valid to the Board members, all employees and board members in all subsidiaries.
Transparency and communication
Hydro’s corporate culture embodies the principles of honesty and respect for others. The company’s ability to operate efficiently in the Norwegian market and internationally requires consistent and professional communication. Hydro adheres, therefore, to the principles of transparency, honesty and sensitivity when interacting with its stakeholders.
Public affairs and lobbying
Given the nature of our industry, Hydro is particularly interested in policies dealing with climate change, reducing emissions from industrial processes, sustainable production and consumption, trade, energy efficiency, energy markets, health and safety at the workplace, etc. Hydro recognizes the value of engaging with public authorities and other stakeholders in relation to the development of various policy initiatives impacting our industry. Hydro interacts primarily with those decision-makers in countries where we have significant operations, such as Norway, Germany, France, Australia, Brazil, USA, as well as with regional structures like the European Union institutions. In general, we promote a pragmatic approach - once ambitious legislative objectives have been set by the political leaders, the market must be left to work towards achieving these objective at the lowest possible cost for society. For example, we support the development of market-based instruments, such as emissions trading, to reduce greenhouse gas emissions in the world.
Hydro promotes its views on issues of importance to us either through direct interaction with public authorities, or through the various industry associations we are member of. These include: the International Aluminium Institute, the European Aluminium Association, the World Business Council for Sustainable Development, the European Roundtable of Industrialists, the Federation of Norwegian Industry, the American Aluminium Association, and many more. Hydro subscribes to the Code of Conduct for Lobbying in the European Parliament, and is currently preparing its submission to the European Register of Interest Representatives, set up by the European Commission. Hydro also is a member of a series of think-tanks, especially in Brussels, and engages regularly in discussions with various NGOs.
Most resources are dedicated for lobbying activities within the EU, Norway and Brazil. Such activities within the EU is publicly reported through the EU Transparency Register. In Norway and Brazil about one full-time equivalent is dedicated to lobbying activities in each country.