Management and management system

CEO and Executive Group Management

The President of Vattenfall AB, who is also CEO of the Vattenfall Group, is responsible for the day-to-day administration in accordance with the Swedish Companies Act. The President has appointed decision-making bodies for managing the Group and makes decisions independently or with the support of these decision-making bodies. Since 12 April 2010, Øystein Løseth is the CEO. As from that day, he succeeded Lars G. Josefsson.

The Executive Group Management (EGM) focuses on the Group’s overall direction and decides on matters of major importance for the Group, such as the Group’s strategy, major acquisitions, investments and divestments.  

Link to information on the members of the Executive Group Management

Governing business ethics

Vattenfall’s core values are Openness, Accountability and Effectiveness.

Vattenfall’s Group-wide Code of Conduct and company philosophy stipulate that all employees shall adhere to and work in accordance with Vattenfall’s core values, policies and instructions. The stipulations of the Code of Conduct are concretised in other parts of the management system, Further information on guiding business ethics is provided in Vattenfall’s CSR Report (Corporate Social Responsibility Report).  

A new Code of Conduct was adopted in 2009. It was developed in an international project that was headed by Group Function Human Resources and involved a large number of units in order to ensure that it is in line with the Group’s strategy and the issues that are central for the day-to-day operations. Central issues that are covered by the new Code of Conduct include sustainability, customers and suppliers, people, culture and values, business ethics, health/security/safety and communication.  

In 2009 Vattenfall continued with the introduction of the Group-wide whistle blowing function, with locally appointed external ombudsmen (attorneys), to whom employees, consultants and suppliers can turn to report suspected, serious improprieties that the reporting person for any reason does not want to report internally via the ordinary reporting channels. This function has existed in Vattenfall’s German operations since 2007 and was implemented in Poland and Sweden in 2009. Work on implementing the function in Denmark, Finland, the Netherlands and Belgium is under way and is expected to be completed during the first half of 2010.

General information on the Vattenfall Management System (VMS)

The Group is governed with a focus on value creation and long-term overarching goals and requirements for the Business Groups and Business Units. The Business Groups propose short-term goals for each Business Unit, which are subsequently approved by the CEO and the Executive Group Management (EGM).

To ensure that Vattenfall develops in the intended direction and lives up to ethical and legal requirements, the CEO has established a management system, Vattenfall Management System (VMS) Integrated with the VMS is an Environmental Management System. The VMS is available to all employees on the Group’s intranet.

The VMS consists of a number of building blocks. It is documented in binding governing documents, consisting of CEO documents, Group policies, instructions, directives and other documents. The Group policies specify guidelines on matters of major importance for the Group, while Group instructions provide more detailed and operative control.

The Group’s management processes for strategic planning, business planning and follow-up are central governance tools for the Executive Group Management. The Group functions are responsible for proposing, developing and following up Group policies and instructions. The Group’s Quality function has a co-ordinating role for the management system and has a decision-making committee that is tasked with establishing adherence and improvements to the VMS. In addition, certain central documents are approved by the Vattenfall AB board each year or after material changes have been made.

All units within Vattenfall are obligated to comply with the management system’s governing documents. Special routines are in place to ensure that the Vattenfall Management System is also applied by subsidiaries. With respect to the German subsidiaries, since June 2008 a special agreement (“Beherrschungsvertrag”) has been in place between Vattenfall AB and the German holding company, Vattenfall Europe AG.

Under this agreement, the board (“Vorstand”) of the holding company is subordinate to Vattenfall AB, and Vattenfall AB has the right to issue directives regarding governance. In the event during the agreement’s validity period a net loss were to be reported for a given calendar year in Vattenfall Europe AG’s annual report, and such a net loss could not be compensated by the dissolution of reserves that have been set aside during the control agreement’s validity period, then Vattenfall AB would have to cover the net loss. Information on liability pursuant to the agreement is also provided in the annual report, note 33 to the parent company accounts.

The Annual report 2009 (PDF 13 kB)

Organisation and processes

Vattenfall’s organisational model is based on the value chain for electricity (generation, transmission, distribution and sales) and for heat (production, distribution and sales). Reporting and follow-up of the business activities are conducted with full transparency in accounting, control, profitability and value creation.

In terms of governance, Vattenfall’s operations are broken down into three categories:

• Business activities are handled by Business Groups and their Business Units;
• Functions that support their respective management teams;
• Shared Service Units, which provide and develop services that support the Business Units and other users’ efforts to optimise their business activities. Shared Service activities operate at both the Group (Group Shared Services) and Business Group levels.

A number of important processes have been established to facilitate governance within the Group. Each process is managed by a process owner, usually a member of the EGM, who is responsible for developing the process. At present, the following Group processes exist: Strategic and business planning, reporting and follow-up, risk management, mergers & acquisitions, investments, communications, management development and asset management.  

The strategic and business planning process culminates in yearly strategy and business plans. This process includes the analysis, evaluation and assessment of strategic issues with decisions made by the EGM on selection, formulation and priorities. Strategic planning includes the Group’s long-term operations as well as its financial performance.  

Each year a strategic plan is drafted for decision by Vattenfall’s board. Based on the directives of the strategic plan, the Business Groups and Business Units draw up one-year plan and a five-year plan containing a strategic direction. These plans are subject to the ultimate approval of the EGM. The finance plan for the following calendar year is ultimately adopted by the Board.  

The acquisition of 49% of the share capital and control via the board of N.V. Nuon Energy entailed the formation of the new Business Group Benelux on 1 July 2009, with units for Exploration & Production, for Power, Heat & Services, and for Sales. In addition, a Group-wide energy trading business unit was formed through integration of Vattenfall’s and Nuon’s energy trading units.