Group-wide governance framework

Group-wide Governance Framework – structure

TeliaSonera’s group-wide governance framework has been approved by the Board of Directors. It is designed to ensure that operational results correspond to decisions made, and is structured to encourage all employees to strive, within set boundaries, towards the same goals, with a common clear understanding of purpose, set of values, roles, responsibilities and authority to act.

Deciding what we shall achieve

Group-wide Governance Framework – structure

In order to provide overall guidance to the employees, the Board of Directors has approved a TeliaSonera purpose statement. Further, the Board yearly adopts a strategy, setting more specific directions for the coming three-year period as well as yearly operational and financial targets.

Purpose: Bringing the world closer − on the customer’s terms

Our ambition is to take TeliaSonera to the next level, to become a New Generation Telco. To grow our business and to stay inspired in our daily work, we need to be truly relevant to our consumer and business customers. Our purpose that shows us how we will get there, is therefore from the customer perspective.

Strategic priorities

Our strategic priorities are:

  • Value through superior network connectivity – Secure the transition from voice to data through future proof network access to end customers
  • Customer loyalty through convergence – Create a seamless experience across technologies, services and channels
  • Competitive operations – Simplify operations and transform legacy to create agility and cost efficiency
  • Explore opportunities in adjacent areas close to the core in internet of things, e-healthcare, financial services and media

Operational and financial targets

Operational and financial targets are set for the group as a whole and for each region, country and business unit.

Setting the boundaries for how we act

Group-wide Governance Framework – structure

The Board of Directors sets the boundaries on how the employees shall act. Key elements are TeliaSonera’s set of values, the code of ethics and conduct, governance of the sustainability work, group policies, organizational structure and delegation of obligations and authority.

Set of values

TeliaSonera’s set of values – Dare, Care and Simplify – is the compass that leads us in how we act and behave in our daily work.

  • We dare to − innovate by sharing ideas, taking risk and continuously learn; lead by engaging with our customers and challenging ourselves; speak up by expressing opinions and concerns
  • We care for − our customers by providing solutions that are adapted to their needs; each other by being supportive, respectful and honest; our world by acting responsibly and in accordance with our ethical standards
  • We simplify − execution by taking actionable decisions and deliver with speed; teamwork by transparent communication, active collaboration and knowledge sharing; our operations by efficient processes and clear ownership

Code of Ethics and Conduct

The TeliaSonera Code of Ethics and Conduct, issued by the Board of Directors, serves as an overall policy document for guiding the behavior of the employees. The Code defines how TeliaSonera’s employees should interact with different stakeholders, including customers, business partners, competitors, co-workers, shareholders, governments and regulatory bodies, as well as local communities wherever TeliaSonera operates. The Code, which is available in 20 languages, applies to the parent company and to each subsidiary and joint operations as their own binding policy. TeliaSonera also works towards adopting the principles of the Code in all operations in which it has ownership interests.

The TeliaSonera Code of Ethics and Conduct is available at: 
www.teliasonera.com/Code-of-Ethics
(Information on the TeliaSonera website does not form part of this Statement)

Sustainability work governance

Sustainability covers all efforts related to how TeliaSonera accounts for its long-term impact on society and the environment throughout the value chain. TeliaSonera’s sustainability work focuses on anti-bribery and corruption, freedom of expression, customer privacy, occupational health and safety, responsible procurement, environmental responsibility and inclusive digitalization. The work is governed by international laws, guidelines and frameworks, such as the UN Universal Declaration of Human Rights, the core conventions of the International Labour Organization (ILO), the OECD Guidelines for Multinational Enterprises and the UN Global Compact principles.

Group Executive Management and the GREC meetings (see section “Governance, Risk, Ethics and Compliance (GREC) meetings”) are the decision-making forums, with implementation oversight by the Board of Directors’ Sustainability and Ethics Committee. The Head of the Sustainability Strategy function within group function Corporate Development and the Chief Ethics and Compliance Officer are responsible for coordination and oversight of sustainability issues.

For additional information, see section “Enterprise risk management (ERM) framework” and Sustainability Work, section “Sustainability in TeliaSonera.”

Group policies

The heads of group functions shall secure that necessary group policies, instructions and guidelines are issued within their respective area of responsibility.

Group policies are relatively short and mainly principles-based. Group instructions are normally more detailed and operational and shall be in line with group policies. Group policies and group instructions are binding for all entities in which TeliaSonera has management responsibility.

Group policies are approved by the Board of Directors, at least on an annual basis, after a preparatory review by the relevant board committee. Group instructions are approved by the CEO after being reviewed at a GREC meeting. Group guidelines are non-binding recommendations that should be in line with group policies and instructions and are approved by the heads of group functions. All valid policies, instructions and guidelines on group level are posted to a common intranet page available to all employees.

In addition to the overall policy document TeliaSonera Code of Ethics and Conduct, the Board has currently issued group policies as presented in the table.

Certain group policies are public documents available at: 
www.teliasonera.com/en/about-us/public-policies/
(Information on the TeliaSonera website does not form part of this Statement)

 

Group policies issued by the Board – area and purpose

Financial management

To set the rules for managing financial risks and for counterparty credit ratings

Financial accounting
and reporting

To require that proper accounting and reporting standards are prepared, regularly updated and made available to consolidated entities and applied by the entities when reporting to the group

Procurement

To provide a single point of reference and direction for procurement activities and a clear understanding of the procurement principles

Insurance

To have an insurance cover for management, employees and business activities in line with peers within the telecom industry

Enterprise risk management

To define the enterprise risk management framework

Environment

To ensure pro-active management of environmental impacts throughout the full life cycle of delivering products and services

Electromagnetic fields (EMF)

To define the elements of the serious approach towards EMF-related health concerns

Security

To ensure that security measures are characterized by appropriate security and risk awareness, prevention, preparedness, and the ability to respond to, and recover from, incidents and environmental changes

Customer privacy

To set high and consistent standards to respect and protect customer privacy

Communication

To ensure that all communication is accurate and provided in a professional and timely manner

Freedom of expression
in telecommunications

To reduce human rights risks, and to ensure that customers feel confident that we will, whenever possible, support, respect and safeguard their freedom of expression when we receive requests or demands from governments regarding surveillance of communications

Anti-bribery and corruption

To set common standards regarding compliance with the zero tolerance policy towards any form of bribery and corruption, and compliance with local laws

Sponsorships and donations

To define a consistent and group-wide approach to sponsorships and donations

People

To define employer expectations on the employees as well as what expectations employees should have on each other

Occupational health
and safety

To make the health and safety culture part of all employees’ everyday working life and to achieve a safe and legally compliant workplace for employees, vendors and visitors

Travel and expenses

To define common principles, expectations and responsibilities for business travel and expenses to benefit business and employees

Remuneration

To set the strategic direction and clarify the approach on designing and implementing remuneration practices for employees at all levels

Recruitment

To ensure that all recruitments are based on respect for the individual, that demands stated in job profiles are based on our common values and that the selection processes are fair

Pensions

To assist in providing pension benefits by clarifying the structure, design and management of pension plans

Competition

To set the principle of not engaging in any practices or conducting business activities that are in breach of relevant competition or antitrust legislation

Insider trading

To ensure a high standard of ethical behavior towards the capital markets by defining trading and reporting rules

Patents

To protect the investments in research and development and to utilize the patent portfolio effectively

 

Organization

TeliaSonera’s largest businesses are mobile, broadband and fixed-line operations in the Nordics and Baltics, and mobile operations in Eurasia.

The guiding principle for TeliaSonera’s organizational structure is to provide clarity, accountability and to support a customer-centric operating model. The operating model is country-based with strong commercial and technology functions on group level. Countries are grouped in three geographical regions.

Region Sweden

The region comprises TeliaSonera’s mobile, broadband and fixed-line operations in Sweden. The region Head reports to the CEO and is a member of Group Executive Management.

Region Europe

The region comprises TeliaSonera’s mobile, broadband and fixed-line operations in Finland, Norway, Denmark, Lithuania, Latvia, Estonia and Spain. The region Head reports to the CEO and is a member of Group Executive Management.

Region Eurasia

The region comprises TeliaSonera’s mobile operations in Kazakhstan, Azerbaijan, Uzbekistan, Tajikistan, Georgia, Moldova and Nepal. The region Head reports to a Steering Board, headed by the CEO (for additional information, see section “CEO and Group Executive Management”).

Group functions

The group functions assist the CEO in setting the framework for the activities of the countries and provide the countries with process development support and common platforms within the areas communication, corporate development (including M&A), finance (including procurement and real estate), human resources, legal affairs, group-wide commercial (including the international carrier operations) and technology (including IT) issues, CEO Office (also responsible for the holdings in MegaFon and Turkcell), Ethics and Compliance Office and Internal Audit.

Delegation of obligations and authority

The CEO has issued a Delegation of Obligations and Authority (the DOA), which defines the obligations imposed on the heads of regions and group functions, and within which limits they may make decisions. Within this framework, obligations and decision authorities are further delegated person-to-person via solid reporting lines based on the roles in the operational organization.

Follow-up of our performance

Group-wide Governance Framework – structure

Performance follow-up is essential in order to be able to take corrective measures and plan for the future. Performance follow-up is applied on organizational units as well as on individuals.

Business reviews

The CEO sets goals for the operations based on the decisions of the Board of Directors. To ensure performance, managers have annual targets for their respective operation. The plan for each business is documented in annual operating plans and follow-up is conducted on a monthly basis, complemented with quarterly forecasts.

Business reviews are meetings held on a monthly basis and include financial and business reviews for the reporting period and forecast period as well as reviewing of risks and operations performance metrics on customer service levels, network quality, etc. The business reviews allow for frequent follow-up of operational key performance indicators (KPIs) on country and region level. The operational KPIs are a key part of the follow-up and consist of several measurements which give management a good overview of current state and progress over time. The Net Promoter Score (NPS®) framework is used to monitor and improve the customer experience that TeliaSonera provides. At the region review meetings, the CEO, CFO, Head of Corporate Control, Head of Investor Relations and selected members of Group Executive Management attend in addition to the respective region management.

The Board of Directors receives reports on operational performance on a monthly basis, and at each ordinary Board meeting the group’s operational and financial performance is presented in detail by the CEO and the CFO, respectively (see also the Board’s annual work cycle as described in section “Board of Directors”).

Risk and compliance reviews

GREC meetings on group, region and country level are the primary governing bodies for risk and compliance follow-up. For further information, see section “Governance, Risk, Ethics and Compliance (GREC) meetings.”

Individual performance management

TeliaSonera is developing a high-performance company culture in order to outperform competition and reach challenging goals. Setting individual objectives linked to strategic business goals and providing frequent feedback are crucial activities for managers at all levels. TeliaSonera applies a group-wide model for individual performance management.

The model applied previously and in 2015, aiming to focus on TeliaSonera’s business objectives and to cascade them into regions and countries, was designed to:

  • Help managers to set and cascade business objectives
  • Review individual performance
  • Develop and reward high performance
  • Address poor performance

The process was annual and the year started with setting objectives and ended with a performance evaluation and assessment. A mid-year review was held in order to secure progress and alignment of goals.

In parallel during 2015, TeliaSonera developed a new performance management approach as a key component to drive the right objectives and behaviors towards becoming a New Generation Telco, where everyone’s performance matters and all activities support the strategic direction. The new approach will be implemented in 2016, resulting in a move from an annual event-driven process to a dynamic, ongoing set-up, integrated with the daily work through frequent dialogue meetings. These frequent “check ins” will be held in an environment of recognition, coaching and feedback with self-leadership as a key component.

To ensure execution of strategy and cultural change, all individual objectives will be connected to the strategic areas or to the key behaviors stated in TeliaSonera’s values – Dare, Care and Simplify – and the Leadership Expectations. This will also mean a new way of assessing the total contribution where it is equally important that expectations are met regarding both objectives and behaviors. The assessment of the total contribution is then integrated in all relevant processes such as development activities, salary review and variable pay.

The frequent coaching and feedback enable and reinforce a more dynamic way of working with expectations and short-term priorities to fit the need in different functions to ensure meaningful and relevant individual objectives that create focus on what matters most, challenge and stretch performance and create accountability for key results.

INDIVIDUAL PERFORMANCE MANAGEMENT – Key components

The Board of Directors’ Remuneration Committee reviews the individual performance of Group Executive Management members on a yearly basis.

© TeliaSonera 2015
In the event of any differences between this online version of the Annual and sustainability report and the printed version, the printed version shall prevail.