Corporate governance
Sandvik AB has its head office in Stockholm and is the Parent Company of the Sandvik Group, with subsidiaries in about 70 countries. The Group has around 41,000 employees and revenues in about 170 countries. Sandvik AB is a public company with its shares listed on Nasdaq Stockholm.
Corporate governance within Sandvik is based on external rules such as the Swedish Companies Act, the Nordic Main Market Rulebook for Issuers of Shares, the Swedish Code of Corporate Governance (the “Code”) and other relevant laws and regulations. The Code is available at corporategovernanceboard.se. In 2023, Sandvik applied the Code without deviating from any of its regulations.
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Corporate governance reports
Latest Corporate governance report
Previous Corporate governance reports
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Governance framework
Sandvik’s corporate governance framework, The Sandvik Way, implements the external rules previously mentioned and also sets out the internal rules and principles for governance that apply specifically within Sandvik. It is based on three segments, as set forth in the model below, and describes how common ways of working have been implemented throughout the entire organization.
The Sandvik Way
Governance structure
- Shareholders' Meeting and Board of Directors
- President and Executive Management
- Business areas, Group functions
- Divisions
- Business units, distribution centers, production units, sales areas, sales units
This segment outlines how the Sandvik Group is led and governed. The Board of Directors, elected at the Shareholders’ Meeting, sets the strategic direction for the Group. The President carries this out through the Group Executive Management whose members manage and oversee the operations of the Group. The main operational responsibility in the Group lies with the business areas and divisions, whereas the Group functions are responsible for functional policies and processes supporting the business.
The Sandvik Way is implemented in the respective business areas, with additional requirements cascaded down in the operational structure of each business area.
Operations
- Sandvik strategy, Risk management
- Objectives and Key Results, Policies and procedures
- Finance forecasting and scenario planning
- External reporting
- Performance management, Compliance and Speak Up
- Internal control
- Internal audit, External audit
The detailed controls and risk frameworks common across the Group are detailed in this segment. This includes many aspects such as strategy and risk management, policies, financial forecasting and scenario planning, as well as compliance, internal controls and audits. Performance management, controls and continuous improvements provide a solid basis for our ways of working.Corporate culture
- Purpose
- Core values
- Code of Conduct
- Leadership Model
This segment sets the foundation for how we all shape our culture in the company and enable a customer-oriented and responsible business. Our operational controls and risk frameworks are supported by the ambitions and requirements of our purpose, core values, Code of Conduct and leadership model. -
Sustainability governance
The sustainability governance of the Sandvik Group is grounded in its business strategy, business model, and international frameworks. Relevant goals are established to address material areas and effectively manage associated impacts, risks, and opportunities. Policies and management systems have been set to ensure financial, environmental and social compliance.
Governance structure
The Sandvik Board of Directors holds primary responsibility for sustainability oversight within Sandvik and the Audit Committee monitors the sustainability reporting. Implementation is delegated to the President and CEO of Sandvik.
The Group Executive Management bears the overarching responsibility for the Sandvik sustainability strategy and agenda. Implementation and follow-up, however, are the responsibilities of the Group functions, business areas and divisions. Additionally, the business areas are tasked with assessing and managing sustainability risks in their operations. The coordination within the Group is managed by the Group Communications and Sustainability function. Key performance indicators (KPIs) are consolidated and reported to track goals at both Group and business area levels. Annually, we assess our performance, establish targets, and outline focus actions for the upcoming year.
The Sustainability Council serves as a collaborative forum for cooperation and best practice sharing across Sandvik, with representation from both business areas and Group functions. Group Sustainability coordinates the sustainability agenda together with the business areas and Group functions.
Board’s sustainability competence
The Board consists of members with experience from different geographic areas and different industry sectors. All Board members have long experience from managing different positions in global, industrial companies in different functions, which includes the topics generally covered by the sustainability concept. Many of the Board members are former CEOs or senior managers of other global, industrial companies and as such, have extensive experience from managing environmental, social, and governance-related impacts of the business in all parts of its value chain.Board’s role in overseeing management of sustainability impacts
The Board oversees the due diligence and other processes to manage the impact Sandvik has on the economy, environment and people through many different processes, managed through the Board's Procedural Guidelines and the policies and procedures in The Sandvik Way. The normal Board processes include regular reports to the Board and its Committees on risk management, human resource management, sustainable supplier management, compliance and environment, and health and safety reporting. Key KPIs within the areas are tracked and reported to the Board on a quarterly basis, both through the interim reports and the Key Objectives tracking. The Audit Committee supports the Board in reviewing performance in these areas.
Stakeholder engagement is managed through the operational structure. This includes Investor Relation meetings with key shareholders, dialogues with the Board union representatives as well as considering external analyst and shareholder reports.
The Board uses this information in the strategic planning for the Group and updates the guidance to management as appropriate, considering the overall balance of the different interests. For example, after input from stakeholders, the Remuneration Committee has requested management to investigate potential Environmental, Social, Governance (ESG) targets for one or several of the existing incentive programs during 2024.
Evaluation and reporting
The effectiveness of the processes described above is evaluated using, for example, the internal controls framework, internal and external audits in different parts of the value chain (including supplier audits), as well as the feedback from the Speak Up system and investigations conducted as part of that process.Sustainability is an integrated part of the reports submitted to the Audit Committee and sustainability reports are also made available to the Board on at least a quarterly basis. These reports include stakeholder engagement and results of the evaluation of the effectiveness of processes.
In 2023, the Board of Directors also received updates on the new sustainability strategy and the Corporate Sustainability Reporting Directive (CSRD) project. The Communication and Sustainability function informed the Audit Committee of relevant sustainability matters and communicated progress throughout the year. Both the Audit Committee and the Board of Directors proactively sought information and engaged in discussions on related topics, including CSRD.