Group-wide governance framework

Telia Company’s group-wide governance framework has been approved by the Board. 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 the group’s purpose, values, roles, responsibilities and authority to act.

Group-wide Governance Framework

Deciding what we shall achieve

In order to provide overall guidance to the employees, the Board has approved a Telia Company purpose statement. Further, the Board has adopted a strategy, setting more specific directions for the coming years as well as yearly operational and financial targets.

Purpose: Bringing the world closer

To grow our business and to stay inspired in our daily work, we need to be truly relevant to our customers. The purpose “Bringing the world closer” guides our ambition to take Telia Company to the next level. Everything we do should be a reflection of our purpose.

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
  • Execute on opportunities in adjacent areas close to the core – invest in areas that complement and strengthen the core business

Operational and financial targets

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

Setting the boundaries for how we act

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

Set of values

Telia Company’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 Responsible Business Conduct

The Code of Responsible Business Conduct, issued by the Board, provides guidance on Telia Company’s framework of policies and instructions. It helps create a Telia Company way of doing business by defining a common ethical compass, setting clear standards and expectations on how to act and helps in recognizing that doing business with integrity is a shared responsibility. The 17 chapters of the Code reflect group policies and instructions and provide practical and instructional information with respect to its interpretation. The Code applies to all Telia Company employees, directors and board members. All contractors and consultants working as part of Telia Company’s operations must also follow the Code. The Code is available in 12 languages in a printed newspaper format document and on the intranet.

The Telia Company Code of Responsible Business is available at:
http://dontdothisatwork.teliacompany.com/
(Information on the Telia Company website does not form part of this Statement) 

Group policies approved by the Board – area and purpose

Name of Group Policy

Description

Anti-Bribery and Corruption

To set the standards for ethical business practices throughout the operations

Communication

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

Customer privacy

To respect and safeguard customer privacy by setting high and consistent standards

Electromagnetic Fields

To ensure that Telia Company fulfils its commitment to take an earnest approach to electromagnetic fields (EMF)

Enterprise Risk
Management

To describe the enterprise risk management framework

Environment

To ensure that we proactively manage environmental impacts throughout the full life cycle of delivering our products and services

Financial accounting
and reporting

To describe our aim to follow relevant accounting standards, report financial information accurately and completely, and have appropriate internal controls and processes to ensure that accounting and financial reporting comply with legislation, regulations and listing requirements

Financial management

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

Freedom of expression and surveillance privacy

To define our commitments in relation to requests or demands with potentially serious impacts on freedom of expression and surveillance privacy

Inside information and
Insider trading

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

Occupational Health
and Safety

To set the framework aiming at providing and constantly improving a safe and healthy workplace by ensuring safety in work processes, preventing and reacting to conditions of ill-health and supporting measures to promote health and wellbeing

People

To provide our employees with an overview of our company values and expectations in relation to people. It gives also employees at all levels the prerequisites to act in line with these values and expectations

Sourcing

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

Quality

To define our commitment to consistently provide products and services with high quality that meet customer needs

Remuneration

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

Security

To describe the governance as well as control, facilitation and implementation of security measures

Sustainability governance

Sustainability in Telia Company covers how the company accounts for its long-term impact on society and the environment. The work is focused on ensuring ethical, responsible business practices and on creating shared value by contribution to business and the UN Sustainable Development Goals. We apply a stakeholder-based approach guided by international guidelines and frameworks, see ”Statement of Materiality.” Group Executive Management and the Governance, Risk, Ethics and Compliance (GREC) meetings are the primary decision-making forums. The ultimate responsibility for sustainability oversight lies with the Board. For more information on the governance of specific responsible business focus areas, see Board of Directors’ Report, section “Responsible business.”

Policy framework

The heads of group functions secure that necessary group policies and instructions are issued within their respective area of responsibility. All group policies and group instructions are binding for all entities in which Telia Company has management responsibility.

Group policies are approved by the Board, at least on an annual basis, after a preparatory review by the relevant Board Committee. Group instructions are approved by the CEO or the head of the relevant group function, after being reviewed at a group GREC meeting. All group policies and group instructions are stored and published in a common governance documents database available to all employees. The database provides a complete audit trail of the entire document lifecycle. In addition to the Telia Company Code of Responsible Business Conduct, the Board has currently approved the group policies presented in the table above.

Group policies are publicly available at:
www.teliacompany.com/en/about-the-company/public-policy
(Information on the Telia Company website does not form part of this Statement)

Organization

Change in organization structure

The organization structure was changed during 2017. Main changes were that heads of Telia Finland and Telia Norway, respectively, became part of the Group Executive Management. For organizational purposes, the countries Lithuania, Estonia and Denmark are now represented in the Group Executive Management team by the Head of Cluster (LED - Lithuania, Estonia, Denmark). For more information, see “CEO and Group Executive Management.”

Also, a new group function was established under the name CEO office; Strategy & Combined Assurance, comprising Group Strategy, Risk Management, Ethics and Compliance and Internal Audit. Head of Group Internal audit reports administratively to the Head of CEO Office, while continues to report functionally to the Audit and Responsible Business Committee.

Head of Group Ethics and Compliance reports to the Head of CEO Office, but the result of its work is reported directly to the Audit and Responsible Business Committee.

The purpose with the change in organization was to increase focus on the Nordic and Baltic operations and at the same time maintain focus on our responsible business agenda.

Country organization and group functions

Telia Company’s largest businesses are mobile, broadband, TV and fixed-line operations in the Nordics and Baltics, and mobile operations in Eurasia. For management purposes, the group is divided into countries and group functions. Also, a separate Steering Committee, chaired by the CEO, has the overall strategic responsibility for region Eurasia.

The countries and group functions shall work in close cooperation with each other, providing advice and guidance in order to maintain high technical and commercial skills, ensure good management and regulatory compliance, use of economies of scale, as well as achieve a business that is sustainable long-term.

The country organization is primarily responsible for running the business operation within its geographical area. Local focus is the most effective way of increasing competitiveness and innovation by ensuring that products, services and solutions offered are adapted to customers’ needs. This proximity to customers makes it easier to identify what the customers want and require. It also enables better understanding of the challenges faced in each market and country, including technical solutions and societal challenges.

Group functions are responsible for driving development within their respective areas to ensure efficiency and cross-border, cross-functional synergies.

Delegation of obligations and authority

The CEO has issued a Delegation of Obligations and Authority (the DOA), which defines the obligations imposed on Group Executives, and within which limits they may take 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

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. Individual performance management is described in Board of Directors’ Report, section “People.”

Business reviews

The CEO sets goals for the operations based on the decisions of the Board. To ensure performance, managers have annual targets for their respective operation. The target for each business are followed-up on a monthly basis and 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 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 Telia Company provides. At the country review meetings, the CEO, CFO, COO, Head of Financial Planning and Analysis, Head of Investor Relations and selected members of Group Executive Management attend, in addition to the respective country management.

The Board 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 section “Board of Directors.”

Risk and compliance reviews

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