12 May 2014

Sustainable board work

Despite the wave of new trends affecting the entire world of management, no area has probably been more affected over the last 20 years than the work of the boards of directors of listed companies. The number of regulations and recommendations has multiplied many times over, and call for high levels of corporate responsibility and sustainability and good corporate citizenship. Good governance means that a board must monitor that a company’s values and operating principles, the ‘tone from the top’, are cascaded down through the entire organization.

From a board’s perspective, corporate responsibility is primarily about responsibility for a company’s success. The choices a board makes must be the right ones. Without a successful business, a company cannot be sustainable. Without a sound financial foundation, it cannot invest in reducing its environmental impact or improving its energy efficiency, and cannot invest in developing new, lower-emission products – something that Neste Oil needs to do.

Generally speaking, loss-making companies are often forced to close their weakest-performing plants and other units, cutting their personnel in the process. Even a successful company cannot allow inefficient operations to continue, as these will endanger its longer-term development.

For personnel, a company’s weak performance is typically reflected in poor pay development and reduced training and personal development, sometimes even shortcomings in occupational safety.

A company will also be unable to succeed, at least longer term, if it does not observe international and local norms and ethically sustainable business principles. Good governance today requires a board to lay down the key ethical principles to be observed across a company and link these principles to international practice, embodied in principles advocated by bodies such as the UN, the ILO, the OECD, the ICC, and others. This is what Neste Oil has done.

When a good company generates a profit and creates value for its shareholders, it also generates prosperity for society as a whole. In the Nordic region in particular, we should not forget that, without successful companies, it would be impossible to maintain the public services funded by tax revenue that we benefit from today.

Neste Oil’s Board of Directors has had numerous discussions, challenged the company’s senior management, and taken numerous decisions related to corporate responsibility and sustainability as part of its work. As a refining company, the importance of process and people safety is always on the Board’s agenda at Neste Oil, and President & CEO Matti Lievonen always begins his reports to the Board with a review of our monthly safety statistics and safety improvement measures.

We develop our corporate structure based on our businesses, and collect and pay taxes and other charges in accordance with our legal requirements, appropriately and on time. Our development work and investments in cleaner traffic fuels are important in terms of European and global climate targets.

Our Annual Report, Sustainability Report, and ongoing communications activities tell us and the rest of the world about what we have achieved so far and highlight our goals. We can be proud of Neste Oil’s achievements in the field of sustainable development – and they should inspire us to continually look for new and sustainable ways of promoting the wellbeing of our environment and our personnel, and improving our financial performance.