The Chairman's comments
A few years ago, when the Board of Directors was discussing the outlook for the 2011 financial year, we foresaw even greater uncertainty than usual on the horizon. Tension in the financial system and the acute debt crisis in several West European countries hung like a dark cloud over the global economy. Clearly, this wasn’t going to be plain sailing, so we made sure we were well prepared for stormy weather ahead.
In retrospect, we can see that the situation wasn’t as bad as we feared and that ÅF has developed in a way that has exceeded our expectations. Profits have improved and the slowdown that we must continue to expect has not yet had any serious impact on operations.
This means that ÅF’s long-term growth goal established by the Board of Directors – to double the volume of business over the next five years – remains firmly in place. Organic growth is well in line with expectations. Acquisition activity has been more sluggish recently, but with our well-filled company coffers, the board and management will assign higher priority to these issues in the future.
It is also pleasing to note that ÅF’s efforts to renew its brand and increase its appeal as an employer have produced clear results. According to employer branding expert Universum, ÅF is now Sweden’s second most popular employer among professional engineers. This is a real strength in a labour market that is competing for the best consultants. We are equally delighted that ÅF also ranks as one of Europe’s top 50 dream workplaces for young engineers. That is news that bodes well for the future.
I think the following corporate governance report presents a good picture of how the board works and of which issues are high on our agenda. The overall regulatory framework is well established and the basic features of our corporate structure are characterised by continuity. But the Board of Directors also has the important task of occasionally testing and reviewing the company’s geographical and functional focus. The increasing internationalisation of ÅF, albeit with a sharper focus on markets close to our core regions, and the sale of ÅF Kontroll in 2010 are just two of the results of this work.
Sustainability issues play a prominent part in the work of the board. ÅF wants to set a good example in the industry, both in relation to clients and through its own actions. As part of these efforts, ÅF adopted a sustainability policy in 2011 and used this as a basis for revising the Group’s risk management processes to meet more clearly the requirements of a world – and our workplace within it – that is constantly changing. Our ambition is also for ÅF to highlight more sustainable options for clients when producing quotes. While such options may initially appear more expensive, they are nevertheless fully justifiable both from an environmental perspective and as a more cost-effective, long-term alternative.
In my opinion, other key tasks include making sure that the company has suitable decision-making and control processes, that the organisation is flexible enough to respond rapidly to change and that the business is run as efficiently as possible. After all, our declared ambition is for ÅF to be a leader in its field.
Finally, a constructive relationship between the board and management is essential for effective corporate governance and productive board work. In that sense, the concept of governance by the board can be misleading. Initiative for change generally comes, of course, from management, which in turn – in a spirit of confidence and trust – benefits from the collective expertise of the Board of Directors. The board naturally bears ultimate responsibility, but I believe that when corporate governance works best, its function as a sounding board for executive management is even more significant.
That’s how decisions evolve in a process of interaction between the Board of Directors, management and employees. By working together in this way we shape a strategy for ÅF that will make a good company even better.
Ulf Dinkelspiel
Chairman