9 BOARD OF DIRECTORS Jotun’s Business Principles and corporate governance provide the moral and administrative backing which is necessary to ensure responsible behaviour towards all stakeholders. These structures result in the selection of credible suppliers, the respectful treatment of customers, the implementation of initiatives that enhance the health and wellbeing of employees and good corporate citizenship in the communities where we operate. Through the Jotun GreenSteps programme, the company embraces initiatives to better protect the environment. This includes developing products that minimise impact on the environment, producing those products in efficient factories, and providing customers with paints and coatings that will reduce their carbon footprint and protect their property. Jotun also seeks to minimize risk by working against corruption and bribery. The company combats these threats through a variety of means, most notably through a robust anti-corruption policy. Emphasis is placed on training via e-learning courses and regular practical dilemma training which is prioritised for employees in management, purchasing and sales. Anti-corruption training is also included in the induction programme for new employees as well as in Jotun Academies. Jotun is always seeking new ways to reinforce its strong stance against corruption. In 2014, the company developed a board game called the Penguin Spirit game. Among other benefits, the game provides a common understanding of what it means to conduct business responsibly and helps to strengthen Jotun’s corporate culture. 8. DIVERSITY Jotun is committed to preventing discrimination in all forms. Jotun recognises the value of a diverse workforce and has deliberately sought to recruit individuals of different ethnic, religious, and national origin to make the company stronger. The company cooperates with a number of institutions that facilitate job training for people who, for different reasons, are unable to fulfil usual working commitments. In addition, Jotun works to ensure that women are provided with the same opportunities as men. To ensure equal opportunity, Jotun has implemented strict, professional and transparent recruitment policies, tools and practices. Two of the nine senior management positions that report to the President & CEO are female. Of those with personnel responsibility in Jotun A/S, 27 per cent are women (29 per cent in 2013). Women make up 10 per cent of skilled workers (9 per cent in 2013), while the corresponding percentage for women among office staff is 34 per cent (same as in 2013). 9. FUTURE PROSPECTS In 2014, Jotun recorded positive growth in all segments. Gross margin has been stable, and the company recorded improvements in operating profits. Costs continued to rise in line with Jotun’s growth ambitions. Jotun continues to invest significant resources, both externally and internally, to grow the business, spending about USD 150 million a year to construct new facilities or upgrade existing facilities. Going forward, it will be important to balance cost development with expected growth. In the past three years, the company has invested for the future in China, Russia, Brazil, Indonesia, Oman, Myanmar, and the Philippines, and is currently evaluating opportunities in other markets. In Africa, where Jotun already has operations in Egypt, Libya, South Africa, Algeria and Morocco, the company sees promising economic developments in countries like Kenya and Tanzania, in addition to the oil-rich countries of Nigeria and Angola. Internally, Jotun continues to commit substantial resources in R&D and to modernise our business practices to improve profitability, HSE performance, operational efficiency and knowledge sharing. Business improvement initiatives include IT systems and tools, recruiting and training personnel, coordinated global marketing campaigns and the development of innovative new products in all segments. As a global organisation, Jotun is sensitive to the price of raw materials and currency fluctuations, political unrest, severe weather, shocks to local economies macro-economic trends. For example, if low oil prices persist into 2016, planned offshore projects may be delayed or cancelled, impacting sales in the Protective Coatings segment. However, it should be noted that low oil prices may boost long term global growth, as energy costs will fall sharply for oil-importing countries and benefit many industries around the world that depend on oil. If so, this growth may encourage more investment in a broad range of industrial sectors and boost consumer spending, creating opportunities for Jotun in the future. Jotun will continue to build the business consistent with the three main components of Jotun’s core strategy; Organic growth, segment diversity and adopting a differentiated approach to selected markets and regions. By making targeted investments and adopting a long-term perspective, Jotun has become one of the fastest growing paints and coatings manufacturers in the industry.
Jotun Annual Report 2014
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