The Kvaerner management system

The Kvaerner
management system
An introduction to how we
manage our business
Introduction
The purpose of this book is to describe how
Kvaerner manages its business. All documents
described in this book are published on kNet,
the Kvaerner internal website. If you have
questions regarding the content of this book,
please contact your line manager.
Contents
Introduction
Our corporate governance Our management system
Vision and values
Our Code of Conduct
Our policies
Our procedures
Our Project Execution Model
Our global networks
Our delivery model
After reading this text, you will:
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¼¼ be familiar with Kvaerner’s main
governing bodies
¼¼ be familiar with the Kvaerner
management system
¼¼ understand the key principles of our
delivery model
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Our corporate governance
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Corporate governance: The system
of structures, rights, duties, and
obligations by which Kvaerner is
directed and controlled. The governance
structure specifies the distribution
of rights and responsibilities among
different functions in the corporation
(such as shareholders, the board of
directors, management at all levels,
auditors and other stakeholders) and
specifies the policies and procedures
for making decisions in corporate
affairs.
Kvaerner performs its corporate governance within the framework of several legal
requirements and principles in the respective jurisdictions in which it operates.
Kvaerner aims to contribute to sustainable
social development through responsible
business practices and strives to conduct
all business operations in an ethical manner
and in compliance with applicable laws and
regulations. Kvaerner has defined a set of
basic corporate values, ethical guidelines
and corporate social responsibility principles for the group to achieve this.
Kvaerner strives continuously for zero
harm to personnel, material and non-material assets. In addition, we are committed
to ensuring that our products and services
have no undue environmental impact, and
to use energy and resources safely and
efficiently.
The corporate governance principles of
Kvaerner are adopted by the Board of
Directors of Kværner ASA. The Board of
Directors evaluates the corporate governance statement on an annual basis.
BOARD OF DIRECTORS
Responsible for strategic direction, overall
governing structure and values and policies,
performed in accordance with Norwegian
law and business principles. The Board of
Directors, and the Board’s subcommittee
the Audit Committee (who has a safeguarding function), shall ensure that Kvaerner
has sound corporate governance, Internal
Control (including financial reporting) and
Risk Management systems and procedures
that are appropriate in relation to the
extent and nature of the corporation’s
activities.
The Board of Directors is elected by the
General Meeting in accordance with applicable legislation.
Board level consists of:
¼¼ Board of Directors
¼¼ Board’s Audit Committee
¼¼ Board’s Remuneration Committee
Kvaerner has three main operating levels
with defined authority set out in the
authorisation matrix:
CORPORATE
Responsible for corporate governance,
strategic development and implementation, and business area operational control.
Each group function in Corporate has a
global responsibility for following up on its
respective areas of specialisation, and has
ownership to its respective global policies
and procedures.
The corporate level supports the President
& CEO with all ongoing and upcoming
business matters and ensures alignment on
strategic or general issues for the Kvaerner
group.
The President & CEO nominates the members of the Executive Management Team
and the Corporate Management Team and
the nominees should then be approved by
the Board of Directors.
¼¼ Corporate management team (CMT)
Supports ongoing and upcoming
business matters on a daily basis.
¼¼ E
xecutive management team (EMT)
Ensures alignment in terms of strategic
or general issues for the Kvaerner
group. Member(s) from Corporate and
each business area.
BUSINESS AREA
Responsible for business area daily operations, as well as legal entity operational
control. Each business area is responsible
for adhering to the internal framework,
execution of projects, and for ensuring
reliable financial reporting and compliance
with applicable legislation and regulations.
Each business area has full responsibility
for profit and loss (EBIT), operational cash
flow and operational balance sheets.
Each business area consists of a number of
legal entities organised in accordance with
the business area strategy.
LEGAL ENTITIES
Responsible for daily operations
of legal entities resides with BA
management.
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The Corporate Planning and Control processes include:
Annual strategy process
The Board of Directors evaluates Kvaerner’s strategy,
goals and guidelines, through a designated strategy
process and a strategy workshop.
Annual risk review process
The Board of Directors performs an annual risk review
focusing on the most important areas of exposure to
risk and its internal control environment. This is linked
to the annual strategy process.
Annual finance budget
process
Each business area is required to prepare budgets annually. These budgets should cover the next financial year
as well as projections views for the following years.
Budgets must be prepared in accordance with targets set
in the annual strategy process.
Annual internal control
processes
Each business area is required to perform an internal
control process to ensure that all business activities
meet financial and non-financial requirements and are
carried out in accordance with the group’s common
norms and values.
Annual management
performance process
An annual performance dialogue is performed to clarify
each employee’s job accountabilities, set clear objectives, follow up progress, and evaluate performance and
employee development.
Quarterly and monthly
business reviews
(QBR and MOR)
Each business area reports status for ongoing operations
on a monthly and quarterly basis.
MOR (Monthly Operating Report) monitors the development of business operations according to defined Key
Performance Indicators (KPI).
QBR (Quarterly Business Report) is used as basis for
quarterly reporting to shareholders and the market.
Our management system
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Management system: The
Kvaerner management system
consists of policies and procedures
needed to control the organisation.
The purpose of the management
system is among other to ensure:
¼¼ financial control and efficient use
of human and capital resources
¼¼ predictable execution of projects
¼¼ secure quality and risk based
management
¼¼ meeting customer expectations
GLOBAL
REQUIREMENTS
VISION & VALUES
CODE OF CONDUCT
POLICIES
PROCEDURES
CORPORATE
The Kvaerner management system
consists of global requirements, as
well as requirements for the various
business areas and legal entities.
The governing documents provide
the framework for how we run our
business.
PROJECT EXECUTION MODEL
CONTRACTORS
NORWAY
SPECIFIC
REQUIREMENTS
CONTRACTORS
INTERNATIONAL
CONTINUOUS
IMPROVEMENT
JACKETS
NETWORKS
CONCRETE
SOLUTIONS
Our vision and values
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Vision statement : An aspirational
description of what an organisation
would like to achieve or accomplish
in the mid-term or long-term future.
Value: Important and lasting beliefs
or ideals shared by the people
in Kvaerner about what is good
or bad, desirable or undesirable.
Values influence a person’s
behaviour and attitude and serve
as broad guidelines.
Our vision:
Kvaerner’s vision is to become a
top league international EPC player.
Our values:
Values are essential for building trust, in
each other, in our partners, in our customers
and with society.
Our values are:
HSSE mindset
We take personal
responsibility for
HSSE because
we care
Open and direct
dialogue
We encourage
early and honest
communication
People and teams
All our major
achievements are
teams efforts
Our mission:
We realise
the world's most
amazing and
demanding
projects,
through:
Hands-on
management
We know our
business and get
things done
Customer drive
Building customer
trust is key to
our business
Delivering results
We deliver
consistently and
strive to beat
our goals
Our Code of Conduct
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Code of Conduct: A set of rules
outlining the Kvaerner standards
and proper practices both for the
company and for the individuals.
The purpose of our Code of Conduct is
to summarise Kvaerner’s standards of
behaviour. Our aim is to ensure that
we run our operations in line with our
values and all relevant laws and regulations, with a high level of integrity. All
people working on Kvaerner activities
must be familiar with this code.
Kvaerner aims to cooperate with
partners and suppliers that adhere to
the same high standards as we do. We
commit to monitoring the performance
of our partners and suppliers and will
take immediate action if the ethical
performance of our business partners
comes into question.
行为准则
Code of Conduct
тәртіп ережелері
Kodeks postępowania
Кодекс деловой
этики
Etiske retningslinjer
Our policies
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Policy: A policy describes the operating
principles within a specific area, defining
the roles, responsibilities and main work
processes in that area.
Kvaerner has a set of global policies. Each
global policy contains a statement describing
the ambitions of the policy and how to achieve
these ambitions. All Kvaerner policies are
subject to an annual review.
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Governance
Risk Management
People
Health, Safety, Security and Environment
Business Integrity
Tender
Project Execution
Quality
Communications
Third Party Representatives and Joint Venture
Supply Management
Investor Relations
Legal
Financial Planning and Reporting
Investment and Disposal
Tax
Treasury
Information Security
Information Technology
Technology and Intellectual Property Management
Insurance
Real Estate and facility Management
Health, safety, security and
environment policy
In Kvaerner, HSSE is a core value
expressed in our HSSE mindset:
To live up to our HSSE mindset,
we will:
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All incidents can be prevented. We strive
continuously for zero harm to personnel, material
and non-material assets.
We focus on employee health and on continuously
improving the work environment.
We conduct our operations through efficient use of
materials and energy, with minimum waste and
damage to the environment.
We design products and services to have no undue
environmental impact, to be safe and to be efficient
in consuming energy and natural resources. We seek
to ensure that our products can be recycled
or disposed of safely.
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Jan A. Haugan
President & CEO
Require every employee to take personal
responsibility for HSSE by focusing on own
behaviour.
Apply a systematic and measurable approach
to continually improve our HSSE culture and
performance.
Bring with us our high HSSE standards wherever
we do business. Complying with applicable laws and
regulations is only the minimum.
Openly communicate HSSE issues and performance,
and share and learn from HSSE best practices,
internally and externally.
Include HSSE performance in the selection, appraisal
and reward of our staff.
Integrate HSSE in all business processes.
Require line management to provide HSSE leadership
and implement this policy.
Our procedures
Procedure: A procedure describes
requirements related to methodologies
or work processes.
Each global policy may have one or more
associated global procedures for areas
where common methodologies or work processes are deemed necessary. A procedure
may also have attachments, for example
templates, forms and/or calculation sheets,
guidelines and work instructions.
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Our Project Execution Model
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Project Execution Model (PEM):
Kvaerner’s PEM is based on 30 years
of experience with complex oil and gas
industry projects. For each execution
phase of a project, the PEM provides
activity descriptions and checklists,
thus securing that all Kvaerner projects
are executed in a coordinated and
standardised manner.
The objectives of the Kvaerner Project
Execution Model (PEM) are to:
¼¼ Secure predictability in project
execution and operations by using a
standard and transparent methodology
well known to the team.
¼¼ Focus on safety, quality and cost
efficiency.
¼¼ Ensure multidiscipline understanding
and coordinated efforts based on
understanding of interactions between
work processes
¼¼ Avoid rework – correct the first time
The main principle for all the modules of
the Kvaerner PEM™ is to define the mandatory Kvaerner requirements for activities to
be undertaken/completed at a given stage
of the execution. Such sets of requirements
(and corresponding checklists) are provided
across all project phases and for all identified work processes.
The PEM therefore represents a powerful
tool in risk mitigation and auditing, supported by effective management systems
and tools.
Whilst the PEM defines the activities to be
undertaken, the detailed description of the
work is provided in underlying procedures.
The Kvaerner PEM ensures that our work
progresses in a controlled manner and that
Kvaerner meets its business objectives.
Consequently, the PEM contributes to
maintain our record of successful project
execution.
Securing coordination of interrelated
and parallel activities
The success of a Kvaerner project depends
on successful coordination of a high number
of simultaneous processes, involving both
own activities as well as the activities
performed by subcontractors and suppliers. Our subcontractors execute significant
portions of our work.
The PEM supports and ensures an integrated management process, taking into
account such interdependencies. Through
an efficient utilization of the Kvaerner PEM,
our ability to control internal and external
interfaces as a foundation for a successful
project execution, is secured.
The quality principles of the PEM™
It is a core element in our project processes
to continuously monitor achievement of
required quality and maturity. Before
proceeding to the next stage of the project,
a formal Gate Review is performed as an
integral part of Kvaerner’s system to ensure
quality in the project execution.
Kvaerner PEM™ adaptation
The Kvaerner PEM™ comprises a global part
that is mandatory for all businesses, covering activities such as business development,
tendering and project management.
Furthermore, execution methodologies that
reflect the specific requirements of the
execution processes for the various project
types are covered by PEM modules maintained by the respective business areas.
Whereas it will always be Kvaerner’s
ambition to execute projects in line with
best practice, as reflected in the PEM, the
execution of unique projects will normally
require project specific adjustments. Thus,
for most of Kvaerner’s major projects,
project specific PEMs will be established
providing an execution methodology capturing both the essence of our experience
based best practice and the project specific
requirements.
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The PEM covers all phases of projects:
Feasibility &
concept
Tender &
kick-off
System
definition
Detailing &
fabrication
Assembly
& erection
System
completion
Contract
completion
Our global networks
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Global networks: Networks foster the
exchange of information, lessons learned
and coordination of development within
the organisation. The objective is to
exploit the potential of the organisation
and its capabilities by joining forces on a
specific professional area.
Kvaerner has built networks for alignment
and coordination across business areas
(BAs). Common processes across Kvaerner
create opportunities to exchange our
knowledge and skills.
Members of the various networks may be
employed in different parts of the organisation, but typically share roles and responsibilities. The networks focus on lessons
learned, experience transfer and interactions between the BAs.
In order to support continuous improvement, all business areas are expected to
share their development work, training
material and project execution experiences through the network. Participants
should encourage interaction between their
organisation and the network, and promote
alignment across Kvaerner.
Kvaerner operates networks on different
areas and levels in the organisation:
BUSINESS AREA
Corporate networks
Key execution networks
Professional area networks
Sub- and discipline networks
BUSINESS AREA
BUSINESS AREA
BUSINESS AREA
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Our delivery model
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Delivery model: The delivery model is
Kvaerner’s overall structure of execution
methodologies, skills, support and
monitoring, enabling a high quality
project performance.
Kvaerner is a specialised engineering,
procurement and construction (EPC) company, working on some of the world’s most
demanding offshore and onshore oil and gas
development projects.
Kvaerner will partner up with and/or subcontract portions of the project to selected
companies or partners around the world. This
may include engineering and/or construction,
as well as manufacturing of equipment. As a
minimum, Kvaerner will control project management and the EPC management processes.
Our approach is to standardise work routines,
thereby increasing the quality of project
deliverables from both Kvaerner and subcontractors. Furthermore, the Kvaerner delivery
model is tailor-made to maintain control of
all phases of execution and to monitor work
with subsequent completion of the overall
project.
Execution methodologies
Based on strategic assessments, construction
work is divided into practically sized modules or sections. This allows for an optimal
construction method and assembly arrangement.
Project management
Integration of the individual parts and phases:
ENGINEERING MANAGEMENT
Kvaerner’s own
engineering
Engineering
subcontractor
- Jackets
- Concrete
- Concrete
- Topsides
- Floaters
- Etc.
PROCUREMENT MANAGEMENT
Kvaerner’s own
procurement
Procurement by
sub-contractor,
partners,
customer, etc.
FABRICATION/CONSTRUCTION MANAGEMENT
Kvaerner’s own
fabrication
Fabrication
subcontractor
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Skills
Our personnel are of great importance to
maintain and develop the required competence Kvaerner has a flexible workforce
and resources, which can be deployed to
execute projects globally.
Kvaerner may partner up with or subcontract engineering/fabrication provided
that the relevant company has proved its
capability to perform its scope of work.
Kvaerner has developed a strong methodology, through the use of systems and software applications, for scope management
and control (systematically define, control
and monitor scope of works for all involved
parties).
Kvaerner also has the capability to undertake large-scale works related to the major
onshore market within the oil and gas
industry (such as refineries) as well as for
hook-up and completion of offshore oil and
gas installations. Kvaerner plans for and
performs onshore demolition work related
to end-of-life for offshore installations,
with a major focus on environmentally
controlled recycling.
Support and monitoring
Kvaerner has four main processes supporting business needs and project execution.
In order to achieve best practices, each of
these processes is supported by process
owners and tools.
Support and monitoring processes
BUSINESS AREA
BUSINESS AREA
Corporate management and planning
Including business development
Tender and execution
Global sourcing
Including supply management, contract and subcontract
Support processes
Including HSSE, HR, finance, legal, compliance and IP
Kvaerner monitors performance through
key performance indicators (KPIs), as well
as by managing risk through early identification and continuous monitoring of risk
exposure. Focus on quality and continuous
improvement drives our achievements,
our customer relations and our financial
performance.
BUSINESS AREA
BUSINESS AREA
www.kvaerner.com
Photos: Kvaerner, Bård Gudim, iStock. Layout design: Haugvar as