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Note 11: Employees

Building an engaged workforce Our people are critical to the success of our company. We won’t achieve our vision of leading performance in the markets in which we operate without an engaged, diverse and capable workforce. Having engaged colleagues who live our core principles and values is what underpins the delivery of our strategic objectives and makes AkzoNobel a great place to work. We want our people to truly reflect and represent the many and varied cultures of the markets we serve and the different locations where we do business. We believe it’s also important that our management teams reflect the diversity of our overall workforce. We know that [...]

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Note 12: People safety

Overall performance indicators for people safety show that the company continues to make sustained improvement towards the targets set for 2020. Implementation of the people safety programs coincides with a continued decrease in the number of injuries to employees, and supervised and independent contractors. The overall TRR for employees and supervised contractors decreased to 1.4 (2015: 1.6), in line with our 2016 target (1.4) 75 percent of our sites have been recordable-free for more than one year (45 percent for three years or more) There were no employee or contractor fatalities during the last four years The lost time injury (LTI) rate for employees and [...]

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Note 17: Human Cities

[...] seventh year in a row. Human Cities can help to accelerate this by building company pride and engaging employees in making a positive impact on society. This means that for business, getting involved in society is now a crucial part of reputation management, recruitment and long-term growth. It’s been proven that companies with a clear purpose and corporate social responsibility strategy grow faster. Great brands are built on what they do, not what they say. Finding a balance between business and societal goals is an important part of running a successful and sustainable business because it: Strengthens the brand and reputation of the corporate and product brands [...]

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– Social value creation

Key performance indicators – social 2013 2014 2015 2016 Ambition 2020 1 Phase 2 started in 2016 Employee engagement score (0-5 scale) 3.88 3.97 4.03 4.17 >4.20 High potential turnover (%) – – 6 4 <5 Female executives (%) 16 17 19 19 25 Executive vacancies filled internally (%) 75 68 58 61 70 Total reportable injury rate employees/supervised contractors (per million hours) 2.3 1.8 1.6 1.4 <1.0 Loss of primary containment (Level 1) – – – 16 – Priority substances with management plan (%) 62 82 100 33 1 100 1 Cumulative Community Program involvement (number of projects) 2,108 2,260 2,385 2,531 – Our sustainability agenda aims to improve the [...]

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Note 15: Post-retirement benefit provisions

[...] plans in the UK. The benefits of these pension plans are based primarily on years of service and employees’ compensation. The funding policy for the plans is consistent with local requirements in the countries of establishment. We also provide certain healthcare and life insurance benefits to retired employees, mainly in the US and the Netherlands. Valuations of the obligations under the plans are carried out regularly by independent qualified actuaries. We accrue for the expected costs of providing such post-retirement benefits during the service years of the employees. Governance of the benefit plans is the responsibility of the Executive Committee Pensions. [...]

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Social

Area 2012 2013 2014 2015 2016 Ambition 2020 1 Definition change 2016. 2 Phase 2 started in 2016. Employees Employee numbers (FTE) number 50,610 49,600 47,200 45,600 46,000 – Employee engagement score 0-5 scale 3.80 3.88 3.97 4.03 4.17 >4.20 Female executives % 15 16 17 19 19 25 Female executive potential pool % 27 28 24 25 30 30 Executive vacancies filled internally % 70 75 68 58 61 70 High potential turnover % – – – 6 4 <5 Community Program investment € millions 1.5 1.0 1.0 1.0 0.8 – People, process and product safety Fatalities employees number 2 0 0 0 0 0 Total reportable injury rate employees/supervised contractors /million hours 2.4 2.3 1.8 [...]

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Note 16: Human rights

[...] health and safety, anti-harassment and child labor. Our Code of Conduct and directives apply to all employees, in all countries in which we operate. Business Partner Code of Conduct We have a diverse supply chain and recognize the essential role our business partners play in helping us deliver our high quality and responsibly sourced products. Our Business Partner Code of Conduct sets out the responsible behaviors we expect from anyone we do business with, including our suppliers, distributors and agents. All new business partners are expected to apply the principles laid down in the Business Partner Code of Conduct, or apply equivalent principles. Non-compliance [...]

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Education program

Our compliance training program is an important pillar of our compliance framework. The e-learning curriculum, face-to-face training program and compliance communications are aimed at educating defined groups of employees on compliance rules and procedures relevant to their day-to-day work. E-learning is mandatory for all employees on the core principles as explained in our Code of Conduct. In 2016, more than 90 percent of online employees completed the Code of Conduct e-learning. Processes are in place to follow up with employees who have not completed the e-learning. In addition, mandatory e-learnings are provided on compliance areas such as competition law, [...]

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Strategic focus areas

[...] to economic development, health and well-being, we need to build the capability and engagement of our employees and partners to deliver performance and growth. Our sustainability agenda aims to improve the well-being of our employees, of others in the value chain and of wider society through our innovative products and processes. This is particularly evident in the external partnerships we continue to establish and our involvement in community activities through our global Human Cities initiative. Other examples include the newly established Human Cities Coalition and the many local activities to assist refugees. For more information, see Note 17 of the [...]

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How we created value in 2016

By bringing more value to our customers, investors, employees and society in general, we can better position ourselves for growth as we aim to achieve our strategic vision of leading market positions delivering leading performance. Economic value Environmental value Social value Financial overview We structurally improved the company with record levels of profitability and cash generation. Focus on growth saw volumes up 1 percent. Revenue was down 4 percent, due to unfavorable currency and price/mix effects. EBIT was up 3 percent at €1,502 million, reflecting the positive effects of volume growth, continuous improvement and lower costs. Profitability increased, [...]

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