Winner of this year’s World Finance Award for Corporate Governance for Austria, Telekom Austria Group values and embraces the recognition of its longstanding efforts in the area of corporate governance.
The company has a clear vision – to become Central and Eastern Europe’s most innovative and efficient telecommunications provider. Currently it is the leading telecommunications services provider in Austria and is a strong player in the region.
Striving for that leadership role also requires the company to set high standards for its corporate governance. A public company since 2000, Telekom Austria Group recognised early on the importance of ethical corporate behaviour and excellence in corporate governance.
New group governance
Telekom Austria Group is an integrated, convergent provider of intelligent information and communications services. It is well positioned in CEE with international mobile operations in Bulgaria (Mobiltel), Croatia (Vipnet), Belarus (Velcom), Slovenia (Si.mobil), the Republic of Serbia (Vip mobile), the Republic of Macedonia (Vip operator), and Liechtenstein (mobilkom liechtenstein). In July 2010, the group merged its Austrian mobile communications and fixed line divisions creating A1 Telekom Austria AG. The company is now in the position to offer convergent products for voice telephony, internet access, data and IT solutions, value added and wholesale services, mobile business and payment solutions in Austria. With the merger, Telekom Austria Group introduced a new group governance model to create a clear framework for efficient and fast coordination within the group. The model is aimed at faster decision making, closer and more binding collaboration and shorter times to market.
Today, approximately 22 million fixed line and mobile customers place their trust in products and services provided by Telekom Austria Group. It has been and is an innovation leader when it comes to mobile communications with numerous ‘one of first to launch’ rollouts, such as the world’s first rollout of a UMTS network, one of the first launches of m-commerce applications worldwide, and one of the first commercial rollouts of HSPA+, HSPA+ Dual Cell and LTE in Europe.
Commitment to transparency
Since its IPO in 2000, Telekom Austria Group has declared its commitment to maximum transparency in reporting, in line with international capital market practices. As a result, Telekom Austria Group has developed a reporting culture that exceeds Austrian requirements. It also adheres to the guidelines and extended reporting obligations of the Austrian Corporate Governance Code, a system of rules in accordance with international standards for the responsible management and guidance of companies in Austria. The code was developed by the Austrian Working Group for Corporate Governance in 2002. Enjoying widespread acceptance, it was expanded and amended in the following years, last in 2010. Several provisions of the code were adjusted to comply with amendments to the Austrian Stock Corporation Act 2009. Telekom Austria Group committed itself to voluntary compliance with the code as early as 2003.
Code of conduct
Telekom Austria Group has implemented additional corporate governance instruments, such as an effective risk management system and its code of conduct. The group’s risk management system enables a group-wide structured identification, evaluation and management of risks on the basis of a defined risk policy as well as strategic and operational objectives. Its effectiveness is subject to external evaluation by auditors pursuant to Rule 83 of the Corporate Governance Code and, along with the effectiveness of the internal control system, it is monitored by the Audit Committee. The internal control system of Telekom Austria Group is aimed at safeguarding the effectiveness and profitability of business activities, the integrity and reliability of financial reporting and compliance with the relevant laws and regulations.
Telekom Austria Group’s code of conduct, which is binding throughout the group, is designed to raise awareness among employees with regard to corruption prevention and lawful ethical conduct. It is available on the official website www.telekomaustria.com so both the public and staff can view it. To prevent the misuse or passing on of confidential information, group-wide compliance guidelines have been implemented and classified units defined within the company. A reporting system has been put in place that enables employees to confidentially report legally dubious procedures or violations of this code.
Anti-corruption management as part of a comprehensive risk-based compliance management system is also an integral element of Telekom Austria Group’s high corporate governance standards. The management board and the audit committee of the supervisory board receive regular reports regarding the effectiveness of the internal control system and the audits carried out by the internal audit department. Furthermore, in spring 2010, the supervisory board closely scrutinised the systemic fundamentals and effectiveness of Telekom Austria Group´s compliance management system.
Investor relations
Telekom Austria Group’s excellence in corporate governance has been recognised on numerous occasions. In addition to this year´s World Finance Corporate Governance Awards, it received the Vienna Stock Exchange Prize for Best Corporate Governance in 2009. Telekom Austria Group also has a proven track record of award-winning investor relation (IR) work; it was recognised as having the Best IR Team in Austria, the third best IR team within the telco industry, the best IR website within the telco industry (IR – GlobalRankings) and achieved numerous awards for its annual reports (Arc Awards, Trend AAA).
Sustainable value enhancement
For Telekom Austria Group, corporate governance has wide-spread implications that exceed good business practice, reporting standards and risk management. Its aim is to ensure long-term sustainable, value-enhancing corporate development. Therefore, Telekom Austria Group not only adheres to strict principles and is committed to transparency, but also shows a strong willingness to engage in open dialogue with its stakeholders. The challenge of responsible company management is to combine economic success with care for environmental and social aspects.
To underline its deep-seated commitment to this principle, Telekom Austria Group endeavours to further develop its sustainability profile, and last year set in place a group-wide sustainability programme. The increased involvement of its international subsidiaries and their integration into the corporate strategy are central to these efforts.
Equal opportunity is considered an important component of Telekom Austria Group’s interpretation of corporate governance and social responsibility. The percentage of women on the supervisory board of Telekom Austria AG has risen steadily – 16 positions were held by women in 2010, as were two of four Officer positions at group level and eight management board or managing director positions at the group´s international subsidiaries. The proportion of women in managerial positions at Telekom Austria Group in 2010 totalled around 32 percent and Telekom Austria Group´s recently founded “TAG Business School” plays an important role in further anchoring the group’s values and gender diversity.
Having won this year’s World Finance Corporate Governance Award is of utmost importance to Telekom Austria Group, given the profile of the jury and entrants. It is a moment for a brief halt, to get re-energised for our further corporate governance quest. Telekom Austria Group already plays a vital role in the Austrian Working Group for Corporate Governance and actively contributes to the advancement of corporate governance standards on the European level today. Our clear aim is to stay abreast of and even anticipate new developments in corporate governance – as any leader should do.
Matthias Stieber, Director Investor Relations, Telekom Austria Group
