EDUCATION EWC and SE Works Council reps - talking business? Would it be possible to transpose this analysis in EWCs or SE representation bodies?

EDUCATION Investments, profits and dividends in the manufacturing industry (Sweden) Investments dividentsProfits

EDUCATION Use of capacity in industry Investment ratio

EDUCATION ”The problem is that companies are submitted to unrealistic demands on investment returns. I know cases in which they demand 20% return and want the investment to be paid back within a few years. They are stucked into a high interest and high inflation conception in a period when we have low interests an low inflation” Bengt Rydén former CO of the Swedish Stock Market and president of Nordic Investor Services in Veckans Affärer nr

EDUCATION Company investments in equipment and machines should be at the same level or higher than company amortization. In other cases the production capacity of the company will decline. Company investments should be higher than dividends. Company dividends must not be distributed at the costs of necessary investments in order to keep the long term competitiveness of the company. Demands on return should be reasonable and be adapted to the company costs for capital and interest rate developments as well as to financial risks. Management bonuses should, where they exist, be connected to several objectives and also promote guidance toward long term growth Companies should assess and evaluate outsourcing and offshoring projects to check if the results are in line with declared objectives. Future investment decisions should be based on this kind of thorough assessments

EDUCATION Companies should improve their capacity to take care of new ideas for investments from all parts of the organisation. Agreements should be concluded between management en employee representations about how employees should be rewarded for proposals increasing the profitability of the company. Companies should organise the staffing of investment projects in such a manner that they can be implemented in a realistic way, especially when the economic conjuncture is good. Companies should be better at assessing investments in developing skills and competencies. Follow up systems should be in place so that new skills and competencies are really set in practice in the organisation

EDUCATION Influence on investments? Board level reps Financial objectives – return? Bonus systems for management Strategy – investment impact Decisions on investments - mandate Reps at group levelinvestment assessments – criterias Training and competence developments Local reps Budget processes Guidance data for invesments And what about the EWC/RB?

EDUCATION Impact on decision making and guidance data Check the decision making structure for different kinds of investments Identify where and by whom decisions are made, who prepares the data and if the employees’ reps have any influence or contact channels Check also who in the company decides upon if a proposal about investment is going to be analysed and how the employee representation can influence such a decision Check the guidance data for the investment and look after if the motives are described well enough to ”sell” the idea within the company/group. This is particularly important in a foreign owned company where final decisions are taken abroad.

EDUCATION Impact on the stragegic level Check how the financial targets are formulated and how they influence the investments opportunities. Take up the debate at company/group board about how the level of return will affect the company/group Check the strategic plan and the business plan. Reflect on how the strategy will impact on company investments. Check the bonus system for management and try to identify if those systems are going to impact on investments in a negative way. Discuss with representation bodies within the company/group how such bonus systems could be modified and why.