The meeting commenced with the sad news of the Bow Fortune incident. In honor of those affected by the accident, everyone gathered for one minute of silence.
The purpose of the meeting was to present, discuss and align the strategy for 2020, priorities and actions, and to gain insight into scenarios and how it will affect Odfjell.
“The Extended Management meeting is an important annual arena to discuss strategy, ESG/sustainability, HR, terminals and fleet development, among other subjects that influence our company”.
Kristian Mørch, CEO
VP Fleet Flumar Ole Svendsen kicked off the meeting with a Safety moment, focusing on how we as adults learn:
“Truth is that we adults only remember about 10% of what we read, 15 % of what we see, but about 90% of what we teach others. We can improve the learnings amongst those who are mostly at risk by letting them become the teachers for others.”
Market updates and possible financial scenarios were covered by Manager Investor Relations Bjørn Kristian Røed and VP Finance Gustav Sannem.
"2018 and 2019 were years with very strong growth in our markets that were hampered by the influx of swing tonnage. Growth throughout 2022 is expected to be slower but still robust, and slower fleet growth ensures that demand will keep growing faster than supply growth”.
“There are clouds on the horizon that makes us see more downside risk to our base case than 12/24 months ago. However, the limited fleet growth ensures that recovery will continue, although modest, despite a low case scenario with a recession materializing. Unlike the previous recession experienced in 2008, order books are very small.”
Global Head of Terminals Adrian Lenning addressed the group with a fresh update from the terminals.
“We are well on the path to an organization and portfolio that is aligned with our strategy for terminals. Looking ahead, our focus in 2020 will be on realizing the inherent potential of our portfolio and start preparing for future growth.”
Adrian Lenning, Global Head of Terminals
VP IT Torbjørn Lussand gave an update from the Digital Innovation Group:
“The foundation for further digitalization and innovation is in place, we have a tremendous platform and access to pristine data, now also from the sensors onboard our vessels. Moving forward, we must to an even higher degree drive initiatives from within the business line, create a pull to resolve business and customer problems. Simplify and automate, reduce workload.”
Leadership development is a key priority for the coming year, and VP HR Ingjerd Nettestad presented HR’s perspectives and encouraged input from all teams.
“There are a lot of strengths within the organization and in the culture. The aim is to build on this as we move forward. A key corporate objective in 2020 is to attract, retain and develop a world-class organization by building talent pipeline, developing leaders and improve succession planning. In order to do so, we need to contribute to an inclusive and engaging culture together, where every employee can contribute to the overall objectives.”
Ingjerd Nettestad, VP HR
The Extended Management meeting traditionally invites an external speaker, and this year, Senior Adviser Thina Saltvedt from Nordea Sustainable Finance contributed with input on how to work on ESG (Environment, Social, Governance). Climate risk is rising on the agenda for every industry, and 2020 is a particularly important year as it’s been five years since the Paris agreement. Now, countries have to start showing results, and this also affects industries worldwide – including banking and shipping.
“The word sustainability is used a lot, and often misused. It’s become a bit of a buzz word, so we need to be a bit careful. ESG covers environmental, social and governance, but not economics. It is good to have the social part included, but we also need to include the economic aspect to make progress”.
“The challenge today is that there is no common way to rank companies' sustainability efforts. EU is now working to create a unified, comparable guideline. The taxonomy tries to set definitions for how we understand ‘green’. It is very important that we share the same understanding of what ‘green’ actually means. No company does this perfectly, and we need a common set of tools to fairly judge companies’ ESG efforts”.
“What are we afraid of if we don’t move fast enough? It’s a transmission risk. If governments see their country does not meet the Paris goals, we can get policy changes overnight, and that’s not what the financial market needs. Uncertainty will rise, investors will pull back. So we have to start now, with long-term and transparent strategies. Like it or not, this is happening, and we have to face it and take it as an opportunity.”
After the presentation, Kristian Mørch commented:
“I’m convinced that sustainability is one of the most important megatrends that we have to get used to. As a company we have only one choice: To embrace it. It’s the right thing to do”.
The final session of the day was Global Head of Tanker Trading Bjørn Hammer presenting potential fleet scenarios for the coming years, and the full-day meeting ended with a thorough group work session under the headline ‘How do we best prepare in the short term’? After discussions, the groups presented their input within the four areas Commercial, Financial, Innovation/Fleet and Organization.
