Inhouse (GC) as Global Leader - You

have to earn it.

GC as leader/coach/mentorof a Legal Team

consisting of

lawyers

support staffpara-professionals

Finance people

tasks:

recruit & retain the team

career development of individuals

forming a team across jurisdictions

importance of a centralised reporting relationship for lawyers everywhere

quality is crucial

GC as strategist for your department

in- vs. outsource vs. stop

doing vs. self helpstaffing strategy

GC as strategist for your company

Business DevelopmentM&A

legal issues that effect business

Lawyer as Risk ManagerAdjacencies GC in other roles

Ethics & ComplianceCrisis Management

Risk Management & Insurance

Other?

GC as member of the Executive Team

ConsiglieriRisk Management

Problem solver

Negotiator

GC as marketer of Legal ServicesPreventative law vs. firefighting

Who sets the agenda?

i.e. Annual Report, Legal Arenacommunicate the value add

GC as Financial & Budgeting ManagerManaging a budget

Managing outside counsel

You must be pro-active: As lawyer's role changes, so does their level of visibility & accountability!

ACC can help you develop all these skills

IMD

You owe it to your team to become a leader

PEOPLE MANAGER

STRATEGIST

LEADER

"Deliberate Management"

SERVICE PROVIDERalignment & prioritisation

©

Inhouse (GC) as Global Leader.mmap - 16/04/2008 -

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Borealis

A leading provider of innovative, value creating plastics solutionsMarch 2008

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Borealis: who we are

• Leading provider of innovative, value creating plastics solutions

• Developing a Base Chemicals business

• More than 40 years of experience

• Unique Borstar® technology to develop polyolefin solutions that are tailored to customers’ needs

• 5,000 employees in around 20 countries

• Customers in more than 120 countries

• Ownership 64% IPIC / 36% OMV

• Joint venture in Middle East and Asia: Borouge (Abu Dhabi)

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Ownership

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Borealis: where we are

Borealis locationsProduction Plants: Austria, Belgium, Brazil, Finland, Germany, Italy, Sweden, United States

Innovation Centres: Austria, Finland, Sweden

Customer Service Centres: Austria, Belgium, Finland, Germany, Italy, Singapore, Sweden, Turkey, United States

Head Office: Austria

Borouge locations

Production Plant: Ruwais (UAE)

Customer Service Centres: Abu Dhabi (UAE), China, India, Singapore

Sales Offices: Abu Dhabi (UAE),Australia, China, Lebanon, New Zealand, Saudi Arabia

Head Offices: Abu Dhabi (UAE), Singapore

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‘Commodity’ path

Feedstock Olefins Polyolefins Converters End users ConsumersReduce

Recycle

Recover

‘Value Creation’ path

Feedstock Olefins Polyolefins Converters End users ConsumersReduce

Recycle

Recover

Successfully pursuing our path of ‘Value Creation through Innovation’ in Polyolefins

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Providing solutions in Polyolefins

advanced packagingautomotive

infrastructure

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Growing our Base Chemicals business

phenol, acetone

melamine plant nutrients

olefins

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Comprehensive asset base

Polyolefins (PE, PP)• Stenungsund, Sweden• Kallo, Belgium• Zwijndrecht, Belgium• Beringen, Belgium• Porvoo, Finland• Burghausen, Germany• Schwechat, Austria• Rockport, United States• Itatiba and Triunfo, Brazil• Monza, Italy• Ruwais, Abu Dhabi (Borouge)

Base Chemicals• Porvoo, Finland (aromatics,

olefins) • Stenungsund, Sweden (olefins)• Kallo, Belgium (olefins)• Linz, Austria (melamine,

fertilisers etc.)• Piesteritz, Germany (melamine)• Castellanza, Italy (additives,

resins)

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Expansion in the Middle East at Borouge

• US $ 4.7 billion investment at Ruwais, Abu Dhabi in the United Arab Emirates

• Tripling of production capacity to 2 million t/y of Borstar polyolefins

• Ethane cracker producing 1.5 million t/y ethylene, considered to be largest gas cracker in the world

• Two Borstar enhanced Polypropylene plants with a combined annual capacity of 800,000 tonnes

• Borstar enhanced Polyethylene plant with an annual capacity of 540,000 tonnes

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Investment in innovation capability

• Expansion at our International Innovation Centre in Linz, Austria

• New facilities at the Innovation Centre in Porvoo, Finland

• Borstar® PP pilot plant in Schwechat, Austria

• Investment in a new Innovation Centre in Abu Dhabi, United Arab Emirates

• Continue to leverage capacities at our Innovation Centre Stenungsund, Sweden

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Key figures 2004-2007

200720062005

6,3505,7424,814Net sales (EUR million)

593327226Net profit (EUR million)

666513422EBITDA (EUR million)

221712Return on capital employed (%)

273444Gearing (%)

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Responding to global challenges…

ClimateClimate WaterWater

CommunicationCommunication FoodFood

EnergyEnergy

HealthHealthHealthHealth

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Latin America:50 % of people

are not connected to

sewage

Asia: 1 in 3 have no

access to drinkingwater;

1 in 2 no sanitation

UN Millennium goal to halve proportion of

people without water access &

sanitation by 2015

No water, no growth:

Water shortage cuts Australia GDP

by 1.5 %/year

Middle East & North Africa:

80 million have no access

to clean water

Responding to global challenges…

WaterWater

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Our values drive our actions

Exceed NimblicityTMResponsible Respect

We are leaders in Health, Safety and the Environment

We are good neighbours wherever we operate

We do business according to high ethical standards

We involve people and communicate in a straightforward way

We work together -helping and developing each other

We are “One Company” - building on diversity

Our customers’ and owners’ success is our business

We win through commitment and innovation

We deliver what we promise - and a little bit more

We are fit, fast and flexible

We create and capture opportunities

We seek the smart and simple solutions

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Our vision

Legal Department Strategy – Executive Summary - 28 March 2006 1

BOREALIS

LEGAL DEPARTMENT STRATEGY

2006 – 2010

GETTING THE BALANCE RIGHT

EXECUTIVE SUMMARY

Legal Department Strategy – Executive Summary - 28 March 2006 2

1. Background

The Legal Department first established its strategy in 2004. Subsequently Borealis conducted a review of its strategy. The outcome of that review was that Borealis will continue to focus on Value Creation through Innovation and to execute the existing strategy more efficiently, with a particular focus on:

• Grow target market segments and build and reinforce market leadership positions

in Power Cable, Pipe, Automotive, Advanced Packaging and Technical Products

• Achieve a step change in innovation throughout the company

• Expand in partnership with Borouge in the Middle East/Asia

• Deliver operational excellence in everything we do

• Drive cost competitiveness from feedstock to customers

• Build cross-cultural organisational capability

On this basis the Legal Department has reviewed its own mission, vision and strategy to ensure they would continue to be fully aligned with and support Borealis in reaching its strategic objectives. The result is an adjusted Legal Department strategy.

2. Emerging trends impacting the choice of Legal Department strategy

2.1 Implementation of the Borealis Strategy

The strategy of Value Creation through Innovation and the stronger focus on delivering operational excellence will have implications for the Legal Department and generate legal work. In addition, the continued need to reduce costs points towards more in- sourcing of legal services: • The strategic necessity to develop in-house IPR expertise

• Major investments projects (including Borouge 2)

• Excellence in execution and a shift towards a more customised (high value) approach of the market will require improved and more customised contract management - bad contract management has resulted in unnecessary costs of at least 4 MEUR in 2005 (e.g. Mitsui, Balmoral, labour cases (Italy), termination of distributor (Plastrans).

• The potential IPO

• The growth of Borealis and move towards global positioning

• In-sourcing of high value activities (see 2.3 below)

Legal Department Strategy – Executive Summary - 28 March 2006 3

2.2 Changing Regulatory and Legal Environment

• REACH, environmental and other legislation lead to a changing and increasingly complex legal environment

• Increase in product liability incidents in a litigious environment

• As Borealis expands in the ME and Asia the attention to proper contract management has to increase (“no loose ends”). In addition, we need to be able to operate under legal systems and meet regulatory standards that we are unfamiliar with today

• Increased focus on CSR/SD

These issues will pose significant and interesting challenges, which will increase the workload of the Legal Department within the strategy period.

2.3 Sourcing of Legal Services

A clear prioritization of the workload of the Legal Department is necessary. The Legal Department will focus on high-value added work and, to the extent possible, prioritise workload and eliminate, outsource or automate certain low-value activities. The goal is to optimise the overall cost profile and staff for the troughs, rather than the peaks. Since one hour of outsourced legal work is at least three times as expensive as an in-sourced hour, the estimated insourcing savings for two lawyers are at least 750.000 EUR per year. We will in general insource work:

• that is recurrent and has sufficient critical mass to allow insourcing at a cost advantage

• to ensure strategic important knowledge is built up in the organisation

• where legal staff working closely with the business adds a competitive advantage

• where internal knowledge is necessary to allow better risk assessment

Decisions regarding in/outsourcing will also be made on the basis of the type of expertise required (e.g. litigation work requiring highly specialised expertise). The Legal Department will assess its existing workload and discuss with its major internal clients where it can provide the greatest value to the business and in particular to the strategic focus areas of Borealis. The workload assessment will be based on the following matrix (with examples of work falling within each quadrant):

Legal Department Strategy – Executive Summary - 28 March 2006 4

Avoid or outsource

• Conduct litigation • Debt collection • Matters requiring specific local

law knowledge (e.g. local real estate matters)

• Review of non-strategic low value complex contracts

• Complex HR matters

Choose Carefully • Investment projects • M&A activity • Licensing • Joint ventures • Borouge 2 • IPO preparations • Strategic financing • IPR • Development of standard

contract templates

Avoid, automate or outsource • Basic Non-disclosure

agreements • Standard sales agreements • Some phenol and olefins

agreements • Bonus agreements • Standard procurement • Most HR contracts

Continue and Develop Momentum

• Compliance programmes • Training • Smaller licensing related

agreements • Where lawyers with industry or

Borealis knowledge adds a competitive advantage

• Monitor litigation

Work in the upper right quadrant may be handled in cooperation with external lawyers due to the high workload and highly specialised expertise associated with those activities. The key to managing costs in this area is to find the right balance between in- and outsourcing and ensure in-house lawyers closely monitor and manage the external lawyers.

2.4 Need for Improved Business Partnering

The Business Alignment Survey (see chart 1 on page 6 below) shows that Borealis places great importance on proactive legal advice and solutions orientation. To improve in the area of solutions orientation, the Legal Department shall further partner with the business. Research also indicates that business partnering leads to overall better compliance and thus improved risk management. The Legal Department is committed to further partner with the business by:

• Providing training and compliance programmes to increase managers’ knowledge of legal risks

• Developing legal service plans together with each BU and function

• Establishing Legal Department contact persons for all BUs and functions

• Establishing a Legal Department presence in each hub

• Improving its communication to the organization so that people know what we do and can do for Borealis, and how we create value by reducing costs and supporting revenue increase

High Effort

Low Effort

Low Impact on Company’s Strategic

Objective

High Impact on Company’s Strategic

Objective

Legal Department Strategy – Executive Summary - 28 March 2006 5

• Continuing to improve the quality and reach of its legal advice

Achieving improved business partnering will add competitive advantage to Borealis. Staffing levels need to be increased so that this competitive advantage can be achieved. The Business Alignment Survey also shows that there are some differences between the Legal Department’s view on risk tolerance and business’ understanding of legal risk. This is due to a variety of factors.

3. Current State Assessment of the Legal Department

The Legal Department has made significant progress since August 2002 when the new General Counsel was hired and the establishment of the current Legal Department initiated. The main focus since then has been on building the Legal Team in Borealis (“getting the right people on and off the bus”) and developing the Legal Department organisation. In addition, the Team has focused on raising its profile through delivering first rate service and through its preventative law emphasis. Although significant progress has been made, much work still remains to be done. Unfortunately the planned HO move has resulted in the right people getting off the bus just as it was making progress. Quick action to replace these people will be required to avoid loss of critical knowledge. In any event this situation will adversely affect the department’s ability to achieve its previously identified goals in 2006. The main strengths, weaknesses, opportunities and threats for the Legal Department today are summarised in the following:

Strengths • High motivation of Legal staff • Quality of Legal Staff • Commercial mindset • Support from management

Weaknesses • Good legal service comes at a price (human and €)

• Department has limited institutional memory • Not enough resources to support critical areas

such as IPR, marketing and communication, product liability

• No redundancy built into the system

Opportunities • Add more value to business and innovation • Closer integration with the business • Improved compliance and risk management • Deploy legal resources where they add most

value

Threats • Volume of work – leading to failures • HO move • Widespread lack of legal mindset in Borealis • Set-back due to gap between expectation and

delivery • Increasing complexity of the legal environment

The above analysis is supported by the result of a Business Alignment Survey conducted in relation to the development of the strategy in cooperation with the General Counsel Roundtable, as illustrated by the following free text reply in the survey:

“I have seen a huge improvement on the performance of the legal department. Specially the response time and the relevance (usefulness) of the response that is coming back. Unfortunately not everybody in the company has experienced this yet, so

Legal Department Strategy – Executive Summary - 28 March 2006 6

in some cases legal department is too late involved due to 'bad experiences' in the past.” The following chart provides an overview of importance vs. Legal Department’s effectiveness in selected categories of work and performance, as judged by internal clients in the Business Alignment Survey. Within the dotted lines, the Legal Department and the Business Units place the same importance on these items. Subjects which appear above or below the line are those which are given different emphasis, and which therefore need attention to achieve alignment.

4. Legal Department Vision, Mission and Strategy

Based on the above the Vision of the Legal Department remains unchanged, while the Mission and Strategy have evolved: Vision We are respected business partners valued for the quality of our people and our contribution to the business

Mission

To provide world class legal support for innovation and intelligent risk taking and drive ethical business behaviour and good governance in Borealis

Law Firm Management

Law Firm Selection

Outsourcing Decisions

Strategy-Level Input

Day-to-Day Business Partnering

Clarity of Communication

Business-Related Skills

Knowledge of Business Strategy

Knowledge of Business Operations

Compliance Guidance/Training

Compliance Enforcement

Ethics Advice

Preventive/Proactive Advice

Risk Tolerance

Understanding of Nonlegal Risks

Quality of Transactional Work

Regulatory Updates

Litigation Outcomes

Law-Related Knowledge

Cost Effectiveness

Positive Demeanor

Client Self-ServiceReceptiveness to Feedback

Guidance on Using Legal Services

Solutions Orientation

Meeting Deadlines

Accessibility Focus on High-Value Work

3.5

4.0

4.5

5.0

5.5

6.0

6.5

3.5 4.0 4.5 5.0 5.5 6.0 6.5

Internal

Client

Importance

Internal Client Effectiveness

Legal Department Strategy – Executive Summary - 28 March 2006 7

Strategy

We will:

• Provide solution oriented support to the business and the innovation process

• Ensure quality and cost effective legal services

• Deploy legal resources where they add the most value

• Integrate proactive legal service throughout the value creation process

• Drive risk management, compliance and corporate governance

• Support Borealis’ expansion in ME/Asia

The chart below illustrates how the Legal Department strategy supports Borealis’ strategic focus areas:

Bo

rea

lis F

oc

us

Are

a

Legal Department Strategy Gro

w ta

rge

t m

ark

et s

eg

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ste

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in

no

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rou

gh

ou

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e

com

pa

ny

Exp

an

d in

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hip

with

B

oro

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e in

the

Mid

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E

ast

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a

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D

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er

op

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llen

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thin

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e d

o

Driv

e c

ost

co

mp

etit

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ne

ss

fro

m f

ee

dst

ock

s to

cu

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Bu

ild c

ross

-cu

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ty

Provide solution oriented support to the business and the innovation process +++ +++ + +++ + +

Ensure quality and cost effective legal services ++ ++ + +++ +++

Deploy legal resources where they add the most value ++ ++ + +++ +++ +

Integrate proactive legal service throughout the value creation process ++ ++ ++ +++ ++

Drive risk management, compliance and corporate governance + + +++ ++ +++

Support Borealis expansion in ME/Asia ++ +++ +++

Legal Department Strategy – Executive Summary - 28 March 2006 8

5. Summary of short term organisational implications

The current structure of the Legal Department is illustrated in the following.

Based on the emerging trends the Legal Department lacks expertise in the following areas and further lacks critical mass in all areas:

• IPR

• Regulatory / Product Liability

• Environmental

• Construction & Engineering contracts

In relation to the future organisation of the Legal Department to following choices have been made: • Staffing that will allow effective in-house support in the execution of Borealis’

strategy

• Staff for the troughs rather than the peaks.

• Balance between lawyers, paraprofessionals and assistants

• Lawyers need to specialise and work more focused

• Paraprofessionals and assistants should carry out routine work and contract administration

Ruth STEINHOLTZ

General Counsel & GroupSecurity Coordinator

(Vienna)

Patrick HOFKENSSenior Legal Counsel

(Mechelen)

Ursula NOWAKLegal Counsel(Schwechat)

Cathrin LUNDBERGLegal Counsel

(Stenungsund)

Marcel ASCHENBRENNER*Senior Legal Counsel

(Vienna)

Manuela WALLY

Executive Assistant(Vienna)

Gabriele LECHNERLegal Counsel

(Schwechat)

Bianca LIBERSKIEthics Officer

(Mechelen)

Karin POSTRACH

Assistant(Schwechat)

Tiffany HEINER

Company Secretary(Vienna)

Alessandro DEANTONIIS

IP Counsel(Vienna)

Katri HEIKKINEN

Contract Manager(Vienna)

Benoît TAYMANS*Junior Legal Counsel

(Mechelen)

Kim DE RYCKE

Executive Assistant(Mechelen)

Antero JANHUNEN

Project Specialist(Porvoo)

Stephan SCHOLZ**

Junior Legal Counsel(Vienna)

* Marcel Aschenbrenner will join the Department in October

Legal Department Strategy – Executive Summary - 28 March 2006 9

The structure at the end of 2006 / early 2007 is expected to be the following:

The Legal Department will further continue to rely on the part time services of a financial analyst from BP&A. Currently there is a great deal of “pull” for legal assistance from the business and as the Strategy evolves it will be necessary to revisit this structure. The ultimate goal is to have lawyers at each of the hubs.

6. Conclusion This Strategy is the roadmap for the gradual development of the Legal Department towards an optimum level of staffing suited to its needs and which will deliver quality legal advice in a cost effective manner to Borealis across all BUs and functions.

Ruth STEINHOLT Z

General Counsel & Group

Security Coordinator(Vienna)

Patr ick HOFKENS

Legal Counsel(M echelen)

Ursu la NOWAK

Legal Counsel( Schwechat )

Cathrin LUNDBERG

Legal Counsel(Stenungsund)

Legal Counsel

Jacob replacem ent(Vienna)

Execu tive Assistan t(Vienna)

Gabriele LECHNER

Legal Counsel(Schwechat)

Eth ics Officer

Paralegal

Karin POSTRACH

Assistant(Schwechat)

Paralegal

Legal Department

admin istrato r

(Vienna)

Company Secretary

Paralegal

IP Counsel

Assistan t(Vienna)

Legal Coun sel

Jens Ole replacem ent(M echelen)

Environ /Reg Co unsel(M echelen)

Kim DE RYCKE

Executive Assistant(M echelen)

Assistan t(M echelen)

Antero JANHUNEN

Project Specialist(Porvoo)

Legal Co unsel(Porvoo)

Assistan t

(Stenungsund)

Leg al Counsel(Vienna)