Integrity and compliance management

We’re committed to leading with integrity in our industry. It’s one of our three core principles for doing business. Our robust Integrity and Compliance program helps ensure compliance with laws and regulations and guides our employees to make fair and honest decisions every day.

Integrity and compliance framework

Integrity and compliance framework (graphic)

Governance and organization

The Executive Committee is responsible for maintaining a culture of integrity and ensuring an effective compliance control framework. The Audit Committee of the Supervisory Board supervises this responsibility. The Executive Committee has delegated certain responsibilities to the following working committees (which are further explained on our website):

Integrity and Compliance Committee

Reviews investigations into material violations of laws, regulations and internal rules and into SpeakUp! reports, and decides on disciplinary measures and control improvement actions. It also monitors and responds to trends in such irregularities. In 2019, this committee was installed to replace the numerous BU and function compliance committees, thus elevating the level at which integrity and compliance irregularities are decided, while improving consistency of measures. This coincides with the initiative of streamlining company-wide end-to-end processes.

Risk, Control and Compliance Committees (RCC)

Responsible for supervising the effectiveness of the control environment and for reviewing weaknesses in this environment, as well as progress on improvement actions.

Human Rights Committee

Responsible for supervising the company’s human rights program (see Note 8 of the Sustainability statements).

Privacy Committee

Responsible for supervising the company’s privacy control framework.

Day-to-day management of the integrity and compliance framework is delegated to the Integrity and Compliance function, which is led by the Director of Integrity and Compliance. The Director of Integrity and Compliance reports to the General Counsel and, as necessary, has access to the Chairman of the Audit Committee of the Supervisory Board. This function includes legal experts in the field of competition law, bribery and corruption, export control and sanctions, fraud, privacy and human rights, who are responsible for setting the rules and making training programs available for their area of expertise, and for providing day-to-day expert guidance and support. The function’s Integrity and Compliance Managers, located in major business hubs spread over six regions, are responsible for risk identification and response, training and awareness, support and monitoring.

In 2019, the heads of the Integrity and Compliance, Internal Control and Internal Audit function met monthly to discuss findings and trends, and to align actions.

Risk management

Annually, each BU and major function identifies its key compliance risks and defines actions to mitigate these risks. These actions form part of the BU/function integrity and compliance plan, which in turn forms part of a larger BU/function legal plan. The top five inherent compliance risks relate to competition law, environmental law, anti-bribery, fraud and data protection. In 2019, key focus areas were competition, bribery and privacy.

Policy management

In 2019, the company launched a new Policy Portal. This portal will become the one-stop-shop for key policies, rules and procedures relating to our Global Processes. By reducing complexity and increasing transparency, it will become easier for employees to understand what rules apply to their job, and will increase our effectiveness in applying the rules.

Awareness and education

We employ several methods to inform and educate employees on integrity and compliance rules and controls, including communication campaigns, e-learnings and training sessions.

Communication campaigns

Employees worldwide regularly receive communications to inform them of certain compliance risks and duties. For example, in 2019, two campaigns were run to alert employees to external fraud threats, with another two focusing on privacy requirements. We also share lessons from investigations on an anonymized basis. In November, a global Integrity Week was held with a focus on compliance in the field of gifts, hospitality and conflicts of interest. Senior leaders distributed messages and videos, articles were posted and discussions held on internal digital platforms, while teams took part in dilemma games and workshops.

E-learning

The company operates a suite of integrity and compliance related e-learnings that is mandatory for employees. E-learnings include: ; Life-Saving Rules; competition law; anti-bribery, gifts and entertainment; export control and sanctions; fraud; information security; and privacy. In response to an increased number of harassment and discrimination-related SpeakUp! reports, we introduced a series of diversity and respectful treatment e-learnings in the second half of 2019.

Training sessions

Numerous face-to-face and virtual trainings are provided on integrity and compliance related topics to dedicated audiences. In 2019, we provided more than 90 trainings on competition law and around 25 on privacy.

Due diligence

We have processes in place to perform due diligence screenings and investigations on business partners and other relevant third parties. As part of our export control and sanctions framework, we screen customers for sanctions and screen transactions for export license requirements. In 2019, we further automated this process to increase assurance that all relevant restrictions are covered.

During 2019, we continued our extensive due diligence on risks of impact on human rights in our supply chains of mica, cobalt and tin-based raw materials and improved the related supplier self-assessment framework (see Note 5 in the Sustainability statements).

During Integrity Week, we launched a new gift and conflict of interest register, creating more transparency on gifts received and provided, and on potential conflicts between the company’s interests and one’s personal interests.

We also introduced a comprehensive registration and assessment process for personal data processing activities. This will enable us to have better visibility on all relevant personal data processing activities and help us support businesses and functions to ensure that these activities comply with applicable privacy rules.

As part of our M&A program, we screen acquisition targets for past non-compliance and assess their integrity culture and compliance framework. For example, in 2019, extensive compliance due diligence was performed prior to closing the acquisition of Mapaero.

Monitoring

We have several processes to monitor compliance by employees and business partners with our rules. For example, every year we require employees to confirm that they have understood and complied with our Code of Conduct as part of the performance evaluation cycle. We also require managers to self-assess and confirm compliance by their units with our rules as part of the internal control self-assessment. We monitor supplier performance, including their control framework relating to bribery and human rights, as part of the EcoVadis self-assessment and Together for Sustainability audits.

In 2019, we ran a poll among employees to seek their feedback on our integrity culture. The results show that employees feel we have high standards of integrity and they feel comfortable to raise concerns.

Every year, we run a competition law compliance declaration program, whereby more than 14,000 employees are reminded of our competition law rules and asked to confirm compliance or raise concerns or questions with our competition law experts. In 2019, preparations were made to integrate this program with a learning program, to be run in February 2020.

Our internal audit function performs numerous audits on our operations. Their audit plan is risk-based and takes account of prior compliance and internal control findings. In 2019, several internal audits were held at the request of the Integrity and Compliance function to validate compliance with our rules in certain units.

“Handle with care” was the theme of our 2019 Safety Day (photo)

“Handle with care” was the theme of our 2019 Safety Day. The annual event is an opportunity for us to celebrate our achievements, while reminding us to stay vigilant. This year, we focused on increasing awareness for the potential hazards associated with chemicals and how to handle them safely.

Grievance and investigation

Our SpeakUp! grievance mechanism offers employees, business partners and members of the public a means to raise concerns relating to compliance with our Code of Conduct. We apply strict principles of confidentiality, respect for anonymity, non-retaliation, objectivity and the right to be heard. In 2019, the investigation process was further improved by introducing a strict investigation protocol, which applies to all investigations. Investigators must follow certain planning, investigation and reporting steps to safeguard the right quality and speed.

As mentioned under Governance and organization, all decisions are now taken by one committee, increasing efficiency and consistency. In 2019, the total number of reports reduced slightly, although the percentage received through SpeakUp! was significantly higher. All reports and alerts led to 25 dismissals and numerous other disciplinary measures and control improvements, confirming the value of our grievance framework.

SpeakUp! reports

 

20171

2018

2019

1

2017 numbers include the Specialty Chemicals business.

  • In 2019, we abandoned the distinction between category 1 and 2 matters. All matters are now decided by one Integrity Compliance Committee
  • “Referred” means that a matter does not relate to a Code of Conduct violation and is referred to another function for handling
  • In 2019, we closed 41 SpeakUp! reports from previous years, ten of which were (partially) substantiated, leading to 0 dismissals
  • In 2019, 58 reports and alerts were received outside our SpeakUp! mechanism. 28 thereof were (partially) substantiated, leading to 21 dismissals
  • “Sustainability” includes reports on harassment and discrimination and other Code of Conduct employment matters

Total reports and alerts registered

261

238

222

Reports received through SpeakUp!

129

104

164

Safety

23

6

5

Integrity

53

50

59

Sustainability

53

48

100

Conclusions SpeakUp! reports:

 

 

 

(Partially) substantiated

17

14

28

Unsubstantiated

80

42

82

Other (e.g. referred)

32

48

54

Dismissals resulting from SpeakUp! reports

4

5

4

Reporting

During 2019, the Director of Integrity and Compliance twice reported to the Executive Committee and the Audit Committee of the Supervisory Board on the material compliance matters, the results from investigations and the progress on the Integrity and Compliance plan. We also introduced a monthly reporting of investigation matters to the Executive Committee.

Through the RCC meetings, material compliance related internal control weaknesses are addressed and reported.

We discuss material investigation matters quarterly with our external auditor.

Code of Conduct

Our Code of Conduct defines our core principles and how we work. It incorporates fundamental principles on issues such as business integrity, labor relations, human rights, health, safety, environment and security and community involvement.