Declaration and reporting

NFLoR

Every year, management verifies and confirms that they comply with laws and internal rules through the Non-Financial Letter of Representation (NFLoR). Exceptions must be reported and actions planned and documented. The process is positioned as an invitation to business and functional leadership to provide transparency, to better understand the company’s compliance risks and to facilitate prioritization and coordinate actions.

In 2018, all management team members of business units and major functions completed the NFLoR for their area of responsibility. The results of the NFLoR process were rolled-up to the relevant Executive Committee members and subsequently discussed by them with the CEO. The final results are reported in the year-end Compliance Report, which is submitted to the Executive Committee and the Audit Committee of the Supervisory Board. The external auditor receives a copy of the Compliance Report.

Individual declarations

Annually, employees confirm compliance with the Code of Conduct as part of the year-end performance evaluation. Employees exposed to competition law restrictions are required to confirm their compliance with our competition rules in the annual Competition Law Compliance Declaration. The declaration serves to remind employees of the importance of compliance with competition laws, educate them on what the key restrictions are and request disclosure of any irregularities in this field.

In 2018, more than 10,000 employees signed the Competition Law Compliance Declaration. Designated employees of newly acquired businesses (Colourland, Fabryo, Xylazel) were invited to confirm competition law compliance, or to report any irregularities that they would be aware of, providing them internal amnesty for such a report.

Reporting

To ensure that management is well-informed, there are several compliance reporting procedures in the company. Monthly, key compliance investigations are reported in the Business Review Meeting. Quarterly, compliance issues and concerns are reported in the Risk, Compliance and Control Committee meetings. The General Counsel provides an update on compliance matters in Audit Committee meetings. The final results are reported in the year-end Compliance Report, which is submitted to the Executive Committee and the Audit Committee of the Supervisory Board. The external auditor receives a copy of the Compliance Report.