Compliance and integrity management

A strong compliance framework is one of the essential foundations of good corporate governance and social responsibility. Based on a comprehensive Code of Conduct, AkzoNobel’s framework is supported by implementation processes, monitoring and control procedures, and is assessed by the Supervisory Board. In everything we do, we aim for the highest standards of performance and behavior. Our conduct must be exemplary wherever we operate.

Compliance framework

Compliance framework (graphic)

AkzoNobel Code of Conduct

The Code of Conduct serves as the common reference document which reflects our strategic values and sets out our fundamental principles and rules for doing business. The code applies equally to our corporate actions and the behavior of individual employees, regardless of the market segment, function or country in which we operate. The Code of Conduct, Business Principles, directives, rules, manuals and guidelines are part of the company’s directives framework, which set out internal rules for employees. Available in 27 languages, the code is regularly distributed in paper form and widely available online.

AkzoNobel is subject to local, regional and international laws and regulations, regulatory controls and customs and practices in the countries in which we do business. Our legal and compliance experts are monitoring and adapting to significant and rapid changes in a wide range of legal and compliance areas, to ensure that the code and our internal regulations remain suited for purpose and are properly applied.

Code of Conduct for joint ventures, acquisitions and our supply chain

We make sure that all employees – including those at joint ventures we operate and at newly acquired companies – are aware of, and comply with, laws and regulations that are relevant to their specific role, as well as the Code of Conduct and related internal regulations. In those joint ventures we do not control, we encourage our partners to consistently apply the values and principles reflected in our code when doing business.

AkzoNobel expects employees of newly acquired companies to adhere to the Code of Conduct in their daily actions and to live up to our strategic values, our fundamental principles and rules for doing business. They receive extensive training, which enables them to fully acquaint themselves with the compliance framework and the code.

We want to do business with suppliers who share our values and principles. Our Vendor Policy, designed to help ensure a sustainable supply chain, specifically states our desire to do business with partners who endorse our ethical and social and environmental standards as formulated in the code. Vendors confirm that they conduct their business in accordance with core compliance principles through the AkzoNobel Vendor Policy Declaration. In addition, in 2013 we joined Together for Sustainability, an initiative designed to develop and implement a global audit program to assess and improve sustainability practices within the supply chains of the chemical industry. See Note 6 of the Sustainability statements for more details.

Code of Conduct training, communication and awareness

We appreciate that raising awareness through effective communication and training is pivotal to strengthening our compliance framework, and assists us in protecting the company and our employees against economic and reputational harm. Communication on the Code of Conduct starts for new employees from the moment they join AkzoNobel and includes online and classroom training. Around 95 percent of our employees have completed the Code of Conduct training module. Each year, all employees must confirm their awareness of the code as part of the annual performance appraisal discussions. The compliance training curriculum also offers specialized training to improve critical competencies and skills to a designated group of employees on topics such as competition law, anti-bribery, export control, privacy, fraud awareness, anti-harassment and trade secrets.

Code of Conduct corporate complaints procedure (SpeakUp!)

We value an open dialog with our employees worldwide on our core principle of integrity. Our employees are encouraged to report potential issues regarding the Code of Conduct to their manager, the relevant business level compliance committee, the compliance department, or the corporate Compliance Committee. A global reporting helpline is available to our employees 24 hours a day to report confidentially – and, if desired, anonymously – potential breaches of the code. These reporting mechanisms are part of the complaints procedure and are described in our SpeakUp! policy and manual. All alleged breaches of the code that are brought to the attention of the compliance department are investigated.

In 2013, a total of 151 alleged breaches of the Code of Conduct were reported, both through SpeakUp! and other channels. The divestment of Decorative Paints North America in April 2013 had a significant impact on the overall number of Code of Conduct matters reported, compared with previous years. Of the 151 matters reported, 57 were substantiated, with 24 still under review. Nine were managed by the Compliance Committee as they met certain criteria. By subject, around 54 percent of the matters investigated in 2013 related to business integrity; around 41 percent related to treatment of employees and approximately 5 percent related to HSE concerns. Company-wide, 43 employees were dismissed on grounds related to breaches of the Code of Conduct. Other sanctions and remedial actions in substantiated matters included: review of procedures (eight); warnings (four); coaching (three); suspension (one); and probation (one). Although none of the issues reported were material, we are aware of the need to continue conducting root cause analyses and take appropriate actions.