Change

Integrity management


Integrity and responsibility in our actions is one of AkzoNobel’s core values, embedded in our Code of Conduct and Business Principles.

We approach compliance issues by:

  1. Assessing the main risks that could have an economic and/or reputational impact on our company
  2. Developing clear norms and guidance
  3. Providing support and training for those responsible for day-to-day compliance
  4. Monitoring compliance with our norms.

Assessment and clear norms

AkzoNobel has worldwide standards and clear directives when it comes to compliance. Our Code of Conduct – which was updated in 2007 – incorporates fundamental principles on issues such as business integrity, labor relations, health, safety, environment and security and community involvement. It provides overall guidance on who we are and how we work.

We have also conducted a risk assessment specifically on compliance issues. The main risks identified were competition law and anti-bribery. For each of these, we have defined a clear norm and prepared a manual and training material for relevant employees. For 2010, we will continue to focus on these main risks before extending guidance to the next priority risks.

Organizational structure on compliance

Compliance relies heavily on communication and having a network within the company which understands the importance of the topic. The structure is described in Managing our values.

Compliance systems

By the end of 2009, approximately 95 percent of employees had received Code of Conduct training. The Code will now be a specific element in all Performance and Development Dialog discussions. Additional courses on competition law and anti-bribery are available online for specific groups of employees. Legal Managers supplement this with face-to-face training for business management, sales, controllers and procurement teams. Employees who are most exposed to competition law issues (around 10,000 in 2009) are trained annually and sign a declaration to confirm adherence to the Competition Law Compliance Manual.

At business unit level, the annual non-financial Letter of Representation monitors compliance with the Code of Conduct and other corporate requirements. The outcome is reviewed with the responsible Board member and General Counsel and the results are reported to the Board of Management and the Audit Committee.

We launched a new whistle-blowing procedure in 2009 called Speak Up!, which is operated by a global, external organization. It encourages employees to voice any concerns to their manager or local HR management. If this is not possible, the employee may report the concern by telephone or via the internet. Each report is dealt with confidentially, with the results being fed back to the caller and reviewed by the Compliance Committee.

In total, 198 (2008: 84) alleged violations of the Code of Conduct were reported through a variety of channels. These resulted in 66 (2008: 61) contracts being terminated. The increase in the number of reported violations can be related to the emphasis on the new Speak Up! procedure. The outcome of all reports is analyzed and put in a broader perspective to determine what lessons can be learned.

Unfortunately, we were involved in two competition law cases, both of which related to the period prior to AkzoNobel’s reinforced competition law compliance program introduced between 1999 and 2000. In November, the European Commission announced that AkzoNobel and (former) subsidiaries were among a number of companies it held responsible for alleged infringements from 1987 to 2000 in tin stabilizers; and 1991 to 2000 in ESBO/Esters and AkzoNobel was fined. In July, the European Commission announced its decision to fine nine companies for their involvement in a price-fixing cartel from 2004 to 2007 between several European producers of calcium carbide. AkzoNobel’s subsidiary, Carbide Sweden AB, was involved in this cartel. The infringement was reported through our Speak Up! procedure.We successfully applied for conditional immunity under the European Commission’s Leniency Notice, with the Commission waiving the full amount of the fine. This case demonstrates the effectiveness of our competition law compliance program in identifying and adequately addressing such misbehavior.

Key Performance Indicators – integrity

 

 

 

 

 

2008

2009

Target 2010

 

 

 

 

Code of Conduct incidents confirmed

84

198

 

Code of Conduct trained (% employees)

31

~95

100

Competition law certification

 

10,000

 

Compliance type

 

 

 

 

 

2007

2008

2009

 

 

 

 

Business integrity: fraud/bribery, use/protection of assets

14

62

53

Misconduct

 

 

40

Equal and fair treatment

11

7

53

Conflict of interest

5

6

10

Health and safety

3

5

18

Free market competition

3

1

6

Other

0

3

18

 

 

 

 

 Total

36

84

198

Compliance source

 

 

 

 

 

2007

2008

2009

 

 

 

 

Corporate complaints procedure

13

17

88

Internal BU investigation

17

46

94

Other sources

6

21

16

 

 

 

 

Total

36

84

198

 

 

 

 

Reports closed by December 31

31

71

167

Reports open on December 31

5

13

31

Number of dismissals

18

61

66

Refer to reporting principles for details on comparability of data
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