Fairness is our Duty

Over recent years the requirements for sustainable and ethically correct corporate management have become significantly tighter. Correspondingly, compliant conduct is increasingly demanded by stakeholders, in particular business partners. Large corporations have recently undertaken major efforts to prevent noncompliant conduct, especially in the area of corruption. However, compliance is about more than simply preventing corruption. It’s also about compliance with the law in general, fairness, non-discrimination and the strict separation of business and private interests.

In order to ensure both proper conduct and the fulfilment of stakeholder expectations, it is necessary for the company to have an organizational structure. In 2011 Xella commenced a comprehensive review of its existing Code of Conduct. Even if much of the content is not new – and also applies without the need for a Code of Conduct – a detailed presentation of the rules of conduct gives employees greater confidence in their actions and helps both them and the company to avoid incurring potential penalties.

Clear compliance structures

For the development, planning and implementation of our compliance organization we also established the Corporate Compliance Board in 2011. This comprises the Head of the Internal Audit department and the Head of the Legal department, who also coordinate the activities of the highest compliance body, the Central Corporate Compliance Committee, which was established at the beginning of 2013. All executive staff of the Xella Holding departments that are involved in compliance-relevant issues during their daily activities belong to this committee. There are also local Compliance Officers in the market areas or at foreign subsidiaries that support this work. They are the local contacts for employees and formally report on a quarterly basis to the Corporate Compliance Committee on compliance-relevant issues, e.g. regional changes to the law. All of the responsibilities and authorities of the committee, board and officers are regulated in a Compliance Directive.

The compliance structure at Xella

No one should fear consequences

In 2013 the Corporate Compliance Committee submitted a policy that is aligned with the special requirements of Xella. The new Code of Conduct is almost fully standardized. Only in exceptional circumstances were minor amendments necessary as a result of national legislation. So far, an external ombudsman has commenced work solely in Germany. The ombudsman treats all cases reported to him by employees in confidence and forwards them anonymously to the Corporate Compliance Committee. All employees are required to report known violations of our Code of Conduct, provided this does not conflict with national legislation. Such violations include not only potential attempted corruption, but also situations where many are put at risk due to the actions of a few (by ignoring the safety regulations, for example). The Compliance Officers are under obligation to do everything necessary to establish the facts of the case and take the necessary consequential action. No employee that reports potential violations, or reasons for suspecting violations, in good faith need fear consequences – even if the report eventually proves to be unfounded.

Rolling-out the Code of Conduct across the group commenced in 2013. It is addressed not only to the executive staff – but to each individual employee worldwide. In addition to a pamphlet that sets out the binding rules of conduct and which each employee will receive in a language he can understand, training has already commenced and is ongoing. The pamphlet makes the relationship to everyday working life easily understandable with the help of specific examples and illustrations. The training programs held for instance in Germany, were well received by the majority of employees who found the content useful. Every participant realized very quickly that each individual carries final responsibility for proper conduct. Where necessary for individual aspects, supplementary directives will be issued and special training provided for employees on selected content.

New Code of Conduct for suppliers

Xella Supplier Code of Conduct

Xella has a standard Purchasing Directive for use by all employees that are either directly or indirectly involved in purchasing processes. The Purchasing Directive defines principles for the classic areas of procurement such as requesting quotations and awarding contracts, ordering, requirements planning and master data management. It also defines value limits and assigns responsibilities.

Since the beginning of 2014 a standard company-wide Supplier Code of Conduct has been effective which also makes the content of our Code of Conduct incumbent upon our suppliers. This Supplier Code of Conduct is aimed at ensuring responsible business dealings throughout the whole supply chain and achieving cooperation with our business partners in an atmosphere of mutual trust. It covers fundamental principles in the areas of anti-discrimination, the rejection of child and forced labor, working conditions and freedom of association, the avoidance of conflicts of interest, anti-corruption, confidentiality, discretion and data protection together with safety, environmental protection and occupational health issues. The Supplier Code of Conduct sets forth the key rules of conduct that are fundamental to both domestic and international business activities. Even if these business activities, particularly on the international level, also involve cooperating with people from different cultural backgrounds who are subject to other types of norms and values, these standards of conduct still remain universally binding.

By issuing this Supplier Code of Conduct, Xella is basing its actions on internationally accepted standards and norms, in particular the Global Compact and the ILO (International Labor Organization) conventions. Xella expects its suppliers, their upstream suppliers – and of course its own employees – to comply with the principles set forth in the Code of Conduct.

Risk management safeguards values

The purpose of the risk management system is to assess all risks with regard to the superordinate corporate objectives – guiding values and growth – with a forward-looking approach. The management of the Xella Group is responsible for ensuring that the risks are identified, communicated and dealt with at an early stage throughout the group. The Chief Financial Officer is responsible for the risk management system. Furthermore, the Head of Controlling of the Xella Group has been appointed Risk Management Officer.

The Risk Management Board – comprising the general management, the Head of Internal Audit, the Head of the Legal department and the Risk Management Officer – deals with top-priority risks established during a group-wide risk identification process. The derived measures serve to maintain our success and the corporate values of the Xella Group.

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