DSM Code of Business Conduct

Business principles

The DSM Code of Business Conduct ('the Code'), as introduced and rolled out from 2010, contains the company’s business principles across the three dimensions of People (11 principles), Planet (5 principles) and Profit (15 principles). These principles translate DSM’s mission and core value − sustainability − into daily practice across its business operations. All DSM employees are expected to act in accordance with the Code, and the Managing Board holds DSM’s unit management accountable for compliance. The Code is now available to employees in 19 languages and the full text of the Code can be found on the company website. An update to the Code and the corresponding training is foreseen in the course of 2017. This update will make the Code more concise and strengthen the business principles of the Planet dimension.

code of business conduct

Umbrella function

The Code serves as an umbrella for several other DSM regulations and together they form the basis for the company's ethical business behavior. These regulations are often supported by e-learning programs to train employees. Depending on the subject, this concerns either all employees or selected employees with a specific role in the organization. Integration and compliance plans, comprising among other things risk management and training on values, are rolled out whenever DSM acquires a business. DSM regulations cover the three dimensions of People, Planet and Profit, of which the most important are listed below:

People: To support DSM’s ambition to create an incident-free and injury-free workplace, the Life Saving Rules specify the 12 most important rules that must be followed by all employees to prevent serious or fatal incidents. An overarching Human Rights position paper bringing together existing human rights-related policies and procedures has been published on the company website. For more information, see Human rights.

The Unlawful Harassment Prevention e-learning emphasizes the importance of the cultural, diversity and non-discrimination aspects of the Code and focuses on effective employee relations, communications, and non-discriminatory practices in the workplace.

The DSM Privacy Code for Employee Data and the DSM Privacy Code for Customer, Supplier and Business Partner Data prescribes a mandatory training for Privacy Officers, human resources employees, legal counsels and employees who work with personal data on a regular basis. The related Privacy e-learning initiated in 2015 was further rolled out in 2016.

Planet: The Basic Course Responsible Care addresses the elements of the Responsible Care Program: Safety, Health and Environment; Product Stewardship; Security and Sustainability. Because of the importance of the Responsible Care principles for all functions and roles within the company, this course is mandatory for all DSM employees, as well as for selected contractor employees.

Profit: DSM has e-learnings for Global Competition Law Principles and Practices and Global Trade Controls. Compliance with these subjects is structurally embedded in DSM’s systems and processes. As part of the global trade controls compliance process, DSM master data is screened to check customers and suppliers against embargoes and lists of sanctioned parties.

The DSM Anti-Bribery and Corruption (ABC) Policy and Compliance Manual has been communicated to targeted employees in commercial and business roles since 2014. Supporting classroom training and a refresher of the ABC e-learning was further rolled out in 2016. Special attention has been given to DSM’s employees and businesses in China, including the provision of a Chinese translation of the DSM ABC Policy and Compliance Manual, an easy-to-use ABC checklist for business people, and ABC classroom trainings in addition to the Competition Law classroom program. During the year a new ABC due diligence program was introduced with regard to agents and distributors. Relevant information on all these parties will be collected by questionnaire; independent audits of these parties may be conducted depending on the possible risks involved.

The Security e-learning covers all key security topics relevant to DSM’s business, including DSM’s seven Key Security Behaviors. To complete the e-learning, participants are required to read and sign off on the DSM Code of Conduct for Information Security. A classroom version of the training is available for locations without access to e-learning facilities.

DSM also has rules in place on the holding of and execution of transactions in DSM financial instruments and certain other financial instruments related to trading in DSM shares, and if applicable, shares and related financial instruments in other companies. These apply to all relevant DSM employees, including the members of the Managing Board and the Supervisory Board.

Value chain

The business principles most relevant for the supply chain are brought together in the Supplier Code of Conduct and structured along the three sustainability dimensions of People, Planet and Profit. The Supplier Code of Conduct (available on the company website in eight languages) is signed off by suppliers in framework contracts, whereby they confirm their commitment to sustainability among other things. For distributors' and agents' contracts, the ABC Policy is being translated into terms and conditions to ensure ethical business conduct when these third parties are acting on behalf of DSM or dealing with DSM’s products further down the value chain.

Training and awareness

DSM employees must refresh their training on the Code every two years. The implementation of this training program continues to progress well. At year-end, over 95% of all DSM employees had completed (or refreshed) their training, excluding employees of some businesses acquired recently. Parts of the training program are offered by the business units to selected contractor employees as well as to employees in DSM's joint ventures.

A Code Review Team, chaired by the Vice President Corporate Risk Management, monitors implementation of the values training program as well as internal and external developments concerning corporate ethics to promote and safeguard the company’s values and reputation. Global monitoring and reporting is in place for all of the values trainings in DSM’s learning management system.

People: At the end of 2016, well over 95% of all DSM employees had completed the Life Saving Rules training, underlining the importance of safety within DSM. The Unlawful Harassment Prevention training also has a very good implementation level among relevant employees (98%). The target audience for the Data Privacy Knowledge course was broadened and further rolled out in 2016 and 90% of the targeted employees have already completed this training.

Planet: The Basic Course Responsible Care has now been successfully followed by over 95% of the employee population.

Profit: The first refresher to the ABC e-learning has been rolled out in 2016; taken over the year, this has been followed by more than 90% of all employees within the ABC target group. The training for Global Trade Controls and Security has been in place for longer and implementation levels remain good at 92% and 97% respectively. Additional training on Trade Controls Compliance has been given to zoom in on various business-specific aspects of this topic.

Those employees for whom competition laws are most relevant must complete an annual statement to confirm their compliance with the rules set forth in the DSM Competition Law Compliance Manual. In this statement they confirm that they are not aware of any violation of competition laws by DSM. Sign-off levels are excellent. Alleged breaches are reported to and discussed with Group Legal Affairs. In 2016, no breaches were reported and DSM was not subject to any investigation by competition authorities related to potential anti-competitive behavior.

Dilemmas

Living the Code can sometimes result in dilemmas that do not have a quick or clear answer. Dilemma workshops can be requested by the company's units to prepare for these cases using the UN Global Compact Dilemma Game as a tool. The workshops build on DSM’s company culture, which is based on openness, fairness and trust. The aim is to create an open-minded atmosphere in which dilemmas can be discussed. These discussions are used to calibrate 'what is right' and 'what is wrong' in order to continuously improve business integrity in daily operations.

Letter of Representation

At the end of each year, the management of all 32 operational units directly reporting to the Managing Board (business groups, regions, others) sign off on a Letter of Representation. With this they confirm the compliance of the unit and its employees with applicable laws and regulations, the Code and related values trainings as well as corporate policies and requirements.

Consequence management

DSM applies zero-tolerance consequence management to violations of the Code. Under our whistleblower procedure (DSM Alert), most Code incidents are reported to, and dealt with by, local line management. In cases where reporting to line management is not considered appropriate, complaints are made directly to the DSM Alert Officer. In all cases, consequence management practices are in place (e.g. official warning, temporary suspension, dismissal) to support compliance with the Code. The DSM Alert Officer reports to the Managing Board and reports independently to the Audit Committee of the Supervisory Board twice a year. People who are not DSM employees but wish to raise a concern regarding a violation of the Code can also contact the DSM Alert Officer via the company website.

In 2016, 24 reports of a potential violation were received via the Alert channel, 3 of which were reported by an external person or party. While this is an increase compared to 2015 (16, of which 1 external report), it is broadly in line with the average of 22 alerts over the last 5 years. There were no bribery or corruption cases.

The table on the following page gives an overview of all reported Code violations, with a breakdown per Triple P dimension and per region. Proven serious violations of the Code can result in dismissal or other forms of consequence management. In line with this policy, 32 employees were dismissed in 2016 as a result of breaches of the Code or other legal or local company regulations. In addition, 76 cases were reported that have led to other kinds of consequence management (official warning or suspension). Overall this is at approximately the same level as 2015.

People: Most of the cases in the People dimension are related to violations of the Life Saving Rules or inappropriate behavior. Safety and health in the workplace has a priority for the company and incident-reporting channels are well known.

Planet: There were a few violations of the Code reported in the Planet dimension in 2016 due to seriously negligent or irresponsible behavior by employees. None of these violations led to serious environmental incidents.

Profit: Half of the cases that were reported in the Profit dimension were related to the incorrect registration of working hours. There were also a number of conflict of interest and fraud cases.

Code of Business Conduct
2016
2015
Training and awareness e-learning:
% of targeted employees trained
  
General
  
- Code of Business Conduct
97%
96%
People
  
- Life Saving Rules
99%
96%
- Unlawful Harassment Prevention
98%
-1
- Data Privacy Knowledge
90%
-1
Planet
  
- Basic Course Responsible Care
98%
93%
Profit
  
- Global Trade Controls
92%
90%
- Anti-Bribery and Corruption
93%2
94%
- Security
97%
93%
DSM Competition Law:
  
% of targeted employees signed off
  
- DSM Competition Law compliance annual statement
99%
100%
Violations of the Code:
  
Number of dismissals/other consequence management
  
Triple P breakdown
  
- People
20/58
26/45
- Planet
3/5
0/0
- Profit
9/13
12/6
Regional breakdown
  
- Europe & Africa
13/31
5/19
- Americas
14/37
27/30
- Asia-Pacific
5/8
6/2
Total
32/76
38/51
Alert cases (whistleblower procedure):
  
Number substantiated/not substantiated/under investigation
  
Triple P breakdown
  
- People
11/7/3
3/10/0
- Planet
0/0/0
0/0/0
- Profit
2/1/0
3/0/0
Regional breakdown
  
- Europe & Africa
2/2/0
2/1/0
- Americas
7/6/3
4/6/0
- Asia-Pacific
4/0/0
0/3/0
Total
13/8/3
6/10/0

1 No overall global data available for this period

2 Average of 4 quarters