2019Governance

DSM Code of Business Conduct

The DSM Code of Business Conduct ('the Code') serves as an umbrella for several other DSM regulations and forms the basis for our company's ethical business behavior. Our purpose, core values, ways of working and business principles are an integral part of the Code. The business principles translate our purpose into important do's and don'ts to guide our business operations in daily practice. All DSM employees are expected to follow the Code, which is available in seven languages. The full text also appears on the company website. The Managing Board holds DSM's unit management accountable for compliance.

Training and awareness

The DSM values training program contains several e-learning courses to explain the Code and a number of its business principles in more detail. These courses are aimed at raising awareness for ethical business behavior and are assigned to all employees or, for certain subject matter, to specific target audiences. When DSM acquires a business, integration and compliance plans are rolled out to make sure new employees are trained.

A review team, chaired by the Vice President Group Risk Management, monitors the internal and external developments around corporate ethics to promote and safeguard the company's values and reputation. The review team also monitors implementation of the DSM values training program (see table Implementation of the DSM values below). At year-end, most employees had completed or refreshed their training (excluding employees of some recently acquired businesses). Our learning management system also has an external portal to enable relevant contractors and other third parties to follow courses of the DSM values training program.

The DSM values training program covers the three dimensions of People, Planet and Profit. An overview of the courses and the changes in 2019 is listed here, as well as a number of important implementation measures.

People

The Life Saving Rules specify the 12 most important rules that must be followed by all employees to prevent incidents. In the revision of the Life Saving Rules, improved standards for warehouse safety and hot work have been included. The corresponding e-learning course was completely revised and relaunched in 2019.

The Unlawful Harassment Prevention e-learning was succeeded by the new Respectful Behavior e-learning in 2019. This course emphasizes the importance of diversity and inclusiveness, and promotes respectful behavior as well as active bystander behavior to foster effective employee relations, communications, and non-discriminatory practices. The course is available in seven languages and is mandatory for all our employees. The Unlawful Harassment Prevention e-learning remains available for specific target groups.

The DSM Privacy Codes prescribe mandatory training for Privacy Officers, P&O employees, legal counsels and employees who regularly work with personal data. This is provided in the Data Privacy Knowledge course, which is available in English. In addition to this, concise e-learnings are in place to train all our employees on the consequences of the new European General Data Protection Regulation. These short courses are available in seven languages.

Planet

The Basic Course Responsible Care addresses the elements of the Responsible Care Program: Safety, Health, and Environment; Product Stewardship; Security; and Sustainability. The course is available in seven languages.

Profit

The course for Global Competition Law Principles and Practices addresses the main principles of anti-trust legislation and is available in six languages. Employees for whom competition laws are most relevant must also follow the Competition Law classroom training (available in six languages) and annually confirm their compliance with the rules via a Competition Law Compliance Statement. In this statement, they confirm that they are not aware of any violation of competition laws by DSM. Alleged breaches are reported to, and discussed with, Group Legal Affairs. In 2019, no breaches were reported.

The course for Global Trade Controls (available in English) explains the most important aspects of international trade legislation. Compliance with trade controls is embedded in our systems and processes. Company master data is screened to check customers and suppliers against embargoes and lists of sanctioned parties.

The DSM Anti-Bribery and Corruption (ABC) e-learning provides training on the most important features of bribery and corrupt behavior and is available in six languages. In addition, the DSM ABC Policy and Compliance Manual (available in English and Chinese) is shared with selected employees in commercial and business roles, who must also follow ABC classroom training (integrated into the Competition Law classroom program, available in six languages). The ABC due diligence program for DSM agents and distributors was further implemented during 2019.

The Security e-learning covers our seven Key Security Behaviors. To complete this e-learning, employees are required to read and sign off on the DSM Code of Conduct for Information Security. The Cyber Fraud Awareness e-learning, introduced in 2018, is an additional training to increase awareness among all employees regarding prevalent types of cybercrime. Both courses are available in seven languages. Furthermore, phishing tests are regularly carried out to ensure that our people stay alert.

We also have rules to prevent misuse of inside information on the holding of or trading in DSM financial instruments, such as shares and other securities, and where applicable the holding of or trading in financial instruments of other companies. These rules apply to all relevant employees, including the Executive Committee, the Managing Board, and the Supervisory Board. A new system was implemented in 2019, that enables us to secure compliance with Market Abuse Regulations in a more efficient way.

Value chain

The business principles most relevant to our supply chain are brought together in the Supplier Code of Conduct and are also structured along the three dimensions of People, Planet and Profit. The Supplier Code of Conduct, available in eight languages on the company website, is signed off by suppliers in framework contracts, confirming their commitment to sustainability, among other things.

For our distributor and agent framework contracts, the ABC Policy is translated into terms and conditions to ensure ethical business conduct when these parties act on behalf of DSM or deal with DSM products further down the value chain.

Consequence management

We apply zero-tolerance consequence management to violations of the Code. Under our whistleblower procedure (DSM Alert), most (potential) violations are reported to and dealt with by local line management. Where this is not considered appropriate, complaints are made directly to the DSM Alert Officer. In both cases, consequence management practices (e.g., official warning, temporary suspension, dismissal) are in place for substantiated violations to support compliance with the Code. The DSM Alert Officer reports to the Managing Board and also reports independently to the Audit Committee of the Supervisory Board twice a year. Any individual not employed by DSM who might wish to voice a concern regarding violations of the Code may also contact the DSM Alert Officer via the company website.

In 2019, 26 Alert cases (reports of potential violations of the Code) were received by the DSM Alert Officer, two of which were reported by an external party. This is at the same level as in previous years. Three of these were potential bribery and corruption cases. After investigation, two Alert cases were substantiated and consequence management was applied.

The table below gives an overview of all reported substantiated violations of the Code (including Alert cases), with a breakdown by Triple P dimension and region. Proven violations result in dismissal or other forms of consequence management. In line with this policy, 42 employees were dismissed in 2019 because of breaches of the Code, legal or local company regulations. In addition, 119 employees received another form of consequence management (official warning or suspension). Over the years, the number of dismissal cases has remained about the same, whereas there is an increase of other kinds of consequence management cases being reported.

People: Most of the cases in the People dimension relate to violations of the Life Saving Rules. Inappropriate behavior that does not contribute to a safe and healthy working environment (discrimination, sexual and other kinds of harassment) is also reported in this dimension. Health and safety are priorities for the company and incident-reporting channels are well known.

Planet: There were three violations of the Code reported in the Planet dimension in 2019 due to irresponsible behavior on the part of an employee. Two cases led to a minor environmental incident, the third did not.

Profit: Most of the cases in the Profit dimension relate to fraudulent expense claims and incorrect registration of working hours.