Integrity is the foundation on which we do business
Unilever’s Code of Business Principles and Code Policies put our values into practice. They are mandatory for all Board directors, employees and contractors. This applies to all Unilever companies, subsidiaries and organisations over which Unilever has management control. They define the behaviours that everyone who works for Unilever must adhere to. This ensures that our values are brought into the workplace, that the good reputation of the company is promoted and protected, and that we operate within all applicable laws and regulations.
Similarly, our Responsible Sourcing Policy defines the standards of integrity we expect of third parties who interact with us.
An important component of our ‘winning with integrity’ strategy is the requirement for the highest standards of behaviour from all of us. We operate with a broad definition of corruption. This includes fraud and financial misrepresentation, conflicts of interest, bribery, facilitation payments, anti-trust violations and misuse of information. We have dedicated policies in all of these areas, and others not specifically related to corruption (such as discrimination, workplace safety and information protection). These policies define in clear, simple terms what everyone who works with and for Unilever must and must not do.
We mitigate against breaches of our Code of Business Principles and Code Policies through comprehensive standards, education and risk assessment. We have clear instructions about the required standards of behaviour from directors, employees, contractors and other individuals who act on behalf of Unilever. We are also clear about the consequences of misconduct.
Our Code of Business Principles and our Responsible Sourcing Policy(Link opens in a new window)
( 4.1MB )
are published on our corporate website.
Our framework for integrity
The Unilever Code Compliance Framework is divided into three pillars: Prevention, Detection and Response. These pillars encompass a comprehensive system of activities by which we ensure that the way we do business is in accordance with applicable laws and regulations of the countries where we operate, as well as with our values and standards.
Our Chief Executive Officer sets a strong tone by communicating that our Code of Business Principles and Code Policies are non-negotiable. Other members of our Executive also champion our Compliance programme. Every country CEO is effectively the Chief Compliance Officer for the country operation, held accountable for compliance matters.
At Unilever Board level, our Audit Committee reviews Code of Business Principles cases relating to fraud and financial crime. It also reviews other significant complaints relating to financial irregularities, which are received through the Unilever Code Support Line. Our Corporate Responsibility Committee is responsible for oversight of the Code and associated Code Policies. It ensures these remain fit for purpose and appropriately applied.
We manage the strategy and execution of the global Code compliance programme through a dedicated Global Risk and Compliance function. This reports to the Chief Legal Officer and the Chief Auditor, and through our Global Code & Policy Committee. This comprises the Chief Legal Officer, Chief Auditor, Group Controller, Chief Procurement Officer, VP Risk and Compliance, SVP Human Resources, and other invitees as appropriate.
A locally appointed Code Officer assists the Local Code and Policy Committee in executing the programme and in investigating allegations of Code breaches. The Code and Policy Committee comprises the Country Chairman, and Heads of Finance, Human Resources, Supply Chain and Legal, and other representatives as required. The Code Officer also reports back to the Global Risk and Compliance function.
In 2014, Unilever implemented a new Group Procurement Code and Policy Committee (PCC) with responsibility for all supply chain compliance issues. The PCC comprises senior leadership in Procurement, VP of Risk and Compliance, Legal Counsel, Supply Chain Compliance Director and other required management.
The focus for our ‘Prevention’ strategy includes reporting channels, management review and self assessment.
Our Code of Business Principles is at the heart of the Unilever Code Compliance Framework. Together with our 24 Code Policies, these reflect four core themes. These are Respecting People, Safeguarding Information, Countering Corruption and Engaging Externally. These are all integrated into our management systems as operating procedures. These Policies are our first line of defence to enforce compliance with laws and regulations, to protect our brands and reputation, and for zero tolerance to harm people or the environment.
We make it clear that Code Policies are mandatory for directors, employees, contractors and individuals who act on behalf of Unilever. They clearly set out minimum standards of behaviour, including what individuals ‘must’ and ‘must not’ do. They also refer to compliance with laws and regulations and to Unilever Standards and internal guidelines. We are clear that substantiated breaches of our Code of Business Principles and Code Policies attract sanctions, which could include dismissal and legal action. Our Policies and Standards are mandatory. They apply equally to all Unilever companies, subsidiaries and joint ventures over which Unilever has management control.
We are unambiguous about facilitation payments – we always consider these as bribes and are prohibited.
Our markets set limits for gifts and hospitality and they should never be offered or received as a bribe. They should be only for valid business purposes and be appropriate and reasonable. We expect all conflicts of interests to be disclosed and managed. We prohibit participation in the activities of political parties for business purposes. We do not allow donations and sponsorships to be used in order to encourage the awarding of contracts. We carefully consider our actions to ensure that we do not willingly enter into transactions that result in breaches of anti-trust and competition laws.
Training & awareness
We provide employees with mandatory Code compliance training. We ensure that regular company-wide communication reminds and reinforces our approach to winning with integrity. Our training is provided both online in English and 14 other languages, as well as face-to-face locally.
In 2014 we extended the training to include directors and contractors. Additionally, in March 2014 we dedicated two weeks to Code compliance awareness campaigns globally. The campaigns included a continuous online presence, topical articles on compliance, targeted training and communications posters for each Unilever site. During 2013 we educated over 54,000 employees in English and 14 other languages. This was an increased audience of 8% over 2012 using online or e-learning facilities. Additionally, shop floor workers and field based employees were trained in face-to-face classroom type sessions.
Every quarter the Global Risk and Compliance function engages formally with all local Code Officers. This is to update and convey information about new policies, Code Compliance activities and new systems. It is also to receive feedback on implementation concerns.
We follow up on all non-completion of mandatory training and take action where required. Our training strategy over two years covers the key themes of Respecting People, Safeguarding Information, Countering Corruption and Engaging Externally and is based on our Code Policies.
We monitor and benchmark our training programmes to ensure we have adequate investment in education and awareness. We also have a Code Education programme that delivers deeper understanding on specific Code Policies to employees in high risk positions. For example, in 2014 we rolled out targeted education about Fair Competition and Responsible Innovation.
Risk assessment & due diligence
Managing third-party risk remains one of our main priorities for Code Compliance. To mitigate the risk, we conduct detailed risk assessment and due diligence of our supply chain. This is to identify third parties who pose a higher than acceptable risk to our reputation, or who are likely to incur legal compliance breaches in our commercial relationships.
We require both quality audits and responsible sourcing audits for partners deemed in scope (based either on the products supplied or risk factors determined). Suppliers considered high risk, identified through risk assessment or audits, are required to remediate deficiencies to our standards within agreed timelines or face termination of contract.
Annually our markets conduct assessments of bribery risk. They are required to develop appropriate mitigation plans. One of the main responsibilities of the Code and Policy Committees (described above) is the evaluation of new emerging compliance risks and review of mitigation plans.
The focus for our ‘Detection’ strategy includes reporting channels, management review and self assessment.
Raising concerns & reporting channels
We are committed to a culture of transparency and speaking up about issues. We provide our businesses with internal and external channels for raising concerns, anonymously if required. We also provide an external channel to our suppliers. We take measures to encourage our suppliers and their employees to contact us if they are concerned about any aspect of our Responsible Sourcing Policy.
In 2012 we introduced a new web-based reporting process for both employees and suppliers. This is in addition to existing telephone and email reporting systems. Employees can report concerns to their Line Manager, local Code Officer, or a member of their local Code Committee (Heads of Finance, Human Resources, Legal and Supply Chain). Alternatively, they can use the confidential ‘Code Support Line’ (whistleblowing line) using the telephone or internet. All our Code Compliance training materials and related communications collateral enforce awareness of these channels.
Our Responsible Sourcing Policy contains clear procedures for the reporting of breaches. It requires the supplier or their employees to raise concerns about breaches to our confidential ‘Code Support Line’.
Annual employee / director declarations
Annually we ask all managers and directors to sign a declaration. This confirms that they have reported any potential Code breaches that they are aware of. Exceptions are followed up and investigated. In 2014, we extended the declaration to contractors.
Management review & reporting
Quarterly at our Global Code & Policy Committee (GCPC) we review compliance strategy, adequacy of Code compliance controls and management systems, performance on training, status of investigations and associated sanctions.
Our Local Code Committees (at country level) review and report quarterly on significant compliance risks and mitigations, adoption of training and awareness, status of investigations and sanctions including disciplinary and asset recovery proceedings.
Our Procurement Code Committee reviews responsible sourcing and quality audit issues, red flags for risk, and other issues relating to non-compliance by our Suppliers.
Compliance self-assessment & audits
Our operating companies undertake a self-assessment of our integrity-related business controls annually. This is to identify areas for improvement. Risks identified through this assessment are addressed as part of local, country-based, or where appropriate global, mitigation plans. This self-assessment is available for independent review by our Corporate Audit function. We have additional detailed controls for preventing financial accounting errors and fraud. Our financial controls are externally audited annually. Additionally, our Corporate Audit function includes the audit of Compliance controls in their scope of business unit audit work.
The focus for our ‘Response’ strategy includes investigations, sanctions and continuous improvement.
We have guidelines and standards for the handling of investigations into breaches of our Code of Business Principles. This includes clear guidelines on managing cases involving bribery and money laundering. These guidelines and standards are applicable to all our business units.
In 2013, we investigated and resolved 789 incidents across all areas of our Code. 33% of these incidents were substantiated and led to some form of sanction. These ranged from verbal warning to dismissal or legal action. We dismissed 124 employees due to Code breaches.
Sanctions & consequence management
In 2013, we launched a global Sanctions Standard. This ensures that sanctions are applied consistently with the requisite seriousness and fairness.
Root Cause Analysis and Continuous improvement
Trends identified from investigations, results of self-assessment and findings from audits are factors in our approach to continuous improvement. Additionally we continue to engage with other companies in the development of better practice. We are a Corporate Supporter of Transparency International, the NGO that monitors and publicises corporate and political corruption, and we are a founding signatory of the United Nations Global Compact.