Business ethics
Our objectives
Heineken wants to run its business with respect for international and national laws and regulations and in compliance with ethical standards. It expects its employees to obey the legal requirements in the host country and to take their business decisions solely in the best interest of the Company and its stakeholders.
Our strategy
In order to reach our objectives we have adopted an approach based on the following pillars:
- The Heineken Code of Business Conduct containing the rules that we want our employees to follow (in place on a country-by-country basis since 2005)
- The Heineken Whistle-Blowing Procedure
- Audit programmes designed to measure the uptake and effectiveness of these instruments.
Activities in 2007
The Code of Business Conduct was implemented in Heineken Russia, meaning that at the year-end of 2007, only five of our operating companies had not completed the transposition of the Code of Business Conduct into a local Code. The Whistle-Blowing Procedure was implemented in the sub-Saharan African operations and in Heineken Russia, meaning that again, five markets have yet to implement the process. This was in addition to the previously reported countries that are unable to fully implement, given French regulatory limitations.
We modified the Heineken Whistle-Blowing Procedure in order to assure compliance with the privacy requirements within the EU. This revised procedure is scheduled to be submitted to the Executive Board for approval in the first months of 2008.
Two reports on our approach to business ethics and its effectiveness were submitted to the Audit Committee of the Executive Board: a half-year review in August 2007 and a full-year report in February 2008. The latter contained a full overview of cases filed locally and with the Integrity Committee of Heineken Group, as well as the results from the activities of Group Internal Audit with respect to business ethics.
In 2007, two cases were reported to the Integrity Committee through the international hotline. Both cases were referred back to the operating company, as they did not involve members of a local Management Team or otherwise meet the criteria for review by the Integrity Committee. On a local level, 36 reports were filed with the local Trusted Representatives of line management. Of these 36 cases, 25 were substantiated. They mainly concerned incidents of fraud or conflicts of interests. The relevant disciplinary or other action was taken in respect of all these infringements.
In the last quarter, Group Internal Audit conducted a Group-wide review into the effectiveness of the Code of Business Conduct and the Whistle-Blowing Procedure. This review provided us with valuable insights on how to further improve our approach. The main conclusion was that the training of employees in certain risk functions needed improvement in a majority of the operations. Also under the leadership of Group Internal Audit, an employee perception survey was conducted among nearly 1,000 employees in five different operating companies. This survey showed that familiarity with the provisions of the Code of Business Conduct is relatively high as nearly all employees who participated in the survey indicated that they knew the content. Familiarity with and trust in the Whistle-Blowing Procedure scored much lower, underpinning the importance of constant communication on the Whistle-Blowing Procedure and how to access it.
Finally, in 2007 we continued our efforts to get a better understanding of the cultural elements of ethical behaviour. Group Corporate Relations and Group Human resources have been jointly working on the possible integration of certain questions in our climate survey that are designed to allow operating companies to better understand the influence of the business culture on ethical behaviour and to undertake interventions when necessary. Our aim is to commence these kind of measurements in the course of 2008.
What we will do in 2008
- Implement the Heineken Code of Business Conduct and the Heineken Whistle-Blowing Procedure in those markets that have not yet done so
- Newly acquired companies will be aided by the Heineken Group in adopting the necessary internal rules
- The roll-out of the revised Heineken Whistle-Blowing Procedure will be started and we will further communicate the procedure and contact details for the local Trusted Representatives and our international hotline internally
- Local trusted Representatives will be trained in the privacy aspects of whistle-blowing
- We will develop better training tools for operating companies allowing them to train employees in risk functions in the provisions of the Code of Business Conduct
- Group Internal Audit will continue its efforts in measuring effectiveness of our approach to business ethics
- A pilot of our revised climate survey in three markets will take place in order to assess whether the inclusion of ethical culture-related questions enhances our insights and allows the operations in the development of so-called soft controls to business ethics.