Compliance

At Sika, a matrix organization is administering Sika’s Compliance Management System. The Head Corporate HR and Compliance leads both the HR as well as the Compliance function. Five full-time Compliance Managers help coordinate the Group-wide compliance initiatives.

Depending on the compliance topic concerned, the Corporate Compliance Team is supported by the Regional HR Heads, or by more than a dozen Legal or Controlling employees who act as part-time Compliance Officers. Together they represent Sika’s cross-functional Global Compliance Organization, which aims inter alia at preventing incidents of bribery and unfair competition by means of implementing targeted policies, trainings, audits, investigations, as well as disciplinary and improvement measures. A separate team is assuring compliance with data protection and privacy regulations. Where required by local law, they are supported by a designated local data protection manager.

Corporate Compliance and Internal Audit collaborate closely in their effort to detect bribery, unfair competition, or fraud. Corporate Compliance usually coordinates investigations concerning these matters.

All bribery, unfair competition or fraud reports must be escalated to the Group Compliance Officer, irrespective of who reports them or where they occurred. In addition, Internal Audit may identify fraudulent or corrupt practices while conducting a regular audit. If this is the case, Internal Audit also informs Corporate Compliance. Together, they assess the situation, decide on whether further investigation is needed, and ultimately propose adequate disciplinary actions and organizational measures to the concerned line management.

Corporate Compliance, and more particularly the Group Compliance Officer, regularly reports substantiated corruption, unfair competition, and fraud cases to the Audit Committee of the Board of Directors, to Group Management, and to the external auditors, informing them about identified root causes and the corrective measures that the concerned line management has implemented.

Sika’s Compliance Management System rests on a life cycle of three closely interrelated core activities: Prevent – Detect – Respond & Adjust. To strengthen the “Detect” component, Corporate Compliance will roll out a Group-wide audit program in 2023 to conduct 15 compliance audits around the globe. The number of audits is expected to increase thereafter, depending on available resources. To assure proper documentation and follow-up, the Group-wide audit tool will be used.

The compliance audits focus on four specific risk areas:

1. Ethical leadership and human rights,
2. Anti-bribery & corruption,
3. Anti-trust & fair competition,
4. Third-party risks including sanctions, marketing expenses, and contracts with intermediaries. The program is closely aligned with the audit activities of other functions, such as Internal Audit and Legal.
   

In 2022, Sika tightened its Third-Party Due Diligence and Monitoring on a global level. On one hand, Procurement continued to implement Sika’s Supplier Code of Conduct across its supply base. The Supplier Code of Conduct prohibits any act of bribery or corruption, and states that such acts, if identified, will lead to the immediate termination of cooperation.

Every supplier is required to commit to this prohibition or demonstrate that it has similar internal rules reflecting a zero-tolerance policy to bribery or corruption. Suppliers are further required to have systems in place that ensure the proper communication training and auditing of their personnel and subcontractors to comply with Sika’s ESG requirements concerning human rights, labor standards and EHSQ across their own supply chain.

On the other hand, Procurement reviews supplier performance on a regular basis, thus monitoring whether Sika’s business partners indeed comply with the Group’s strict ESG requirements. Further, suppliers are obliged to immediately inform Sika of any known violation of its Supplier Code of Conduct.