Sika has a Group-wide, culturally well established and integrated Compliance Management System (CMS). The Group pursues a holistic approach to compliance. It thus has put the compliance and HR functions under the joint leadership of a “Head of Corporate HR & Compliance”. The resulting symbiosis of HR and Compliance greatly facilitates the infusion of compliance initiatives in the whole organization, throughout hierarchies, functions and geographical areas. Five core activities contributed to a further strengthening of Sika’s CMS in 2020. ?

Design of a Compliance Audit Program

Sika’s CMS rests on a life cycle of three closely interrelated core activities: Prevent – Detect – Respond & Adjust. In the context of detecting compliance violations, Corporate HR & Compliance in 2020 developed the necessary cornerstones to build up a compliance audit program. In close cooperation with other assurance functions at Group level, including Internal Audit, Legal, Finance, EHSSQ (Environment-Health-Safety-Sustainability-Quality), Procurement and R&D, Corporate HR & Compliance designed a “Compliance Self-Assessment” questionnaire for General Managers (GMs).

The questionnaire aims at three goals: to identify “high risks” and “focus entities” for targeted compliance audits; to monitor the local implementation of compliance requirements at all Sika entities; and to align closely with the above mentioned assurance functions and their audit activities.

To reduce complexity, it was split into two parts. Part 1 was rolled out and completed in Q4 2020, with a 100% response rate (123 out of 123 GMs). It focused on five compliance risk areas: (i) integrity/speak-up culture, (ii) anti-corruption, (iii) anti-trust, (iv) third party risks, and (v) EHSSQ. Based on the feedback received, neither “high risk” areas nor “focus entities” with an urgent need for intervention or follow-up regarding these five topics could be identified. Part 2 will be rolled out in 2HY 2021, focusing on compliance requirements related to Procurement, R&D, Finance and HR.

Development of Focused Training Initiatives

Throughout 2020 and due to Covid-19, travel restrictions reduced drastically the possibility to deliver on-site compliance trainings. Therefore, Corporate HR & Compliance decided to focus on the development of some online trainings.

Sika’s internal risk analysis in 2019 had shown that fostering awareness among Sika employees about anti-corruption and conflict of interest was likely to help prevent future compliance cases. With the support of Sika’s top management, therefore, Corporate HR & Compliance designed a new ABC e-learning, which it embedded in a broader campaign about values and leadership. This campaign will be launched in Q1 2021, on a group-wide level. Campaign materials, including the new anti-corruption e-learning, will be translated into a dozen languages. While the campaign aims at reaching all of Sika’s nearly 25’000 employees, the anti-corruption and conflict of interest e-learning is targeting only the group of Sika employees chiefly exposed to those risks, including Sika Senior Managers, GMs, and the members of the Sales, Procurement and R&D functions.

A second training initiative in 2020 focused on the revision of Sika’s existing anti-fraud online training, in close collaboration with Corporate Finance. This e-learning aims to raise the awareness about cyber fraud, again primarily among those employees most exposed to cyber risks.? It is expected to be launched in the 2 half-year 2021.? ?

Implemetation of an automated Sanctions Screening Tool

Trading globally, Sika is required to comply with a broad range of trade sanctions. In 2020, Sika initiated the group-wide implementation of SAP-GTS (Global Trade Services). SAP-GTS allows for a largely automated, digitalized screening of select “sanctioned parties lists” (SPL). Sika’s IT team, in close cooperation with the SAP Business Team and Corporate HR & Compliance, currently is developing the project design for a progressive global rollout of automated SPL checks to all Sika entities, including those not yet using SAP (roughly 75% of all entities). Project implementation is expected to start in Q2 2021.

Collection of Annual GRI Confirmations

Each fiscal year, General Managers are required to fill in and sign the “GRI Compliance Confirmation”. Via digitalized questionnaire, Corporate Compliance in 2020 again sought to obtain assurance from all General Managers that core compliance policies and manuals regarding fundamental environmental, anti-corruption, antitrust, and labor laws were implemented at each entity, and that GMs provided adequate information and training to their staff.

Code of Conduct

Sika’s Code of Conduct requires all employees to comply with applicable laws and regulations. At all locations where Sika operates,?forced, slave, compulsory or child labor are strictly prohibited. The Code of Conduct is available in 44 languages.

Effective Case Management

Addressing compliance cases helps Sika not only to detect possible risk areas, but also to address them right away with targeted measures. Sika identifies compliance cases based on internal and external complaints.?Complaints are escalated to Corporate HR & Compliance via several channels, including Sika’s whistleblower platform (“Sika Trust Line”) permitting anonymous reporting. External parties may report misconduct by contacting management or Corporate Compliance. In 2020, Corporate HR & Compliance received 60 complaints. The complaints triggered 44 internal compliance investigations. In 23 cases, allegations of misconduct could be substantiated. 17 cases could not be substantiated. 4 cases still are under investigation.

The analysis of the 2020 compliance investigations allows for the following conclusions:

  • Sika’s number of reported (60) and confirmed/substantiated (23)
    compliance cases is very low, considering the size of the company.
  • Most investigations (80%) centered on either interpersonal tension (17) or fraudulent behavior (18).
  • Of 23 reports submitted anonymously, only 1 (4%) could be substantiated.
  • Sika employees remain the main channel to openly report misconduct. Of the 18 incidents they’ve escalated, 12 (66%) could be substantiated. While 11 of the 18 cases were reported by business employees (first line), 5 were reported by assurance functions (2nd line) and 2 by Internal Audit (3rd line).
  • External partners were a second important source of reports. Out of the 13 external complaints brought to our attention, 10 (77%) were substantiated.
  • In 19 out of the 23 substantiated cases, sanctions were imposed (7 warning letters, 15 dismissals). The consequent imposition of serious sanctions confirms Sika’s zero tolerance for compliance violations and an overall consistency in punishment.