Business ethics accross our value chain

Arjo has an ethical responsibility to employees, customers and business partners, and we strive for high business ethics on all levels. Ensuring compliance is part of our daily work.

Good business ethics and well-defined principles for compliance are at the core of Arjo’s long-term business relations. Our strategy is to support companies that share our core values. Our ambition is to influence other players in contributing to the development of a fair global market, free of corruption.

Arjo’s Code of Conduct

The credibility of and compliance with our Code of Conduct are decisive for our continued success. Credibility creates trust among internal and external stakeholders. Since 2017, our strategy includes a clear ownership of various initiatives regarding regulatory compliance in daily operations.

Arjo’s Code of Conduct is based on the following international principles:

  • UN Global Compact
  • OECD’s guidelines for multinational companies
  • The UN Guiding Principles on Business and Human Rights
  • The International Labor Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work.

The Code of Conduct applies at Group level and to individual employees and comprises legislation, regulations, human rights, the environment, health and safety, and business ethics.

UN Global Compact

UN Global Compact is the world’s largest corporate initiative in sustainability. Arjo follows the ten principles that apply to human rights, labor, the environment and anti-corruption. More than 12,000 organizations and 8,000 companies have signed these guidelines.

Anti-corruption

Arjo’s anti-corruption policy has a zero tolerance of all types of fraud and bribery. This includes actions that contravene Arjo’s rules, but also local laws, industrial standards and ethical codes in the countries where we operate.

Whistleblower function

Arjo’s employees are urged to report situations that are demonstrably or suspected of being influenced by corruption or are ethically indefensible in some other way. The aim is to take action at an early stage. Reporting can be done anonymously.

High demands on our partners

Arjo does business throughout the world and has a broad network of suppliers and partners. We place the same high demands on them as on our own business in terms of business ethics and regulatory compliance.

Suppliers

Arjo’s goal is to create long-term relationships with suppliers that have solid business ethics. We train our partners continuously in
anti-corruption, regulatory compliance and other processes that ensure ethical business.

We conduct continuous risk assessments and have a close dialogue with 25 of our largest global suppliers regarding business ethics and regulatory compliance. They represent a significant share of our purchasing value and were selected based on the principles behind Arjo’s Code of Conduct for suppliers, but also because they are in close proximity to our production units. This minimizes unnecessary transport and costs, and generates environmental and business gains.

Arjo’s Code of Conduct for suppliers is based on the principles defined in the UN Global Compact.

Self-assessment

Arjo has a comprehensive process for the approval of suppliers. Each supplier must conduct an internal review and be familiar with and accept Arjo’s Code of Conduct for suppliers. Suppliers who conduct business with us must also accept and be subject to continuous audits and measurements of business ethics, work conditions and environmental work.

Distributors and agents

In 2019, Arjo’s business ethics and compliance function focused in particular on strengthening audits of distributors, agents and other commercial intermediaries.

An improved process has been developed to evaluate new partners before initiating a collaboration. After an initial risk assessment focused on country/region and the partner itself, the sales unit can further choose to supplement the assessment with an in-depth analysis by a third party.

If an existing partner does not meet the relevant criteria and does not take actions to make improvements, Arjo can choose to cancel the contract and terminate the partnership. This process will be gradually implemented in 2020.

An annual evaluation of compliance

Arjo aims to be a credible business partner. Accordingly, we have well-developed processes and procedures to ensure that we are complying with the necessary laws, regulations and policies relevant to our operations.

Our employees play a crucial role in enabling Arjo’s regulatory compliance. Since 2017, our employees receive training in our Code of Conduct, which includes policies and directives for Arjo’s global compliance processes.

Based on a risk assessment, we prioritize the countries and regions where most action is required and where we can have the highest impact. Some sales units in prioritized regions received advanced internal training in business ethics and compliance during 2019.

We conduct annual assessments of the level of compliance with international guidelines for sustainability reporting (ESG). The results are followed up on the basis of various key data, including:

  • Training of new employees in the Code of Conduct
  • The proportion of employees who have signed the Code of Conduct
  • The proportion of business partners who have signed the Code of Conduct
  • The number of cases reported in the whistleblower function.

Arjo’s Ethics & Compliance Committee

The Ethics & Compliance Committee sets the strategic direction pertaining to Arjo’s business ethics and regulatory compliance. It acts on the instruction of the Management Team and monitors that Arjo’s operations comply with the ethical guidelines in the global market, and follows-up ongoing internal processes and activities in this area. The committee also has an advisory function and responds to employees’ questions.