OUR GOVERNANCE PHILOSOPHY IS TO ENSURE COMPLIANCE TO ACHIEVE DEVELOPMENT THAT IS SUSTAINABLE, GROWTH THAT IS INCLUSIVE AND PROGRESS THAT IS ACCOUNTABLE.
We are a multi-locational federated Group, where each company is independent for its day-today operations and the comprehensive governance structure acts like a glue to ensure a uniform culture of accountability, fairness and transparency.
At the helm of our governance structure is the Board of Directors, who provide leadership for the Group and strategic direction to the management. It is collectively responsible to shareholders for promoting long-term success of the Group through the creation and delivery of sustainable shareholder value.
In accordance with the UK Corporate Governance Code, the majority of our Board, excluding the Chairman, comprises independent Non-Executive Directors. As of March 31, 2018, our Board consists of the Executive Chairman, Executive Vice Chairman, and five independent Non-Executive Directors.
The Board has four established committees that help oversee the management of the Group:
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Ably assisting the Board are our 'Code of Business Conduct and Ethics' and the Vedanta Sustainability Framework. While the Code is a guiding set of principles for our employees to conduct themselves impeccably, the Framework is for our businesses to understand and integrate sustainability into their operation and decision-making.
To further ensure the robustness of our structure, we also follow global standards and good practices such as ICMM, IFC and OECD guidelines. International consultants are also engaged to audit and provide feedback on the structure's strengths and weaknesses.
BOARD OF DIRECTORS
For Vedanta, compliance with the local regulations is non-negotiable. Requisite checks and balances are built in the system with a well-defined reporting structure and responsibilities to address local issues equitably. A responsive feedback mechanism and quick redressal system ensure that we are effective and efficient.
CODE OF BUSINESS CONDUCT AND ETHICS
Vedanta will not compromise on ethics and integrity. Fraud, bribery or any form of corruption is non-negotiable, and the Company is committed to their eradication. Each suspected case is thoroughly investigated and concluded. The Audit Committee reviews the actions taken by management in the elimination of fraudulent practices and to promote ethical working practices.
The CBCE is supported by the following additional policies and guidance notes:
In order to ensure transparent and easy access to our policies in the public domain, our Insider Trading Prohibition Policy and Anti-trust Guidance Notes relating to Disclosure of Sensitive Information are publicly available on our website and are incorporated into contracts where relevant.
Vedanta's Whistle-blower Policy currently communicates our commitment to a 'policy against retaliation', and commitment to maintaining confidentiality, in case of a company employee.
|Number of whistle-blower cases opened in 2017-18||87|
|Number of whistle-blower cases upheld and found correct in 2017-18||23|
|Number of whistle-blower cases closed in 2017-18||76|
Appropriate disciplinary actions against erring employees, contract workforce and vendors, including warning, counselling, transfer and separation, were taken.
Awareness of CBCE among the employees is important. To make sure that all our employees are well-versed with our Code, mandatory training is provided for new recruits, and refresher workshops on anti-corruption policies and procedures are conducted for relevant employees. As part of our commitment to continual improvement, and going 'beyond legal compliance', we are currently working on rolling out an e-learning module for the CBCE across the Group and issuance of post-training e-certificates.
The supply chain is a significant contributor to our performance and we have institutionalised a dedicated accountability mechanism for suppliers and contractors. Our Suppliers' Code of Conduct communicates our requirement for our suppliers to operate in compliance with all relevant legislation, align to our policies while executing work for, or on behalf of Vedanta or on our sites, and adopt ethical practices. Vedanta encourages suppliers to adopt principles and practices comparable to our own, including the Supplier Code of Conduct, supplier and contractor management policies and supplier screening checklist.
A FRAMEWORK FOR SUSTAINABILITY
Our Sustainable Development Model is reinforced by a Vedanta Sustainability Framework (VSF), which assists each business in the implementation of the Model. Developed in line with ICMM, IFC, OECD, UNGC and SDGs guidelines, the Framework comprises several policies, standards and guidance notes which help us in its execution.
The chart below illustrates the implementation of our comprehensive Sustainability Framework aligned to global standards and practices.
The Framework is an effective tool to unify Vedanta's sustainability approach across locations and businesses. It is an integral part of our business strategy and helps us to conduct business in line with our core values of trust, entrepreneurship, innovation, excellence, integrity, respect and care. It is a great sieve to check all our decisions, which ensures that we remain safe, ethical, transparent and responsible all the time.
It is also a tool to help strengthen our commitment to conduct our business in an ethical and responsible manner. Every year, a gap analysis to identify any lacunae between the existing management systems and the requirements of the Framework is conducted at each business. The identified gaps are discussed and reviewed by the leadership teams, and action plans are put in place to ensure compliance within a specified period.
VEDANTA SUSTAINABILITY ASSURANCE PROGRAMME (VSAP), OUR INTERNAL RISK MANAGEMENT TOOL RUN BY THE GROUP'S MANAGEMENT ASSURANCE SYSTEM, ASSURES THAT ALL BUSINESSES ARE IMPLEMENTING THE FRAMEWORK CONSISTENTLY. SUSTAINABILITY OBJECTIVES ARE MONITORED AND REVIEWED IN COMPLIANCE WITH THE FRAMEWORK.
THE SUSTAINABILITY COMMITTEE REPORT
MANAGING OUR RISKS
Risks are inherent in a business opportunity. We recognise that identifying and actively managing them leads to sustainable growth for all stakeholders. A robust risk governance framework and a risk management framework are in place to identify, assess and respond to the principal and emerging risks facing the Group's businesses.
The Board has the ultimate responsibility for management of risks and for ensuring the effectiveness of internal control systems. The Audit Committee's report on the risk matrix and significant risks, and actions put in place to mitigate these risks, helps the Board gain a detailed understanding of the risks.
The Audit Committee is in turn supported by the Group-level Risk Management Committee (GRMC), which assists them in evaluating the design and operating effectiveness of the risk mitigation programme and the control systems. The Group has a consistently applied methodology for identifying risks at the individual business level for existing operations and for ongoing projects.
RISK GOVERNANCE FRAMEWORK
Our management systems, organisational structures, processes, standards, and Code of Conduct and Ethics together form the system of internal control that governs how the Group conducts its business and manages associated risks.
The effective management of risk is critical to support the delivery of the Group's strategic objectives. Risk management is, therefore, embedded in critical business activities, functions and processes. The risk management framework is designed to manage rather than eliminate the risk of failure.
GROUP RISK MANAGEMENT FRAMEWORK
Each business has developed its own risk matrix of top twenty risks, which is reviewed by their respective Management Committee/ Executive Committee, chaired by their respective Chief Executive Officers. In addition, each business has developed its own risk register depending on the size of its operation and number of SBUs/locations. Risks across these risk registers are aggregated and evaluated, and the Group's principal risks are identified based on the frequency, potential magnitude and potential impact of the risks identified.