Philips 2014 Annual Report Download - page 68

Risk management 7.1
68 Annual Report 2014
operating eectiveness of controls over nancial
reporting which were not completely remediated are
evaluated at year-end by the Executive Committee. The
Executive Committee’s report, including its conclusions
regarding the eectiveness of internal control over
nancial reporting, can be found in section 12.1,
Management’s report on internal control, of this Annual
Report.
Philips General Business Principles
The Philips General Business Principles (GBP) set the
standard for our core behavior − ‘Acting with integrity’
− and they apply to the behavior of individual
employees as well as to corporate actions. They
incorporate the fundamental principles adopted within
Philips for conducting business. The GBP have been
revised in 2014 to make the GBP more accessible to
Philips employees and to reect certain changes in the
business environment.
The GBP form an integral part of virtually all labor
contracts. It is the responsibility of each employee to
live up to our GBP. In addition, the management of each
business unit signs o on compliance with the GBP, with
this conrmation forming part of the annual Statement
on Business Controls.
As part of the Philips Business Control Framework, a
GBP self-assessment process is fully embedded in an
automated workow application (ICS), which helps
management to monitor the internal controls. With the
GBP self-assessment forming part of ICS, GBP
compliance necessarily forms part of management’s
quarterly ICS/SOx (Sarbanes-Oxley) monitoring
process. Non-compliance issues are highlighted and, if
signicant, they are reported to the Board of
Management/Executive Committee through the
Quarterly Certication Statement process.
Managers are viewed as the principal point of contact
in cases where employees wish to raise a concern. To
further facilitate this process, the GBP include a
reporting policy, standardized complaint reporting and
a formal escalation procedure. The Philips Ethics Line
platform enables employees to le a complaint by
telephone in their native language. Additionally,
concerns can now also be raised using an online
reporting form, a facility that is available as part of the
Philips Ethics Line. Every country organization and all
main production sites are supported by a GBP
Compliance Ocer. This network of Compliance
Ocers is supervised by the General Business
Principles Review Committee. Alleged violations of the
GBP, which are either led directly through the Philips
Ethics Line or raised through a GBP Compliance Ocer,
are registered consistently in a single database and are
investigated in accordance with standardized
investigation procedures.
Since 2013 it has become mandatory for all executives
to sign o on the General Business Principles. To drive
the practical deployment of the General Business
Principles, more detailed underlying policies have been
developed. Where necessary, these policies can be
adapted to reect ongoing (regulatory) developments,
both internal and external. In addition, there are
separate Codes of Ethics that apply to employees
working in specic areas of our business, i.e. the
Procurement Code of Ethics and the Financial Code of
Ethics. Details can be found at www.philips.com/gbp.
The relevant employees sign o on the Financial and
the Procurement Codes of Ethics each year to conrm
that they are aware of, and will comply with, the
respective codes.
Financial Code of Ethics
The Company recognizes that its businesses have
responsibilities within the communities in which they
operate. The Company has a Financial Code of Ethics
which applies to the CEO (the principal executive
ocer) and CFO (the principal nancial and principal
accounting ocer), and to the heads of the Group
Control, Group Treasury, Group Fiscal and Group
Internal Audit departments of the Company. The
Company has published its Financial Code of Ethics
within the investor section of its website located at
www.philips.com. No changes were considered
necessary and no changes have been made to the
Financial Code of Ethics since its adoption and no
waivers have been granted therefrom to the ocers
mentioned above in 2014.
For more information, please refer to sub-section 5.2.7,
Philips’ General Business Principles renewed, of this
Annual Report.