Code of Conduct

The Code of Conduct is the Volvo Group’s mandatory, Group-wide policy for appropriate business behavior and responsibility towards our stakeholders, and is the backbone of the Group’s CSR and sustainability commitment.

The Code of Conduct policy outlines the Volvo Group’s principles and minimum standard for conducting business in an appropriate, responsible and transparent manner. It is the minimum behavioral standard and is mandatory for all Group companies, meaning that everyone in the Group must understand and comply with the principles in every day work.

The policy consists of business ethics, human rights and social justice and environmental principles which shall be applied in policies, decisions and activities.

The Code of Conduct consists of business ethics, human rights and social justice and environmental principles

The Code of Conduct is reviewed annually and was recently updated due to higher expectations on companies to assume responsibility for their operations and to changes in the Volvo Group’s organization. The new Code of Conduct was adopted by the Board of Directors in September 2012. The content is based on international charters such as the United Nations Global Compact initiative and the OECD’s guidelines for multinational companies. The updated version of the Code contains more principles on business ethics, and guidelines on how to implement the principles of the Code in daily business. The effects of non-compliance are also described more thoroughly, as well as the process for reporting violations.

As a complement to the Code of Conduct approximately 20 other policies in areas such as environmental issues, anti-corruption and workplace practice are implemented in the organization. These complementing policies are often more extensive than the minimum standard in the Code and describe in more detail how to address the issues.

Implementation and follow-up

The Volvo Group’s managers are responsible for communicating and demonstrating the content and spirit of the Code of Conduct as well as for complying with the rules and objectives it includes.

A Group-wide training program was launched in November 2012 to support the implementation of the new Code of Conduct

A Group-wide training program was launched in November 2012 to support the implementation of the new Code of Conduct. This is the third round of Group-wide training on the Code of Conduct since 2006. This training helps our employees and managers to reflect on their own attitudes and behavior in different situations. The training is available in twelve languages as an e-learning course and a workshop with open discussions. Since the launch of the new Code of Conduct in November approximately 11,000 employees have participated in the web-based training.

Compliance with the Code

The compliance with the Code of Conduct is monitored through audits and assessments.

The Volvo Group has a management control system to evaluate how well Group policies, such as the Code of Conduct, have been implemented and enforced by conducting an annual self-assessment to measure the level of maturity. The result of the self-assessment is reported to Group management and the Audit Committee and is used as input to the long-term development of our corporate values and business behavior.

The Audit Committee is established by the Board of Directors with the primarily responsibility of overseeing the accounting and reporting processes and the audit of the financial statements. The members of the Audit Committee are independent from the company and the company management.

Employee commitment

The annual Volvo Group Attitude Survey (VGAS) measures among other things employee engagement which is critical for achieving strategic objectives and for business success. Questions on Code of Conduct are included and measured in the survey.

Findings from the survey are discussed in work groups, involving managers and employees. Feedback discussions result in an action plan with activities addressing areas for improvement throughout the year.

Report on violation

All employees within the Volvo Group are expected and encouraged to report suspected violations of the Code of Conduct to their direct superiors or managers of their superiors. To support this, a Whistleblower procedure is available.

In the event that a reported incident is not taken seriously, or if an employee does not feel comfortable reporting the matter to his or her superior, the employee can report it to the Head of Corporate Audit in accordance with the Whistleblower procedure. Reports made using this procedure may be submitted anonymously, to the extent permitted by law. In accordance with our Code of Conduct, we do not tolerate retaliation against a person for making good-faith complaints of suspected improper behavior.

All incidents are investigated. Suspected irregularities always lead to further investigation. The consequences are proportional to the gravity of the action. It may vary from a warning to demotion, dismissal and/or filing a police report.

In total, 33 cases were reported in 2012 under the Whistleblower procedure. Eleven of these were dismissed following investigation, as there were no grounds for the allegation. In 19 cases we found grounds for the allegations and proceeded with appropriate actions. Three of these cases are still under investigation. All cases were investigated and reported to the Audit Committee of the AB Volvo Board of Directors.

Among these 33 cases, two cases were dealt with as potential corruption cases in 2012. These were investigated and reported to the Audit Committee. One case is still under investigation.