3.1 Business integrity
Nedap is committed to upholding a culture of ethical behavior and integrity, whereby we respect laws and regulations. We are committed to honesty and respect for each other, our customers, partners, suppliers and all other stakeholders. This requires all our employees to take ownership, act transparently and professionally and speak up in a joint effort to safeguard the integrity of Nedap.
The Board of Directors emphasises the importance of a corporate culture and business conduct that is in line with the standards and values of Nedap as described in the code of conduct and further elaborated in several policies. The supervision by the Supervisory Board also specifically focuses on ensuring that these standards and values are upheld by the organisation.
Code of conduct
Our code of conduct sets out the standards, values and behaviors that Nedap expects its employees and everyone working with us to live by. These include avoiding conflicts of interest, not accepting practices such as bribery, corruption and fraud, respecting human rights, compliance with laws, not engaging in insider trading, and treating confidential and price-sensitive information with due care. Furthermore, Nedap’s code of conduct demands respect and equal treatment of people, working responsibly and committing to the health and well-being of people, the environment and society. Please, refer to our website for the full code of conduct.
To strengthen and embed governance throughout the Nedap organisation worldwide, governance visits are made periodically to Nedap’s subsidiaries. The purpose is to align Nedap’s global governance topics with the local situation, as well as to share experiences, learn from each other and ensure that available knowledge is used to the full.
Anti-corruption and anti-bribery
Subjects covered by the code of conduct are detailed in policies, such as our anti-bribery & corruption policy. Doing business all over the world exposes Nedap to potential bribery and corruption risks, which can lead to reputational damage and substantial penalties.
The Nedap anti-bribery & corruption policy sets out the guiding principles and do’s and don’ts in this field.
In addition:
We provide anti-bribery & corruption training routinely for relevant groups of employees.
We address and discuss anti-corruption and anti-bribery during the monthly compliance meeting, as these are themes within the Nedap Compliance Framework.
We have due diligence and supplier screening procedures in place.
We have implemented a speak up! policy and procedure to report suspected irregularities.
We maintain a strong informal system of checks and balances that provides for mitigation of fraud and/or corruption risks.
Furthermore, on a regular basis we assess risks in the markets and countries where we do business. We are cautious with respect to high-risk countries and markets and provide additional guidelines for doing business in these countries, which include guidance on sanctions and export controls. We focus continuously on improving awareness measures against corruption, bribery, and fraud.
Nedap compliance training
To ensure that all our employees know what the code of conduct means for their daily work and how to apply it, they must undergo training. We have several e-learning courses in place in our e-learning portal. The code of conduct course is mandatory for all Nedap employees and interns. Our target is a 100% pass rate. Of the employees who were invited to the Nedap code of conduct e-learning course in 2023 97.2% completed it.
In addition to the virtual training, new employees are expected to participate in person in courses on personal data protection and information security. Extra training sessions on business integrity subjects will be provided and adapted to the needs of the business and the applicable circumstances.
Speak up!
The principles contained in our code of conduct and our business integrity standards must be applied in the right way. Employees, suppliers, customers and other stakeholders must know what we stand for and can expect from each other in terms of behavior and business integrity. We therefore strive to create a safe working environment that encourages an open dialogue within the entire organisation and with third parties. To uphold our business integrity standards, all stakeholders play a role in monitoring compliance with the code of conduct and reporting any inappropriate behavior or undesirable situation.
Nedap’s culture is based on transparency and personal responsibility. We encourage our employees to speak up whenever they observe or suspect a violation, and we have incident reporting procedures in place. In our culture, we encourage confronting each other to prevent or swiftly address potential challenges. This approach has been instrumental in effectively mitigating and resolving issues.
If confrontation is awkward or not possible for any reason, the employee can turn to one of the three confidential counsellors appointed by Nedap. This may be in situations when, for example, they are confronted with undesirable behavior such as discrimination, sexual harassment, bullying, aggression or violence. The confidential counsellors give employees advice and may refer them to external professionals. They also meet on a regular basis to evaluate, reflect and share knowledge. All three of them have taken specific training for this role.
In addition, Nedap has a whistle-blower policy that facilitates the reporting of suspicions of wrongdoing or irregularities. In the year under review, we updated our whistle-blower policy to reflect the new Dutch Whistle-blowers’ Protection Act (Wet bescherming klokkenluiders), which came into force. When a situation cannot be resolved through the informal procedure, employees and external parties can report suspected wrongdoings or irregularities through two formal internal channels. Reports can be made to the Compliance Officer or using the IntegrityLog reporting system. If desired, reports can also be made anonymously using the system. The IntegrityLog reporting system can be used to report wrongdoings or irregularities as set out in the Whistle-blowers’ Protection Act, but also for any misconduct, suspicions of bribery, corruption or fraud.
Relevant speak up! notifications will be investigated and promptly followed up on. Where appropriate, necessary action will be taken. Relevant cases will be reported to the Board of Directors and any material violations will be immediately reported to the chairman of the Supervisory Board.
To encourage our employees even more to express any concerns they may have regarding possible violations of our code of conduct or the law, we discuss ‘speak up!’ in our governance visits and training.
In the year under review, no material violations of the code of conduct were either reported through the speak up! procedure or detected in internal audits. However, a limited-scale and financially insignificant fraud incident at one of our subsidiaries was identified and adequately addressed by management. Following this event, we refined our internal control systems, further strengthening our operational integrity.
Health & safety
In creating Technology for Life, we put people first. Their health, well-being and safety are paramount. Nedap aims to provide an optimum working environment for all who work for the organisation. Employees should be able to work safely, but also feel comfortable and enjoy their work.
We take responsibility for our people by letting them grow and keeping them safe. We aim to ensure a healthy work environment with good physical and psychosocial conditions, where people are treated equally and feel included. A working environment that encourages people to speak to each other, not about each other. We work responsibly and focus on preventing incidents that may be harmful to our own people but are also committed to the safety of our contractors and the environment.
Nedap’s health and safety policy emphasises that Nedap, along with its employees, shares collective responsibility for the well-being, safety and welfare of employees. It also states that the success of this effort relies on the effectiveness of this partnership. Needless to say, obligations arising from relevant laws and regulations must be adhered to. Ensuring optimum health and safety is an integral part of our Human Resources policy. In fulfilling its duty to protect the health and safety of employees, the Board of Directors is supported by internal health and safety officers, a company emergency response team, confidential counsellors, the Human Resources department and other competent employees where needed. For subsidiary companies, local laws and regulations apply.
Specific safety policies are in place at our Smart production facility, which complies with ISO 9001 and ISO 14001 standards. Emergency response courses are held several times a year and are attended by employees across all company units.
Supply chain management
In our efforts to continuously improve or maintain integrity and sustainability throughout the entire value chain, we prioritise forming partnerships with suppliers who align with the fundamental principles outlined in our code of conduct.
In the process of selecting our suppliers, we place a strong emphasis on sustainability criteria. These criteria include factors such as product quality, adherence to health and safety standards and environmental performance. We also conduct audits of our key suppliers to ensure their continued compliance with these standards and information security demands. Many of these key suppliers are Electronic Manufacturing Services parties. They are all ISO 9001 and ISO 14001 certified and audited as such.
Product safety and quality
Nedap is committed to delivering high-quality products and services, with a strong focus on continuous improvement. Throughout our product development, design and manufacturing, we prioritise safety and quality.
Our production facilities adhere to robust quality management systems in line with ISO 9001 and ISO 14001 standards. We also proactively manage risks associated with chemicals and hazardous substances, ensuring compliance with REACH and RoHS standards.
Nedap is dedicated to responsible material sourcing, aiming to ensure our products are free from conflict minerals like tin, tantalum, tungsten and gold from conflict-prone or high-risk areas. We identify products and services that may contain these minerals and conduct due diligence processes. We expect our suppliers working with 3TG materials to comply with relevant regulations for responsible mineral sourcing.
We support our clients by providing our products with the appropriate certifications with respect to EMC, radio and electrical safety as required for unrestricted sales. Substances of Concern in Products (SCIP) notifications have our attention as well.
Human rights and other fundamental rights
We are committed to preventing human rights violations and conduct our business operations with a strong emphasis on fairness, honesty, and integrity, as outlined in our code of conduct. We expect the same from all of those we work with.
Nedap’s dedication to upholding human rights, as defined by the United Nations in its Universal Declaration of Human Rights, is formalised in a human rights policy. We support the principles set out in the OECD Guidelines for Multinational Enterprises and those in the ILO Declaration on Fundamental Principles and Rights at Work.
In our pursuit of building enduring, sustainable relationships with our employees, we ensure that fair wages and benefits are provided. The right to freedom of association and collective bargaining is a fundamental and non-negotiable principle that we fully respect. The principle of free choice of employment is upheld for every employee across all the countries in which we operate.
In 2023, we received no reports or evidence of human rights violations or abuses. Human rights form part of supplier assessments and audit procedures.
Taxation
Nedap considers a responsible and conservative tax policy an integral part of our sustainability and business strategy. We regard paying taxes as making an important contribution to society and part of the process of creating sustainable long-term value for all stakeholders. Our tax policy starts from the given that we pay taxes globally based on the economic value of our activities.
This basic given has been captured in the following principles:
Nedap’s primary financial target is to create sustainable long-term value for all stakeholders.
The design of the Nedap organisation is based on operational considerations, not on taxation.
Nedap pays taxes in line with the economic value created by its activities.
Nedap complies with relevant tax legislation and regulations and respects the spirit of the law.
Nedap maintains timely and comprehensive communications with tax authorities.
Tax compliance is integrated into both the Nedap Risk Management Framework and the value creation model.
The tax policy and ensuing principles have been approved by both the Board of Directors and the Supervisory Board. The Board of Directors ensures that Nedap’s tax policy is aligned with and integrated into Nedap’s strategy. Potential material tax risks are discussed with the Supervisory Board at least once a year. Tax policy is also a recurring topic in talks with both internal and external stakeholders. Internally, awareness of tax topics is raised by organising trainings sessions, workshops and regular meetings for all controllers, whereby the focus is specifically on tax, finance and legal risks.
Nedap’s risk tolerance when it comes to taxation and compliance with legislation and regulations is zero. We respect not only the letter of the law, but also the spirit of the law. Nedap neither engages in aggressive tax planning nor uses ‘tax havens’ as defined by the OECD. Nedap does not have any third-party arrangements aimed at evading or avoiding taxes. Grants or government incentives are only applied for when aligned with our business operations and Nedap does not actively participate in public policy lobbying or advocacy. Where necessary, external experts are engaged for more in-depth knowledge or to ensure compliance.
Nedap applies transparency towards tax authorities in the countries in which we operate and proactively shares information. In the Netherlands, Nedap has agreed on a horizontal supervision regime with the tax authorities. Under this arrangement, we provide timely and full insight into all relevant current and future developments influencing the Group’s results. This gives us insight into the tax authorities’ expectations, which adds to our ability to measure or mitigate potential tax and other risks.
Information security and personal data protection
We have implemented technical and organisational safeguards to mitigate the risk of the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access, to data, including personal and other data relating to Nedap, its customers, and their end users. In recent years, we have strengthened our policies, procedures, and contractual agreements to enhance the protection of (personal) data. The onboarding programme for new employees gives due attention to this aspect.
We use an information security e-learning programme to ensure that all our employees receive training in this regard. Our commitment to strengthening internal control measures for our IT infrastructure and systems remains unwavering, with a primary objective of safeguarding personal data, intellectual property and other sensitive information.
We maintain control measures to safeguard Nedap’s security baseline, along with additional measures in certain specific domains, supply chains or jurisdictions. These controls concentrate on critical areas such as security awareness, secure software development, user access management, email and endpoint protection, as well as incident management. They are set up to guarantee swift and appropriate responses when necessary.
Within the Security Management, Identification Systems and Healthcare business units, we hold ISO 27001 certification. Healthcare also holds additional certifications, such as NEN7510, ISO27701, and ISO27018. The Retail business unit holds SOC 1 certification and is actively pursuing SOC 2 certification. The Livestock Management business unit is in the process of obtaining the ISO 27001 certification. An external audit is scheduled for the first half of 2024.