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Koç Holding A.Ş. (EN) Sustainability Business Ethics and Anti-Corruption

Business Ethics and Anti-Corruption

Koç Holding’s accountable, transparent and equitable management approach, which adheres to ethical business values, and its business conduct, which strives for full compliance with applicable laws and regulations, supports universal human rights principles, and embraces corporate citizenship, have served as a role model for a large number of organizations.

The business ethics approach adopted across Koç Group was documented in writing under the title Koç Group Code of Ethics and Implementation Principles. This document is posted on our website in Turkish and English. The Code of Ethics and Implementation Principles is binding for all Koç Group operations and employees as well as business partners such as suppliers and dealers. The Ethical Conduct Boards, set up separately within Koç Holding and Group companies, are responsible for overseeing compliance with the Koç Group Code of Ethics and Implementation Principles. These rules and principles have been communicated to all Koç Group personnel, while they are conveyed to new staff members during orientation training. Suppliers and dealers are informed of these rules and norms when the Group establishes business relations with them. Group companies also issue company-specific ethical conduct norms documents that meet sector-specific expectations while complying with the Koç Group Code of Ethics and Implementation Principles.

The Koç Group Code of Ethics and Implementation Principles document can be accessed here.

As also stipulated in the Koç Group Code of Ethics and Implementation Principles, Koç Holding and Group companies do not champion any political thought or support any political entity or person financially, in-kind or in any other way. Koç Holding and Group companies do not engage in communications with public authorities in the countries they have operations in except for the commercial relations established within the framework of the related laws, fair competition norms and transparency; responses to requests for information and input; and social responsibility projects.

Koç Holding and Group companies are committed to creating utmost value for stakeholders while remaining steadfast to their legal and regulatory obligations. To this end, Koç Holding and Group companies fully comply with the laws and regulations of the countries they do business in – in addition to Turkey where the operations are headquartered – and adhere to norms of international trade. Koç Holding and Group companies have a standardized, effective and continuously-functioning control procedure to ensure compliance with this responsibility necessitated by the code of ethics.

Internal audit efforts within Koç Group companies are carried out at two levels. Reporting directly to the Koç Holding Chairman, the Koç Holding Audit Group Presidency conducts the central audit process of Koç Group companies; meanwhile, Group companies also perform this function through their own internal audit units. Koç Holding and Group companies’ internal audit departments conduct essential Risk Management Auditing, Process Auditing, Financial Statements Auditing, Regulations and Compliance Auditing, and Anti-Bribery and Anti-Corruption Auditing activities each year.

The adequacy and effectiveness of the internal control systems that are used while conducting these five core auditing tasks are assessed in accordance with International Auditing Standards, and necessary improvements are implemented expeditiously. In addition to the existing internal control procedures and preventive approaches, Group companies conduct special-purpose auditing efforts to eliminate all types of bribery and corruption risk, and undertake preventative initiatives. To this end, the following measures are implemented across the Koç Group:
• Koç e-audit software carries out analytical inspections and monitors company results.
• Programs such as the Audit Portal and Koç Audit are used to continuously enhance the know-how of our employees in the financial affairs fields of the Group companies on laws, rules and regulations, best practices, and Koç Group principles.
• Regular audits and reviews conducted by independent audit firms provide Group companies with an external perspective on compliance with international auditing and risk management standards.
• The Group companies together with global partners benefit not only from the Group’s principles, but also the know-how of the foreign partners in terms of codes of ethics. Those ethical principles are implemented across all entire business processes and in all relationships.

In 2016, audits against bribery and corruption risks were kept as a part of audits conducted at Koç Holding and Group companies. When encountering behavior that is suspected to involve bribery or corruption, stakeholders can file a report through the Group companies’ channels of communication or reach Koç Holding Audit Team managers via their direct telephone numbers. These systems enable employees and all other related parties to report bribery and corruption allegations directly and without fear of retribution.

Managers and personnel of Group companies also receive training on anti-bribery and anti-corruption policies and implementation processes. Training in this area are conducted in each country that Koç Group companies operate and topics regarding human rights are also covered. In 2016, 23 executives and 3,956 staff members of Group companies attended training on anti-bribery, anti-corruption policies and procedures, and human rights. Further, an 78 person-hour portion of the Work Life Training that was conducted within Koç Holding with the participation of 39 HR managers was reserved for anti-bribery and anti-corruption topics.

Similarly, employees of business partners such as suppliers and contractor firms attended approximately 3.600 employee-hours of training on anti-bribery, anti-corruption and human rights. In addition to this, supplier auditing efforts of Group companies, which encompass such areas business ethics, employee rights and human rights, serve to manage sustainability risks in the supply chain. Within this scope, over 1,300 suppliers were audited in 2016. Meanwhile, 1,183 suppliers were audited in terms of human rights criteria. Some 10% of suppliers across the Group are subjected to human rights audits.

According to Koç Group Procedures, the moment the possibility of bribery or corruption arises, the manager of the related department informs the company’s General Manager about the situation. Meanwhile, the General Manager, in turn, immediately informs the Audit Group Presidency in addition to the Business Unit Presidency he or she reports to at Koç Holding. The results of the bribery and corruption audits and inspections are also shared with Koç Holding’s senior management. Koç Holding Board of Directors is informed on the audit and inspection activities through the Audit Committee, which is composed of independent board members.

We take heed of the following principles while investigating suspicion of corruption:
• Resolving the issue as expeditiously as possible
• Maintaining confidentiality
• Following the proper legal processes
• Notifying public authorities or stakeholders if necessary
In order to boost the effectiveness of bribery and corruption auditing, an audit segment that requires unique specialization, Koç Holding employs two auditors with a special certification in fraud auditing (CFE-Certified Fraud Examiner). In addition, to raise the know-how of our auditors to international standards, Koç Holding encourages them to obtain Certified Internal Auditor (CIA) certification. As of 2016, seven auditors with CIA certification are employed at the Koç Holding Audit Group Presidency.

*Data used in this page cover the companies representing 77% of our Group employees and 82.8% of combined turnover of the Group, as of 2016. Further information may be retrieved from Koç Group Sustainability Reports.

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