Fiscal 2020 Universal Registration Document

5. Corporate governance

Assessment procedure for related-party agreements and other agreements

On November 6, 2019, on the recommendation of the Audit Committee, the Board of Directors adopted an internal charter for the Group to be used for identifying those agreements that need to undergo the procedure for related-party agreements, and distinguishing them from other agreements entered into in the ordinary course of business. This charter will help ensure that Sodexo complies with new French legislation on these agreements, which requires companies to regularly assess the conditions under which such agreements are entered into and to analyze their classification.

In addition to describing the regulatory framework applicable to the various types of agreements that may be entered into by the Group, the charter provides for a regular assessment to be carried out by the Audit Committee of the conditions under which agreements are entered into in the ordinary course of business, with any parties that have a direct or indirect interest in an agreement being prohibited from taking part in the corresponding assessment.

A summary of how the charter has been applied is presented once a year to the Audit Committee, which then reports to the Board of Directors on the work it has carried out.

5.3.3 Ethics and Compliance

Conducting business with integrity is critical to Sodexo’s success and constitutes a fundamental pillar of the Group’s responsible business conduct commitments.

In line with this, Sodexo has chosen to appoint a Group Chief Ethics Officer, who reports directly to the Chief Executive Officer and is responsible for promoting ethical principles. Ethics and Compliance governance

Since 2011, the Sodexo Group Ethics and Compliance Committee ensures that business is conducted responsibly, by:

  • deploying an ethics and compliance culture, and related programs and policies across the Group;
  • addressing a range of issues relating to anti-corruption, the duty of vigilance, and preventing conflicts of interests;
  • supporting all of the Group’s Ethics and Compliance Committees worldwide;
  • examining all specific issues brought to its attention.

This Committee is co-chaired by the Group General Counsel and the Group Chief Ethics Officer and comprises representatives from the Group’s various support functions: Ethics, Legal, Internal Control, Internal Audit, Human Resources, Supply Management, corporate responsibility, and Communications, as well as heads of certain Group activities (some of whom are also members of the Group Executive Committee). Two other Group Executive Committee members take part in the work of the Ethics and Compliance Committee (a region Chair and a worldwide segment CEO). These two members change every year so that all of the Group’s functions can be represented. The Ethics and Compliance Committee makes a quarterly report on its work to the Group Executive Committee.

A local network dedicated to compliance issues has also been recently deployed throughout the Group. Each country, in all of the Group’s activities, now has at least one compliance point of contact, whose roles include (i) drawing up the local risk mapping, (ii) adapting the Group’s overall ethics and compliance program to the specific requirements of the country and activity concerned, (iii) reporting to the Group all information relating to local deployment of the program so it can be adapted where necessary, (iv) assisting operations teams on a daily basis, and (v) helping local executives promote a culture of integrity within their subsidiaries. This compliance community has been given dedicated systems and processes so it can access the resources needed to deploy the program globally and consistently.

In addition, local Ethics and Compliance Committees – which report to the regional Executive Committees – have been put in place in regions and/or countries that did not have them before France’s “Sapin II” Act took effect. Ethics and Compliance program

In order to make its strategy tangible as well as meeting the applicable legal requirements, Sodexo has structured its Ethics and Compliance program around the following pillars:

  1. A committed management team: Sodexo’s management team embodies the Group’s culture of integrity and has a zero-tolerance policy for any form of unethical practice, such as bribery, corruption, or breaches of human rights. The management team’s commitment is demonstrated in a number of different ways, including regular communications from the Chief Executive Officer and other executives, for example during the “Let’s Chat” ethics and compliance forum which was relayed on all of the Group’s local intranets in November 2019.
  2. Risk assessment: Risks specific to responsible business conduct have been assessed for each country and aggregated within the global risk mapping. These risks cover major issues such as bribery, corruption, breaches of human rights, anti-trust practices and environmental damage. In order to deepen the Group’s risk assessment processes, the methods used are currently being reviewed, and the revised versions will be implemented during Fiscal 2021.
  3. Policies and procedures: Sodexo put in place its first Group-wide ethics charter in 2007 and subsequently drew up its Code of conduct. This Code – which sets out the Group’s ethical principles – was updated in 2018 to take into account the changes introduced by the French Sapin II Act. The Code of conduct provides practical examples showing employees how to do the right thing when faced with a dilemma. It is available in 16 languages and can be consulted on the Sodexo website. It is rounded out by policies and procedures, employees practical tools for guiding them in their daily work and projects, notably in relation to gift s, invitations, donations, corporate sponsorship, public affairs and intermediaries.
  4. Training and awareness-raising: Specific training courses on responsible business conduct are developed and delivered within the Group to the staff categories with the highest level of exposure. E-learning modules on Responsible Business Conduct (combating sexual harassment, data protection, human rights in the workplace, and preventing corruption and conflicts of interest) have been put in place for all of the Group’s leaders and managers. In-house communication campaigns are regularly launched to let employees know about these e-learning modules, and as of August 31, 2020, over 45,512 people had signed up for them. In addition, face-to-face training is provided to Executive Committee members and certain other Group executives about the obligations resulting from the Sapin II Act.
  5. Third-party assessment: Since 2008, Sodexo has had a Supplier Code of conduct, which is translated into 23 languages and is regularly updated. The Group’s suppliers are required to respect this Code, which is included as an appendix to all sales contracts, and also to pass on its terms and conditions to all of the players in their own supply chains.Sodexo is continuing the deployment of its online registration tool in order to centralize information about its suppliers. This tool incorporates all of Sodexo’s requirements relating to capacity, certification, geographical coverage, and regulation. It is also used to collect data on social responsibility. Suppliers benefit from a simple interface, which enables them to provide all the required information easily. The advantage for Sodexo is that the tool provides a “gateway” for the collection of information adapted to the Group’s social responsibility requirements. Suppliers are invited to respond to various questions linked to the Group’s social responsibility commitments and are required to update them throughout their relationship with Sodexo. In parallel, over the past several months Sodexo has been working on launching a solution for carrying out a full assessment of the corporate responsibility of companies in its supply chain.During Fiscal 2020, the Group added a compliance section to its due diligence procedures for mergers and acquisitions.
  6. Whistleblowing system – Speak Up: The Sodexo Speak Up Ethics Line – available in over 30 languages, online or by phone in each country – enables (subject to local legislation) all Sodexo employees and partners (in particular suppliers, customers and consumers) to report anything that they suspect to be unethical, particularly harassment, theft , fraud, corruption, conflicts of interest, environmental damage, document forgery or insider trading. In compliance with local laws and regulations, this system is hosted by a third-party company and replaces the local whistleblowing systems that previously existed. All of the managers concerned have been informed of the case management and responsible investigation procedures through two online training sessions. 894 cases were lodged via Sodexo Speak Up during Fiscal 2020.