Group whistleblowing procedure

The Group Whistleblowing Procedure is a tool that supports compliance and internal control activities, as well as risk prevention. Pirelli provides its shareholders, employees, suppliers, customers, all its stakeholders, and the general public with this channel to report any acts or omissions adopted by any party within Pirelli, in its relations with Pirelli or on its behalf such that constitute or may constitute a violation or inducement to violate laws and/or regulations, the principles enshrined in the Pirelli Values and Ethical Code – obviously including equal opportunities –, principles of internal control, company policies, rules and procedures and/or that can either directly or indirectly give rise to economic, financial or reputational damage for Pirelli Group companies.

The Procedure explicitly encourages employees who are aware of potential or real situations of violation to report them immediately – even anonymously – to the Company, with the guarantee that their identity will be kept absolutely confidential and that they will not suffer reprisals of any kind.

These reports may involve Company directors, statutory auditors, management and employees, as well as anyone else who operates inside or outside Italy on behalf of the Pirelli Group or has business relationships with the Group. This includes partners, customers, suppliers, consultants, independent contractors, accounting firms, and public institutions and entities.

An e-mail address (ethics@pirelli.com) is provided to anyone who wishes to file a report. That e-mail address is managed at the corporate level by the independent Internal Audit Function and is to be used by all Group affiliates and the External Community. The Group Internal Audit Department is responsible for:

  • preparing, managing and updating the guidelines for transmitting notices; receiving, recording and analysis the reports received;
  • engaging the participation of other corporate departments and offices for investigation as necessary and forwarding any reports to the supervisory bodies with jurisdiction according to the situations were a specific supervisory body exists (for Italian companies: the Board of Statutory Auditors, the Supervisory Bodies for offences pursuant to Legislative Decree 231/01);
  • planning specific action plans;
  • ensuring the retrieval and storage of documentation for five years after the conclusion of the investigation;
  • filing a quarterly report with the Internal Control Committee of Pirelli & C S.p.A. on reports received and actions underway.

If it is ascertained that the report is valid, the Company must take appropriate disciplinary measures and legal action to protect itself and the Group, if necessary.

An updated version of the Whistleblowing Policy was approved during a meeting of the Board of Directors in March 2013. The updated procedure has been distributed internally in local language versions and is also published on the Pirelli website.

Group suppliers also have the Whistleblowing Reporting Channel (ethics@pirelli.com) specifically indicated in the Sustainability Clauses included in every supply contract.

The following table summarises the content and the number of reports received in 2012 and 2013.

WHISTLEBLOWING REPORTS

20132012
Total Report 11 8
Anonymous reports 6 3
Archived due to absolute vagueness 3 2
Investigated 8 6
Countries of origin of report Italy, Brasil, Argentina, Venezuela Italy, Brasil, Egypt, Polond, Mexico
Allegation made in report Employee misconduct, one case of postsales disservice Employee misconduct, trade union claims, a case of discrimination
Outcome of investigated cases Revision and modification of process if deemed appropriate, measures by the competent fuctions Human Resources Department, action in satisfation of customer Revision and modification of process if deemed appropriate, a measure by the Human Resources Department

Eight reports were received during 2012 from Italy, Brazil, Egypt, Poland and Mexico. Four of these reports were received at the e-mail address given in the Group Whistleblowing Procedure (ethics@pirelli.com); three reports were received directly by management, which in turn alerted the Internal Audit Department. One report was received by the Legislative Decree 231/01 Compliance Program Supervisoroy Body at a Group company, which in turn alerted the Internal Audit Department to conduct an investigation. Three of the eight Whistleblowing reports were received in anonymous form, while the remaining five were signed by the whistle-blower.

It was impossible to conduct any investigation into two of the anonymous reports, given the absolutely vague details provided. Instead, for the other six reports, the Internal Audit Department was able to conduct specific audits on what had been reported.

The examined reports concerned alleged misconduct by management, union claims, and discriminatory conduct against an employee. The results of the audits conducted on the basis of these six reports did not find any violations of laws, regulations, ethical principles or corporate procedures. In one case, it was decided to inform the Human Resources Department, which took the appropriate measures.

Eleven Whistleblowing reports were received instead in 2013, from four different countries (Italy, Brazil, Argentina and Venezuela). Of these, eight reports were received at the e-mail address provided in the Group Whistleblowing Procedure (ethics@pirelli.com) and/or directly at the Internal Audit Department. Three reports were received directly by management, which in turn alerted the Internal Audit Department to conduct an investigation.

Six of the eleven Whistleblowing reports were received in anonymous form, while the remaining five were signed by the whistle-blower.

It was impossible to conduct any investigation into three of the anonymous reports, given the absolutely vague details provided. Instead, for the other eight reports, the Internal Audit Department was able to conduct specific audits on what had been reported.

The examined reports mainly concerned alleged misconduct by employees. Upon conclusion of the audits carried out in response to these eight reports, no violations of laws, regulations, ethical principles or corporate procedures were found in four of the reported cases. However, the other four reports triggered the involvement of delegated corporate functions, and particular the Human Resources Department which, after reviewing the evidence, took action as provided by internal procedures and the applicable employment agreements.

Upon conclusion of the investigations, the Internal Audit Department conducted specific audits of the corporate processes involved in the Whistleblowing incidents, and revised or modified them as necessary.

The Internal Audit Department has systematically informed the Pirelli Internal Control, Risks and Corporate Governance Committee and the Board of Statutory Auditors of Pirelli & C. S.p.A. about all Whistleblowing reports it has received and the progress of this analyses.

In regard to reports by the External Community, it is confirmed that no Whistleblowing reports signed by suppliers or other categories of stakeholders were received at the Whistleblowing e-mail address, with the exception of one received in 2013 from a customer involving an alleged case of post-sale disservice, where the Company took action in satisfaction of the customer’s requests.

However, it is objectively impossible to confirm that absolutely no such reports have been received from suppliers, insofar as certain reports were made anonymously, as mentioned above.

The slight increase in reports in 2013 from 2012 may be attributed to repetition of the communication campaign to employees in their local language, advising them about the procedure and how to use it.