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Ethical values
Principal ethical standards governing the PZU Group are defined in “Best Practices of the PZU Group .”* Their aim is to develop the company’s consistent organizational culture in all key aspects of its operation.
They define behaviors and conduct towards all stakeholders based on respect and trust. At the same time, this document serves as the common denominator of corporate culture in all of the Group’s entities. Thanks to the consistent compliance of our fundamental principles, all our activities and processes are carried out based on coherent assumptions, thus ensuring a high operating standard throughout the Group. The “Best Practices of the PZU Group” have been adopted as a uniform model of the standards observed by all PZU Group entities, except for the Alior Group and the Pekao Group, which have adopted the “Code of Conduct in Alior Bank” and the “Code of Conduct in the Pekao Group”, respectively.
Ethical culture
PZU Group’s ethical culture is developed in observance of the highest standards and in line with the needs of the Group’s entities, consequently taking account of the scale, character and type of their operation and local laws. The PZU Group furthers its ethical culture by creating systemic solutions at the level of PZU. As the parent company, PZU sets and develops standards of conduct, and then recommends their proliferation to other Group companies (save for the banks that have their own codes of conduct in place). These solutions are implemented in the various companies in keeping with the principle of relevance and suitability. Companies report compliance risk to PZU, taking into account respect to legally protected secrets.
PZU Group companies follow principles of ethics applicable to members of corporate bodies, i.e. “Principles of Ethics for Members of Management Boards of PZU Group Companies”, “Principles of Ethics for Members of the Supervisory Board of PZU SA”, “Principles of ethics of supervisory board members in PZU Group companies who are not employees of a PZU Group company and who are not bound to a PZU Group company by some other contract of a similar nature”, and “Principles of ethics of supervisory board members in PZU Group companies who are employees of a PZU Group company or who are bound to a PZU Group company by some other contract of a similar nature”. These principles serve to:
- ensure that the members of the corporate bodies discharge their functions properly in compliance with the highest standards of conduct;
- they prevent the occurrence of a conflict of interest, in particular by counteracting the use of the position held to reap private gains;
- specify the ethical standards, values and attitudes by which members should be guided.
The PZU Group has a unique character – not least because it is the only financial conglomerate in Poland that offers the widest range of regulated financial products and services to its clients. The Group includes three listed companies, which are attractive issuers, applying the highest standards of corporate governance. Such a wide range of activities also involves a number of regulatory and supervisory challenges, which have become an important risk factor in the current macroeconomic situation. Adequate and effective management of compliance risk while maintaining business efficiency and being fair in customer relations are competencies that, among other things, contribute to the PZU Group’s continued market leadership status
Ethical culture is of the utmost importance also in terms of investment practices.
TFI PZU abides by the Code of Best Practices of Institutional Investors prepared and approved by the Chamber of Fund and Asset Management. For TFI PZU, the Code provides a great deal of support in defining the rules, moral and ethical standards and due diligence levels in the company’s relationships with other institutional investors, clients and issuers of financial instruments. The adoption of this code also confirms the application of best investment practices in TFI PZU.
In 2014, the TFI PZU Management Board adopted a resolution to apply the Corporate Governance Rules for Regulated Institutions” issued by the Polish Financial Supervision Authority (KNF), whereby the Board declared its readiness and wish to follow these rules to the objectively broadest possible extent, taking into account the principle of proportionality resulting from the scale, nature of business and specific characteristics of TFI PZU. The rules are a collection of standards that define the internal and external relations of regulated institutions, including their relations with shareholders and customers, their organization, the functioning of internal oversight and key internal systems and functions as well as the governing bodies and the rules for their cooperation. According to the contents of this document, TFI PZU provides on its website information on the application or non-application of specific principles addressed to the Management Board and Supervisory Board.
TFI PZU and PTE PZU employs managers holding the CFA designation who are bound by a code of ethics and standards of professional conduct In their professional contacts with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets, members of the CFA Institute act with integrity, competence, diligence, respect and in an ethical manner. They also promote the fairness and vibrance of capital markets to obtain the greatest social benefits. PTE PZU also employs investment advisers who are guided in their work by the standards laid down in the “Professional Ethics Principles for Brokers and Advisers.”
Ethics in subsidiaries – banks
In Alior Bank, ethical issues are managed in the Regulatory Compliance Department. This is a separate independent organizational unit reporting to the President of the Management Board of the Bank. The Regulatory Compliance Department prepares and presents to the Management Board and the Supervisory Board’s Audit Committee (quarterly) reports of compliance risk monitoring, including information on the identified compliance risk level in the individual area and the recommendations made to mitigate or eliminate the identified risk. In addition, the compliance unit’s annual action plan and annual report on compliance risk management are submitted to the Management Board, the Supervisory Board’s Audit Committee and the Supervisory Board.
Alior Bank abides by the rules of honesty and business ethics in all of the areas of its operations. It follows the “Compliance Policy”, whose fundamental principles ensure compliance of operations of Alior Bank and all bank employees and entities cooperating with the bank, internal regulations and market standards, and whenever it stems from the law and relevant regulations of other bodies, by way of managing compliance risk and the control function, also in the first or second line of defense. The actions of Alior Bank as a public trust institution are based on the principles described in the “Code of Conduct in Alior Bank”.
The Code of Conduct in Alior Bank is a collection of the most significant principles and ethical standards governing the standards of conduct adopted by Alior Bank that must be followed by all members of the Bank’s governing bodies, employees and individuals hired by the Bank to carry out various banking activities. The purpose of the principles laid down in the Code of Conduct is to ensure a consistent and continuous improvement in the quality of services offered by Alior Bank and to build an internally more robust organization rooted in honesty, reliability and mutual trust. These values serve as the foundation for building an effective internal governance framework within the Bank, and the rules of conduct developed on their basis are aimed at shaping responsible and ethical attitudes among its staff. As a consequence, the Bank is capable of pursuing the significant undertaking of increasing the awareness of the importance of risk in the activities of this institution among the Bank’s employees. As part of its internal communication, Alior Bank promotes ethical conduct and working environment which is based in mutual respect and trust.
Pekao Bank has a separate unit responsible for compliance – the Compliance Department. This department is organizationally and operationally independent and it reports directly to the President of the Management Board of the Bank. The Compliance Department’s reports on the execution of its tasks along with information on the level of the estimated compliance risk are presented to the Management Board and the Supervisory Board. The Bank supervises the compliance risk associated with the operations of its subsidiaries. Rolling out and applying compliance risk standards play an important role in creating goodwill, strengthening and protecting the good name of Bank Pekao and in strengthening public trust in the bank’s business and its position.
The “Code of Conduct in the Pekao Group” contains the most significant rules of conduct applicable to all individuals bound with Bank Pekao or any other member of the Bank Pekao Group by an employment relationship or another legal relationship of a similar nature, including members of the statutory bodies of the Bank or other Pekao Group companies. These rules apply to contacts with stakeholders: clients, business partners, representatives of local communities, the business environment and colleagues. They are expected to be followed in all areas of the Pekao Group’s business in order to ensure the highest quality of services rendered. Compliance with the provisions of the Code of Conduct is considered to be a fundamental duty of each and every employee of the Bank or of other members of the Pekao Group.
Ethics in the compliance risk management system
Practiced by the Management Board which is responsible, among other things, for setting the strategy and adopting policies related to compliance risk management and promulgating the adherence to standards of conduct in PZU, and by the Compliance Department which coordinates the compliance risk management process;
By the managers of various cells and organizational units in PZU in the area subject to their oversight.
The compliance risk management system in the PZU Group is based on the best market standards and proprietary solutions, while using a number of agreements between PZU entities and group policies. It is an integrated set of values, standards, tools, including procedures and regulations, supported by adequate communication with, and education of, employees. Individual companies in the PZU Group have a range of separate policies, procedures and practices in this area.
- values and rules of conduct, including the “Best Practices of the PZU Group”, “Code of Conduct in Alior Bank” and the “Code of Conduct in the Pekao Group”;
- procedures, policies and organizational arrangements;
- a system of reporting irregularities and potential malpractice (whistleblowing system);
- educational and communication activities addressed to employees and suppliers.
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Supervision and audit
PZU has the Compliance Department, which is a separate and independent organizational unit. The person overseeing the key compliance function is the Managing Director on Regulations, who is also in charge of the Compliance Department and reports to the President of the PZU Management Board. The Compliance Department is responsible for systemic management of compliance risk, including compliance with the adopted standards of conduct. The Managing Director on Regulations, overseeing the Compliance Department, as well as the Director of the Compliance Department, have direct access to the members of the Company’s Management Board and Supervisory Board, to whom the compliance function reports. Reporting is done through monthly and annual reports for the Management Board and quarterly risk reports to the Supervisory Board’s Audit Committee and the Supervisory Board itself, as well as in the form of current information provided on an ad hoc basis to the members of the Company’s statutory bodies if the need arises. At the same time, every year the PZU Management Board approves a Compliance Analysis Plan for a given year, which specifies additional areas to be subject to analysis, also including the ethical matters.
Compliance units responsible for compliance risk management also operate in other PZU Group financial-sector units on regulated markets (e.g. LINK4, TFI PZU, PTE PZU, TUW PZUW, foreign insurance companies).
Training and communication
PZU emphasizes instilling an awareness among employees that ethical values and compliance are of equal importance in the company doing business and employees discharging their daily duties.
Actions instilling an awareness of compliance:
Standards are a permanent part of training for new hires. Employees may participate in additional topical workshops and training sessions regarding its anti-corruption policy, among others;
Every quarter, PZU employees receive the Compliance Bulletin, i.e. the inhouse magazine devoted to compliance-related topics. Employees regularly receive Compliance Alerts. They are distributed in the form of e-mail messages to describe planned amendments to the law and new guidelines. Compliance Alerts are sent to employees in selected areas and several hundred more people who have reported their interest in receiving this type of information. These alerts are critical to procure the company’s compliance with the legal regulations. They make it possible for them to obtain information quickly about the projected changes to the law and the regulator’s expectations and adapt to them on a timely basis.
Structure of compliance and ethics management
