Responsible corporate governance
At HS Timber Group, responsibility means that our entrepreneurial thinking is geared towards sustainability principles on a long-term basis. To make that a reality, we need clear guiding principles and internal guidelines, effective management and supervisory mechanisms, a powerful mission statement, properly functioning compliance management and a clear Code of Conduct for both employees and suppliers. The only way to deal fairly with external stakeholders – including customers and the local community in the region – is to guarantee that our own internal corporate culture is responsible and transparent.
As an international company with strong ties to Romania, we operate in a difficult environment. Nevertheless, we firmly believe that transparency and proper training of staff is the best way to tackle corruption. We, therefore, set standards which go far beyond the statutory requirements, and we intend to play a pioneering role in ensuring that our suppliers and business partners adopt a similar approach. We place particular emphasis on a transparent wood supply chain and support for sustainable forestry. To find out more about our approach to supplier management, our exemplary Due Diligence system and our action plan for a sustainable and secure wood supply chain in Romania, please see chapter 5.
4.1. Our mission statement:
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Perfection in Timber.
Our mission statement also constitutes our vision for the company’s future and forms the basis for all our corporate principles and all managerial decisionmaking. It covers the following areas: customers, employees, business partners and suppliers, regions, internal organisation and sustainability.
The mission statement was developed by the Management Board in 2017 and has been widely disseminated. It is available at: https://hs.at/en/company/our-model.html
4.2. Compliance and sustainability
The main pillars of the Group’s corporate philosophy are fair competition, ethical conduct and mutual respect. At HS Timber Group, compliance involves more than just adhering to applicable legislation and internal guidelines. It means treating business partners and colleagues fairly and includes appropriate conduct in interaction with relevant authorities. To meet those goals, HS Timber Group has introduced clear internal guidelines, which apply to everyone at the company.
The Chief Compliance Officer (CCO) is in charge of compliance within the Group. His core tasks include monitoring compliance with all relevant legislation and internal rules, with particular emphasis on anticorruption and sustainable, transparent wood procurement. The CCO engages in dialogue with employees, representatives from civil society organisations and other external stakeholders, evaluates internal standards and activities on an ongoing basis and develops methods for improvement. Challenges which relate to the international context play an important role. The CCO reports directly to the Management Board of the Group. He oversees and works closely with the Supply Chain Control & Certification Department and collaborates in the fulfilment of his tasks with the Legal Department and other relevant departments. Internal and external sustainability management is also closely linked to our compliance agenda and is coordinated by the CCO.
He receives support from an assistant and a part-time CSR manager. In addition, since April 2018, an internal auditor has been working with the compliance team in Romania; his main task is to improve, fine-tune and monitor internal processes.
4.3. Code of conduct for employees
Our Group-wide, binding Code of Conduct sets forth basic rules for all employees and managers. Alongside the mission statement, the Code of Conduct is one of the most important internal sets of rules, providing clear instructions to all employees about ethical business practices. The Code of Conduct focuses on anti-corruption and compliance (adherence to regulations), internal interpersonal interaction and mutual respect.
Once completed, the Code of Conduct was introduced throughout the group via a campaign at all mills. It was also integrated into a mandatory on-boarding process for new employees.
The Code of Conduct is audited internally on a regular basis. The document is available at https://hs.at/en/responsibility/how-we-do-business/code-of-conduct-for-employees.html
In addition to the internal Code of Conduct, in 2019 HS Timber Group issued a Supplier Code of Conduct. It sets forth ethical business practices with which all raw material suppliers must comply with and was incorporated by reference into all HS Timber Group purchasing agreements. For more information about the Supplier Code of Conduct, see section 5.2.8.
The document is available at https://hs.at/en/responsibility/how-we-do-business/supplier-code-of-conduct.html
4.4. Cooperation with IACA
In 2017, HS Timber Group began a collaboration with the International Anti-Corruption Academy (IACA). The Academy is the first global institution of its kind to focus on ways to tackle shortcomings in expertise and practice in the field of anti-corruption. The IACA has the observer status in the UN General Assembly, the Council of Europe’s Group of States against Corruption, the United Nations Economic and Social Council and the International Organisation for Migration and has been explicitly mentioned via various international resolutions.
For HS Timber Group in 2019, the IACA has run tailored training courses for the entire Management Board as well as selected staff from the second level management and, thereby, helped to roll out the new Code of Conduct. In total, 64 employees, among them the whole top management and senior management, have undergone such training.
4.5. Anti-trust training
One of the basic attitudes of the company is to comply with all rules and regulations. HS stands for fair competition. For this reason, the company has also clearly committed itself to market principles in its Code of Conduct and has stated that it does not enter into any agreements with competitors, suppliers or customers, that could hinder trade – such as price fixing or agreements on sales conditions, market sharing, restriction of competition or influencing the outcome of tenders.
In order to raise awareness on these issues among the company’s employees, seminars were organized for personnel in the wood procurement, sales and logistics departments. The interactive training sessions focused on general provisions as well as on the correct and compliant behaviour in various situations. The training sessions are a fixed component of the company’s compliance program. All in all, 61 employees were personally addressed with the training sessions.
4.6. Leadership training
From January to September 2019, with the support of external consultants from the Integrated Consulting Group (ICG), HS Timber Group implemented a five-stage organisational development and leadership development programme for the Group’s top leaders. Within this framework, improvement measures were defined for the organisational structure, internal organisational processes were optimised and change management projects were launched. In addition, managers were introduced to various management tools and methods, in order to continue to successfully lead the company and its employees into the future. Particular attention was paid to a responsible management style, in line with the corporate mission statement. During this time, relationships at the personal level were also significantly strengthened.
A total of 31 managers and junior managers from the Austrian holding company and the Romanian subsidiaries participated in the Leadership Programme. An extension to the next management levels is planned for 2020.
4.7. Stakeholder dialogue
We are well aware that our corporate decision-making has a significant impact on various interest groups. They include our customers, employees and business partners as well as the regions in which our production sites are located.
It is important for us to acknowledge and understand the needs and requirements of our stakeholders through regular mutual interaction with them. Open, ongoing dialogue is the key to aligning our expectations and relative positions and successfully developing joint solutions. The input we receive from these stakeholders is very valuable to us. It can help to bring facts and concerns to light, and it can also encourage the development of ideas of which our company might not otherwise have become aware. HS Timber Group is convinced that, constructive dialogue with stakeholders, and the willingness to address their concerns will help improve performance in sustainability.
As a major player in the international wood market, HS Timber Group maintains a broad network of stakeholders and service providers. We are in regular contact with customers, suppliers and business partners, authorities, NGOs and representatives of interest groups and, of course, our own employees. Depending on the stakeholder group, different forms of communication are used.
To communicate with local stakeholders in particular, HS Timber Group organises regular meetings. At these meetings, information is provided via in-person conversations, industry topics are discussed and input and feedback about measures taken by HS Timber are provided.
With international stakeholders, HS Timber Group interacts via structured dialogue. This takes place via regular in-person meetings or via exchanges of information involving other interest groups.
We also emphatically support multilateral initiatives, e.g. the Romanian NGO/Industry Roundtable. Formats of this kind improve communication between HS Timber Group and individual stakeholders; they are also a means of building trust and relationships and of encouraging mutual understanding of general problems in the industry as a whole.
Stakeholders play an important role in, for example, the certification of standards, e.g. for sustainable forest management. We consider external input to be an integral part of our risk management activities.
Our wood tracking system Timflow is designed specifically for interaction with stakeholders. On www.timflow.com, HS Timber Group publishes all details regarding shipments of wood in Romania which have been delivered by truck, e.g. images of loaded trucks and GPS-based information about the origin of the wood. Any stakeholder or any user among the general public can contact us via the website if there are any perceived irregularities or if anything is unclear. Timflow was implemented in all of the Group’s Romanian sawmills in April 2017 and, one month later, its scope was broadened to include all wood collection points owned by the company.
For more information about Timflow, see section 5.2.7.
4.8. Open door policy regarding NGOs
In line with its commitment to transparent communication, HS Timber Group has implemented an open door policy for NGOs. After registering with the company‘s Compliance Department and signing a standard non-disclosure agreement regarding the technologies used, representatives of recognised NGOs can visit our mills unannounced.
Our goal is to transparently demonstrate our efforts to ensure a secure supply chain.
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