Policies relating to all stakeholder groups

Ethics

Code of ethics at the Bank

The main document governing the issue of ethics at PKO Bank Polski SA is the Code of Ethics.  The Bank’s Code of Ethics is a set of internal rules, standards and models of conduct specifying the method in which the Bank conducts business activities and shapes relationships between employees and between employees and customers. This code is a supplement to the Bank’s organizational culture and is a tool supporting the dissemination and implementation of values, according to which all employees of the Bank should behave. The principles contained in the Code of Ethics apply to all of the Bank’s employees, regardless of their position or function.

The Bank’s Code of Ethics was implemented for the first time by a resolution of the Management Board of PKO Bank Polski SA of 16 May 1995. The last update was in 2017. 

The Code of Ethics and the Bank’s Employment Regulations contain provisions, inter alia, regarding the prevention of discrimination by: 

• gender;
• age; 
• disability; 
• religion and creed; 
• race;  
• ethnic origin; 
• nationality; 
• political convictions; 
• union membership; 
• sexual orientation; 
• employment for a definite or indefinite term; 
• full-time or part-time employment. 

Other than these issues, about which the Bank also provides notice on its website, the Code of Ethics also addresses such issues as:

• the fair treatment of all suppliers (not discriminating against and not favouring selected entities); 
• not using confidential information for private purposes; 
• not taking steps by employees that would be in conflict with their employment duties; 
• the pursuit of an objective and reliable information policy by the Bank; 
• the prohibition to conduct lobbying activities;
• the prevention of corrupt practices. 

In its investment policy, the Bank applies a number of solutions that ensure the ethical functioning of the Bank, which extend beyond the Code of Ethics. The most important ones include:

• compliance with the applicable law and recommendations of the PFSA;
• the introduction of appropriate changes to the internal regulations and the customer service process, in accordance with the requirements of MiFID II; 
• the prevention of the appearance of a situation of a conflict of interests. 

Counteracting breaches of ethical principles

In order to identify and counteract breaches of the principles of ethics contained in the Code, a number of separate internal regulations are applicable, in particular: 

• The principles of counteracting mobbing (more in Chapter 17); 
• The principles of managing conflicts of interests; 
• The principles of conducting internal and external communication; 
• The principles of compliance risk management.  

The principles of reporting and handling complaints, as well as a description of the remedial actions are set out in separate internal procedures related to the collecting information on non-compliance cases. So far, the Bank has only kept a register of complaints about a breach of employee rights (including mobbing). During the review of the individual cases, they were not analysed in terms of ethics, but purely employee rights and applicable regulations, so the number of breaches of ethical principles is not known. Monitoring of complaints for a potential breach of ethics standards started in January 2018. 

An important element of the dissemination of ethical conduct is the building of employee awareness of the need to comply with them. The content of the Code of Ethics is available in a specially created tab in the intranet portal, which is accessible to all of the Bank’s employees. 

In 2017, modules regarding the issue of ethics were included in 2 training programmes:

• Certification regarding investment products;
• Training on mortgage banking.

Conduct, which is inconsistent with the regulations and the provisions of the law, are subject to appropriate sanctions arising from the provisions of the Labour Code and the Employment Regulations. The code of ethics in force at the Bank is one of the internal regulations, so the obligation to comply with it arises from the Employment Regulations. Penalties for failure to comply with the principles of ethics may be a reduction of the bonus.

The Bank’s objective is to collaborate only with trading partners who observe the principles of ethics in their activities. According to the Bank’s enquiry, when entering into the procurement procedure, suppliers declare, among other things, that they observe ethical principles (more in the subchapter 14.1). 

Ethics management in the remaining entities of the Group

Within the Group, individual entities create ethics policies which are adapted to the nature of their activities. When implementing the ethics management policy, some entities from the Group use a formalized set of norms and principles of ethical conduct in the form of a Code of Ethics. Some entities, which do not have a Code of Ethics, include issues on ethical standards in additional internal regulations. This applies, for example, to internal procedures for performing the legal obligation to act in the best interests of the customers and to implement practices and processes for managing reputation risk or compliance risk. The provisions on ethical standards of conduct are often included in the compliance risk management policy.

In the Group’s entities that have a Code of Ethics, it is most frequently made available in the intranet, to which all employees have access. In some entities, employees are familiarized with the Code of Ethics at the stage of introduction into the company (on-the-job training). In most entities, there is no obligation for the employees to confirm that they are familiar with the Code of Ethics.

Conduct, which is inconsistent with the regulations and the provisions of the law, are subject to appropriate sanctions arising from the provisions of the Labour Code and the Employment Regulations. The code of ethics in force at the Companies is one of the internal regulations, so the obligation to comply with it arises from the Employment Regulations.

In some of the Group’s entities, responsibility for managing ethical issues lies with the personnel management units. In some entities, the Board passes responsibility for ethical issues to the President. The delegation of responsibility to teams responsible for compliance / assurance of compliance of activities with legal regulations is also a solution that is encountered.

Reporting ethical issues and irregularities in this area is related in some entities to the compliance risk management policy. 

Caring for the selection of trading partners who act ethically applies to all entities from the Group. Just as in the case of the Bank, in accordance with the supplier’s enquiry – by entering into the purchasing procedure – they declare, among others, that they will pursue ethical principles. 

Companies operating in the insurance industry apply additional tools communicating ethical principles to their trading partners:

• the insurance distribution policy contains a description of ethical principles, which, in addition to employees taking part in the sales process, are also obligatory for anyone performing agency activities;
• in contracts with a business partner (i.e. the Bank) there are references to the ethical principles described in the insurance distribution policy;
• during training, information is provided to the advisers about the principles of ethical sales, which means informing the customer not only about the benefits, but also exclusions and limitations of liability. 

Human rights

Consideration and respect for human rights

Depending on the size and specificity of the given entity of the Group, taking into account and observing human rights is manifested equally in the provisions of internal law, the initiatives undertaken and in everyday practice. This applies, in particular, to the rights to:

• recognize the identity of every employee;
• proclaiming one’s views and opinions,
• freedom of thought, conscience and religion;
• the protection of personal rights;
• equal treatment;
• access to information;
• access to healthcare;
• respect for privacy.

Documents related to human rights

Some of the Group’s entities have included provisions related to respect for rights and the prohibition of discrimination in such documents as:

• employment regulations;
• Code (Principles) of Ethics;
• the Book of Values.

At the Bank, references to respect for human rights are contained in

• the Code of Ethics;
• the principles of preventing mobbing;
• the principles of recruitment and the Standards of Recruitment;
• agreements concluded with service providers (applies to personal data protection agreements);
• as well as in strategic programmes such as:
• Culture of a modern organization and
• Improving the processes of managing employee potential.

Some entities consider that there is no need to formalize the issue of respect for human rights, although matters of respect for human rights are taken into account, equally in the processes conducted, everyday practice and in the unwritten rules.

Respecting human rights

Examples of activities conducted within the Group, in which respect for human rights is reflected, are presented below:

1. Counteracting mobbing (anti-mobbing policy, anti-mobbing committee).
2. Basing the rules of the periodic appraisal on a dialogue with the employee, the employee’s involvement in the appraisal with the employee’s ability to appeal against the appraisal of skills and the results of the work issued by the superior.
3. Use of recruitment principles that ensure equal treatment of candidates during the selection process for filling vacancies, without any discrimination, prejudice and without obtaining information that could breach the candidate’s rights and personal dignity.
4. Basing promotion decisions on an objective appraisal of qualifications, skills and results of work.
5. Supporting diversity in management, in particular with respect to age, experience, style of work, thinking; promotion of diversity among managers as an asset and not a limitation (more in Chapter 17).
6. Enabling employees to express their opinions and influence important issues regarding the organization and working conditions, management, organizational culture, as well as enabling the provision of information about perceived crimes and fraud – assuring their anonymity and confidentiality.
7. Protection of personal rights (personal data, sensitive data) of employees and customers through carefully prepared procedures and systems and inclusion of restrictive entries in contracts concluded with service providers who have access to such data (more in Chapter 9).
8. Creation of conditions for satisfying needs related to recreation and culture, as well as respect for principle of the work-life balance.
9. Assurance of freedom of association (discussed in detail in Chapter 16).
10. Creation of a safe working environment (discussed in detail in Chapter 18 on Health and safety at work).

Issues regarding forced labour and child labour are not directly reflected in the Bank’s regulations, because

• the prohibition of forced labour arises from Article 4 of the Convention for the Protection of Human Rights and Fundamental Freedoms;
• the prohibition to employ people under the age of 16 arises from Article 190, para. 2 of the Labour Code.

There were no cases of breaches of human rights, including children’s rights in the Group, including the Bank, in 2017, while the actions taken have the objective of preventing such an eventuality.

Communicating human rights internally and externally

Human rights are communicated within the Bank through the intranet portal, which contains principles and procedures containing references to human rights, i.e.:

• the Code of Ethics,
• the Principles of Recruitment,
• the Recruitment Standards,
• the Rules on the prevention of mobbing,
• the Rules on the periodic appraisal,
• Good practices in serving the disabled,

as well as a presentation of the Bank’s Values, which the Bank addresses to customers and employees.

Human rights are communicated externally through the Bank’s publicly accessible website, which contains information about the PKO Bank Polski Foundation, about the idea of the charity it pursues as a measure of respect for the environment, in particular for other people. 

Prevention of corruption

Anti-corruption system at the Bank

PKO Bank Polski SA does not tolerate corruption and counteracts all corrupt practices. Such phenomena as nepotism and accepting or offering any physical goods in order to influence decisions or actions taken are in conflict with the Bank’s values of credibility and trust.

The Bank has a number of regulations regarding the prevention of corruption, including accepting benefits, presents or gifts. They are primarily:

• PKO Bank Polski SA’s Code of Ethics;
• the Code of Banking Ethics (Good Banking Practices) of the Polish Bank Association;
• the principles of compliance risk management and risk management at the Bank.

The Bank applies an internal anti-corruption policy intended to prevent the creation of an environment which is conducive to the offences referred to in Articles 229, 230a, 296a and 305 of the Penal Code (acts of a corruption nature) by entities related to the Bank, including, in particular, solutions ensuring:

1) counteracting the emergence of mechanisms for granting property and personal benefits;

2) familiarizing entities related to the Bank with the principles of criminal liability for the crimes referred to above;  

3) observance by the people related to the Bank of PKO Bank Polski SA’s Code of Ethics and the internal regulations regarding the procedure for reporting the acceptance of benefits, presents or gifts by the Bank’s employees;

4) counteracting decision-making under the influence of corrupt activities and conflicts of interest;

5) immediate notification of the relevant organizational units of the Headquarters and the Bank’s authorities by the entities related to the Bank about possible corrupt proposals received by those persons regarding the operation of the Bank, as well as reporting them to the competent bodies of public administration.

Within the Group, including the Bank, the risks related to corruption are identified in particular:

• in the customer service areas (individual and business);
• in the area of the supply of goods and services to the Group’s entities, including the Bank, by external entities;
• in connection with donations and sponsorship agreements;
• in the area of relations of the Company’s (including the Bank’s) employees with bodies of state administration.

These areas are subject to particular attention, the processes are regulated in detail, while decisions which have significant financial consequences are accepted, in principle, through the so-called “second hand” (they require dual acceptance).  

The regulations on the prevention of corruption are very detailed at the Bank. With regard to the Bank’s employees and people acting on behalf of the Bank, they include:

• the prohibition to accept benefits, presents or gifts intended for personal use from customers and potential customers, as well as representatives of entities working with the Bank or applying to start working
  with the Bank, which could:
• result in an informal obligation to a given customer or a person working with the Bank;
• cause a conflict of interests;
• otherwise negatively affect the manner in which the Bank’s employee performs his corporate duties.
• this prohibition applies, in particular, to cash or cash equivalents, physical donations (presents and gifts)
  and other material benefits (in particular financing of travelling expenses, relaxation or training costs, participation in an event, or lending an asset, e.g. a car, for free use or use on terms that deviate from market terms), as well as the acceptance by any person involved in the procurement proceedings organized by the Bank, of any gifts and benefits from entities which are bidders or potential bidders in these proceedings;
• the exclusion of the possibility of circumventing the above prohibition, in particular by persuading other people (e.g. people living together in a household, family members or relatives) to accept the gift on their behalf;
• it is exceptionally acceptable to accept a benefit or gift in business relations, on the terms and conditions set out in the Bank’s internal regulations regarding the acceptance of benefits, presents or gifts;
• the prohibition to offer any benefits, presents, gifts or incentives to customers, trading partners, representatives of bodies of public administration and other entities, which are not a part of the Bank’s offering of products and services, on behalf of the Bank, in order to persuade those persons to behave in a particular way, especially to take steps which are inconsistent with the provisions of the law or good practices.

If the Bank’s employee has doubts as to whether the acceptance of a benefit, present or gift is admissible in a given situation, he is required to consult his supervisor or the appropriate organizational unit at the Bank, which manages compliance risk.

System of lodging breaches and reporting

The Bank has an anonymous system for reporting breaches. Additionally, under the internal regulations, each of the Bank’s employees is obliged to report any suspicion of a crime having been committed in connection with the Bank’s activities. A report regarding a member of the Management Board is escalated to the Supervisory Board, in other cases – to the vice-president of the Bank’s Management Board. Each matter is dealt with on the basis of the internal regulations in force at the Bank. The Management Board is required to submit regular reports at the Bank about identified cases of fraud, including those involving corrupt activities.

In the case of a breach by an employee of the Bank of the applicable regulations (the generally applicable and the Bank’s internal regulations), including those regarding corruption, the Bank applies the solutions specified in the provisions of the labour law. If a particular case is qualified as grounds for instituting disciplinary proceedings, such proceedings are conducted and – depending on their outcome – the Bank applies the list of consequences provided for in the above Act, including the right to terminate such an employee’s employment contract.

The Bank holds preliminary and regular training of the Bank’s employees on the reporting of breaches and cases of non-compliance (including those bearing signs of corruption) and gives them access to the necessary information and internal regulations in this area (also electronically through the intranet). Each of the Bank’s employees is required to undergo training regarding the principles of counteracting all corrupt practices.

Anti-corruption system at the Group

Within the Group, each of the entities, the business of which is related to the risk of corruption, has the appropriate regulations on the prevention of corrupt practices. Every employee is required to read and apply these regulations. Each company formulates appropriate regulations, taking into account the specificity of its activities and its own assessment of the areas of risk of corruption and bribery, which is why a uniform policy does not apply within the Group on this.

No reports were filed in 2017 and no corruption was identified in the Group’s entities, including the Bank.

The Bank and the Group also include their potential trading partners in the anti-corruption activities. When joining the procurement procedure, the bidder declares that “he does not offer or provide any financial benefits to bear an influence on the decision on the selection of his proposal. He does not affect the choice of offering in a manner which is in conflict with the law or good practices and does not take part in any agreements or arrangements with other third parties, which would have the objective of influencing the selection of them.” 

The Act on Transparency of Public Life

The Act on Transparency of Public Life, relating to, inter alia, the phenomenon of corruption will become effective on 1 March 2018, with a 6-month vacatio legis. According to the draft, the Act will impose the obligation on the Bank and the Group entities, among others to:

• have a code of ethics (signed by all employees and trading partners);
• have procedures on the acceptance of gifts, conflicts of interest and corruption;
• have procedures for providing notice of corrupt proposals;
• use anti-corruption clauses;
• familiarize employees with criminal liability;
• have procedures preventing the creation of “corruption funds”.

After the Act enters into force, at the Bank with respect to the anti-corruption system, the following will be subject to adjustment:

• the introduction of an obligation for all employees and trading partners to confirm that they are familiar with the Code of Ethics;
• the introduction of anti-corruption clauses into contracts with trading partners;
• the preparation of procedures preventing the creation of “corruption funds”.