Preventing corruption and conflict of interests

The PZU Group has, and will always have, zero tolerance for any form of corruption. The organization’s implemented solutions define the rules of corruption risk management, including the identification of this risk, its prevention and monitoring.

The Group’s companies operate solutions designed to prevent corruption, including, inter alia, the rules of accepting and giving gifts, conflict of interest management, and ethical principles to be followed by members of the Company’s statutory bodies. Relative to the entity in question, these rules are covered by a range of implemented documents, regarding, inter alia, prevention of corruption, a code of code of conduct, whistleblowing, conflict of interest management, and procurement. Those issues are also discussed during in-house training in the Company. Gifts and entertainment, exclusively of low value, may be offered or received in the course of typical business practice. Under no circumstances can money or its equivalent be offered or received. Giving and receiving gifts and entertainment cannot be so frequent, excessive or generous as to represent an actual or perceived risk of corruption, or breach local statutory or executive regulations.

The basic document in the anti-corruption policy is the document entitled “PZU Group’s Best Practices” which expressly prescribes zero tolerance for any corruptive behaviors. The provisions of the policy obligate each employee to act in compliance with the law and defined ethical standards. The best practices have been implemented in all PZU Group entities as well as the Alior and Pekao Group, which have separate regulations in this respect in place.

PZU, PZU Życie and Tower Inwestycje have in place an Anti-Corruption Program which reduces the risk of corruption. The Program defines examples of corruption and division of responsibilities to effectively control the risk in the company. The Program defines the business areas in which the corruption risk is potentially the highest and describes the symptoms of behavior and conduct of employees which may point to potential corruption threats in the given area. The Program also introduces an obligation of periodic assessment of corruption risk in PZU. It includes, among other things, corruption risk self-assessment questionnaires conducted among employees, registered notifications of irregularities in specific areas, results of internal inspections and reports of non-governmental organizations dealing with the corruption problem. In 2018 PZU adopted a mechanism for automatic (using an internal HR system) collection of employee representations confirming familiarization with and application of the Anti-Corruption Program.

After implementation of the Anti-Corruption Program all PZU employees were obligated to familiarize themselves with it and comply with its provisions and submit pertinent representations confirming familiarization with and application of the Program.

Ethical issues are en element of onboarding training for the newly employed. Additionally, in 2018, corruption risk was the subject matter of training courses delivered as part of the 2018 Compliance Week organized by PZU and PZU Życie. PZU also organized meetings with an external expert devoted to the question of corruption. In Q1 2019 an e-learning course dedicated to the Anti-Corruption Program will be launched.

With regard to suppliers, the corruption risk is a constant element of the purchasing process in place in PZU and PZU Życie. Each potential supplier is subject to corruption risk assessment on the basis of a dedicated risk assessment questionnaire. In addition, in accordance with the Anti- Corruption Program, each cooperation agreement between the company and a business partner should comprise anticorruption clauses. One of the clauses is a confirmation of acceptance of the anti-corruption standards prevailing in PZU by the supplier. In accordance with the internal procedures, entities cooperating with PZU and PZU Życie are informed about the Anti-Corruption Program in place in the company.

PZU has implemented solutions imposing an obligation to identify and assess corruption risk as part of the ongoing compliance risk management. The 2018 corruption risk assessment confirms that the system solutions work correctly and that actions aimed at managing this risk are taken with due diligence.

These actions are supplemented by anti-corruption training and campaigns executed in the corporate communication channels, attracting the employees’ attention to the corruption risk. In 2018 the company was also preparing for implementation of a new e-learning training on the Anti-Corruption Program.

Building on the general rules laid down in the Anti-Corruption Program, PZU and PZU Group companies, excluding Armatura Kraków SA and Arm Property, have also adopted their conflict of interest management rules. Each potential conflict of interest which could hinder effective and objective performance of work for the PZU Group should be reported by the employee to their manager and the PZU Group entity’s compliance unit. The conflict of interest management rules introduced in the PZU Group ensure professional, reliable and fair treatment of all clients and persons related to the company in conflict of interest situations.

A person who determines that a conflict of interest has occurred or may occur as a result of the performance of his/her duties is required to take steps aimed at eliminating the conflict of interest and to notify the conflict of interest in accordance with the adopted procedure. The report form is submitted to the managers and the compliance unit in the PZU Group company which analyzes the report.

All business units of the PZU Group are analyzed for corruption risk. One corruption case was identified in the PZU Group.

One case of corruption was recorded in PZU in 2018. In the case in question the company conducted clarification activities, ended with recommendations for the substantive units. Based on the collected findings the company terminated its cooperation with the employee pursuant to Article 52 of the Labor Code and made a decision to report a suspicion of crime. No corruption cases were recorded in PZU Życie.