Integrity & Compliance governance

Primary responsibility for integrity in business practices and regulatory compliance rests with the first line of defence (the operational business). This means that the business itself should decide and coordinate integrity and compliance policies. Indeed, this chimes in with our conviction that integrity and compliance are part and parcel of our daily operational management. Several departments advise the business on how to integrate integrity and compliance in working practices: Legal Affairs, Risk, Finance, Procurement, HR, and Quality, Health, Safety & Environment. Each from within its own domain, these departments report on their efforts in areas such as safety, public procurement and financial accountability.

In addition, there is an Integrity & Compliance (I&C) department, which focuses on encouraging desired behaviour, regulatory compliance and observance of the NS Code of Conduct. This department develops policy, provides information on that policy, handles and investigates integrity violation reports, provides solicited and unsolicited advice, and promotes integrity awareness within NS. In addition, I&C monitors the development of business risks surrounding integrity and compliance and reports on those risks to the Executive Board, the Risk and Audit Committee and the Supervisory Board. The department reports directly to the Executive Board, working closely with other departments including HR, Communications, Risk, Legal Affairs, Security and Audit. Consultations also take place (subject to the limits set by confidentiality) with the confidential advisers within NS and the ‘Vangrail’ network about developments, trends and signs regarding integrity violation reports and queries.

Additionally, NS has an Integrity Committee whose members include the directors of I&C, HR, Legal Affairs, Security and Risk and, depending on the topic, representatives of the business. The Integrity Committee is charged with testing new integrity and compliance policies and policy changes before their adoption by the Executive Board. It also handles major issues and violation reports in the area of integrity and compliance, and issues recommendations.

Policy

In line with its core values and Code of Conduct, NS has adopted policies on several specific themes, including conflicts of interests, desirable and undesirable behaviours, competition, protection of information, and fraud. As such, the business has guidelines in place on how to deal with issues in each of these fields. The policy documents concerned apply for NS as a whole, constituting the company's internal assessment framework for integrity-related queries, recommendations an reports. In addition, NS has a policy framework specifically aimed at helping managers deal with reported integrity violations. This policy framework is part of the Regulations for Reporting Integrity Issues, which also apply to whistle-blower reporting at NS.

Information and advice

I&C works with the business to create an open culture in which employees feel free to express their views, hold each other to account and help each other make the right decisions. This cannot simply be imposed from the top down, but requires a truly joint effort. NS has opted for a practical approach that the people on the shop floor can identify with. I&C organises dilemma sessions for all parts of the organisation, from the Executive Board to teams in the various regions, in which teams are invited to discuss issues surrounding integrity, compliance and social conduct. The purpose of these sessions is to provide managers with practical tools for encouraging open and honest team dialogues, based on the 'train the trainer' principle, on any sort of dilemma that is relevant to the people at NS. In 2019, 495 of such dilemma sessions and dialogues were held.
In addition, employees receive regular information about current developments and issues, for example during the Integrity Week. We also use messages, posters and other information materials to draw our employees' attention to specific themes such as communication and behaviour, conflicts of interests or social conduct. On a monthly basis, we send themed bulletins with information on these issues to all employees who wish to receive them.
On the Integrity Portal on the intranet, employees can find a wealth of information about integrity and compliance-related issues. For instance, it includes a current overview of NS's integrity and compliance policies. Employees can also use the Integrity Portal to submit specific issues and dilemmas to I&C. Alternatively, they can ask questions by telephone or drop by in person. I&C will then advise them about possible solutions and measures. I&C helps people develop policies, place issues on the agenda and find relevant sources of information.

Integrity Desk and Regulations for Reporting Integrity Issues

Staff have several options for (anonymously) reporting integrity issues or abuses: by email, by telephone, in a one-on-one conversation or via the Integrity Desk on the Integrity Portal. The Regulations for Reporting Integrity Issues (including ‘whistle-blower’ reporting) guarantee that employees can report actual or suspected irregularities, that these reports will be dealt with carefully and confidentially and that employees will not experience any adverse consequences of having reported an incident.

All reports are handled according to the NS Regulations For Reporting Integrity Issues. Each report results in a recommendation to the person who reported the issue and to the managers involved on any subsequent steps or measures. This may be followed by an investigation into the circumstances of the case, the aim of which is to establish the truth. Such investigations take place in accordance with the investigation protocol of the Regulations For Reporting Integrity Issues. An investigation may result in measures with regard to the organisation, processes and/or corporate culture. Disciplinary measures may be taken against employees involved, and relationships with suppliers or other partners may be reconsidered or indeed terminated. If there are suspicions of criminal misconduct, we may decide to hand over the case to the police and the judicial authorities.

Integrity investigations potentially have far-reaching consequences for the employees involved; they may apply for personal guidance through this process by an NS confidential adviser. Confidential advisers are independent and focus exclusively on the employee concerned. In 2019, a confidential advisor was consulted on 97 occasions.

And a total of 96 integrity violation reports were received. Of those reports, 12 were still being investigated by the end of the year. Of all finalised reports in 2019, 44% were found to be wholly or partially unfounded.

Compliance

NS wants to comply systematically and permanently, demonstrably and credibly with the standards that are appropriate for a company of our social standing and responsibilities. We are aware that as a State-owned enterprise we serve as an example to other players, must be transparent on our regulatory compliance and act with integrity at all times. Integrity and compliance go hand in hand. We are keen to ensure that we comply with all the applicable laws and regulations and abide by the standards and values in force.
In these efforts, NS is bound to a compliance framework that governs compliance with external laws and regulations such as the Railways Act, the Competition Act, the main rail network franchise, NS's obligations under the collective labour agreement, and the Working Hours Act. In addition, we apply internal policy frameworks and guidelines such as our Code of Conduct, the procurement regulations and the train drivers' manual. NS has set up a compliance management structure in order to ensure that we keep abreast of this multitude of rules, standards and norms and are able to bring our social responsibility into practice. The legislator has imposed certain requirements that NS has to meet in its operations. These requirements have been translated into practical performance indicators and process execution norms. NS applies compliance performance indicators in a range of fields, including competition, tendering, privacy and hiring external staff.
As compliance greatly depends on the conduct of our employees, there is also a direct correlation with integrity. NS believes it is extremely important for all employees to maintain an ethical attitude in their work, which will naturally promote compliance. In 2019, NS launched a nationwide Desired Behaviour Programme to take stock of - and where necessary improve - existing social behaviours on the shop floor. The NS Code of Conduct served as the guiding document for this programme.
NS invests in raising the knowledge of its employees on specific compliance themes. For example, in 2019 we ran a series of training programmes on competition and privacy. These programmes, which are continuing in 2020, comprise e-learning modules and tailor-made awareness sessions for specific groups of employees for whose work certain topics, such as new competition rules, are particularly relevant. Employees could also complete micro-learning modules on topics in the field of information security. By offering these training options, we enable our people to stay abreast of regulatory changes and current policies.

Monitoring and adjustment

During 2019, the focus was on setting up an NS-wide monitoring and reporting structure for integrity and compliance issues. We created a dashboard for NS as a whole, covering the key risks and ‑issues regarding integrity and compliance, plus an overview of all relevant KPIs. The dashboard findings are reported to the Executive Board and to the Supervisory Board's Risk and Audit Committee as part of quarterly reporting within the NS planning and control cycle. This enables the NS management to make deliberate and balanced choices on integrity and compliance issues.
Given the scope of laws and regulations that NS must comply with, the reporting function is still in the process of development, particularly as regards compliance. We are gradually arriving at an integrated overview of all the relevant integrity and compliance issues and the associated key controls, and expect to complete that overview by the end of 2020.