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How Vodafone is managed

Contents

Management

Governance model and responsibilities
Vodafone Netherlands has a layered management model: an Management Board and a Supervisory Board. The management consists of a CEO and the Director of Corporate Affairs & Strategy, both managing directors, and 7 board members with the title ‘Director’ of the Consumer Business Unit, Enterprise Business Unit, Retail, Commercial Operations, Finance, Technology and HR, Property & Internal Communications. The position of Finance Director has been vacant since November 2014. Since June Carmen Velthuis has taken the position of Finance Director. The Supervisory Board has three members, one position which has been vacant since 31 December 2013, which is to be filled in 2015.

Statutory authority and responsibilities are described in the articles of association of Vodafone Libertel BV. The Management Board is tasked with monitoring legal matters, government policy , health and safety. The board must also ensure that the company complies with legislation and regulations and that implementation directives of the ‘General Meeting of Shareholders’ for financial, social and economic policy and personnel management are followed. Our Code of Conduct serves as a guideline for the management of our organisation, which states what we expect from employees and suppliers with respect to the environment, health and safety, local communities and society. Management Board for 2014-2015. Vodafone Netherlands does not specify a term for its management board members.

Executive Board for 2014-2015
Vodafone Netherlands does not specify a term for its executive board members.

Rob Shuter – Chief Executive Officer

Rob has been working as the Chief Executive Officer (CEO) at Vodafone Netherlands from 1 April 2012. He started his career as an accountant with Deloitte in Johannesburg, after which he spent a long time in the banking sector. Rob has always enjoyed working in the field of strategy and leadership. He was for instance the manager of Strategy and Corporate Affairs for Nedbank and in 2004 he was appointed as head of the retail division. In 2008, Rob received ‘South Africa’s leading manager award’ from CRF. In 2009 he joined the Vodacom Group as Finance Director. Rob loves music, reading, travelling, poetry and he enjoys delving into the history of South Africa. Rob is also an avid sportsman who enjoys running, canoeing and cycling.

  • Age: 47
  • Nationality: South African
  • Specific knowledge and skills: Stakeholder Management, Business Strategy, Investment Banking, Telecommunications, Consumer Experience and Storytelling
  • Other positions: None

Marcel Krouweel – Director Finance (interim)

Marcel has been interim Director Finance for Vodafone Netherlands with effect from 1 November 2014. In this role he is responsible for the financial strategy, controlling, planning, reporting, business development and financial operational processes within the company. Marcel has held various positions at Vodafone since his appointment in 1998. He started at Customer Services as Business Analyst where he developed to become the Quality Assurance Manager. In 2008 Marcel joined the Information Management Team in Finance, where the Business Intelligence Competence Centre (BICC) originated from later on. He has been the head of the BICC since July 2012. Marcel has a background in Financial Econometrics (University of Maastricht) and extensive experience with analysis and reporting.

  • Age: 40 years
  • Nationality: Dutch
  • Specific knowledge and skills: Financial Econometrics, Planning & Analysis, Business Intelligence and CRM
  • Other positions: None

Bart Hofker – Director Consumer Business Unit

Bart has been with Vodafone since 1 march 2008 as the Director Consumer Business Unit. He is responsible for all sales, marketing and marketing activities for the consumer market. Prior to joining Vodafone, Bart worked as Commercial Director at the energy company Nuon. Previously he held various senior marketing management positions at KPN in the Netherlands and the Czech Republic. Bart studied Business Economics at the Erasmus University in Rotterdam.

  • Age: 50 years
  • Nationality: Dutch
  • Specific knowledge and skills: Branding, Marketing & Sales
  • Other positions: Member of the Advertising Code Committee

Alexander Saul – Director Enterprise Business Unit

Alexander has been working as Director Enterprise Business Unit at Vodafone Netherlands since 1 April 2013. In 1997 Alexander started at Deutsche Telekom. Since 1999 he has worked in various management positions at Vodafone Germany. Alexander studied at the RWTH Aachen in Germany and at Wharton University in Philadelphia in the United States. He is a marathon and motor sports fan and an avid sailor.

  • Age: 47 years
  • Nationality: German
  • Specific knowledge and skills: Marketing & sales
  • Other positions: None

Marco Houtman – Director Retail

Marco has been the Director Retail at Vodafone Netherlands since 1 April 2014. He worked at BelCompany when Vodafone acquired this organisation in 2012. Marco’s positions at BelCompany included that of Sales Manager and Sales Director for the consumer and enterprise market. After the takeover by Vodafone Marco was initially responsible for the Vodafone store format and later for the entire Vodafone store organisation with the formulas of BelCompany and Vodafone shop. Marco graduated from the Business School of the Netherlands.

  • Age: 48 years
  • Nationality: Dutch
  • Specific knowledge and skills: Retail, Sales & Marketing, Customer Experience and Managing Change
  • Other positions: None

Harry Odenhoven – Director Commercial Operations

Harry has been the Director Commercial Operations at Vodafone Netherlands since April 2012. In this role he is responsible for providing the best service to our customers through all channels (call centre, invoicing, online, mobile and social media). He is also responsible for innovation and product delivery. His goal is to make Vodafone one of the best service companies in Netherlands. Previously Harry held various positions in the mobile technology and Internet market. He has international experience in the field of marketing, sales and business development. Harry studied Industrial Design at the Technical University in Delft. He has worked for Vodafone since 2001. Harry has been employed by the Vodafone Group with effect from 1 April 2015. Katherine Farnon has taken up the role as interim Director Commercial Operations.

  • Age: 52 years
  • Nationality: Dutch
  • Specific knowledge and skills: Marketing, Innovation, Customer Experience, Digital, Managing Change
  • Other positions: None

Mallik Rao – Director Technology

Mallik has been working for Vodafone Group since February 2012, following which he was appointed as Director Technology at Vodafone Netherlands with effect from 1 April 2012. Before that Mallik was the Chief Technology Officer at Aircel in India. Mallik is an engineer with eighteen years of work experience in technology for providers such as Ericsson, Nortel and Multi Service providers. At Vodafone Netherlands he is responsible for the IT landscape and network convergence developments. He plays a key role in important projects such as Unify (a BSS/CRM update) and the Fast Forward programme (focused on network excellence). Mallik is a telecommunications engineer with a passion for travelling, working with people and managing technology.

  • Age: 45 years
  • Nationality: Indian
  • Specific knowledge and skills: Engineering, Technology
  • Other positions: None

Adam Parsons – Director HR, Property & Internal Communications

Adam has been the Director HR, Property & Internal Communications at Vodafone Netherlands since September 2012. He began at the Vodafone Group in 2007 as the Head of Global of Reward and Strategy. Adam was responsible for the remuneration policy and operations and his passion has always been in the field of HR. Before joining KPMG in 2013, he worked as an HR consultant at Mercer Human Resourcing. Adam has several hobbies, including running, reading, cooking and travelling. He has a law degree from the University of Birmingham and a Master of Personnel and Development from the Westminster Business School.

  • Age: 37 years
  • Nationality: British
  • Specific knowledge and skills: HR, Legal knowledge
  • Other positions: Chairman of Vodafone Foundation

Barbara Jongerden – Director Corporate Affairs & Strategy

Barbara has been the Director Corporate Affairs & Strategy at Vodafone Netherlands since 1 July 2014 where she is responsible for Strategy, Security, Legal, Regulatory and External Affairs. Barbara started at Vodafone as Head of Legal Affairs in 2012. Previously she worked at PwC, Corporate Express (now Staples) and Liberty Global. Barbara studied at the Utrecht University and she enjoys running, rock climbing and travelling.

  • Age: 40 years
  • Nationality: Dutch
  • Specific knowledge and skills: Law & Economics, Mergers & Acquisitions, Corporate Governance, Compliance, Telecommunications, Stakeholder Management
  • Other positions: None

The following changes took place in the Management Board during the 2014 – 2015 financial year:

  • Marcel Krouweel replaced Carla de Geyseleer as the interim Director Finance. Carla was the Chief Financial Officer from May 2012 until November 2014.  Marcel was followed up by Carmen Velthuis on 1 June.
  • Barbara Jongerden replaced Klaske de Jonge. Klaske was the Director Corporate Affairs & Strategy from January 2010 until 1 July 2014.
  • Harry Odenhoven has been working at the Vodafone Group since 1 April 2015.

How diverse is the management of Vodafone Netherlands?
Vodafone believes in the power of diverse teams. People with different backgrounds, knowledge and skills, age, gender and nationalities bring balanced skills and management styles to an organisation. This can provide more innovative ideas, better decision making and improved performance.

Within the Vodafone Group male/female diversity is a part of the objectives. These objectives are implemented by the Vodafone Group at local markets, including Vodafone Netherlands. We regularly report on this. Are our directors diverse enough? They are in terms of background, knowledge, skills, age and nationality, but with one woman and eight men you cannot speak of a balanced gender ratio. When filling vacancies we look at the best match, after which we also consider diversity. The position of Director Finance will be filled by a woman with effect from June, which makes the ratio shift to 7 men and 2 women.

Supervisory Board
The Supervisory Board (SB) advises and supervises the Management Board. The Management Board informs the Supervisory Board at least twice a year on strategic policy, finance and relevant developments and progress, as in the personnel policy and the ‘Planet Tomorrow’ environmental programme. Before implementing major changes that affect the identity of the company, the Executive Board must first obtain approval from the SB.

In the 2014-2015 financial year the SB convened on 4 June 2014 and 10 November 2014. During these meetings, the SB Board discussed issues such as telecommunications trends, strategy, financial results, progress on key programmes and focus areas for 2015-2016.

The SB consists of:

Erik de Rijk – Chairperson of the SB of Vodafone Libertel BV and and Managing Director of Vodafone International Holdings BV

Erik has been working at the Vodafone Group since 1 July 1999. He has been the Managing Director of Vodafone International Holdings BV since 1 September 1999. Over the years Erik has held executive positions at Vodafone companies throughout the world. He started his career as a tax consultant at Deloitte in Rotterdam and he also worked as a lawyer and tax expert for a few years at Loeff Claeys Verbeke. After working as a consultant Erik worked at Tetra Laval and AirTouch Communications. In his spare time Erik likes to take sport and adventure trips with his family.

  • Age: 55 years
  • Nationality: Dutch
  • Specific knowledge and skills: Dutch Law and Tax Law, Mergers & Acquisitions, Restructuring, Governance and Stakeholder Management
  • Other positions: None

Ronald Schellekens – 
Member of SB of Vodafone Libertel BV and Vodafone Group HR Director

Ronald reinforced Vodafone and the Supervisory Board in January 2009. He is responsible for Human Resource Management, Health & Safety and Vodafone assets. Before he started working at Vodafone, Ronald was the Executive Vice President of Human Resources Downstream at Royal Dutch Shell. He also worked for PepsiCo for 9 years in various international senior human resources positions, including in Switzerland, Spain, South Africa, the United Kingdom and Poland. In his last position he was responsible for PepsiCo Foods International in Europe, Middle East and Africa. Ronald also worked for 9 years in various HR positions at AT&T in the Netherlands and Poland.

  • Age: 50 years
  • Nationality: Dutch
  • Specific knowledge and skills: Human Resources Management, Management and Organisation, Management Development, Health & Safety, Real Estate, Telecommunications
  • Other positions: None

The third position in the SB at Vodafone Libertel BV will be filled in July 2015.

Appointments
The General Meeting of Shareholders of Vodafone International Holdings BV has a right of recommendation for the appointment of new commissioners. Besides, the Works council has a right to propose a member of the SB. In the past, the Works council proposed Ronald Schellekens. The appointment of new directors must always be approved by the Executive Committee of Vodafone Group, the local CEO and local Director HR. Criteria for nomination and selection of members of the Executive Committee include: a proven track record within Vodafone or the telecommunications industry, at least one international position, thorough knowledge, expertise and professionalism and a personal connection with our corporate values are also required. At least 70% of the appointments must be made internally, taking diversity into account (gender, nationality, etc.).

Remuneration policy

Salary
We established the function levels of our employees with the job evaluation system of Towers Watson. We use the following structure:

  • Executive Board – Senior Leadership Team group (SLT)
  • Senior management – E group
  • Management – F group
  • Staff – G group

Every year we determine salary scales for all job levels and job families. This is done based on a thorough analysis of market salary data from international research agencies (e.g. Towers Watson and the Hay Group).

Short-term performance award
In addition to fixed salaries we also have a bonus scheme in place. The level of the bonus is determined based on the salary, the bonus percentage (ranging from 8% – 50%), the annual business performance (ranging from 0% -200%) and individual performance (0% -150%).

Company performance
For company performance a service level objective applies (2014-2015: € 1,683,800), EBITDA (2014-2015: € 604,700) Operating free cash flow (2014 – 2015: € 245,700) and competitive performance. The NPS score or customer satisfaction and the relative market share, weigh in to determine competitive performance. The weighting between the four objectives are the same.

Personal performance
Individual targets are agreed with all employees, including executives, e.g. with regards to social impact such as employee satisfaction, customer satisfaction and scores on the reputation benchmark. A part of the bonus as explained above is based on individual performance and it is determined in the annual assessment.

Long-term performance award
E group employees can qualify for an annual bonus based on company performance, but they can also qualify for shares (Long Term Incentive Plan), up to a maximum of 30% of their salary. This depends on the personal potential and performance of the manager. The Senior Leadership Team (SLT) is also entitled to shares up to 50% of their salary. These are divided into global long-term incentives and global long-term retention awards.

In 2014-2015 the distribution is as follows:

  • One-third of the global long-term incentives with a worldwide free cash flow performance condition.
  • One-third of the global long-term incentives with a local market free cash flow performance condition (or global performance requirement for Group employees).
  • One-third of the global long-term retention awards.

Division between the global long-term incentives and the global long-term retention awards will take place after differentiation (varying between 0% -200%). The conditions for global long-term incentives are subject to allocation.

Assessment cycle
The fixed assessment cycle is implemented throughout the financial year. In this context the CEO evaluates, assesses and rewards the results of the Executive Board and its individual members. The CEO of Vodafone Netherlands is assessed by the CEO for Europe.

Ratio in remuneration
The highest paid employee at Vodafone Netherlands earned in 2014-2015 9.1 times (2013-2014: 8.7) more than the median (excluding the highest paid) gross annual income of all employees. This gross annual income is based on full-time employment, including bonuses on targets, but excluding non-financial remuneration components, e.g. private use of mobile phones, company cars and expense reimbursement. The increase in the annual income of the highest paid employee in 2014-2015 Vodafone Netherlands amounted to 0% (in 2013-2014: 0%). The median salary increase for all employees amounted to 1.75% (in 2013-2014: 1.75%)

Pension
Vodafone Netherlands has a defined contribution scheme. 100% contribution is provided on a 4% sliding scale. For tax purposes we continue to use the 3% scale. Employees do not pay a personal contribution. We also offer a partner’s pension, disability pension and ANW (General Surviving Relatives) shortfall pension. We assume responsibility for the cost of these schemes. Following changes in legislation the employer contribution is capped at € 100,000 with effect from 2015.

Works council

We have two works councils, one for Vodafone Libertel BV and Vodafone Retail BV, whom we involve in subjects related to health and safety and labour issues. This happens for example with small-scale and large-scale reorganisation of business units of Vodafone Netherlands to other companies. The works councils provide their opinions, they take the initiative and they provide consent before we introduce certain schemes. The works councils have their own daily management team, which consists of a chairperson, a vice chairperson, an official secretariat and permanent and temporary committees. The two works councils are to be merged as of 1 July 2015.

Organisation of sustainability/corporate responsibility

There is no separate sustainability strategy at Vodafone Netherlands. Sustainability is integrated into the business strategy. This means that all directors are responsible for sustainability aspects in relation to their individual responsibilities. The directors have joint and individual KPIs with regards to sustainability, E.g. related to employee satisfaction, customer satisfaction and scores on reputation benchmarks. We have some KPIs validated externally, e.g. environmental KPIs that fall under the ISO 14001 certification and the KPI for diversity through ‘Talent naar de Top’ [Talent to the Top]. Risks and opportunities related to sustainability are identified within reputation and stakeholder involvement programmes (see below). Vodafone Netherlands reports to Vodafone Group Plc. twice a year on its sustainability performance.

Stakeholder involvement

We consider good contact with our stakeholders to be critical for the success of our company. We have a reputation and stakeholder engagement programme in place in order to properly identify all stakeholder interests, to address that and to ensure that we regularly communicate with the stakeholders about these issues. This programme is engrained in our strategic pillar of an Improved Leading Reputation. Our motto hereby is: ‘Be good and tell it’. This means that we are primarily looking at our behaviour through the eyes of the stakeholders. Are we falling short of expectations? If so we consider how we can implement a change, then we communicate this to the stakeholder.

15 stakeholders groups and 10 themes
We have identified all of our stakeholders and their needs and expectations within our reputation and stakeholder engagement programme. We have clustered the stakeholders into 15 stakeholder groups, including the Lower House, the government, customers and the general public. We determined the topics that are crucial for each stakeholder group through research and dialogues. Ten different topics emerged: network performance, customer service, fair and transparent tariffs and invoices, digital rights, impact on health and the environment, economic and social contribution and innovation, attractive employer, challenger, responsiveness and reliability and in control.

Working group for each theme
We have established working groups for each topic with people from various relevant departments. These working groups identify, analyse and address the concerns and aspirations of stakeholders and (potential) issues, risks and opportunities related to the economic, social, environmental and ethical issues. On this basis we determine the action points and the desired interaction with stakeholders on these topics. Using a stakeholder event calendar we look at what opportunities we have to engage with stakeholders or to reach out to them and whether this is sufficient to achieve the desired level of interaction. In some cases we organise additional occasions ourselves, such as stakeholder dialogues on specific subjects.

Reputation steering committee
If a working group cannot resolve an issue, e.g. because it conflicts with a substantial commercial or organisational interest, that issue is escalated to the reputation steering committee. The Steering Committee consists of the CEO, Director Finance, Director of Corporate Affairs & Strategy, Commecial Operations Director, Head of Brand and the External Affairs and Public Affairs managers. The working groups report every two months to the steering committee on the analysis and status of agreed points of action. Satisfaction with Vodafone is measured annually among a broad group of stakeholders. During the year we conduct limited measurements among customers and the general public. See the stakeholder table below.

Cooperation
On issues where a common approach is more effective we make the effort to establish collaboration with other providers in our sector. We make use of umbrella organisations such as VNO-NCW, Netherlands ICT, Monet and ECP, and occasional collaborations.

As a part of our commitment to the government programme Beter Benutten [Better utilisation] and the signing of the Regioconvenant Maastricht Bereikbaar [Accessible Maastricht Regional Covenant], our outgoing Director of Commercial Operations, Harry Odenhoven, received a letter from Schultz van Haegen, the Minister of Infrastructure and the Environment in which she thanked him for his efforts. According to her a successful programme was developed that was in part responsible for significantly reducing traffic congestion in the Maastricht region. The minister writes in the letter that she considers Odenhoven to be a leader in the development of mobility policies.

Below it is stated with each stakeholder group what their expectations and wishes are with regard to the material issues, how we have involved them and a reference is provided for our approach:

Current and prospective employees

Themes and expectations

Attractive employer

  • Responsible employer
  • Pride in Vodafone
  • Involved with the process of improving products and services
  • Simple processes, quick decision-making
  • Employees with limited capacity in the workplace
  • Flexible labour market
  • Diverse and inclusive organisation and women in senior management

Involvement

  • Annual survey on employee satisfaction, with a short survey twice a year
  • All Hands sessions on major developments
  • Monthly strategy updates by the CEO
  • Regular Senior Management Team sessions
  • Line Manager events twice a year
  • Joint participation in sport events and volunteer activities
  • Various feedback programmes such as Easy 66 and customer feedback programme
  • The works council is involved in reorganisations, outsourcing of business units. A meeting is held once a week between the Works Council, the CEO and the HR director, and a strategic meeting is held twice a year between the Works Council and the entire Board of Directors.

Approach

See the section on Our staff and Governance for the action points of the past year.

Private customers

Themes and expectations

Network performance

  • High speed
  • Stable connection
  • Constant good coverage, everywhere
  • Better coverage in border and remote areas
  • Knowing when there are failures and when work is being done

Customer service

  • Qualitative and fast service
  • Friendly and competent staff

Reliable and in control

  • Clear and transparent agreements
  • Keep promises
  • No nasty surprises
  • Open, fair, transparent
  • Reliable network

Involvement

  • Monthly NPS measurements in all customer contact and digital channels
  • Regular intensive workshops with clients in the office or outside locations to determine needs and wants and to understand and translate customer experience into good improvements in our services and products/services
  • Stakeholder survey in collaboration Netherlands ICT
  • Every year we conduct quantitative research with Motivaction among customers to determine whether material themes are still relevant to them, how they assess Vodafone on this and what their expectations are.
  • Each quarter, we check with customers through Motivaction how we score on the three most important material themes.

Approach

See the section on Our customers and Our Technology for the action points of the past year.

Business customers

Themes and expectations

Network performance

  • Reliable network, no dropped calls
  • Always and everywhere available, even indoors, in tunnels and remote areas
  • Knowing where and when there are failures and when work is being done
  • Network speed

Customer service

  • Qualitative and fast service
  • Friendly and competent staff
  • One-stop-shop Helpdesk
  • No waiting
  • Fast problem resolution

Fair and transparent charging

  • Good value for money
  • Clear and transparent terms, rates and invoices
  • It must be clear in advance what is charged; no unexpected costs
  • Real-time cost monitoring

Involvement

  • Regular roundtables
  • One-on-one meetings through Vodafone business partners
  • Regular surveys
  • Newsletters
  • Every year we conduct quantitative research with Motivaction among customers to determine whether material themes are still relevant to them, how they assess Vodafone on this and what their expectations are.
  • Each quarter, we check with customers through Motivaction how we score on the three most important material themes.
  • Stakeholder survey in collaboration Netherlands ICT

Approach

See the section on Our customers and Our Technology for the action points of the past year.

Indirect channels (retail channels, business partners)

Themes and expectations

Reliable and in control

  • Well organised, clear internal processes
  • Reliable partner, mutual respect, keep promises
  • Timely reporting and communication of accurate and relevant information
  • The services must operate smoothly

Responsiveness

  • Flexible and quick response to trends and market needs
  • Leading
  • Translating vision and innovation into value for consumers
  • Think with business partners

Network performance

  • Constant coverage everywhere
  • High data speed
  • No dropped calls
  • Qualitative, reliable and fast network
  • Improved uptime for both the fixed and mobile

Involvement

  • Regular contact between Vodafone business partners and channels
  • Events for business partners: Business Partner of the Year event, TSG Leek, MasterLezing [Master Lecture], INTO MasterClass, 5 Achievers events, Iris One network day, Breaking Records incentive event
  • Events for indirect channels: a seminar for indirect online channels, a unify day for all indirect partners, various strategic meetings with individual partners such as Phone House
  • Every year we conduct quantitative research with Motivaction among indirect channels to determine whether material themes are still relevant to them, how they assess Vodafone on this and what their expectations are.

Approach

See the section on Our Technology, Our Image, Our Financial Performance and Governance for the action points of the past year.

Suppliers & Outsourced partners (technology partners, resourcing partners)

Themes and expectations

Challenger

  • Market leader, the first to introduce new products and services.
  • Efficient collaboration with clear agreements
  • Cooperation in innovations
  • Challenging player

Customer service

  • Proactive service
  • Friendly and competent staff who can answer all questions without having to transfer a call.
  • Solution oriented

Network performance

  • Constant coverage everywhere, including border areas
  • Stable network, few dropped calls and a constant internet speed
  • Nog major outages
  • Sufficient capacity at major events

Involvement

  • Regular 1 to 1 contact via the purchasing department
  • In 2013/2014 a quantitative and qualitative research was conducted by Motivaction in which it was established which material themes are relevant for suppliers and outsourced partners, how Vodafone is assessed on this and what their expectations are.
  • During one-on-one contacts we test whether material themes are still relevant to them.

Approach

See the section on Our customers, Our Technology, Governance and the paragraph on the Supply Chain for the points of action over the past year.

Ministry of Economic Affairs

Themes and expectations

Network performance

  • Quality and stable network
  • Continuity
  • Coverage and speed
  • Investing in the network

Reliable and in control

  • Keep promises
  • Share dilemmas
  • Familiar with issues in the political arena and anticipate accordingly
  • Be a constructive partner in discussions and have sufficient knowledge

Digital rights

  • Abide by the law and be transparent about it.
  • Take position

Involvement

  • Regular meetings at all levels on various topics
  • Participation in consultations and research by the Ministry
  • Regular contact via sector organisations (Netherlands ICT, ECP)
  • In 2013/2014 a qualitative research was conducted by Motivaction in which it was established which material themes are relevant for the Ministry of Economic Affairs, how Vodafone is assessed on this and what their expectations are.
  • During one-on-one contacts we test whether material themes are still relevant to them.

Approach

See the section on Our Customers, Our Technology, Our Image and Governance for the action points of the past year.

Other ministries and local government

Themes and expectations

Responsiveness

  • Adaptability, moving with situations, can-do attitude
  • Willingness to improve
  • Anticipate legislation
  • Open, transparent and accessible
  • Be more open on the vision and views

Challenger

  • See the bigger picture
  • Market leader, leading in prevention of abuse of mobile services
  • New business models
  • Use international knowledge

Economic and social contribution and innovation

  • Focus on the future, vision for the future
  • Forward thinking and new solutions that fit better with the wishes and needs of consumers
  • Assist in policy formation
  • Provide employment and business services via the network
  • Prevention of debt
  • ‘Social Return’: people with employment limitations to a greater or lesser extent should be used with the implementation of contracts above € 250,000.
  • Access for women to senior positions. Charter Talent to the Top (until the end of 2014).
  • Road safety
  • Recycling and reuse of phones (raw materials, WEEE)
  • Coverage in remote areas
  • Phone theft
  • Masts and health
  • Installation of antennas
  • Vodafone involvement in the Maastricht region

Involvement

  • Regular meetings with staff from various ministries on various topics
  • Interview with Mayors on coverage in border areas.
  • Participation in consultations and research conducted by ministries and regulators
  • Regular contact via sector organisations (Netherlands ICT, ECP)
  • In 2013/2014 a qualitative research was conducted by Motivaction in which it was established which material themes are relevant for the other ministries, how Vodafone is assessed on this and what their expectations are.
  • During one-on-one contacts we test whether material themes are still relevant to them.
  • The Regioconvenant Maastricht Bereikbaar [Accessible Maastricht Regional Covenant] was signed with more than 50 parties in the context of the government programme Beter Benutten [Better utilisation] to seek lasting good accessibility and liveability in the city and the region of Maastricht, in combination with an economically sustainable development. We sit on the steering committee of the Accessible Maastricht Programme Office with the municipality and the province.
  • Cooperation with the University of Maastricht
  • Participation in Customer Service Valley. The aim is to increase the number of jobs available in the sector, to strengthen the sector and to improve its strength through better positioning of the sector by improved matching of training. The City of Maastricht initiated this collaboration because the sector is of great importance for the Maastricht economy.

Approach

See the sections on Organisation profile, Our People, Our Customers and Our Image, Our Financial Performance and Governance for the action points of the past year.

Parliament (political parties and parliamentarians)

Themes and expectations

Challenger

  • New ideas based on (global) vision and insights
  • First and be different
  • Benefit from international expertise
  • Clear vision on the market
  • Less consumer communication, more corporate communication in order to benefit as a thought leader

Responsiveness

  • Anticipate changes and consumer interests
  • Think and move with, do not put own interests first
  • Do not cling onto old business models, the market is ready for new business models
  • Anticipate legislation

Digital rights

  • Anticipate legislation
  • Fair and honest working method
  • More proactive communication with customers about what happens to their personal data
  • Provide consumers with several clear options regarding privacy

Involvement

  • Meetings with MPs on different topics
  • Regular contact via sector organisations (Netherlands ICT, ECP)
  • In 2013/2014 a qualitative research was conducted by Motivaction in which it was established which material themes are relevant for parliament, how Vodafone is assessed on this and what their expectations are.
  • During one-on-one contacts we test whether material themes are still relevant to them.

Approach

See the sections on Organisation profile, Our Customers, Our Image, Our Financial Performance and Governance for the action points of the past year.

Regulators

Themes and expectations

Digital rights

  • Abide by the law

Reliable and in control

  • Systems and processes well organised

Involvement

  • Meetings on actual topics
  • Participation in consultations
  • Intensity differs per stakeholders

Approach

See the sections on Our Customers, Our Image, Our technology and Governance for the action points of the past year.

EU Brussels (EU Parliament and EU Commission)

Themes and expectations

Challenger

  • Survivor attitude
  • Challenge the status quo in communication, innovation and propositions

Economic and social contribution and innovation

  • Innovation is not just about products and services but also about general attitude and intentions

Responsiveness

  • Anticipate market developments such as smart meters, domotics and health solutions.
  • Anticipate EU legislation
  • Make voice heard in the organisation sector
  • Respond to the needs and desires of consumers
  • Create new business models with improved propositions.

Involvement

  • Interaction at all levels through the Vodafone Group
  • In 2013/2014 a qualitative research was conducted by Motivaction in which it was established which material themes are relevant for the EU, how Vodafone is assessed on this and what their expectations are.
  • During one-on-one contacts we test whether material themes are still relevant to them.

Approach

See the sections on Organisation profile, Our Customers, Our Image, Our Financial Performance and Governance for the action points of the past year.

Consumer interest organisations (including consumer associations)

Themes and expectations

Network performance

  • Coverage in remote areas without interruption, including coverage in remote areas
  • Take complaints about the network seriously

Digital rights

  • Give consumers control over their personal data, no commercial use without permission
  • Do not ask too much information
  • Clear and transparent policies about what happens to personal data.
  • Open Internet
  • Transparent about tapping requests from the government

Fair and transparent charging

  • Good value for money
  • Clear and transparent terms, rates and invoices.
  • Make it clear in advance what is charged; no unexpected costs
  • Focus on the needs and desires of consumers
  • Offer a more limited choice to make decisions easier
  • Make it clear what a customer can do with a number of Mbs
  • Protect vulnerable consumers
  • Understanding the cost of a mobile phone other than the cost of a subscription

Involvement

  • In 2013/2014 a qualitative research was conducted by Motivaction in which it was established which material themes are relevant for consumer interest organisations, how Vodafone is assessed on this and what their expectations are.
  • During one-on-one contacts we test whether material themes are still relevant to them.

Approach

See the sections on Our Customers, Our Technology, Our Image and Governance for the action points of the past year.

Digital rights organisations (Bits of Freedom, Privacy First)

Themes and expectations

Reliable and in control

  • Be transparent about processed personal data

Responsiveness

  • Show vision and take positions in public debates about civil rights

Network performance

  • Respect net neutrality

Involvement

  • Meetings in response to current developments related to civil rights, including privacy.

Approach

See the sections on Our Customers, Our Technology, Our Image, Our Financial Performance and Governance for the action points of the past year.

Environmental organisations (Greenpeace, WWF, Natuur & Milieu [Nature & Environment])

Themes and expectations

Digital rights

  • Clear and transparent policies about what happens to personal data.
  • Transparent about tapping requests from the government

Customer service

  • Proactive service: anticipate customers’ needs and provide solutions
  • Friendly and competent staff who can answer all questions without having to transfer a call.

Impact on health and the environment

  • Influence the chain by imposing demands on suppliers
  • Open to discussions with social bodies
  • Offer used phones to consumers

Involvement

  • Regular one-on-one contact
  • Stakeholder dialogue on circular economy
  • Stakeholder dialogue on Environmental Profit & Loss
  • In 2013/2014 a qualitative research was conducted by Motivaction in which it was established which material themes are relevant for environmental organisations, how Vodafone is assessed on this and what their expectations are.
  • During one-on-one contacts we test whether material themes are still relevant to them.

Approach

See the sections on Our Customers, Our Technology and Governance for the action points of the past year.

The Telecommunications Sector

Themes and expectations

The industry is aware of its social role and collaborates on cross-company issues that are not commercially sensitive, such as:

  • Continuity of telecommunications as a critical infrastructure
  • Safety of telecommunications services
  • Privacy
  • Electromagnetic fields and health

Involvement

  • Every year we conduct quantitative research with Motivaction among the general public to determine whether material themes are still relevant to them, how they assess Vodafone on this and what their expectations are.
  • Each quarter we check with the public, private individuals and corporate customers how we score on the three most important material themes.

Approach

See the sections on Our customers and Our Technology for the action points of the past year.

General public (mainstream audience)

Themes and expectations

Network performance

  • Reliable network
  • Constant coverage everywhere
  • High data speed

Customer service

  • Easy access
  • Friendly and competent staff
  • Listen to customers
  • Resolve problems quickly

Fair and transparent charging

  • Clear invoices
  • Invoices should correspond with expectations
  • No small print with extra costs

Involvement

  • Every year we conduct quantitative research with Motivaction among the general public to determine whether material themes are still relevant to them, how they assess Vodafone on this and what their expectations are.
  • Each quarter we check with the public, private individuals and corporate customers how we score on the three most important material themes.

Approach

See the sections on Our customers and Our Technology for the action points of the past year.

Influencers and industry experts (opinion leaders, bloggers, journalists)

Themes and expectations

Digital rights

  • Must be able to guarantee safe data storage and exchange for customers
  • Highest security against hackers
  • Differentiate on security levels
  • Only collect personal data that is needed
  • Clear policy
  • Transparent about tapping requests from the government

Responsiveness

  • Meet the wishes and needs of society
  • Be proactive
  • Surprise consumers
  • Adapt to changing market developments
  • Do not rely on existing business models

Fair and transparent charging

  • It must be clear in advance what is charged; no unexpected costs
  • With the technology of today it is possible to only charge consumers for what they consume
  • No more bill shocks for consumers

Involvement

  • In 2013/2014 a qualitative research was conducted by Motivaction in which it was established which material themes are relevant for influencers & industry experts, how Vodafone is assessed on this and what their expectations are.
  • During one-on-one contacts we test whether material themes are still relevant to them.

Approach

See the sections on Organisation profile, Our Customers, Our Image, Our Financial Performance and Governance for the action points of the past year.

Health & safety management

The Global Health, Safety & Wellfare Team manages and monitors the Health, Safety & Wellfare (HS&W) strategy and governance of the Vodafone Group. The Head of HS&W Worldwide reports to the Human Resources Director of the Vodafone Group. The CEO and the Executive Board members of Vodafone Netherlands are responsible for HS&W at Vodafone Netherlands.

Line managers are responsible for the health, safety and welfare of their employees and other people who may have been involved in activities. They must ensure that systems function adequately and compliance with the policies and standards of the Vodafone Group and Dutch laws and regulations. All of this is facilitated by HR, Property & Internal Communications and Retail. Retail is concerned with the safety of the buildings (the workplace). HR, Property & Internal Communications are concerned with the well-being of employees. All this should lead to a healthy workplace. Read more about the Health & Safety policy.

Human rights

We respect human rights as stipulated in the Universal Declaration of Human Rights. Our approach is designed based on the UN Guiding Principles on Business and Human Rights. Our responsibility is enshrined in our Business Principles and our Code of Conduct. Based on our external research, 6 categories have been identified that are most relevant to our business: 1) working conditions: for our employees and those who work in our chain, 2) civil and political rights: privacy and freedom of expression, 3) children rights: especially online child safety, 4) economic, social and cultural rights: economic development, bribery and corruption, mobile phones, masts and health, 5), land and property rights: in relation to construction of the network, 6) environmental rights: minimising environmental impact. Read here how we assume international responsibility with regard to these six categories.

Environment management

The environmental programme of Vodafone Netherlands is called ‘Planet Tomorrow’. With this programme we want all environmental initiatives to provide a recognisable and familiar structure. The programme includes more than 40 different projects with 3 objectives:

  1. Improve our operations, e.g. by implementing energy-savings measures and waste reduction by reducing paper use and electronic waste.
  2. Enable customers to become more environmentally friendly, e.g. by making the Eco Score visible at all direct sales points, by buying back used phones and by maximising the effect of our environmentally Machine-2-Machine with the ‘connected world series’.
  3. Inspire our employees to work and live in an environmentally friendly manner, e.g. by encouraging the use of public transport and by encouraging The New Way of Working and the Footprint Challenge.

Achieving our goals
We steer our goals and achieve them based on the KPIs within the three most important environmental issues within Vodafone: energy consumption, CO2 emissions and mobile phones. The CEO is ultimately responsible for Planet Tomorrow and he informs the SB twice a year on progress. The environment manager bears daily responsibility for the programme. A steering committee, which convenes four times a year, provides supervision. Major material issues are represented by relevant senior managers on the steering committee, chaired by the Director of Corporate Affairs & Strategy. There are also two working groups: General Planet Tomorrow and Energy. Both working groups convene six times a year. Because energy utilisation is one of the material issues, an energy manager within the Technology Business Unit is responsible for all activities related to energy. The programme Planet Tomorrow is ISO14001 certified. We also achieved the third level of the ‘CO2-prestatieladder’, a carbon emission certification scheme.

Privacy

With more than 5 million customers we have a great responsibility as a provider to protect customer data and the confidentiality of their communications. This goes beyond compliance with laws and regulations. The success of our company is dependent on the extent to which customers trust us to respect their privacy. Our privacy promises are stated in our Privacy WebCenter. With these promises we shape our own approach and communication related to privacy.

Privacy organisation and programme
We have a privacy organisation and programme in place for assurance that our employees comply with these promises and for us to effectively manage concerns and risks related to privacy. The privacy programme consists of a Privacy Risk Management System and Critical Privacy Risk Register. The Privacy Risk Management System helps us to manage privacy compliance on a daily basis. We conduct for instance privacy risk impact assessments for new products and services and we make clear agreements with suppliers that process personal data on our behalf. We also report security breaches of personal data to Autoriteit Consument & Markt [Consumer & Market Authority] (ACM). Sometimes we file a report in response to a complaint from a customer, while we discover other leaks ourselves. In an event where a data breach had a negative impact on the privacy of customers we also inform the customers about this. In the Critical Privacy Risk Register we assess the most significant privacy risks and we develop a policy to manage these risks. Critical risks can arise around for example data management, traffic management or the delivery of data to the authorities for investigation purposes. We employ privacy-by-design principles, so that we can include all privacy aspects in product development. We also ensure that partners and vendors that provide products and services for our development take our privacy requirements into account.

Privacy Officers
Our ‘Privacy Officers’ ensure that everyone abides by privacy laws. We also keep up with developments in the privacy policy and technology to determine the content, implementation and compliance with the privacy statement. It is stated in the privacy statement what is personal data, which personal data we use, what we do with personal data, what we do to protect data, how customers themselves can safely handle their own personal data, an explanation of the rights that clients have when it comes to their personal data and how to contact Vodafone about privacy.

Customer data
Vodafone only shares personal data with third parties if this is necessary for the service, if there is a legal obligation to do so or if a customer provides explicit permission to this end, e.g. for the use of an app. We are required by law to report that customer data we process with the College Bescherming Persoonsgegevens [Data Protection Authority] (CBP).

We work closely with organisations such as Netherlands ICT, the World Wide Web Consortium (W3C), the Internet Architecture Board, the Internet Engineering Task Force and GSMA. Together we have created technical standards that enable better privacy for customers.

Vodafone is a co-founder of the ‘Mobile Privacy’ initiative of GSMA. These sector-wide privacy principles and guidelines have been established for the development of mobile applications. We also hold regular meetings with policy makers, regulators, VNO-NCW [Confederation of Netherlands Industry and Employers], social bodies and opinion leaders in the field of privacy.

With the Vodafone Mobile Protect app and the Vodafone Safety Net app we ensure that our customers and their children can safely use their mobile phones.

Security

Security of our databases, IT systems and network and physical security are essential for the continuity of our services. We must constantly look ahead and try to stay ahead of threats.

International guidelines and certification
We adhere to international guidelines and local laws and regulations for the protection of information. We established our security management system in accordance with the international standard for Information Security Management, ISO27001. We are not certified. The Vodafone Group core data centres where most of our data is stored, is however ISO27001 certified. Our employees, our management and involved third parties are obliged to report a defect or potential security compromise. They are also required to report any unlawful disclosure of sensitive and/or confidential information they may discover.

Responsibility for security
Responsibility for the protection and security of customer information rests with our security team, which is headed by the Chief Technology Security Officer and the Director of Corporate Affairs & Strategy. They put technical access security features in place for the mobile and fixed networks and the related IT infrastructure. They also monitor compliance with data retention and security policy and they take measures to prevent and combat fraud. They are also responsible for lawful interception of telecommunication traffic, e.g. in order to detect crime. They are also responsible for the technical assurance of security checks. For this purpose we conduct regular tests and external parties do assessments to detect and prevent malicious activities and hacking attempts at an early stage.

The Global Security Operating Centre of the Vodafone Group monitors our infrastructure 24/7 and manages all security incidents with the security team. This allows us to prevent any impact on our customers or to limit it as far as possible. Our CEO is ultimately responsible for the security policy.

Responsible Disclosure hotline
Together with five other telecommunications service providers and Netherlands ICT industry association we launched the ‘Responsible Disclosure’ hotline. Here ethical hackers – anonymously if preferred – report any potential security issues and vulnerabilities in the ICT systems of telecommunications service providers.

Physical security
We also pay attention to physical security and we use the ‘Absolute Rules’ throughout the world. These are safety rules that apply to all employees. We also contributed to a new safety standard for working around antennas through cooperation in Mobile Operators Monet (KPN, T-Mobile and Vodafone). We have made agreements about switching off power during maintenance work on antenna masts used by multiple mobile operators.

Internal audit

The mission of Vodafone’s international Internal Audit Department is to help protect the assets, reputation and sustainability of the organisation. By regularly performing operational audits the department determines whether processes are managed effectively and efficiently. Where necessary the department makes recommendations for improvement, which local management is obliged to follow up on. All Vodafone parts are tested on a regular basis.

Audit organisation
The Internal Audit department prepares an annual audit plan, which meets the international standards of the Institute of Internal Audit and the Vodafone Code of Conduct. The department consists of local and regional teams and the operations team that is responsible for coordinating and administering operations. Each team is headed by a member of the Audit Leadership team. All Vodafone establishments have their own local audit committee. The local audit committee in the Netherlands is responsible for overview of activities in the market. The regional governance teams monitor local audit committees. The local audit manager is required before each meeting of the Audit Committee to prepare a written report on the status of activities in the annual audit plan, identification and tracking of issues, material fraud incidents and disruptions in business operations. The auditors in the teams are required to keep their technical skills current through continuous professional development. Their training is tracked in detail in individual training reports.

Audit responsibility
The scope of the Internal Audit department is not constrained by management. The department is authorised by the Board and maintains its independence by reporting to the Chairman of the Group Audit and Risk Committee. The department also reports to the Chief Financial Officer of the Vodafone Group. The Audit and Risk Committee is a committee of the board with a formally approved constitution. The Board bears overall responsibility for the internal control system and receives an evaluation report.

External Audit
The Internal Audit department also maintains close contact with the external auditor. The main purpose of the external auditor is to give an independent opinion to stakeholders on the financial situation of the company. Internal audit provides all internal audit reports and any other documents required to the external auditor in support of the external auditor.

Risk management

Risks can occur in various forms, including strategic, operational, financial, reputation and compliance risks. Enterprise Risk Management (ERM) helps us to identify and quantify the largest and most prominent risks in our business operations Depending on our risk appetite, we determine whether we need to do more or less to manage and reduce these risks.

Risk appetite is clearly and widely communicated within Vodafone and differs by area and type of risk:

  • Health, Safety & Compliance: as an important part of the Code of Conduct we continuously point out safe participation in the work environment and society in general to our employees. We maintain a zero tolerance stance regarding non-compliance with our Code of Conduct.
  • Financial: We prepare our annual financial objectives annually and we strive to attain that. We expect all employees to contribute to this. We also motivate them to do their part and to reduce risks with a financial impact as much as possible.
  • Operations & Reputation: we do everything possible to prevent or reduce risks with an operational impact. This is the only way in which we can offer our customers the quality we stand for and to protect our reputation.

ERM-framework
ERM also helps management to achieve performance and profit targets and prevent loss of resources and assets. It also provides effective reporting and compliance with laws and regulations and prevents damage to our reputation. We have implemented an internal ERM framework with the relevant criteria as set by the Committee of Sponsoring Organisations of the Treadway Commission (COSO). The framework allows for internal control and a robust and extensive focus on the broader ERM topic.

Responsibility for Risk Management
The Business Continuity & Risk Manager is responsible for the entire process and must ensure that the local ERM framework is implemented in all of our business units. ‘Risk Champions’ are present in various departments within Vodafone Netherlands who assist the risk manager to identify risks. The Risk Steering Committee and Risk Management & Compliance Board manage the ERM process at a strategic level and they align the process to operating risks

The Risk Management & Compliance Board discusses the most relevant risks and explain the main risks to the Risk Management four times a year. The Financial Director chairs the Risk Management board. The Risk Management board explains the main risks twice a year to the Board of Directors, including the CEO, and annually to the Vodafone Group. The internal control system and Enterprise Risk Management are discussed by the Audit Committee and the Supervisory Board. The Internal Audit department provides independent assurance on the internal monitoring environment. In this manner we are assured that risks are properly managed.

Below is a list of the 5 most significant operational risks. For a more comprehensive overview of the operational and strategic risks, see ‘the world around us’.

TABEL_23_Governance_UK

Compliance

Code of Conduct
We have core values ​​and guidelines that go beyond legal requirements. We strive for an integrated, responsible and ethical way of working, which we expressed in our Code of Conduct. When new and/or modified laws or regulations come into force we update our Code of Conduct and our underlying compliance policies.

Not all compliance matters are included in our Code of Conduct or our compliance policies, however. Vodafone is for example subject to Sarbanes-Oxley legislation, which guarantees the reliability and quality of financial information. We described the risks and control mechanisms for relevant processes accordingly, including processes for preparing invoices for customers. If new laws or regulations in force we use the COSO framework to establish additional measures.

Responsibility for compliance
The CEO of Vodafone Netherlands holds ultimate responsibility for compliance with laws and regulations. This responsibility has been delegated to the different divisions of our organisation, e.g. Compliance Office and Corporate Affairs & Strategy. All business units are represented in the Risk Management & Compliance Board, which convenes three times a year and is led by the Financial Director.

Supply chain management

We closely work with suppliers to help them comply with our ethical, health and safety, and social and environmental requirements. We also help improve their performance through monitoring, assessments and by suggesting improvement activities.

Management
Our central purchasing organisation in Luxembourg is responsible for the vast majority of our procurement, but a small part of our procurement goes through our Dutch purchasing department. All of the employees involved with procurement have been trained, they know the Code of Conduct  and they bring it to the attention of our suppliers. They attend annual refresher courses on the ethical procurement code, anti-corruption and competition law. We train supplier performance managers to identify non-compliances during site visits, including an unsafe workplace. All employees at Vodafone Netherlands are obliged to follow the ‘Doing what’s right’ training course. The way in which Vodafone deals with suppliers forms a part of this.

Dutch suppliers
Vodafone Netherlands has about 575 suppliers, 495 of which are Dutch suppliers and 80 non-Dutch suppliers. As Vodafone Netherlands we spend approximately € 420 million on procurement (excl. mobile phones, which goes through our central purchasing organisation). Procurement of network and IT equipment and services to operate our network and marketing communication services. We subdivided our suppliers into categories:

TABEL_24_Governance_UK

What our suppliers must comply with
The Code of Ethical Purchasing  applies for all suppliers throughout the world. This code contains requirements related to social, environmental, safety and ethical issues and it is based on international standards and our own Code of Conduct. The Code of Ethical Purchasing now forms a part of the purchase contract. and it states that we expect our suppliers and their subcontractors to comply with the code.

Qualification process
All potential suppliers go through a qualification process, which starts by completing a self-assessment on topics such as their financial situation, ethics, sustainability, diversity and inclusion, quality management, environmental management, product safety, health, business continuity and information security. We then determine whether the supplier meets our requirements and categorise them by risk profile. The results of these analysis determine whether we can collaborate with a supplier.

The policy documents describe the minimum standard that we expect from our suppliers: Business Principles, Privacy promises, Anti-corruption policy, Code of Ethical Purchasing, Health and Safety, Supplier Expenses, Supplier Assistance with Law Enforcement, Business Continuity, Information Security, Quality Assurance, PCI Compliance, Sanctions and Export Control.

Monitoring
We evaluate existing suppliers annually on their performance through the supplier performance management system. They must complete a scorecard for this purpose. Sustainability issues make up 10% of the questionnaire. This involves questions about public reporting on labour conditions, the environment, health and safety, SA8000 certification of the labour management system or a similar standard, OHSAS 18001 certification for health and safety management systems and ISO14001 or EMAS certification for the environmental management system. Supporting evidence of how the supplier manages the risks and opportunities related to climate change, the prevention of corruption and bribery and how industry initiatives are adopted also form a part of this.

Performance evaluation is done through independent, external sustainability assessment platform of Ecovadis. We conduct regular assessments to ensure compliance. This is done by our own independent auditors or audit firms.

Improvement
Recommendations for improvements are made based on the results of the sustainability assessment and we work with suppliers to help improve their sustainability performance. We focus primarily on high-risk and strategically important suppliers. We conduct follow-up assessments or on-site audits to check whether improvements have been made. See the Vodafone Group Sustainability Report  for information on recommendations for improvements in 2014-2015.

To achieve even further improvements in the supply chain we require our suppliers to set similar standards to their suppliers. We check this through audits and the supplier performance management process. We also organise workshops on specific subjects for high-risk suppliers. We organised an event in 2014-2015 for instance for 20 Dutch suppliers, including Tier 2 suppliers, on health and safety. During this event we explained the Vodafone policy on health and safety. We also discussed real cases where our policy was violated.

Suppliers who perform well are rewarded with our Responsible Supplier of the Year Award. We grant this award based on the score in the Supplier Performance Management programme.

Non-compliance
If suppliers do not meet our requirements we investigate this further and help them to meet requirements. When they fail to meet our requirements several times we do not continue collaboration with them. In some cases we even claim damages for breach of the Code of Conduct, e.g. when violating customer privacy. Read more here about the consequences policy for non-compliance with our Code of Conduct.

Payment term for suppliers
Our general payment term for suppliers is a maximum of 60 days. This term may be too long for small suppliers such as self-employed persons. We will investigate whether we can shorten the payment term for certain suppliers.

Conflict minerals
The Vodafone Conflict Minerals Report for 2014  describes how we determine the origin of conflict minerals in our products and how we try to reduce risks.

A consistent industry approach
We participate in industry initiatives such as the Global e-Sustainability Initiative (GeSI) in order to raise standards in the industry. By using the same tools, e.g. Ecovadis, we reduce the reporting burden on suppliers and we provide the industry with consistent independent assessments. In order to improve the social and environmental performance of these same suppliers we also work with other providers via the Joint Audit Cooperation (JAC) initiative.

Ethics, conflicts of interest, anti-corruption, competition and fines

Ethics & integrity
We publish our Code of Conduct  on our website. Line managers are responsible for ensuring that employees are aware of and comply with this code of conduct. Upon appointment employees are provided with this information in the form of a CD-ROM that contains employment conditions. We also pay attention to this aspect during the introduction programme. Additional information is available via the intranet and staff are required to follow e-learning courses on the subject. In e-learning employees are introduced to the Code of Conduct and the regulations resulting from that in an interactive manner. In the e-learning programme employees must also sign to confirm that they have actually read the Code of Conduct. We monitor whether employees meet this obligation.

In 2014-2015 we paid additional attention to the Code of Conduct and the various topics covered therein on various occasions, e.g. via posters and additional information on the intranet. We held a line managers briefing session (‘Doing What’s Right’) for new managers where we made presentations on the various elements of the Code of Conduct. New managers were required to attend this meeting. With effect from 2014-2015 this briefing session forms a standard part of the induction programme for new managers.

We have a whistle-blower programme (‘Speak Up Policy’) in place for employees who suspect that a person may not adhere to the Code of Conduct. Employees can also submit an anonymous report. The Code of Conduct explains the processes on asking for advice about compliance, ethics and organisational integrity and how to submit a report (page 5, 8 and 9 of the Code of Conduct).

Conflict of interest rules
The rules of conflict of interest apply to the Executive Board of Vodafone Netherlands as stated in the law and the articles of articles of association. The Articles of Association, Code of Conduct (including anti-corruption and anti-bribery rules), Sarbanes Oxley, Group Internal Audit performing audits and Delegation of Authorities must avoid conflicts of interest. The Delegation of Authorities suggests clear guidelines for each division of the company when approval is needed or when specific persons must be consulted. Certain activities are also restricted to certain positions or groups of people. Only people who belong to these groups are authorised to perform these activities in accordance with the applicable policy. The Vodafone Group sends out a questionnaire each year concerning conflicting interests to each member of the Executive Board.

There is also a policy in place for external employment through which we request all employees to report external employment to their managers and the HR department. If there is a potential conflict of interest, the employee must register this in the Conflict of Interest Register. After registration a report is sent from the register owner (Group) to the manager and HR. Follow up steps are implemented where appropriate. If a conflict of interest should arise, we only communicate on this issue internally. If deemed necessary we report it to external stakeholders as appropriate. No conflicts of interest emerged in 2014-2015.

Anti-bribery & corruption
We have a zero tolerance policy towards bribery in our Code of Conduct. This also applies to our suppliers, which we establish through contracts. Rules apply to providing and receiving corporate gifts, other gifts and invitations to events (Gift & Hospitality). This applies to all employees. As in 2013, also in 2014 we informed all new line managers about anti-bribery policies and the like and we issued company-wide communiques on anti-bribery policies. In February 2015 we rolled out several e-learning modules (under the banner of ‘Doing What’s Right’), including an anti-corruption module. These modules apply to all employees, except for the shop staff and call centre agents, who are to receive concise modules from May/June 2015.

We also paid close attention to the Gift & Hospitality Register and we monitored reports in this register. We informed specific (higher risk) teams and staff personally about the risks and anti-bribery policies that apply to their specific positions.

In 2014-2015 we conducted another risk assessment on the risks of bribery and corruption. We then incorporated the results of the risk analysis into the anti-bribery and corruption annual plan. In the 2014-2015 financial year no instances of corruption were reported.

Competition
Compliance with the competition law is an important part of the line manager trainings (‘Doing What’s Right’). In this context we bring the Code of Conduct and the Competition Law Compliance policy to the attention of all managers and line managers. We also organise periodic training that is specifically related to competition law. These training courses are presented both online and offline and are for all employees. Vodafone requires all members of the Executive Board and all employees who report directly to the Executive Board to submit quarterly written declarations that they and their teams act in accordance with the competition law.

The ACM observed that public statements (at conferences, in trade publications, etc.) of mobile providers on future market behaviour may pose competition risks, e.g. planned price increases or a deterioration of commercial conditions for consumers, without being based on a final decision. Vodafone, KPN and T-Mobile have therefore undertaken to ACM to refrain from making such statements in order to avoid any risk of price coordination in future, which is not permitted. The ACM took a commitment decision on 7 January 2014 whereby the ACM accepted the commitments of Vodafone and the investigation was thereby concluded.

We have adapted our existing compliance programme and now provide additional annual training related to price signalling to the members of the Executive Board and the commercial management team. We also inform anyone who is about to speak at a public event on what can and cannot be said.

Fines
The ACM [Netherlands Authority for Consumers and Markets] imposed a fine of € 200,000 in December 2014 against Vodafone for violating the rules on net neutrality. In September and November 2013 Vodafone offered subscriptions for customers to watch the pay channel HBO through an app without being charged for the data used. The ACM stated that this is not allowed because it is an easy manner to introduce steered Internet behaviour among Vodafone customers. Vodafone has objected to the decision of the ACM .

Complaints with regard to marketing communication
In the 2014-2015 financial year we received 10 complaints through the Reclame Code Commissie [Advertising Code Committee]. One of these complaints was dismissed on appeal. We have dealt with all of the complaints, bar one. Three complaints were concerned 4G statements, of which one was upheld. This considered the claim ‘4G for everybody and now also for prepaid’. However, at that moment this was not applicable for older price plans. The RCC upheld the complaint as this reservation was missing.

Endorsement of initiatives

We endorse the following externally developed economic, environmental and social charters, principles, or other initiatives:

  • Multi-year agreements on energy efficiency (MJA3), agreements between the government and companies, institutions and municipalities on the effective and efficient use of energy.
  • CIO Covenant – Energy Efficiency (CIO Platform NL).
  • ‘Talent to the Top’ charter, through which we committed ourselves since May 2011 to the objective that the number of women in top management positions in our company (GMT/SMT) should increase by 50% over five years.
  • SMS Code of Conduct and Code of Conduct for paid Mobile Internet Services of the SMS Code of Conduct Foundation, which is a joint initiative of all parties involved in the provision of SMS services and mobile services in the Netherlands.
  • Dutch Advertising Code of the Advertising Code Committee, which lays down the rules that advertising must comply with. These rules were drawn up in consultation with the parties that together form the advertising industry (advertisers, advertising agencies and media).
  • Covenant of the Customer Service Federation (CSF). Signatories are obliged to communicate the most important quality parameters of customer service in a transparent manner.
  • Code of Conduct for Transparent Mobile Data Costs, prepared jointly by the mobile operators to avoid nasty surprises on invoices.
  • Code of Conduct for Transparent Internet Speeds, prepared by the fixed and mobile Internet service providers combined.
  • Covenant with the Ministry of Infrastructure and the Environment and Ziggo, T-Mobile and KPN (through Netherlands ICT) about ‘attention on the road’. Joint initiative for promoting responsible use of social media in traffic from 2014 to 2016.
  • Regioconvenant Maastricht Bereikbaar [Accessible Maastricht Regional Covenant] between the Ministry of Infrastructure and the Environment, the Province, the Municipality and the private sector to seek lasting good accessibility and liveability in the city and the region of Maastricht, in combination with an economically sustainable development.
  • Working agreements between mobile operators, ProRail and Agentschap Telecom [Radiocommunications Agency] on the prevention and resolution of interference from mobile networks and GSM-R train radios.
  • Covenant between cable providers and mobile operators on preventing and resolving interference between cable and mobile networks and phones.
  • Antenna covenant: an agreement between mobile operators, the Vereniging van Nederlandse Gemeenten [Association of Dutch Municipalities] (VNG) and the Ministries of Economic Affairs (EA) and Infrastructure & Environment (I&E), which sets conditions for the installation antenna installations of up to 5 metres designed for mobile communication that do not require a permit.
  • Regional Roaming. Agreements between mobile operators with regard to taking over traffic in the event of major malfunctions

We respect and comply with all laws and human rights standards in the countries where we operate; see the Code of Conduct.

In our Code of Ethical Purchasing we refer to internationally recognised social standards of the ILO (International Labour Organisation), the United Nations Universal Declaration of Human Rights and the United Nations Convention on the Rights of the Child.

Association membership
We are a member of the following associations, foundations and collaborations:

  • Platform for Internet Security and Digibewust from ECP-EPN
  • VNO-NCW
  • Netherlands ICT
  • Monet
  • Preventel
  • Maastricht Bereikbaar [Accessible Maastricht] (steering committee member)
  • Electromagnetic Fields Knowledge Platform (financial support)
This article is composed by Marlies Blokland, Melany Lottering and Jolanda Schoenmaker
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