Professional Excellence

The contribution we make to sustainability
SGS provides a wide array of services that contribute to sustainability. Our service offers contribute to environmental management, ensure the safety of consumer products, help government departments to combat corruption, monitor working conditions in factories and certify the safety management systems that protect workers from injury. Many areas of sustainability are now included in national and international standards.The following table illustrates how SGS’ professional services can not only help our customers express their own corporate values across the sustainability spectrum, but also embed them into their products and services.

Service delivery and improvement
‘Lean’ is a programme to continuously improve the efficiency of SGS’ service delivery and optimise our interface with customers. It consists of four strategic programmes: laboratory excellence, back office operations, sales relationships and laboratory information management.Following successful trials in Asia, our Operations Council decided to roll out Lean across theCompany. The programme is currently being implemented across our laboratories and offices with over 100 live projects. Efficiency improvements continue to be achieved through small teams who design and implement solutions to improve the way we work. This year we expanded our Lean Leader Training and introduced a Lean qualification which 40 SGS employees have now attained. This has built a solid platform for accelerating the programme and ensuring it becomes an integral part of our management approach.Lean helps SGS’ operational efficiency by reducing or eliminating activities that do not add value, and improving those that do. This coordinated, strategic approach has led to improvements in our response time, reductions in customer complaints and improvements in turn-around time and on-time delivery. By processing more samples through the same laboratories with reduced energy, resources, equipment, consumables and water, SGS is able to expand its business whilst reducing the environmental impact per sample.The environmental benefits of the Lean programme are tracked using our sustainability data management system. The positive attitude of employees actively seeking new and better ways of working through Lean is leading to tangible environmental savings. For example, in our Hong Kong and Shenzhen laboratories, more efficient sample processing saved 1 880 000 sheets of paper in a year.Our customer opinion survey, ‘Voice of the Customer’ helps SGS to understand and respond to customer interests, suggestions and expectations. The survey will typically cover quality of service, technical capabilities, turnaround time, administration team, reporting format, satisfaction in queries being dealt with, courtesy and value for money. Since 2008, SGS has conducted a total of 247 Voice of the Customer surveys in 23 countries and has obtained responses from 4 793 customers.

Professional integrity
Everyone who relies on SGS’ services must have total confidence that they will be delivered reliably and professionally. Some of the ways in which we meet our responsibilities include:

Technical compliance
SGS businesses have specialized technical governance units which ensure compliance with internally-set quality standards and industry best practices. Each develops its own set of specific rules and frameworks for technical governance, determined by relevant legislation, regulation and best practice. The adequacy of such programmes and corresponding controls falls within the scope of Internal Audit.

Our Code of Integrity and Professional Conduct
SGS’ standards of business conduct are set out in our Code of Integrity and Professional Conduct (the Code) which is available in 29 languages. The goal is to ensure that the highest standards of integrity are applied to all Group activities worldwide in accordance with international best practices. It sets out the universal behaviours expected of all employees and people working on behalf of SGS under the following headings:

• Integrity of services
• Employee relations
• Integrity of financial and company records
• Fair competition
• Conflicts of interest
• Compliance with laws
• Procurement
• Insider trading
• Improper advantages
• Confidentiality.

Integrity training
We ensure that the highest standards of integrity are applied by providing a Group-wide integrity and professional conduct training programme for all employees. Training raises awareness of the Code and incorporates business specific case studies which are refreshed annually. Fraud awareness forms a part of our integrity training. The programme is supported by five e-learning modules which are provided for all employees joining SGS including employees from newly acquired companies.

Compliance monitoring and assurance
We monitor and assess compliance with the Code in a number of ways:

• All employees and people working on behalf of SGS are required to sign the Code upon joining SGS to indicate that they understand it and will comply with it.
• Operational management are required to explain and action any non-compliances and sign a compliance management declaration every year.
• All operations are audited for compliance with the Code at least once every three years by our Internal Audit team.
• SGS has an Integrity Helpline available to both employees and business partners to ask questions or raise concerns about professional conduct.
• The Chief Compliance Officer assesses, reports and makes recommendations on any significant non-compliances.
• Serious incidents are reported to the appropriate member of the Operations Council and there is a regular halfyearly report of non-compliances to the Board of Directors.

We are aware that certain environments where SGS carries out direct inspections on clients’ premises are potentially more vulnerable than others to offers of incentives. This risk is mitigated by conducting ‘mystery audits’ whereby a second audit is used to calibrate the initial audit’s findings and by participating in cross industry initiatives to develop and share best practices between inspection companies and with clients.

Key performance indicators

OUR PERFORMANCE AGAINST OUR CODE OF INTEGRITY AND PROFESSIONAL CONDUCT (CIPC)

*2009 Figure restated to align with definition
During 2010, 150 concerns were reported via our Integrity Helpline, of which 53 were investigated and 29 confirmed breaches of the Code idendified. As a result of these investigations, 26 employees were dismissed during 2010. Investigations included two cases of fraud and , in response, We introduced fraud awareness as part of the integrity training.

Looking ahead
During 2011 we will:

• Continue to expand the Lean continuous improvement programme.
• Integrate sustainability e-learning into global HR development programmes.