SustainabilityBusiness ethics & integrity The Organisational, Management and Control Model

The main sustainability topics are regulated within the Organisational, Management and Control Models pursuant to Italian Legislative Decree no. 231/2001 (the “Models”), adopted by all the Italian companies of the Recordati group and in similar Models or sets of procedures adopted by the other subsidiaries of the Recordati group.

During 2020, the parent company Recordati S.p.A. updated its Organisational, Management and Control Model pursuant to Italian Legislative Decree 231/2001, including recent legislative developments regarding racism and xenophobia, incitement to corruption between private individuals, employment of illegally resident third-country nationals, market abuse, trafficking in illicit influences and tax offences. 

Regarding the foreign companies of the Group, the Spanish subsidiary Casen Recordati S.L., following the adoption on 14 March 2018 of its own Organisational, Management and Control Model in compliance with Ley Orgánica 2015/1 of 30 March 2015, is continuing the activities provided for in the Model through the action of its Supervisory Body.

The organisational models adopted by the Group companies are dynamic and effective tools thanks to the constant control and updating activities in part promoted by the Supervisory Bodies. All of the Organizational Models (Italian and foreign) provide for dedicated channels for reporting irregularities or breaches by employees and regular personnel training on the contents of the Models and reference standards. 

The Supervisory Bodies appointed within the Group Companies are collegial and are composed of an internal member (the Director of Audit & Compliance or the Compliance Officer) and external professionals (criminal lawyers or university professors in business administration). Each Supervisory Body is internally regulated and operates according to a specific action plan. The Supervisory Bodies have their own spending budget and periodically report to the Board of Directors and the Board of Statutory Auditors (where present). These Models are constantly monitored and updated, with particular attention to crime prevention and risk assessment following the introduction of new legislation. 

The Group's Italian companies, Recordati S.p.A., Innova Pharma S.p.A., Italchimici S.p.A. and Recordati Rare Diseases Italy S.r.l. annually submit their protocols for medical and scientific information and management of relationships with the medical community, which are part of their respective models pursuant to Italian Legislative Decree 231/2001, to certification by Farmindustria, through an independent inspection body (Certiquality). In 2020, the aforementioned Companies were audited by Certiquality, which renewed and confirmed the Farmindustria Certification attesting compliance of the activities related to medical-scientific information with the association’s code of ethics.

Similarly, where required by law, the subsidiaries of the Recordati group also submit their medical and scientific information procedures for independent review by the associations of national pharmaceutical companies.

The systematic approach of the Organisational, Management and Control Models pursuant to Italian Legislative Decree no. 231/2001 is reinforced though additional models dedicated to specific company departments, such as in the context of health and safety in the workplace, environmental management and privacy. 

In terms of personal data management, the Recordati group has adopted the General Data Protection Regulation (GDPR no. 2016/679). The Personal Data Management Model (the “Privacy Model”) includes the measures and requirements provided for by European regulations, both at Group and local level, in Recordati's European subsidiaries. The Recordati group has a Group Data Protection Officer (DPO) and has appointed a Key Privacy Person in each European subsidiary to assist the DPO at a local level. In terms of processes and operating rules, a set of Group policies has been adopted upon which the local procedures adopted by the Group's European subsidiaries are based. The Recordati group has also equipped itself with IT applications to optimise personal data management and ensure GDPR compliance.  During 2020, training sessions were held for the Key Privacy Persons in all European branches of the Group and, during 2021, there are plans to extend training in this context to around 1,200 employees of foreign branches. 
Code of Ethics

During 2020, the Group approved a new version of its Code of Ethics. This update was motivated by the Recordati group's wish to further increase the accessibility and usability of this document, and was achieved through careful critical rewording and review by an inter-departmental internal team supported by external specialists and by the Recordati S.p.A. Supervisory Body. This inter-departmental method allowed the creation of a broad-reaching, shared document, capable of further strengthening guidance on ethics and compliance within the Recordati group.

As previously stated, the Code of Ethics, in its new version approved in July 2020 by the Recordati S.p.A. BoD, defines Recordati's fundamental values, which guide and support the Group in its day-to-day operations and in relations with both internal and external stakeholders.

Furthermore, the Code of Ethics sets out the responsibilities of all recipients, both internal and external, and defines “shared commitments”, i.e. conduct through which Recordati’s values find concrete, practical application.

This Code has been inspired by the main standards and guidelines for corporate governance, human rights and the environment, such as the United Nations’ Universal Declaration of Human Rights, the Charter of Fundamental Rights of the European Union, the decent work standards set out in ILO (International Labour Organization) conventions, the OECD (Organisation for Economic Cooperation and Development) Guidelines for multinational enterprises, and national and supra-national Anti-Bribery legislation (e.g.: the OECD Anti-Bribery Convention, Italian Legislative Decree 231/2001, the Foreign Corrupt Practices Act, the Bribery Act, Loi Sapin 2, Ley Orgánica, etc.), as well as ISO 14001 standards on the environment.

Additionally, the principles and guidelines contained in the Code are further detailed in numerous other company documents. These documents help all recipients of the Code to put its principles into practice in their daily work. These additional documents include, for example, the Group’s Anti-Corruption Manual; national organisational, management and control models and local compliance procedures; privacy management models; the product quality and clinical research management system; the Group’s policies on the main corporate processes and its policies on the environment and safety in the workplace, as well as the relevant local procedures; local and Group accounting manuals; and the administrative and technical procedures which govern Company activities in detail.

The new version of the Code of Ethics defines the methods for reporting breaches (whistleblowing) and provides information on management of such reports. Recordati is committed to taking responsibility for all the reports it receives and to respond to them, guaranteeing maximum confidentiality in their management and the anonymity of the whistleblower, without prejudice to legal obligations and protection of the rights of persons accused maliciously or in bad faith. Additionally, Recordati expressly prohibits any type of retaliation against anyone lodging a report in good faith. Recordati is committed to creating a collaborative work environment, where the dignity of every person is respected and everyone can feel at ease in reporting any violations of the law, the Code or Company policies.

Following approval of the Code of Ethics, the process for its translation and distribution has been launched. The Code of Ethics is currently available in Italian, English, French, Turkish, Russian, Spanish, Portuguese, Polish, Czech and further translations will follow in 2021. The Code of Ethics is published on the Recordati group website in order to guarantee widespread availability and access, and its distribution within the Group has been carried out with involvement of the General Managers of all Group Companies.

To facilitate dissemination and comprehension of the principles contained in the Code of Ethics, a training programme has also been launched targeting all Group employees. This programme has a two-year duration, 2020–2021 and involves provision of an online training course for all Group employees with access to digital devices and distribution in hard-copy format for employees without access to such devices.

Finally, participation in this course is also required for external parties who, although not employed directly by the Recordati group, perform activities in the name of and on behalf of the Recordati group on an ongoing basis.

The Recordati group's focus on human rights throughout the value chain

As described in the Code of Ethics, with regard to human rights the Group adheres to the highest international standards, such as the UN Universal Declaration of Human Rights, the EU Charter of Fundamental Rights, and the decent work standards set out in ILO (International Labour Organization) conventions.

Recordati acts to guarantee respect of all human rights for all employees and recognises the importance of safeguarding and promoting them throughout the value chain, taking actions to ensure that their suppliers also do so. 

As a pharmaceutical company, it also prioritises the need to guarantee the human rights of all subjects involved in clinical and post-marketing studies, as well as their health and safety, rights to dignity, self-determination, privacy and the confidentiality of personal data.  It also recognises health and access to care as another fundamental aspect of human rights: in this context, on the basis that every patient should have access to the best possible treatment, the Group operates in the area of rare diseases around the world and is committed to improving diagnosis and management of such diseases.

The Anti-Bribery Model​

The Recordati group is deeply committed to conducting its business in line with the principles of transparency, honesty and ethics in all of the countries in which it operates, and to refusing all forms of corruption. To this end, since 2009 the Group has conducted an assessment of its internal control in line with international and supra-national Anti-Bribery legislation in the countries where the Group has branches and has developed a Group Anti-Bribery programme and Manual that involves both the personnel of the Parent Company and branch personnel.

The Anti-Bribery programme, contained in the respective Group Anti-Bribery Manual, consists of four main phases:
    1. assessment of local and national legislation;
    2. assessment of local systems, procedures and models to safeguard against corruption phenomena;
    3. analysis of existing risks and controls to identify any residual risks;
    4. updating of the Group's Anti-Bribery Manual. 

The Group Anti-Bribery Manual is subject to periodic review. The most recent review, which involved significant additions and improvements to the contents and areas covered, with new examples of potential corruption risks and related guidelines for conduct, was performed at the end of 2019. In the context of this review, the structure of the Group Anti-Bribery Manual has also been revised for easier usage and comprehension. Currently, the new Group Anti-Bribery Manual contains 16 business areas potentially exposed to the risk of corruption, for which specific principles of conduct have been formulated to avoid corruptive phenomena*. 
The 16 areas potentially exposed to corruption risk are: Research and Development, Production, Relations with the medical community and healthcare facilities, regulatory activities, transactions with public authorities, consultancy, medical samples, courses and conferences, promotional material, contributions and donations, financial transactions, human resources and relations with politicians or political parties and procurement management, interaction with the public administration and management of entertainment expenses.
To facilitate dissemination and comprehension of the principles contained in the Group Anti-Bribery Manual, a training programme has also been launched targeting all Group employees. This programme has a two-year duration, 2020–2021 and involves provision of an online training course for all Group employees with access to digital devices and distribution in hard-copy format for employees without access to such devices. This training has already involved third parties who, whilst not employed directly by the Recordati group, perform activities in the name of and on behalf of the Recordati group on an ongoing basis.

During 2020, there has been a consolidation and strengthening of communication, coordination and control activities between the Parent Company and the various branches, through introduction of additional information to existing information flows on anti-corruption and anti-terrorism, allowing interception and management of potential risk situations through dedicated channels.
With regard to the detection of corruptive phenomena and internal fraud, a continuous monitoring tool based on mass analysis of transactions in the company's accounting systems went live in 2020. This tool, based on business intelligence systems, will make it possible to continuously monitor anomalous accounting transactions en mass and to plan audits with greater precision and accuracy. 

The Compliance Questionnaire tool was also consolidated. This is submitted to General Managers of the Group's foreign branches and the Recordati S.p.A. Supervisory Body on a quarterly basis in order to strengthen information flows regarding ethics, compliance and the existence of potentially negative situations or events in these areas.

In terms of communication and training on anti-corruption and the contents of the Group's Anti-Bribery Manual, in 2020 all members of the Board of Directors of Recordati S.p.A. were informed of the policies and procedures adopted via periodic reporting from the Group’s Internal Audit and Compliance Director. 

As regards to the channels for reporting breaches and anomalies regarding laws and internal procedures, for some time the Company has established dedicated whistleblowing channels as part of its organisational models pursuant to Italian Legislative Decree no. 231/2001 for Italian Companies and the Group Anti-Bribery system**. 

During 2020, the existing whistleblowing channels were further reinforced. On the basis of a 2019 pilot project that saw implementation of dedicated web portals and hotlines in the Recordati Rare Diseases France branch and in the Italian Group Companies, during 2020, these whistleblowing platforms were extended to the entire Group, going live in January 2021. Whistleblowing management has been formalised by means of internal procedures that ensure the confidentiality of the whistleblower, safeguards (non-retaliation policy) and anonymity, if desired by the whistleblower in accordance with the relevant legislation.

*Updating of the new Anti-Bribery Manual and aspects regarding its implementation are based on Business Against Corruption: A Framework for Action - U.N. Global Compact, Transparency International. The Anti-Bribery Manual is available on the Corporate website in the Corporate Governance section. 
**Corporate Governance Code, comment to Article 7: “ The Committee deems that, at least for companies belonging to the FTSE MiB index, an adequate internal control and risk management system must include an internal whistleblowing system for employees to report any irregularities or breaches to applicable legislation and internal procedures (so-called whistleblowing system) in line with national and international best practices, which guarantees a specific and confidential informational channel as well as the anonymity of the whistleblower”.

Additional information can be found in the Compliance Programmes website page