For us, integrity means honesty and acting in accordance with non-negotiable ethical standards. It is at the core of our Responsible Business Principles and is part of the company’s culture.
The Compliance area, which reports to the Board of Directors through the Audit and Control Committee, focuses most of its policies, procedures and controls to ensure our integrity, addressing, among others, issues related to corruption and bribery.
Telefónica's commitment to our stakeholders is zero tolerance for fraud and corruption as we understand that they have a negative impact on business and society.
Adherence to our Business Principles
The Compliance unit with Telefónica Group has both preventive and reactive functions. As part of the prevention function, the Compliance Program includes, amongst others controls, risk assessments procedures, anticorruption internal policies, compliance third party due diligence processes and awareness and training initiatives. Finally, in respect of the reactive function, Telefonica has a whistler-blower channel and a discipline program, among others.
The Whistleblower Channel is specific for reporting any alleged irregularity or act contrary to the law or internal regulations of which it becomes aware, and a Responsible Business Channel. In both cases, the company will diligently and respectfully follow up with any received communication, and is committed to responding and acting, when necessary, within a reasonable period of time.
In cases in which the company confirms that an employee has consciously violated any of these Principles or any internal policy, the company reserves the right to act, either imposing the corresponding penalty or taking the allowed legal action according to the applicable penal and/or employment arrangements in each case and if necessary, imposing the pertinent sanction and/or taking the legal actions permitted in accordance with the labour and/or criminal regime applicable in each case..This is estipulated on our "Corporate Policy on the Comprehensive Disciplinary Program of the Telefónica Group.
For us integrity means honesty and acting in accordance with non-negotiable ethical standards
Thus, our Anticorruption Policy prohibits any type of bribery and regulates the acceptance and offering of gifts and invitations. To strengthen and expand it, we have the Rule on the Relationships with Public Entities, related to how the relationships of Telefónica Group with public entities and officials/employees should be managed from the diverse perspectives, and in particular, related to the internal rules to be complied with in connection to hospitality events with public officials.
In the same way, we have a conflict of interest rule and reporting channel to help our employees when faced with an ethical dilemma.
- We prohibit all kinds of bribery.
- It is not allowed to promise, offer or give any benefit or advantage to anyone, in order to influence decisions of any kind (including governmental, administrative or judicial) or obtain an improper advantage for the Company. We also prohibit any sort of benefit or advantage that may result in a breach of the obligations and duties of our employees.
- We do not offer or accept gifts, invitations or any other inducements that may reward or influence a business decision.
- We avoid or declare conflicts of interest that may precede personal priorities to collective ones.
- We behave with righteousness without looking in any case for any benefit for ourselves or third parties, by misusing our position or our contacts within Telefónica.
In addition, we promote and encourage these behaviour patterns among our partners and suppliers, through our Policy on Responsibility in the Supply Chain.
At Telefónica we train, both in on-site and online mode, our employees regarding anti-corruption, addressing, for example, the risks of international public corruption (Foreign Corrupt Practices Act). We also have training on criminal liability.
In parallel, we are reinforcing our internal regulatory framework with new policies and regulations, as well as our third party assessment protocols.
Third Party Due Diligence
In that sense, Telefónica Group has defined a third party due diligence model from a Compliance point of view; such control is on a continuous improvement and implementation process. As part of such model, certain transactions (among others, M&A and joint venture transactions, donations, agency agreements, etc.) require individualized assessments
Internal Control of Internal Policies and Regulations
In Telefónica, the party responsible for the Internal Regulation is the individual or individuals who lead the proposal, creation, communication, and implementation of the Internal Regulation, and monitor, evaluate, and update them.
The internal control of the Company is configured as a process integrated in the daily activity. All areas, as managers and within their scope of action, are responsible for internal control and must consider it among their tasks:
- Effectiveness: to ensure the achievement of operational objectives
- Efficiency: using as few resources as possible
- The veracity of information: the availability of adequate information for decision making and external reporting
- Compliance with laws and regulations
On all these tasks the areas must be defined:
- Assess the risks: consider the possible contingencies that may arise.
- Define internal control structures: incorporating elements of assurance against possible contingencies
- Supervise: incorporate the monitoring of activities and their own internal control structures within their scope of responsibility.
In line with the provisions of the National Securities Market Commission (CNMV) and the provisions of Article 22 of the Regulations of the Board of Directors of Telefónica, S.A., one of the powers of the Audit and Control Committee of the Board is to "supervise the effectiveness of the Company's internal control, internal audit and risk management systems".
In this sense, and in accordance with the provisions of the Statute of the Internal Audit Function of the Telefónica Group, Internal Audit is the area in Telefónica in charge of confirming, through appropriate evidence, the adequate functioning of the internal control and risk management structures and, if applicable, detecting possible inefficiencies or breaches of the control system that the Group establishes through its processes.
One of the main lines of action developed by the Internal Audit Unit is the coordinate on of the Telefónica Group's Regulatory Framework, through the supervision of the process of defining internal standards; promoting, in turn, actions that favour the updating and communication of these standards. In addition, Internal Audit Unit runs privacy auditing activities by they own, supported by external audit firms, as appropriate. It detects the needs and opportunities for improving, modifying or updating existing internal regulations, proposing lines of action to those responsible parties for the internal regulations. And provide support and advice, through design audits, to the internal regulations in relation to development and implementation of internal regulations.
Communications and queries
Last year we received 882 complaints through the Complaints Channel available to employees, 385 of which were founded.
A total of 229 complaints, arrived through our Responsible Business Channel, available to all our stakeholders, 217 of them have been resolved and closed.
Telefónica has a criminal compliance management system in Spain, in accordance with Standard UNE-19601, certified by AENOR
We have specific commissions and units to ensure that our commitment to control and transparency is met.
Committees dependent on the Board of Directors:
- Audit and Control Committee.
- Regulation and Institutional Affairs Committee.
- Global Chief Compliance Officer and Compliance Officer in all countries in which the Group has significant interests.
- Internal auditing in all countries in which the Group has significant interests.
- Centralised Inspection Unit specialising in fraud prevention assignments and investigation of complaints and other allegations.
- Payment Intervention Unit at major companies.
- Global management and local sustainability units.
- Corporate Risk Management Unit in charge of centralising and reporting risk information received from the local areas of risk management, implemented in the Group’s major operators.
Telefónica remains neutral at the political level. At no time we do take a position, directly or indirectly, for or against, of any political party and therefore we do not make donations to them.
Our expenditure on contributions to sectoral entities and trading organizations, that carry out different sectorial activities which affect Telefónica business, is around 4 million euros every year. We are registered in the voluntary transparency register of the European Union and in the register interest groups of the CNMC (Spanish Commission of Markets and Competition).