At AMG, we understand the importance of maintaining proper business ethics, regulatory compliance, and risk management. The Company endorses good corporate governance, with a focus on independence, accountability, and transparency. AMG aims to be as open and transparent as possible about its structure, financial reporting, internal controls, tax reporting, and procedures. Headquartered in the Netherlands, AMG also governs in accordance with best practices outlined in the Dutch Corporate Governance Code. Our robust approach to ethics, compliance, and risk management across our various business units serves as a strong foundation for a sustainable business.
At AMG, our leaders ensure that proper business ethics permeate the Company. AMG introduced the first official company-wide Code of Business Conduct in 2009, though our Management Board had complied with their specific Code of Business Conduct since 2007 when our Company went public. Our Code of Business Conduct is one of a few policies standardized across our business units that otherwise have a significant amount of operational independence. The AMG Code of Business Conduct and the Speak Up and Reporting policy, which both reference the AMG values, are now available in 15 languages, and are prominently displayed in the local language at each facility where AMG companies carry out their operations and where staff are employed. AMG joined the Amsterdam stock exchange in 2007 and has complied with the Dutch Corporate Governance Code since its adoption on December 8, 2016. More detail on AMG’s Corporate Governance policies can be found on the Corporate Governance page of our website (www.amg-nv.com/about-amg/corporate-governance/).
AMG’s leadership provides oversight on business ethics through frequent discussions with our business units, reiterating the importance of this topic. AMG’s Internal Risk Committee develops a quarterly report to review performance against our Code of Business Conduct and employee awareness of the Code, as well as any prospective changes to present to the Supervisory Board on a regular basis.
A network of compliance officers located at all major sites oversees deployment of AMG’s ethics training programs and distribution of information concerning AMG’s Values and Code of Business Conduct and serves as a first point of contact for employees, suppliers, customers, and other third parties who wish to file a report, complaint, or have an inquiry about AMG’s business practices. In February 2022, AMG’s Chief Compliance Officer reported to the Management Board and the Supervisory Board about applicable compliance and incident trends at AMG during 2021. The number of reports received under AMG’s Speak Up and Reporting policy in 2021 was well below the available benchmark as published by NAVEX Global (2020 Ethics & Compliance Hotline & Incident Management Benchmark report). No incidents or complaints have been reported to AMG or any public authorities in 2021 to date which would implicate AMG or any of its staff in any bribery scheme involving public officials or agencies.
Employees are made aware of our business ethics expectations through various communications and annual trainings. AMG employees complete an online training focused on our Code of Business Conduct when they join and receive their own copy of this Code in an introductory meeting with Human Resources. The online training is required every 3 years as a refresher. AMG also provides on a regular basis anti-trust and anti-bribery training for staff members as appropriate. Refer to the table below, extracted from our Environment, Social, Governance, Products Dashboard.
|Anti-Corruption Training Hours||1,255||1,806|
|Human Rights Training Hours||609||936|
AMG is highly aware of and fully committed to the protection of internationally decreed human rights. We assess each AMG facility during visits by our internal auditors to identify any possibility that freedom of association or collective bargaining is at risk due to political or business factors. In 2021, no AMG sites were at risk, except for China where the formation of unions remains restricted. Similarly, the Company reviews sites to assess risk for employing child labor or exposing young workers to hazards. No sites have identified risks at this time.
AMG also aims to ensure rights are protected in our supply chain through our Supplier Conduct Charter. AMG actively mitigates supply chain risk by making ethical choices that benefit our employees and our customers, such as investing in and leveraging existing mining infrastructure to maintain our position as the largest conflict-free supplier of tantalum. Our Policy on Human Rights, the AMG Code of Business Conduct, the AMG Supplier Conduct Charter, and other AMG policies are available on the AMG website (amg-nv.com/about-amg/corporate-governance).
Maintaining an ethical supply chain is integral to AMG’s mission of growing sustainably. AMG is the world’s largest supplier of conflict-free tantalum, a metal used in various consumer electronic products. Sourcing critical materials from conflict-free suppliers is of significant importance to AMG and our clients in the electronics industry, and we proudly work with them to meet this goal.
AMG has a robust culture of compliance, mirroring AMG’s emphasis on business ethics as a way to manage and mitigate our risks and secure a sustainable future. We work systematically to build compliance processes that enable the success of our business units and reinforce the message from top leadership that adherence to ethics and compliance standards is expected. Additional details about AMG’s compliance commitments in our Code of Business Conduct and related policies can be found on the Corporate Governance page of our website (www.amg-nv.com/about-amg/corporate-governance).
As with many critical aspects of our Company, AMG’s first line of defense is our local compliance teams. Many of our facilities have existed for over a century, allowing for a robust understanding of local compliance issues. A network of compliance officers located at all of AMG’s major sites oversees compliance. In addition to managing the facilities’ legal compliance with local and federal regulations, compliance officers manage AMG’s ethics training programs and distribution of information concerning AMG’s values and Code of Business Conduct.
AMG employs a Chief Compliance Officer who works with our local compliance officers to manage their compliance needs and communicate material compliance risks to our Management Board and senior management as appropriate. AMG’s Chief Compliance Officer also looks for trends relating to incidents, new regulations, or compliance challenges to identify opportunities for improvement.
While our legal and compliance functions regularly visit our local business units to provide compliance support, AMG also relies on a network of external legal and other subject matter experts who advise us on material changes to local and global regulations. With the support of our internal and external compliance advisors, AMG engages with a number of voluntary compliance standards that align with our Company’s mission. AMG is an active participant of the United Nations Global Compact, a strategic initiative for businesses that, like AMG, are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labor, the environment, and anti-corruption.
AMG also supports the Extractive Industries Transparency Initiative (EITI), a global initiative to improve governance in resource-rich countries through the verification and full publication of Company payments and government revenues from oil, gas, and mining. AMG’s operations in Mozambique are currently the only AMG activities relevant to the EITI objectives.
We maintain compliance with international anti-corruption and anti-bribery standards, and no incidents or complaints have been reported to AMG or any public authorities to date that would implicate AMG or any of its staff in any bribery scheme involving public officials or agencies. In addition to general business conduct concerns, AMG’s Speak Up and Reporting policy ensures that our employees, customers, or other third parties can raise concerns or file reports in confidence and/or anonymously regarding compliance matters. In 2021, AMG incurred two non-material fines in Rotherham, UK and Henderson, KY related to environment and non-environmental issues, respectively.
The Company’s diverse portfolio, unique business units, and global footprint make a comprehensive and continual understanding of business risk a critical matter. Through a formal and thorough risk management program, AMG creates value for its customers and investors while maintaining safe and innovative places of work. The risk management program applies the Precautionary Principle to determine when threats of serious or irreversible damage, exist due to our current or future operations, and without delay, requires the implementation of cost-effective measures to prevent environmental degradation.
A formal Internal Risk Committee, comprising AMG’s Treasurer, Chief Financial Officer, and Vice President of Sustainability, Environment, Health, and Safety, supports our Risk Management program. The addition of AMG’s Vice President of Sustainability, Environment, Health, and Safety to the committee in 2018 broadened our risk focus to consider environmental and safety risks more fully.
Through frequent engagement with our facilities, the Internal Risk Committee produces a quarterly risk report, which is presented to AMG’s Management and Supervisory Boards to inform decision-making at the highest levels of our Company. The quarterly risk report contains information from our business units, including a summary of key risks, the associated potential monetary impacts, a projected 1-year risk outlook, probability, and prospect of mitigation. Our facilities and Internal Risk Committee consider each of these factors and assign a risk rating to each risk, which we track each quarter.
At our facilities, we rely on our business unit level management to identify and understand their unique risks and to work with AMG’s Internal Risk Committee to manage them. By embedding risk management into every level of our operations, we decrease the likelihood of unknowns. We believe that our risk management program is most successful because of our top-down and bottom-up approaches. We trust our business units to have an intimate understanding of their safety, environmental, climate, operational, and financial risks. Additionally, many of our business units have decades-long relationships with their suppliers, providing them with deep insight into supply chain risks.
To mitigate the risk of raw materials and supplies becoming difficult to source, AMG enters into longer-term contracts with its suppliers when practical and diversifies its supplier base when alternative suppliers are available. The Company also mitigates risk by monitoring supplier performance and holding our suppliers accountable to comply with AMG’s Supplier Conduct Charter. AMG engages with all new suppliers and audits our suppliers throughout our relationship to ensure compliance.
In 2021, AMG spent more than 361 hours evaluating our business risks through quarterly risk management meetings. We are confident in our risk assessment process because the risks that ultimately impact our business consistently appear in the risk report and are proactively addressed through mitigating actions. Due to COVID-19, risk assessments increased significantly in 2021. Impacts to our Company’s performance may have increased if we had not proactively identified risks during our reporting mitigation plans.
|Hours Invested in Risk Management Meetings||328||361|
Throughout the organization, AMG has implemented critical planning processes such as emergency preparedness (i.e., flood and earthquake response plans where applicable), crisis management, business continuity to help ensure resilience, and the ability to recover quickly from unexpected events. These detailed and comprehensive plans involve the identification of the risks, tools, and resources to mitigate impact and the responsible personnel to successfully implement the response. Using internal and external resources, employees are trained on their responsibilities and participate in exercises to ensure readiness. The practice improves our production rates and helps avoid long downtimes.
A proactive approach to identifying and mitigating risks allows us to focus on developing innovative, sustainable solutions for our customers. At AMG, we will continue to maintain an effective risk management process, including quarterly risk reporting and day-to-day communication regarding risk. Our executive leadership will maintain our reporting process and open, active dialogue with business unit leadership. We all work to anticipate known and unknown risks.