Holding ourselves to high ethical standards

Acting in an ethical manner is essential to building trust with society. Our stakeholders not only expect us to do what is legally required, but also to follow high standards of ethical behavior wherever we operate.

Supporting ethical decision-making

We are making progress in embedding our Code of Ethics across the organization and supporting employees to do what’s right when faced with ethical dilemmas.

In 2021, around 98% of employees completed e-training on the Code of Ethics. In addition, around 84 000 employees visited an internal Code of Ethics information platform and around 65 000 accessed an online tool called Decision Explorer that provides guidance to help resolve ethical dilemmas. We also launched a toolkit to support leaders in discussing ethical dilemmas with their teams.

We improved the way we manage conflicts of interest with the release of a revised framework, including a new guideline, disclosure process and supporting tool. Around 97% of employees completed a declaration on potential conflicts of interest.

Further, we took steps to integrate an ethics dialogue into the process for recruiting potential new employees. In 2021, we launched a guide for interviewers to assess the ethical profile of potential hires and their fit with the Novartis Values and Behaviors and our Code of Ethics. By signaling that ethics and integrity matter to Novartis during the first interaction with a candidate, we improve our chances of hiring high-integrity individuals who are a good fit for our ethical culture.

In our Code of Ethics, we commit to use artificial intelligence in a transparent and responsible way. In 2021, we were one of the first companies to issue a position statement on the topic. For more information, please see the section “Go big on data and digital.”

Advances in digital technology have led to new, more personalized ways of engaging with our customers across multiple channels. To ensure we navigate these changes in the external environment ethically, we are adjusting our Professional Practices Policy and processes to create consistency in how we manage new relevant types of compliance risks. We have rolled out a global system architecture to ensure our processes are implemented consistently across markets.

Measuring our ethical climate

We launched our first annual global ethics survey in 2021 to measure our progress in embedding our Code of Ethics across the organization. Translated into 15 languages, the survey was sent out to 150 000 Novartis employees and external contractors.

The results from more than 50 000 responses to the survey provide us with robust data across different parts of the company to evaluate the effectiveness of our policies, programs and controls. Importantly, they also help us identify areas where we may need to reinforce our ethical culture and climate. We are working to turn these insights into processes and tools to further encourage ethical behavior, and we plan to repeat the survey in 2022 to gain further insights.

Anti-bribery policies and practices

Our Anti-Bribery Policy states expectations for all employees, and we also clearly state our standards in our Code of Ethics. Specific principles are set out in our Professional Practices Policy, while third-party risk is governed by our Anti-Bribery Third-Party Guideline. Our SpeakUp Office investigates allegations of misconduct.

Novartis participated in a collective action initiated by Norges Bank Investment Management (NBIM) to jointly develop a reporting standard on anti-bribery. In early 2022, we published our first anti-bribery report based on the guidance issued by NBIM and aligned with principles such as the United Nations (UN) Global Compact and the OECD Guidelines for Multinational Enterprises.

Ethical business practices performance indicators

 

2021

2020

2019

Code of Ethics

 

 

 

Percentage of employees trained and certified1

98

98

98

Grievance indicators: SpeakUp Office – central matters2, 3, 4, 5

 

 

 

Misconduct cases reported

174

157

209

Total allegations6

296

284

427

Total allegations per category (%): SpeakUp Office – central matters

 

 

 

Fraud/asset misappropriation

13

7

7

Expense fraud

4

2

5

Books and records, accounting irregularities

0

1

1

Improper professional practices

20

14

17

Bribery, kickbacks

2

1

2

Discrimination and sexual harassment

8

11

8

Retaliation

5

3

6

Other employee relations issues

14

18

18

Conflict of interest

12

13

11

IT security breach

4

4

4

Quality assurance/data integrity

3

8

6

Data privacy

3

2

3

Antitrust, fair competition

1

1

0

Company confidential/trade secret information

2

4

0

Other

9

11

12

Allegations substantiated7

137

118

252

Dismissals and resignations related to misconduct

62

101

186

1

Active Novartis employees with email addresses, trained via e-learning or via One Deck for Novartis Technical Operations. Training rolled out from July 2021 to January 2022, with a preliminary completion rate as of December 31, 2021.

2

The SpeakUp Office provides a safe place for employees to raise concerns (including anonymously) about potential misconduct while being protected against retaliation.

3

A central matter applies to a senior leader or manager, potentially disruptive reputational impact, sexual harassment, discrimination, retaliation and significant financial impact.

4

The number of misconduct cases, allegations reported and substantiated, and dismissals and resignations may change year-on-year as matters may be reassessed in the course of the case life cycle. As a result, we may restate the previous two years of reported data.

5

The remainder of the complaints were addressed or investigated locally, as they were of lower and local risk.

6

The number of allegations is higher than the actual number of cases as a case can have more than one allegation.

7

“Allegations substantiated” may include allegations from previous years while “misconduct cases reported,” “total allegations” and “total allegations per category” refer to allegations reported within each calendar year.