Fraud and integrity
TenneT aims to operate in a consistent and reliable way, independent of suppliers and electricity producers, providing all parties with guaranteed, non-discriminatory access to our transmission grid. We operate in a straight-forward and predictable manner so our stakeholders can rely on us at all times. Our Company Code and Rules of Conduct define our way of working at TenneT and are published on our company website.
Potential fraud is one of the risks identified by the Executive Board. Detecting potential fraud is part of all our internal audits. Effective communication and awareness training on this subject help to protect TenneT and our employees against economic and reputational harm.
We also have a Compliance Committee, with members from relevant functions (Risk Management and Internal Control, Internal Audit, Corporate Safety & Security) and compliance officers. The objective of the Compliance Committee is to raise awareness of potential fraud and prevent it, thereby reducing this risk.
In 2016, two integrity breaches were identified at TenneT, both related to inappropriate relationships with a supplier. Internal investigations were carried out and we took additional measures that can help prevent similar cases in the future.
TenneT has a sexual harassment committee and a whistle-blowing procedure for internal and external integrity issues. In the Netherlands, employees can report any concerns confidentially to a trusted counsellor ('vertrouwenspersoon'). In Germany, this role is covered by the compliance officer. Our whistle-blowing procedure and the cases arising in 2016 are published on the company's website.
Due to growing size, complexity and associated integrity risks, a compliance risk analysis was performed to make a comprehensive assessment of the compliance risks inseparably linked with the business model and role of TenneT. The analysis was performed by an external advisor and included interviews with members of the Executive Board and senior management, document reviews and additional analysis, as well as a review of existing measures to mitigate compliance risks, including bribery and corruption. The analysis did not reveal any compliance violations or suspicion in relation thereto, but confirmed that significant risks exist in terms of possible passive corruption or conflicts of interest, particularly given TenneT's substantial volume of investments and associated procurement activities. The risk analysis outcome and the advisor's recommendations to enhance the existing risk mitigation measures were discussed in the Executive Board. To strengthen compliance within TenneT, several actions were taken and will be further addressed in the coming year. Among others this entails the issue of a Corporate Gift Policy, an updated compliance policy and the implementation of a systematic and group-wide compliance management system, managed by two newly appointed compliance officers reporting directly to the CEO.