UPM Annual Report 2018

First page Table of contents Previous page 80-81 Next page Last page

UPM AT A GLANCE

STRATEGY

BUSINESSES

SOCIETY AND ENVIRONMENT

GOVERNANCE AND COMPLIANCE

REPORT OF THE BOARD OF DIRECTORS

FINANCIAL STATEMENTS

AUDITOR’S REPORT

OTHER FINANCIAL INFORMATION

OUR PRINCIPLES UNDER UPM CODE OF CONDUCT

We are committed to integrity We respect people and human rights We take care of our environmental impact and product safety We have zero tolerance for corruption and bribery

99%

86%

of active employees had completed the UPM Code of Conduct training “Every choice matters” by the end of 2018

the number of languages in which the UPM Code of Conduct is available on the UPM Intranet and on the corporate website www.upm.com/governance

Integrity index based on Employee Engagement Survey results

We know with whom we trade We comply with competition law We protect our assets and information We source responsibly We engage with our stakeholders and society We voice our concerns

UPM COMPLIANCE SYSTEM

Company performance Corporate reputation, financial performance, operational excellence

PREVENT

Risk assessment Policies and procedures Preventive controls

Communication Training Proactive advice

Continuous improvement

OUR GOVERNANCE AND COMPLIANCE

Auditing, monitoring and surveys Notification/reporting channels

REACT

MONITOR

Investigation and resolution Remediation

Culture of integrity

COMPLIANCE, SUSTAINABILITY AND INTEGRITY IN EVERYTHING WE DO RESPONSIBILITY:

Our decision making, management and operations are guided by our values and the UPM Code of Conduct. Our leading principle is that we do not compromise our standards of integrity under any circumstances.

MINDSET Tone from the top Trust and openness Strengthened speak-up culture PRACTICES Upholding the Code of Conduct Training and communication Group policy management AIMING HIGHER Proactive identification of risks Risk mitigation and follow-up Reacting to misconduct

PROMOTING A CULTURE OF INTEGRITY

We also aim higher in our governance. We are committed to good governance and compliance with the guiding principles of the UPMCode of Conduct and with applicable laws and regulations. We trust that our governance structure supports good governance, responsible business operations and compliance at all levels, with clear responsibilities and reporting lines. Accountability for compliance extends from the Board of Directors and senior management down to every employee (read more on page 109). Responsibility is one of our strategic focus areas and compliance is an integral part of it.

Our compliance system is embedded in our governance model and is designed to support company performance and a culture of integrity at all levels. Our integrity index figure highlighted above is an average calculated on the basis of favourable responses to integrity-related questions in our annual Employee Engagement Survey (EES) (2017: 85%). These questions are: 1. I understand the UPMCode of Conduct and ethical standards. 2. If I had to report unethical behaviour or misconduct, I am confident that it would be handled effectively by UPM. 3. UPM operates in an ethical manner and in accordance with the UPMCode of Conduct.

The main emphasis of our compliance system is on preventive actions, which are based on the annual risk management cycle and risk assessments conducted in all businesses and operations. Our compliance system and actions within this system are presented in the illustration on the right. Read more on our governance structure and risk management processes on the corporate website.

We create value by seizing the limitless potential of bioeconomy

SUPPORTING EMPLOYEE DESICION- MAKING

PURPOSE OF UPM COMPLIANCE

UPM PURPOSE

Our purpose is to preserve the value created and ensure that it is sustainable in the long term