Compliance
"Our success and our reputation are not only dependent on the quality of our products and the service provided to our clients, but also on the way in which we do business. The AXA Group's ambition is to become a global leader in its core business, financial protection. For us, becoming a global leader means not only being on the podium in each country where we operate for our technical, commercial and financial performance, but also setting the standard through exemplary business practices and ethical behavior". (Henri de Castries, Chairman of the AXA Group's Management Board, in the introduction to the Group Compliance Guide).
The Group's ambition lies at the crossroads between two key requirements: firstly, the performance made possible through operational excellence, and secondly, the excellence of the Group's behavior in relation to all of its stakeholders. The excellence of our behavior is therefore founded on our stringent compliance-related procedures and commitments, as summarized in the Group Compliance Guide, reflecting AXA's values of professionalism, innovation, pragmatism, team spirit and integrity.
1) The Group Compliance Guide
The AXA Group has had a Group Compliance Guide since 1994. This reference document is regularly updated in order to keep pace with changes in legislative and regulatory requirements and meet the changing expectations of AXA's stakeholders. In this way, in 2004, the Guide was significantly amended in order to factor in the requirements of the American Sarbanes-Oxley Law and complete local company guides.
In 2006, AXA chose to draw up one dedicated guide that would apply to all of its companies, setting out the minimum standards required and the ethical principles that must guide AXA's employees in their jobs. In each country in which the Group is present, this guide has been translated and supplemented as relevant.
The main changes over 2006 concerned a reorganization of its content in order to make it more reader-friendly, while introducing whistle-blowing regulations, provisions linked to money laundering, the fight against corruption, procurement-related ethics, checks over the means for applying the Guide, and a personal undertaking for executives.
The whistleblower policy
All members of staff are invited to report any practices that they believe might be in breach of the principles set out in the Compliance Guide and might be putting the company at risk. This process (Section 6.1) is recommended, but remains voluntary. It is not anonymous, except for certain exceptional conditions under which anonymous information may be transmitted directly to the Chairman of AXA's Audit Committee. Indeed, since it is listed on the New York Stock Exchange, AXA has set up a whistleblower procedure enabling any member of staff to report - on a named or anonymous basis - any complaints, concerns or suspicions they may have concerning accounting, internal control or auditing matters (including fraud in connection with any of these matters), as well as in relation to any employees whose responsibilities give them a role in or knowledge of these matters. The Group undertakes to protect the employees in question, even if the concerns turn out to be unfounded, in terms of both the whistleblower and the person accused. As such, no names are recorded in its reports.
Through its Compliance Guide, AXA undertakes to conduct its business in total honesty and impartiality. This commitment to upholding the highest ethical standards is designed not only to ensure compliance with the laws and regulations in force in the various jurisdictions where the Group operates, but also to earn and keep the continued trust of its clients, shareholders, staff and business partners.
The Guide applies for all members of staff - directors, executives, employees and tied agents - and Group companies, in line with legislation:
- Companies in which AXA directly or indirectly has a majority of voting rights
- Subsidiaries that are consolidated on an accounting basis
- Joint-ventures in which AXA has at least 50% of voting rights
In the Group Compliance Guide, AXA's employees are able to find an attitude that fits in with the corporate values they need to adopt in critical situations in the performance of their professional activities.
Compliance with the laws and regulations in force is highlighted by the Group Compliance Guide, which explicitly refers to the Group's international commitments and notably the Global Compact's 10 guiding principles, based on the Universal Declaration of Human Rights and the International Labor Organization. They undertake to handle the information provided to them in line with the Group's principles governing data confidentiality, disclosure and retention. They also undertake to not use or disclose any confidential information they may have access to in connection with their work for any personal or inappropriate purposes ("Insider Trading Policy") or for the benefit of other Group departments or companies ("Ethical Wall Policy"). All information disclosed, notably to the supervisory authorities and statutory auditors, must be accurate and verified. The Group has adopted a set of regulations for the archiving and retention of files, and more specifically accounting and financial documents. In addition, documents making it possible to trace back through a decision-making process must also be kept.
Compliance Guide content
- AXA's vision and values: the Group's business, hallmark and commitments in relation to its stakeholders
- Personal conduct, activities and equity interests: conflicts of interest, procurement code of conduct
- Confidential information and disclosure practices: duty of confidentiality, accuracy of information disclosed (supervisory authorities, statutory auditors)
- Legal and regulatory compliance / regulatory inquiries and disputes: national regulations, AXA Group commitments, insider trading
- Internal fraud and money laundering
- Reporting of breaches of the Guide: whistleblowing procedure
- Annual certifications and dispensations
1.1) Implementation of the Compliance Guide
Since 2006, implementation recommendations have been associated with the Group Compliance Guide and represent an integral part of the AXA Compliance Standard, calling for a compliance steering committee to be set up and the Group Guide to be tailored to local regulations.
Once each local version had been validated by the Group, the distribution of the 2006 Guide was accompanied by a targeted communications plan, with articles and news flashes published in Group-level internal communications tools alongside a local communications plan. The Group Compliance Guide is provided to AXA staff, who will receive suitable training and will need to acknowledge that they have effectively been informed of the Guide.
Each year, the Group's executives are required to sign an undertaking to uphold the Guide. In connection with the annual process to certify compliance with the Guide, all of the Group's executives must submit a certificate each year stipulating that they have upheld the Compliance Guide's provisions or indicating any aspects that they have not complied with, as well as any breaches of policies by other people that they are aware of. All the Group's executives who are required to submit a certificate are provided with instructions and a certificate form by their local human resources departments. Any dispensation from the Guide's conditions may only be granted by AXA's Supervisory Board if required by law or stock market regulations.
A first annual report made it possible to identify the effective conditions for implementing the Group Compliance Guide in AXA's various companies. This reporting system is based on the recommendations set out - seven sections - and looks at 45 indicators, including a number of "open" indicators for identifying best practices.
1.2) Fight against money laundering and terrorist financing
Although AXA is not a banking institution per se, its business means that it is exposed to money laundering practices. Indeed, taking out and then cancelling an insurance product represents one of the ways in which organized crime may try to launder illegally acquired money.
In addition to reputation and image issues, AXA's commitment to the community is at stake: the Group believes that every effort should be made to combat whatever may endanger the economy and society in general.
The three stages of money laundering
Laundering involves transforming illegally acquired money - such as from drug trafficking, arms dealing, mafia activities, - into money seemingly from legal activities, and this process generally involves three stages:
1. Criminal funds are transferred into the financial system, generally through known institutions.
2. The funds are then transformed through a series of transactions making it possible to distance them from their origins.
3. These funds are then integrated back into the legal economy.
To combat such practices, the Group has drawn up an Anti-Money Laundering and Counter terrorist Financing Charter, setting out minimal standards for entities in the Group including the following:
Each entity in the Group is responsible for fighting money laundering and terrorist financing, and for ensuring local legislative and regulatory compliance. This responsibility belongs to senior management of the entity and must be discharged in accordance with the higher of the requirements in this Charter and the requirements of applicable local legislation and regulations.
Each entity must have a clearly designated Anti-Money-Laundering Officer (AMLO). The AMLO should report to a senior officer and should have direct and regular access to the CEO.
CEOs should ensure that the AMLO has the authority, competency and resources to discharge his or her responsibilities in an effective manner. Any other responsibilities the AMLO may have should be compatible with the AML/CTF role.
The AMLO has responsibility for the implementation of AXA's policy within the entity and for compliance with local legislative, regulatory and reporting requirements. The objective of the AMLO is to prevent, detect, and report on money laundering and terrorist financing. The AMLO is also responsible for liaising with relevant national AML/CTF authorities.