Assignment no: III

Date of Submission: 31st March 2020

Subject: Indian Ethos and Business Ethics

BAT -781

Submitted To: Submitted By:

Dr. Santosh Singh Safi Joshi

18MBA1055
INTRODUCTION

Tata Steel Limited, formerly Tata Iron and Steel Company Limited, is an
Indian multinational steel-making company headquartered in Mumbai,
Maharashtra, India, marketing headquarters in Kolkata, West Bengal,
India, and a subsidiary of the Tata Group. ). It is one of the world's most
geographically-diversified steel producers, with operations and
commercial presence across the world.

Tata Steel has been recognized as one of the 2019 World’s Most Ethical
Companies by the Ethisphere Institute, a global leader in defining and
advancing the standards of ethical business practices. The Company has
received the coveted recognition for the eighth time in the ‘Metals,
Minerals and Mining’ category and continues to be the driving force for
improving communities, building capable and empowered workforces,
and fostering corporate cultures focused on ethics and a strong sense of
purpose. Tata Steel has been recognized by the Ethisphere Institute,
USA seven times earlier and is one of the only two honorees in the
‘Metals, Minerals and Mining’ industry. Ethisphere recognition honors
companies that recognize their critical role to influence and drive
positive change in the business community and societies around the
world.
Ethical Audit Process :

1. Start with a detailed foundation.

 An ethics audit is a comparison between actual employee behavior and

the guidance for employee behavior provided in policies and procedures.
The more descriptive and specific ethics-related policies and procedures
are, the easier it is to make these comparisons.

2. Develop metrics.

 Ethics audits may not be as black-and-white as financial or operational

audits, but they run more smoothly when tangible ethics measures are in
place. Consider adding ethics goals to annual performance reviews and,
where possible, tying compensation to ethical behavior.

3. Create a cross-functional team.

It includes an HR professional familiar with people in the business unit

being audited. Most ethics audit teams include an ethics and compliance
manager where possible as well as an internal auditor and legal
managers.

4. Audit efficiently. 

Audits frequently disrupt normal operations in business areas subjected

to review. Before scheduling an audit, find out if internal auditors or the
finance team may be conducting reviews of the same area. If so,
combine these efforts to limit disruptions. Once the audit has been
scheduled, create a plan that spells out employees to be interviewed,
information that requires review and any processes that require
observation.

5. Look for other issues.

 Keep an eye out for other improvement opportunities, and share those
with relevant colleagues. For example, ethics issues in a sales area may
have revenue-recognition implications from a financial reporting
perspective.

6. Respond consistently and communicate. 

Discipline ethics violations in complete accord with policies and

procedures and the code of conduct every time. Also, use ethics issues,
when possible, as grist for "lessons learned" in ethics-related
communications and training.

Corporate Governance Norms

Tata Steel embeds the highest standards of governance in its operations,

striving to manage its affairs in a fair and transparent manner and create
long-term value for all stakeholders. Our focus is not only to follow
corporate governance guidelines, but global best practices as well. The
Company has laid a strong foundation for making corporate governance
a way of life by constituting a Board, which is active, well informed and
independent, using several Board Committees as a mechanism for
managing the affairs of the Board.

With regulations becoming more stringent on the domestic as well as

international fronts, our policies and the Tata Code of Conduct (TCoC)
are implemented to ensure that business is conducted ethically and
responsibly, through a well-defined ethical governance framework.

Tata Steel’s rigorous approach to Enterprise Risk Management (ERM)

enables the Management to protect and enhance the value of assets,
people, performance and reputation. To manage risks throughout our
value chain, we have a robust risks management framework in place
across the organization, overseen by the Risk Management Committee at
the Board level.

Sustainability is embedded in our business operations. We aspire to be

an industry leader in sustainable business practices. To prepare for the
future, we are taking steps to reduce our environmental footprint and
contribute towards the creation of a circular economy.

TSL has a robust Corporate Governance model in place with roles

established at the Board and Management-level committees. The Ethics
Counselor regularly attends Audit Committee meetings to share updates
on the status of the vigilance mechanism. On its part, the Apex Ethics
Committee meets on a quarterly basis to decide upon policies and
guidelines as well as review sexual harassment concerns and statistics of
concerns. There are also 13 Internal Committees (IC) instituted across
the organization. The Ethics Committee provides uniform decision
making following the consequence management framework in case of
ethical breaches, while also providing protection to the whistleblower. It
is promoted and enforced by the senior leadership through an
appropriate reward and recognition policy to encourage whistle blowing.
TSL also has a scheme for ‘reputation champion’ where stakeholders
who demonstrate ethical behavior are recognized and their actions
publicized through the organization.

Corporate Citizenship, transparency and Standard Of

Integrity

Tata Steel has adopted a formal organizational structure to deploy the

Code. The process of its implementation in the Company has been
designated as the Management of Business Ethics (MBE). It stands on
the four pillar-concepts of Leadership, Communication and awareness;
Compliance structure; and Evaluation of effectiveness.

1. Leadership

The Managing Director is also Tata Steel’s Chief Ethics Officer and is
responsible for the deployment of the Code of Conduct. A designated
Ethics Counselor reports directly to the Managing Director and assists in
managing the MBE process. The Counselor also has access to the Board
of Directors of the Company. The Ethics Counselor is, in turn, supported
by Departmental Ethics Coordinators. Through all communication, the
Managing Director exhorts all stakeholders to comply with the TCOC.

2. Communication and Awareness

Compliance to TCOC is a condition of service for all employees at Tata

Steel. All officers must supply declarations and compliance
undertakings, at the time of joining and through SAP HR. Ethics and
TCOC training is a part of all officer induction programmers and
refresher programmers for existing officers. It is a prerequisite for entry
and continuation as a vendor/ supplier to the Company and vendors are
required to make an electronic undertaking of compliance. Employee
unions at various locations have signed a joint MoU with the Company,
on behalf of the workers, to comply with the Code.

Compliance structure various systems and processes have been

developed and implemented in Tata Steel to ensure the implementation
of the Code. These include Gift Policy, Whistle Blower Policy, Whistle
Blower Reward Policy, Vendors Whistle Blower Policy, Sexual
Harassment Prevention and Redressed Guidelines. Tata Steel has a zero
tolerance policy towards corruption and unethical behavior and has,
therefore, taken specific action to implement anti-corruption measures
articulated in Clauses 2, 5, 6, 13, 17, 20 and 25 of the TCOC. All
officers have to submit a Conflict of Interest (COI) declaration on the
intranet and update it as and when a new COI situation emerges in their
employment period. Any employee can directly raise concerns with the
Ethics Counselor/Head of Vigilance/Chairman of the Audit Committee.
The constitution and role of the Audit Committee is elaborated in the
Corporate Governance Report, which forms a part of this Annual
Report. It encourages employee activism against malpractices, and to
protect the identity of the Whistle Blower, a third party operated Whistle
Blowing Line was established in 2011-12.

3. Annual TCOC Compliance Declaration

The Managing Director submits an annual declaration in the Annual

Report regarding compliance by Board Members and Senior
Management Personnel with the TCOC. The Managing Director also
submits an annual TCOC Compliance declaration to the Chairman,
incorporating the steps taken in the Company during the year to promote
and institutionalize an ethical culture in the organization. Information
related to compliance with all country specific statutory guidelines, the
Tata Code of Conduct and standards for global businesses, such as the
principles of the United Nations Global Compact (UNGC), is published
annually and placed in the public domain in the Company’s annual
Corporate Sustainability Report, which is subject to an independent third
party assessment.
4. Action for Non-Compliance to the Code

It concerns raised regarding the involvement of its employees and

business partners in any act of bribery or corruption are thoroughly
investigated and punitive as well as preventive action is taken. Non-
compliance by vendors leads to severe consequences, including
blacklisting. Similarly for employees, punitive action is taken, including
termination of employment. Evaluation of Effectiveness the MBE
Programmed evaluation is conducted once in every two years. This is
done through Employee and Vendor perception surveys, conducted by
TQMS through an independent third party. The results are analyzed for
self-evaluation and gaps identified are used for new initiatives under the
MBE Annual Business Plan.

Overall, TSL has conducted several benchmarking exercises within Tata

Group Companies and other reputed companies, apart from various
international forums such as Ethics & Compliance Initiative (ECI) Best
Practice Forum and Ethisphere Summit.