SearchINTERNAL AUDIT
SABIC’s Internal Audit Department reports functionally to the Board Audit Committee and administratively to the Vice Chairman/Chief Executive Officer. In carrying out its duties, the Department has full access to SABIC’s sites around the world, information, documents and employee related matters. The Internal Audit Department operates in accordance with the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors (IIA Standards) as confirmed by external quality assurance & improvement program. Furthermore, Internal Audit maintains an internal quality assurance and improvement program, covering all aspects of the internal audit activities, to evaluate and continuously improve these activities.
The Internal Audit Department carried out planned audits in accordance with the agreed schedule and changes required during the year, as approved by the Board Audit Committee to evaluate, objectively and independently, the adequacy and effectiveness of Internal Controls System. Furthermore, Internal Audit participated in special assignments and conducted consulting services, including, for instance, integrated assurance and control self assessment, maturity assessment of governance, risk management and controls culture in SABIC and other advisory engagements.
Throughout 2022, Internal Audit Department regularly issued audit progress reports to the Board Audit Committee during the year covering the audit plan progress, audit activities / observations, progress on internal audits’ outcome and overall update / view on internal controls effectiveness and related subjects. During 2022, Internal Audit continued its significant progress made in closing and verifying audit findings along with strengthening the follow-up / closure process.
The Internal Audit Department continued to pursue the IA Strategy in 2022, with impactful outcomes. The four strategic pillars of the IA Department are Audit Functional Excellence, Stronger 3-Lines of Assurance, More and Broader Technology and Talents for Today & Tomorrow, which enabled conducting more efficient and effective audits with tangible influence on Governance, Internal Controls & Risk Management across SABIC’s Corporate Functions and SBUs globally. The Department is committed to continuous improvement through the role of dedicated Audit Expertise Center.
In strengthening the 3-Lines of Assurance, the IA Leadership team continued the structured engagement sessions with SABIC leadership teams, proactively sharing key risks, common themes of audit findings and enhancing internal controls.
The Internal Audit Department’s focus on advancing technology remains a top priority in 2022. Significant improvements were made in enhancing the existing capabilities within SABIC and its Affiliates, where applicable, including technologies such as robotic process automation, data analytics and others to automate audit processes and to enable continuous auditing and monitoring the company's critical processes.
The Internal Audit Department’s focus on human capabilities remains a top priority; attracting and developing talents and enabling them to acquire required skill sets and relevant qualifications to perform the audit activities in an effective manner. In 2022, 6 auditors completed their certifications which further strengthens the line of assurance within Internal Audit Department. Furthermore, SABIC Internal Audit contributes to SABIC people development programs such as Internal Audit Capability Program, where employees from different departments are seconded to SABIC Internal Audit to improve governance, risk management and internal controls culture and gain in-depth experiences about the internal audit processes.
SABIC Internal Audit maintained its active collaboration with SABIC External Auditors to accommodate both responsibilities and add greater value to the organization and its shareholders. The External Auditors reports to the management contributes to the formation of board audit committee’s opinion on the effectiveness of Company’s internal controls system.
The Board Audit Committee is of the opinion that the Company’s Executive Management has maintained an effective internal controls system capable of providing reasonable assurances; and that the audits outcome together with the Audit Committee meeting discussions, have all provided reasonable grounds for formulating this opinion.
COMPLIANCE
SABIC conducts business ethically, honestly, and in full compliance with the law. We believe that how we conduct ourselves is critical to our success as the preferred world leader in chemicals. At SABIC, compliance and ethics are integrated in ongoing processes that seek to engage our workforce, customers, suppliers, investors, community members and other stakeholders with a framework for conducting business in an ethical manner, addressing risk and mitigating issues and concerns.
Starting with our Code of Ethics, we hold ourselves to the highest standards of integrity and seek to comply fully with the laws and regulations of the countries in which we operate. Our leaders embrace the Code and incorporate it into the daily activities of their teams.
To build the right foundation for our integrity culture and avoid violations, all employees are required to complete compliance training on specific topics based on work duties, such as antitrust regulations, fair employment practices and trade controls. This training takes various forms, including face-to-face or online training, with training materials and formats being updated regularly.
SABIC's Chief Compliance Counsel is responsible for managing the implementation of the compliance program, supported by a team of lawyers and professionals working in each region where we conduct our business. The Chief Compliance Counsel regularly reports to the Audit Committee of the Board on progress, risks, mitigation measures and initiatives.
We encourage employees to report any compliance concerns, and we encourage them to inquire and ask for guidance if there is any doubt. We also make our reporting channels available to external stakeholders such as customers, suppliers, and community members. The company responds quickly to potential risks of any such concerns or possible breaches.
In order to stay abreast of the latest regulatory developments, to have a broader perspective, to learn best practices and, in some cases, to act collectively to impact change, we partner with external organizations that lead on important integrity issues.
Since 2013, SABIC has participated in the annual G20/B20 policy process on anti-corruption. In 2022, we were part of the Indonesian B20 Integrity and Compliance Task Force. In the Middle East, we are part of an organization called the Pearl Initiative – a group for Gulf-based companies to share best practices on compliance and good governance. Through these partnerships, we learn about pioneering efforts that other companies are taking and we share our best practices with others.
Building capacity in our business environment is important to our external stakeholders. They are not satisfied with just knowing what SABIC is doing internally, but also want to have assurances that our supply chain is free of corruption, forced and child labor, environmental violations and other compliance violations. In 2021, SABIC launched a wide-ranging training program for 3rd party business partners including suppliers, distributors and contract workers. Through this online, local-language training, we are able to ensure that our third parties have a grounding in the compliance concepts that we adhere to.
All of these internal and external efforts benefit us in many ways, including through independent recognition. SABIC was awarded the Ethisphere Compliance Leader Verification®, valid through 2024. The verification process takes a deep-dive view of all aspects of a company’s program, including its ethics program structure and oversight, training and communication, risk measurement, monitoring for misconduct, disciplinary measures and ethical corporate culture and employee perceptions. The rigorous review process and verification signals to SABIC and our stakeholders that our compliance efforts meet or exceed benchmark expectations.
As a signatory of the United Nations Global Compact (UNGC) since 2012, SABIC is committed to upholding the 10 principles of the UNGC. In 2022, we furthered this commitment through the publication of our first external statement on human rights. As detailed in that statement, we seek to create Chemistry that Matters™ in a manner that respects and fosters human rights in our daily operations. We embrace this same position with our business partners in our value chain, in the communities where we operate, and in the application and use of our products. We deploy numerous cross-functional resources in support of this aspiration.
