Business ethics refer to implementing appropriate business policies and practices with regards to subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities. A strong and fully embedded commitment to undertaking business ethically brings considerable benefits, including improved consumer perception (leading to increased loyalty), greater investment, reduced costs, and enhanced employee motivation, involvement and interaction to name just a few. JSW has always recognized its moral obligation to do all that it can to operate its business to the highest standards of personal and professional integrity, honesty and transparency, recognizing the intrinsic benefits that good business ethics and governance provide. However, in spite of all that we have so far achieved in operating our business ethically, we recognize that there remains a potential for us to do much more. JSW is committed to embed sound governance, deliver transparency, tackle corruption, manage risks and provide value through strong and robust business ethics. The major operations of Integrated Steel Plants of JSW are ISO 9001, 14001, 45001, 50001 compliant
SDG Mapping of JSW Steel’s Business Ethics Model
JSW has a strong business conduct model which encompasses its corporate governance, materiality assessment, stakeholder engagement, reporting and disclosures as per the statutory norms and risk management.
With the aim to ensure that the Company keeps the stakeholders’ interests at the centre of all operations and business decisions, JSW Steel follows a stringent corporate governance policy. Transparency and openness are the core principles of corporate governance at JSW Steel and it has established a corporate governance structure that works towards achieving sustainable growth in the medium- and long-term.
The Board of Directors oversee the overall functioning of the Company. They also provide and evaluate the strategic direction of the Company, management policies and their effectiveness and ensure that the long-term interest of the stakeholders are being served. The Chairman and Managing Director is assisted by the Executive Directors/ Senior Managerial Personnel in overseeing the functional matters of the Company.
Board of Directors: The Company’s Board of Directors consists of global thought leaders who create trust by example. They ensure that the highest levels of corporate governance are practiced through the organization. The Company’s Board comprises:
- Chairperson Emeritus - Mrs. Savitri Devi Jindal
- Chairman & Managing Director, Non-Independent Executive Director - Mr. Sajjan Jindal
- Joint Managing Director & Group CFO, Non-Independent Executive Director - Mr. Seshagiri Rao M.V.S.
- Executive Director - Dr. Vinod Nowal (Superannuated)
- Deputy Managing Director - Mr. Jayant Acharya
- Two Nominee Directors - Mr. Hiroyuki Ogawa & Dr. M.R. Ravi, IAS
- 5 Independent Non-Executive Directors - Dr. (Mrs.) Punita Kumar Sinha, Mr. Haigreve Khaitan, Mr. Seturaman Mahalingam, Mr. Harsh Charandas Mariwala, Mrs. Nirupama Rao
- Additional Director (Independent) - Ms. Fiona Jane Mary Paulus
This Board of Directors are from diverse backgrounds with rich experience in either the industry, finance, or policy-making which enables them to instill hope and confidence about the future and make employees feel enthusiastic and proud of being part of the journey. They are the leaders who are helping translate JSW’s vision into a reality.
- Board Committees - The Board has constituted 13 Standing Committees - namely; Audit Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Project Review Committee, Finance Committee, Risk Management Committee, Business Responsibility/Sustainability Reporting Committee, Hedging Policy Review Committee, JSWSL ESOP Committee, Share Allotment Committee, Share/Debenture Transfer Committee, and JSWSL Code of Conduct Implementation Committee. The Board constitutes additional functional committees, from time to time, depending on the business needs. Some of the key committees are -
AUDIT COMMITTEE -
Audit Committee, a sub-committee of the Board of Directors, comprises Independent Directors. The Audit Committee oversees the Company’s financial reporting process, approves related-party transactions and regularly reviews financial statements, changes in accounting policies and practices, audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards, appointment of statutory auditors among others.
Number of meetings held in FY 22: 10
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING COMMITTEE -
Responsible for the adoption of National Guidelines on Responsible Business Conduct (NGRBC) in the business practices of JSW Steel. The committee also overlooks matters related to climate change, water and biodiversity and guides required actions for these sustainability practices.
Number of meetings held in FY 22: 3
RISK MANAGEMENT COMMITTEE -
To periodically review risk assessment and minimisation procedures and ensure that the Executive Management controls risk by means of a properly defined framework, besides reviewing major risks and proposed action plans.
Number of meetings held in FY 22: 2
STAKEHOLDERS RELATIONSHIP COMMITTEE -
To periodically look into the functioning of the Company’s shareholder/investor grievance redressal system and oversee improvements in the same, besides reporting serious concerns, if any.
Number of meetings held in FY 22: 3
PROJECT REVIEW COMMITTEE -
To closely monitor the progress of large projects, in addition to ensuring a proper and effective coordination among the various project modules, essentially with the objective of timely project completion within the budgeted project outlay.
Number of meetings held in FY 22: 4
NOMINATION & REMUNERATION COMMITTEE -
The Nomination & Remuneration Committee’s constitution and terms of reference are in compliance with the provisions of the Companies Act, 2013 and Regulation 19 and Part D of the Schedule II of the SEBI (LODR) Regulations. The primary responsibilities of the Committee include identifying persons qualified to become Directors, decide on senior management appointments and carrying out evaluation of every Director’s performance. The Committee also looks into extension of tenures of Independent Directors on the basis of the report of performance evaluation of Independent Directors.
Number of meetings held in FY 22: 2
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE -
To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate a list of CSR projects or programmes which a Company plans to undertake while also recommending the amount of expenditure to be incurred on each of the activities and to monitor the CSR policy of the Company from time to time.
Number of meetings held in FY 22: 2
- Stakeholder Grievance Mechanism: JSW Steel is committed to promoting responsible behaviour and value for social and environmental well-being. We have a policy on business conduct that is applicable to all our employees and value chain partners. We also have a structured stakeholder grievance redressal mechanism through which stakeholders freely share their concerns and grievances with the Company. In FY 22, we received some shareholder feedback and issues and all of them were satisfactorily resolved.
- Whistleblower Policy: We formulated the whistleblower policy / vigil mechanism in order to provide a mechanism for Directors and employees of JSW Steel to approach the Ethics Counsellor/ Chairman of the Audit Committee of the Board to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Code of Conduct or Ethics Policy, or any other unethical or improper activity.
- Cybersecurity: For us, cybersecurity is a top priority. As we embed digitalisation into our operations, our business is more prone to cyber threats. We have meticulously devised ways through which we can protect our business and our stakeholders, through various vulnerability and breach assessments, keeping ourselves updated as per the industry best practices. This is headed by our Chief Information Officer and overseen by the Risk Management Board Committee.
All the policies of JSW Steel can be found here.
As part of our strategic action plan, we conducted a materiality assessment during FY 2021-22 and identified issues that have a significant potential to influence our business. We have devised clear pathways to approach and work on these issues in order to deliver sustained value.
Steps undertaken for Materiality Assessment by JSW:
- Identification – Initial step of materiality assessment is identification of a universe of topics and key internal and external stakeholders across all plant locations as well as the corporate office.
- Assessment – Post identification of all topics as well as stakeholders, one-on-one interactions were carried out across each stakeholder group to gather their views on the key topics that are important for the Company’s success in the long run. A total of about 150 individuals, including senior management personnel, plant heads, employees, suppliers and local community were covered as part of this exercise. These detailed discussions provided valuable insights that were used as inputs in the materiality assessment process.
- Prioritization - Appropriate weightage was provided to the ability of each topic to help the Company mitigate the risks that it faces. Besides, the process also incorporated the capability of each topic to enable the Company to reach its strategic goals. These inputs, together with an analysis of their external environment, led to the prioritization of 14 distinct material topics. JSW Steel also continues to work on a host of other issues that may not be covered in the 14 material topics.
Reporting & Disclosure
The Company is committed to pursuing its business objectives ethically, transparently and with accountability to all its stakeholders. The Company believes in demonstrating responsible behavior while adding value to the society and the community, as well as ensuring environmental well-being with a long-term perspective. To adhere to the above said commitments, JSW Steel discloses information related to Environment, Social & Governance (ESG) parameters initiatives taken by the company in its annual Integrated Report.
The Annual Integrated Report is prepared on the guidelines of Global Reporting Initiatives (GRI), and has provided with requisite mapping of the principles of the National Guidelines on Responsible Business Conduct (NGRBC) in order to fulfill the requirements of the Business Responsibility and Sustainability Report (BRSR) framework as per directive of SEBI, and also is in line with the United Nations Sustainable Development Goals.
- JSW has always been proactive in managing its risks as it believes that success in a challenging and dynamic external environment is largely dependent on an organisation’s ability to be agile and respond to changes quickly and effectively. This forms the basis of the risk management process at JSW Steel, which is well geared to identify, assess and manage traditional as well as new-age risks, thereby protecting stakeholder interests, achieving business objectives and enabling sustainable growth. JSW Steel follows the globally recognized Committee of Sponsoring Organisations of the Treadway Commission (COSO) framework for risk management. The Company has constituted a sub-committee of Directors to oversee the Enterprise Risk Management framework. It monitors risks related to performance, operations, compliance, incidents, processes and systems and tracks their mitigation plan till their closure.
- Overview of the risk management process
- Risk ownership - There are three main aspects of risk management process, i.e. risk identification, risk assessment and risk response (e.g., avoid, mitigate or retain). Identification, assessment, response and tracking of risks under their control are ensured by the risk owners (HODs) at respective locations. Risk is identified by the risk owners at the plant level, which is reviewed at respective plant-level risk committees, headed by the plant head.
- Corporate risks - All the plant-level risks and risks of corporate functions as well as organizational risks requiring review of the macro environment, policies and processes are discussed at the corporate meetings. The corporate risk committee is headed by the JMD.
- Board of Directors – All the key risks identified at corporate risk committee meeting are presented to the board and all plants & corporate updates on risk mitigation action status on a half-yearly basis are reviewed by the Board of Directors.
- All these activities are coordinated by the Chief Risk Officer.
Stakeholders are the key material topics for JSW. Stakeholder engagement refers to the trust-based, mutually beneficial relationships of the Company with key stakeholders such as investors, customers, vendors, society and government, among others. They are essential to business operations, and their feedback is vital for understanding their concerns and their material impact on the Company. JSW Steel’s stakeholder engagement strategy seeks feedback on a regular basis, which is then integrated into the organisation’s medium- and long-term strategy and planning exercises. This also enables the Company to promote the idea of shared growth and a common prosperous future for the society at large. The Company has formal mechanisms in place to engage key stakeholder groups in a constructive manner and collect valuable feedback. This proves to be a valuable input for the risk assessment and strategy formulation process of the Company.