AIM 9

Adhere to global business standards of corporate governance

We believe sound corporate governance is the bedrock of a sustainable and commercially successful business. It helps us meet our strategic goals responsibly and transparently, while being accountable to our stakeholders. A robust governance structure upholds global best practices, preserves the interests of stakeholders and ensures the integrity of the information that goes out to them.

Key material issues

Compliance to government regulations

Ethical business practices

Governance for sustainability

Risk management

SDGs impacted

Sub-goals8.7: Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms

16.7: Develop effective, accountable and transparent institutions at all levels

GOVERNANCE FRAMEWORK

The Company is equipped with a robust framework of corporate governance that considers the long-term interest of every stakeholder. The framework lays down procedures and mechanisms for smooth administration and productive collaboration across the value chain among employees, community, investors and the government. All our operational facilities are certified with EMS (Environmental Management System) certification (ISO 14001).

The Group’s Corporate Governance framework consists of the Board, Board Committees, the Group Management Committe (ManCom), and the Group Executive Committee (ExCo.)

Executive Committee

Chaired by the Chief Executive Officer, Mr. Sunil Duggal

The Committee meets monthly and is responsible for implementing strategic plans formulated by the Board, allocating resources in line with delegated authorities and monitoring the operational and financial performance of the Group.

Group Management committee

Effective 1 April 2020, a Group Management Committee has been formed comprising the Chief Financial Officer, Chief Executive Officer, Chief Human Resource Officer Head and Chief Commercial Officer. The Committee is collectively responsible for all key decisions taken under the guidance of Chairman and Board. This Committee drives all important initiatives and is empowered by the Board.

ESG governance

As part of our continued commitment to ESG, we have expanded the scope of the erstwhile Sustainability Board Committee and implemented a uniform ESG governance structure across the organisation. The ESG Committee, together with our Group Sustainability and ESG function, will be responsible for activating, mainstreaming and monitoring initiatives under the ‘Transforming for Good’ agenda. We have also established dedicated forums for regular management oversight at all levels and ESG- themed communities at each BU and SBU to own projects and drive their timely implementation.

Composition of the Board

At Vedanta, a diverse Board draws on the rich industry experience of its members who belong to various professional backgrounds. Made up of 50% Independent Directors and 25% women Directors, the Board composition ensures both independence and inclusivity, enabling it to uphold the long-term interests of the Company’s stakeholders.

As on 31 March 2022, the Board comprised eight members as listed here:

Name Designation Gender Age (as on 31 March 2022)
Mr. Anil Agarwal Non-Executive Chairman Male 69
Mr. Navin Agarwal Executive Vice Chairman Male 61
Ms. Priya Agarwal Non-Executive Director Female 32
Mr. Upendra Kumar Sinha Non-Executive Independent Director Male 70
Ms. Padmini Sekhsaria Non-Executive Independent Director Female 46
Mr. Dindayal Jalan Non-Executive Independent Director Male 65
Mr. Akhilesh Joshi Non-Executive Independent Director Male 68
Mr. Sunil Duggal Whole-Time Director & Chief Executive Officer Male 60

50% of the Board consists of independent, non-executive Directors.

Age Group Between 30-50 years Above 50 years
Number of Directors 02 06
Gender Male Female
Number of Directors 06 02

The Board ensures the implementation of the strategic objectives of the Company and guides the management to fulfil commitments made to various stakeholders while upholding the principles of ethical business conduct and responsible growth. In conducting its business, the Board is supported by:

  • Established committees
  • Risk Management Framework
  • Vedanta Sustainability Framework (VSF) and Vedanta Sustainability Assurance Process (VSAP)
  • Code of Business Conduct & Ethics and various other policies and practices adopted by the Group

For additional details about our Board structure and our corporate governance, please refer to our FY2022 Annual Integrated Report.

INTEGRATING ESG PERFORMANCE IN MANAGEMENT KPI

Vedanta has always aspired to build a culture that demonstrates world-class standards in safety, environmental stewardship and sustainability. To further ingrain this culture, at the leadership level, ESG has been made a mandatory KPI to be considered for annual performance appraisal and increment cycle. Additionally, leaders responsible for driving this agenda for the Group have higher weightage.

We follow a formal scorecard-based performance management approach across the Group, providing a unified experience to all our full-time employees. Our compensation structure comprises the following elements: fixed pay, benefits, annual bonus, Long Term Incentive Plan (LTIP) and components that factor in holistic employee growth and wellbeing.

Compensation structure - Factoring ESG in pay

Impact of ESG on employee remuneration:

Area Where it will impact Brief summary Details
Scorecard-based KPIs Annual performance rating and fixed pay increases Emphasis on objective and transparent KPIs ESG is a mandatory KPI for senior leaders – to foster a culture of safety/sustainability
ESG component in annual performance bonus Annual bonus pay-out Safety/sustainability scorecards have a 15% weightage VSAP Audit has extensive factors in place – a total of 70 guidance factors A minimum score of 70% is needed in VSAP audit as a threshold for pay-out under this component
Assurance Models (Compliance, New Projects, Process Safety), Safety Focus Works (Work at Height, Confined Space).
Integration of fatalities into annual bonus Fatalities work as a negative multiplier 10% reduction on one fatality – leading to potential 25% reduction overall in case of multiple fatalities
Focus on long-term sustenance Integration of ESG into long-term strategic KPIs 1/3 weightage of ‘long term strategic sustainable’ objectives
Framework of ESG in LTIP plans Long-term incentive payout Carbon footprint and fatalities integrated into various long-term incentive schemes Carbon footprint – 15% weightage in Business Performance (40% of total weightage) in scheme Fatalities – 10% additional pay- out kicker in case of no fatalities during the vesting period

RISK MANAGEMENT

We identify risks at the individual business-level for existing operations as well as for ongoing projects through a well- crafted methodology. Business-level review meetings, undertaken at least once every quarter, formally discuss risk management. Every business division of the Group has evolved its own risk matrix, which is reviewed by the Business Management Committee. In addition, business divisions have developed their own risk registers.

Respective businesses review the risks, changes in the nature and extent of major risks since the last assessment, the existing control measures and decide on further action. Control measures stated in the risk matrix are also periodically reviewed by the business management teams to verify their effectiveness. These meetings are chaired by the CEOs of the respective businesses and attended by CXOs, senior management and functional heads concerned. The role of risk officers at each business-level and at the Group-level is to create awareness on the risks among the senior management, and to develop and nurture a risk-management culture within the businesses.

The Audit & Risk Management Committee aids the Board in the risk management process by identifying and assessing any changes in risk exposure, reviewing risk control measures and approving remedial actions wherever appropriate. The Committee is, in turn, supported by the Group Risk Management Committee (GRMC), which helps it evaluate the design and operating effectiveness of the risk mitigation programme and control systems. The Group Risk Management Committee meets at least four times annually to discuss risks and mitigation measures, review the robustness of our framework at the level of individual businesses and map the progress against actions planned for key risks.

BUSINESS ETHICS

Ethical business conduct is ingrained in our value system. It strengthens our brand equity, serves as a market differentiator, and helps us grow responsibly while safeguarding the interests of our stakeholders and the business.

Ethical conduct of business, prevention of corruption and unlawful disclosure or use of inside information, and observance of human rights are essential principles of operation and make up part of our risk management process. In the year under review, no corruption or bribery cases were reported to the Board Committee.

We strive to foster a healthy culture of feedback in which employees can feel free to voice any concerns they may have. Should employees become aware of irregularities or wrongdoings, they can report their concerns anonymously through our Whistle-blower mechanism. Our established vigil mechanism is implemented through the Whistle- blower Policy, which provides adequate safeguards against victimisation of persons who use such mechanism. It also gives the complainant direct access to the Chairperson of the Audit Committee. The policy communicates our commitment to a ‘policy against retaliation’, and commitment to maintaining confidentiality, in case of a Company employee.

The Management & Assurance Services (MAS) team is responsible for monitoring implementation of the Code of Conduct and Business Ethics. Through independent, third-party audits it seeks to ensure that businesses, departments, employees, and business partners remain aligned with the Company’s ethical business conduct requirements.

From time-to-time, the MAS team along with the Company Secretary also reviews and benchmarks the Code of Business Conduct & Ethics, in order to remain aligned with global thinking on the subject and lessons learnt from the implementation of these policies.

The Company also adheres to UKBA and FCRA regulations.

Code of Business Conduct and Ethics (CBCE)

Our Code of Conduct serves as a guiding tool to align organisational culture with individual conduct and integrates our values into the day-to-day business conduct. The Code contains general guidelines for conducting the business of the Company, consistent with the highest standards of business ethics. This Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations.

All these policies, notes and codes are publicly available on our website and are incorporated into contracts, where relevant, in order to ensure transparent and easy access to our policies in the public domain. Annual affirmation and training on the code of conduct including bribery and corruption is taken from all the employees to keep them updated and to reiterate their commitment to ethical practices.

In FY2022, 100% of our new-hires undertook training on the code of conduct and 13,855 employees took a refresher course on the code. More than 46,000 hours of training was imparted on the code.

Implementation of CBCE

The implementation of CBCE is supported by the following additional policies and guidance notes:

  • The Insider Trading Prohibition Policy
  • The Whistle Blower Policy
  • Anti-trust Guidance notes
  • The Supplier Code of Conduct

BREACHES OF CODE OF CONDUCT

For resolving the cases identified throughout the fiscal year, various set of actions were taken across all our BUs. These mitigation actions involved taking stringent steps towards errant vendors, vendor personnel and employees. Corrective actions range from judicial interrogations, fines, rotation, warnings, and separation from the company.

Types of categories Cases that have been resolved Open cases
Whistleblower Cases
Employee misconduct 7 -
Business integrity breach 11 -
Workplace harassment and discrimination 2 -
HSE breach 0 -
Data and privacy breach 0 -
Financial misconduct 1 -
Others 1 -
Total 22 6
Other Code of Conduct Breaches -
Related to employee 11 -
Related to business partner employee 9 -
Total 20 -
Grand Total 42 6

* Of the reported breaches of the code of conduct, 22 cases were received through whistleblowing channel and 20 cases were received through other mechanisms.

OUR APPROACH TO PUBLIC POLICY AND ADVOCACY

We are members of several industry associations that share our common goals, and we routinely work together to advance public policies of interest to us and the natural resources industry.

In FY2022, we have spent `53.44 million on membership fees to industry and trade associations, and sponsorships to the events organised by these associations. During the course of this year, we have purchased electoral bonds worth `1,230 million.

Industry Associations Thinktanks & Subject- Matter Expert Organisations Academic Institutions NGOs and Civil Society Organisations
Aluminium Association of India Quality Circle Forum of India IIT - Madras Wockhardt Foundation Charbhuja Filling Station
Federation of Indian Mineral Industries (FIMI) National Safety Council IIM – Sambalpur Action for Food Production MECC
International Zinc Association TERI IIT- Bombay
Confederation of Indian Industry (CII) UN Global Compact ISB - Hyderabad Drishtee Foundation. Barmer Jan Sewa Samiti
FICCI UN Women’s Empowerment Principles IISC – Bengaluru Sarthak Jan Vikas Sansthan IPE Global
ASSOCHAM IUCN – Leaders for Nature BITS-Pilani Learnet Skills limited Paralympic Committee of India
Indian Steel Association British Safety Council IIM-Raipur BAIF Development Research Foundation GT Healthcare Trust
Federation of Indian Petroleum Industry Indian Green Building Council National Forensic Sciences University Sheghal Foundation CHETNA Foundation
The Federation of Indian Chambers of Commerce and Industry Mine Ventilation Society of South Africa (MVSSA) (NFSU), Gandhinagar Swajal Pvt. Ltd. Navrachna Mahila Vikas Trust
International Zinc Association Recycling and Environment Industry Association of India Waterlife CEDRA
Minerals Council South Africa Fontus BODH Siksha Samiti
Mine Health & Safety Council (MHSC) Rural Development Organisation (RDO) HelpAge India
Association of Mine Managers (AMMSA) Vodalife
Recycling and Environment Industry Association of India SEEDS

We regularly engage with these associations to improve the competitiveness of the Indian metals & mining industry through cost competitiveness, raw material security, import substitution and enhancing domestic market share of the metals & minerals produced within the country.

We are also members of the CII Climate Charter & the CEO Declaration on Climate Change where we are strong proponents of Indian industry taking strong climate commitments in alignment with the country’s Net Zero goal.

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