Social performance

Employee engagement Diversity and inclusion Developing our people

General Business Principles Health and safety

Employee engagement

In 2009, 91% of our employees took the Philips Engagement Survey. The Employee Engagement Index – the single measure of the overall level of employee engagement at Philips – decreased slightly to 68% in 2009, from 69% in the previous year. Overall our engagement levels remained high during difficult economic circumstances. The target for 2010 is to reach the high-performance score of 70%.

Equally important is the insight we gained into ways we can improve. We continue to place emphasis on connecting all of our people with the long-term ambition of Philips, supported by the solid results over 2009.

Diversity and inclusion

In 2009, 35% of the Philips workforce was female, while 17% of newly appointed executives were female, illustrating our sharp focus on diversity and inclusion. Due to an outflow of female executives, the total number remained unchanged at 10%. Our ambition is to employ 15% female executives in 2012, a target the Healthcare sector exceeded in 2009.

Overall, the 593 Philips executives at year-end represented more than 30 nationalities and the percentage of executives with BRIC nationality stood at 5%.

Moreover, 23% of our top potentials and 29% of our high potentials were female in 2009. The percentage of top potentials with BRIC nationality stood at 10%, with high potentials at 17%.

Developing our people

With nearly 5,500 employees participating in programs in our Core Curriculum during 2009, enrollment decreased compared with 10,000 the previous year. Functional Core Curricula enrollment was some 11,000 in 2009, an increase from 8,664 in 2008. The overall decrease is a result of travel restrictions partly offset by intensified web-based training courses and “virtual class-room” trainings. Almost 43,000 employees participated in ‘Leading to Win’ training in 2009.

In 2009, our Inspire program for high potentials facilitated the completion of 24 project assignments. Top potentials in the Octagon program completed eight projects.

In the face of the economic downturn, participation in our curriculum of internal and external programs for executives reduced compared to 2008.

General Business Principles

The Philips General Business Principles (GBP) are central to how we operate, enabling us to maintain an ethically responsible attitude in all countries and cultures. To meet challenges in a changing world, we update our policies and directives as well as GBP training and communications programs. The global One Philips Ethics hotline seeks to ensure that alleged violations are registered and dealt with consistently within one company-wide system.

From Whistleblower Policy to GBP Reporting Policy

The Philips Whistleblower Policy was updated in 2009 based on a benchmark study and advice from outside experts. Our policy has been renamed the GBP Reporting Policy to avoid any possible negative connotations related to ‘whistleblowing’. Additional changes include:

• More clearly defined reporting channels for reporting: our GBP Compliance Officers and One Philips Ethics Line.
• Employees are more strongly encouraged to first discuss issues with management.
• Indication of preference for more specific grievance channels if available.

Updated global privacy framework

We added two additional sets of Privacy Rules to our global privacy framework as part of the General Business Principles: The Privacy Rules for Employee Data and the Privacy Rules for Customer, Supplier and Business Partner Data. These Rules specify the privacy principles defined in the Philips Privacy Code by requiring certain rules and procedures to be followed with regard to data privacy in Philips, if necessary in addition to applicable legal requirements. The Privacy Rules are intended to function as ‘Binding Corporate Rules’ for Philips as defined by the European data protection regulators, thus creating a ‘Safe Haven’ for personal data in Philips globally. The roll-out of the new Privacy Rules is coordinated by the Philips Global Privacy Council, in which Consumer Lifestyle, Lighting and Healthcare, as well as several corporate functions and countries are represented.

Updated GBP Directives

The updated edition of the GBP Directives was adopted by the Board of Management in December, for worldwide launch as of January 2010.

Improving communication

In March 2009 we rolled out a GBP communication and awareness toolkit to the Country Compliance Officers and local communication staff. Materials can be further localized and communicated with relevant cultural and business/functional examples.

Ongoing training

In 2009 an updated and refreshed version of the global web-based business ethics training tool was developed in 23 languages for Philips employees with an internet/intranet account. Employees without internet access will be provided with classroom training in their local language. The first phase of implementation was completed with a roll-out to approximately 30,000 employees in the US, the Netherlands and India. The other regions and countries are scheduled for 2010.

Seven training courses were conducted in 2009 (one each in Latin America, US/Canada and APAC, and four in EMEA). The courses provided detailed insight into conducting investigations.

The Compliance Officer network

We developed a new, more dedicated business ethics risk analysis and assessment tool in 2009. The tool includes a number of control parameters as well as internal and external risk parameters, including a number of more subjective parameters per country, for which the respective GBP Country Compliance Officers were asked to provide input.

We implemented Rules of Conduct for GBP investigations with mandatory procedures to be adhered to in all GBP investigations around the world. This includes a clear distinction between local responsibility and matters where the responsibility for investigation has to be delegated to the respective functional owners at corporate level.

Health and safety

In 2009 we recorded 427 Lost Workday Injuries cases, occupational injury cases where the injured person is unable to work the day after the injury. This is a 34% decrease compared with 2008. The rate of Lost Workday Injuries also decreased substantially to 0.44 per 100 FTEs, compared with 0.68 in 2008.

Reductions were particularly realized in the Lighting sector, which continued to make progress with a dedicated action program started three years ago to drive down injury levels.