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Business partners

Saab’s business partners have a key role in the company’s success. The relationships are built on mutual respect, but at the same time it is important for us to manage the risks that may arise through our partners.

We could not realise all of our achievements and continue our success without our business partners. At the same time we recognise that business partners may pose a legal and reputational risk if not managed correctly. Therefore we divide our business partners into four categories based on risk, with each category being subject to specific corruption risk management procedures. If a business partner falls into more than one category then it is managed in accordance with the corruption risk management process for the highest risk category.

Anti-corruption

Category 1 is made up of business partners that are retained to market, promote or sell Saab’s products and services or to provide strategic advice. This includes for example market consultants, agents, lobbyists, strategic advisers, resellers and distributors. The appointment and management of these business partners follows a centralised and mandatory process which serves to (i) assess the business partner’s credentials and suitability for the assignment through due diligence and background controls, (ii) bind the business partner to Saab’s anti-bribery and compliance expectations through appropriate contractual commitments, and (iii) follow-up and control the business partner’s performance and conduct.

Category 2 includes prime contractors, offset suppliers and teaming partners. Business partners in this category are subject to a pre-defined process with detailed requirements concerning due diligence, corruption risk assessment, anti-bribery and corruption commitments and ongoing monitoring. The process is supported by specific tools developed by our central compliance expertise.

Category 3 is made up of incorporated joint ventures. The assessment of joint venture partners and the governance and management of joint ventures follow our M&A-process. We are mindful that joint ventures are not used to circumvent the strict anti-bribery and corruption standards applied elsewhere in our operations.

Category 4 consists of all business partners that are not referred to Category 1, 2 or 3. Business partners in Category 4 are risk assessed as part of ordinary operations.

Anti-corruption

A common objective for the corruption risk management of all business partner categories is the identification and proper management of red flags. Training and tools are made available to help employees identify red flags and understand when to look out for them.

Business intermediaries

Business intermediaries are all business partners that are engaged in the marketing and sale of Saab’s products and services or to assist in the strategic development or political context of Saab’s business. Examples include market consultants, lobbyists, offset consultants and resellers. Business Intermediaries are deemed to represent the highest level of third party risk. They are therefore classified as category 1 and subject to a centralized onboarding process under the supervision of the group function Market Network Management.

Anyone who wants to appoint a business intermediary must prepare a business justification and an initial corruption risk assessment, and have the documents signed off by the head of the requesting organisation, before the matter is handed over to Market Network Management.

Upon acceptance of the business justification, Market Network Management will initiate and perform a risk based due diligence investigation. This will include: collecting information from the business intermediary through a due diligence questionnaire; screening of the business intermediary against relevant data bases; conducting face-to-face interviews and ABC training; and, where needed, instructing specialist due diligence providers. The due diligence is valid for 2-4 years depending on the risk level. During the term of the agreement the business intermediary is continuously screened against relevant databases.

All contracts with business intermediaries are based on templates developed by central compliance expertise. They have a limited term (normally two years) and include mandatory provisions regarding anti-bribery and corruption, reporting and audit rights. The remuneration shall be based on objective criteria and be reasonable and proportionate to the scope of work. Where the remuneration includes a commission element this shall be capped.

People

Engagements relating to business opportunities of high values are subject to the approval of the Ethics and Compliance Board. Remuneration in these cases are based on a calculation model developed together with an international law firm. The Ethics and Compliance Board also receives regular statistics and trends relating to business intermediaries.

Saab’s Internal audit function will every year audit a selection of business intermediaries in order to verify compliance with the corruption risk management process and to achieve reasonable assurance as to the integrity of the services. The findings of the audits are reported to the Ethics and Compliance Board, which will decide on any corrective or preventive actions.

Industrial partners and offset

Prime contractors, teaming partners and offset suppliers are considered to carry a heightened level of third party risk as they are engaged in winning business or likely to be interacting with the end customer. They are therefore classified as category 2 and subject to a mandatory corruption risk management process.

The process prescribes the collection of a due diligence questionnaire, the verification of the questionnaire against external databases and the performance of a corruption risk assessment. In addition to customary business partner data, such as ownership, management and compliance maturity, the risk assessment addresses areas like identification and selection, qualifications, use of third parties, track record and country risk. There are guidelines to assess the importance of identified red flags and to recommend mitigating activities where possible.

A business partners that pass the process is subject to anti-bribery screening and monitoring requirements. The agreement shall include ABC-clauses based on templates approved by central compliance expertise.

Group Industrial Co-operation is the central function assigned with the responsibility to co-ordinate and monitor all Saab’s offset activities.

Supply chain management

Suppliers of goods are either classified as category 2 or category 4 depending on the perceived corruption risk associated with the relationship. Suppliers referred to category 2 are subject to a mandatory corruption risk management process.

The process prescribes the collection of a due diligence questionnaire, the verification of the questionnaire against external databases and the performance of a corruption risk assessment. In addition to customary business partner data, such as ownership, management and compliance maturity, the risk assessment addresses areas like identification and selection, qualifications, use of third parties, track record and country risk. There are guidelines to assess the importance of identified red flags and to recommend mitigating activities where possible.

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A business partners that pass the process is subject to anti-bribery screening and monitoring requirements. The agreement shall include ABC-clauses based on templates approved by central compliance expertise.

All suppliers, regardless of category, are requested to sign up to Saab’s Supplier Code of Conduct. The Supplier Code of Conduct includes requirements regarding anti-corruption, business gifts and hospitality and conflicts of interest along with other sustainability areas. Saab expects the supplier to flow-down similar demands to its supply chain.

Group Procurement is the central function assigned with the responsibility to co-ordinate and manage Saab’s sourcing activities. This is done in accordance with a procurement process integrated in Saab’s Global Management System, which includes assessing, evaluating, appointing and monitoring suppliers. Audits of the suppliers are planned in a priority order on a yearly basis, depending on Saab’s rating of the supplier and its performances.

Mergers & Acquisitions

Mergers & Acquisitions (M&A) transactions typically involve interaction with parties that are unknown or with no previous business dealings with Saab and, where a business is acquired, may result in Saab absorbing liability for historic events. It is therefore important to carefully and promptly assess and manage corruption and reputational risks in M&A transactions.

Group M&A is the central function assigned with the responsibility to co-ordinate and manage Saab’s M&A activities. This is done in accordance with a process integrated in Saab’s Global Management System, which includes detailed requirements regarding due diligence investigations, risk mitigating activities and implementation procedures. Corruption and business ethics risks are among the risks specifically addressed.

All M&A transactions involving acquisition of shares shall be approved by Saab’s board of directors.

Joint Ventures

Joint ventures are considered to carry a heightened level of third party risk. They are therefore classified as category 3 and subject to mandatory corruption risk management processes.

The incorporation of a joint venture is preceded by a thorough due diligence investigation to verify the integrity of the joint venture (including its partners and the business model). The investigation is conducted in co-operation with central compliance expertise.

Joint ventures under Saab’s control shall apply Saab’s rules and procedures for corruption prevention or of a similar nature. Joint ventures that are not under Saab’s control shall sign up to Saab’s Supplier Code of Conduct or commit to follow an equivalent of its core principles. Joint venture agreements shall include effective remedies in case of non-compliance with Saab’s requirements such as a contractual right to terminate the agreement in case the non-compliance is of a material nature.