Governance Overview

At PPG, we hold ourselves to a very high standard of integrity and professional conduct. It is imperative that each board member, employee and business partner knows, understands and fully abides by our staunch commitment to strong corporate governance, ethics and compliance.

Because we own and operate the vast majority of our global footprint, we have direct control over, and visibility into, our operations. This facilitates our ability to instill an ethical culture and monitor compliance to our codes and policies.

In 2019, we were the only coatings company awarded a Pro-Ethics seal by the Brazil Federal Ministry of Transparency and the Comptroller General of the Union. The seal recognizes companies that demonstrate lawful business practices and operate with the highest level of fairness, transparency and integrity.

We also received a Gold Rating in corporate social responsibility from EcoVadis, a leading provider of business sustainability ratings, in 2019.

Structure

PPG is governed by an 11-member Board of Directors in accordance with our Corporate Governance Guidelines. The board’s Audit Committee provides oversight for ethics and compliance.

We maintain a Global Ethics and Compliance Committee chaired by our CEO, as well as regional committees chaired by our regional business leaders.

Our compliance office is headed by our chief compliance officer (CCO), who directly reports to our senior vice president and general counsel. The CCO also reports progress to the Audit Committee at least three times per year.

In 2019, we had 21 full-time equivalent employees in our compliance office. Located around the world, these employees oversee general ethics and compliance matters, investigations, export compliance, training and more. They are supported by hundreds of employees worldwide who help implement specific codes, policies and initiatives.

Codes and Policies

The PPG Global Code of Ethics, which is available in more than 20 languages, sets forth the principles that apply to all employees – everywhere and in every circumstance.

Supplementing the code are specific policies and procedures that include our Global Anti-Corruption Policy, Global Export Control Policy, Export Compliance Alert, Anti-Corruption Due Diligence Procedure for Third Party Intermediaries and Denied Country Policy.

In 2019, we refreshed our Anti-Corruption Policy to simplify certain concepts and make the policy more practical. We issued the updated policy in the first quarter of 2020. We also refreshed and issued our Anti-Corruption Due Diligence Procedure for Third Party Intermediaries in 2019 to streamline some of our processes, better align the procedure to our risk profile and add ongoing media monitoring of our approved third parties.

External to our own operations, our Global Supplier Code of Conduct and Supplier Sustainability Policy clarify our expectations in the areas of business integrity, labor practices, human rights, associate health and safety, and environmental management. Every supplier, vendor, contractor, consultant, agent and other provider of goods and services must adhere to this code and policy.

Legal and Compliance Risk Assessment

We conducted a global legal and compliance risk assessment in 2019. For the assessment, we surveyed approximately 10% of our managers at all levels who have four or more direct/indirect reports regarding 33 legal and compliance risks across the following 11 risk categories:

• Corruption;
• Fair competition;
• Trade compliance;
• Non-public information;
• Intellectual property;
• Labor, employment law and security;
• Asset protection;
• Conflicts of interest;
• Books and records;
• Third-party management; and
• Change in local regulation.

We initiated action planning around the five most commonly cited risks, with the work continuing into 2020.

Training and Communications

Our employees have access to online training in multiple languages that covers, among other topics, anti-corruption, competition law, conflicts of interest, export compliance and our Global Code of Ethics. We also deliver in-person training in every region, with particular focus in higher-risk regions and for higher-risk topics. More than 10,000 employees – 20% of our workforce – received in-person training in 2019. Overall, more than 60% of our employees completed either online or in-person training on ethics and compliance issues in 2019.

With the launch of PPG’s new global training platform, we began preliminary work in 2019 to update our ethics and compliance curriculum. Development will continue in 2020.

We communicate with all employees on ethics and compliance topics throughout the year. We do this primarily through our quarterly Compliance Connections bulletins and associated manager toolkits to encourage discussion of ethics and compliance topics in smaller group settings. Our ethics intranet site also provides information on policies, procedures and more, as well as an avenue to report ethics and compliance concerns.

In 2019, we launched the Speak Up Challenge email series, with each challenge providing an in-depth look at a specific ethics or compliance issue and encouraging employees to report concerns. The first two challenges covered data falsification and conflicts of interest.

Reporting and Investigating

The PPG Ethics Helpline is available for all employees and third parties, including customers and suppliers, to ask ethical and compliance questions or report a concern anonymously. Individuals also can contact a number of management resources, including our chief compliance officer, to report concerns. It is against PPG policy to retaliate against anyone for making a good-faith report of a violation of law or the PPG Global Code of Ethics.

The helpline is managed by an independent, third-party firm with multi-lingual representatives who are trained to listen carefully, ask questions and document the situation accurately and anonymously.

* Benchmarks represent comparisons to other manufacturing companies with 10,000+ employees. Data is for 2019 as of 4/2/20.

Our compliance office handles all reported issues, with each taken seriously and fully investigated.

Each case is assigned to the appropriate functional or regional investigator or team for investigation. Actions include reviewing and preserving relevant documentation, conducting interviews, communicating relevant findings, preparing a final report and identifying any appropriate corrective actions. Disciplinary actions are the responsibility of the human resources team in conjunction with legal, compliance and the business.

* Benchmarks represent comparisons to other manufacturing companies with 10,000+ employees. Data is for 2019 as of 4/2/20.

Although the complexity of any allegation may necessitate an extensive investigation, our goal is to close the investigation and case report in a timely manner. The person who reported the issue through the helpline is given a case number to anonymously check the status of his or her report throughout the process.

In 2019, we opened 548 investigations encompassing 822 allegations of employee misconduct. We had 51% of these reports come through the PPG Ethics Helpline (phone and internet submissions). We received the remainder through internal sources, including direct emails to management. Of the 2019 allegations closed as of year’s end, 59% were substantiated and resulted in 498 disciplinary actions.

We experienced an increase in allegations between 2018 and 2019 due to acquisitions and continued efforts to communicate to our employees on the importance of reporting concerns. To encourage involvement and promote transparency, we provide information and data on reported ethics concerns to our employees throughout the year.