GOVERNANCE
Philosophy
Governance has a broad scope and includes both social and institutional aspects. It combines voluntary practices and compliance with laws and regulations, leading to effective control and management of the organisation by encouraging a trustworthy, moral, and ethical environment
Corporate Governance at our pharma business:
Corporate Governance is a way of controlling, monitoring, evaluating, and providing a direction to the Company. PEL’s Governance has an intricate web of practices, processes, and rules and regulations, considering the interests of the various stakeholders of the Company. Its practices are characterised by the Company’s focus on integrity, accountability, professionalism, transparency, and customer satisfaction to achieve sustainable growth.
a. Governance Structure
PEL aims to excel in ESG practices beyond mere compliance with regulatory requirements and set a benchmark in the sector. It has a 3-tier governance structure that takes control of governance in local, regional, and central locations, respectively
Our major focus areas include – Responsible & Sustainable Procurement, Quality Practices, Enterprise Risk Management, and Corporate Governance across the following areas:
Risk & Opportunity Management
Responsible Investment
Data Privacy and Security
Business Continuity and Disaster Resilience
Financial Performance
Operational Excellence
Corporate Governance
Board of Directors and Committees
With an emphasis on 'Doing Well and Doing Good,' PEL has a strong Board of Directors responsible for developing the Company's vision, policies, and strategic goals and keeping track of its overall performance.
The Board acts as the stewardship body of the Company. It recognises the importance of a diverse board leveraging different perspectives, experience, expertise, gender, and culture. This will help the Company retain its competitive advantage and put the Board in an elite league. Given this context, the following changes have been undertaken in the Board structure during the year:
- In line with the Company's plans for growth in the financial sector, the Company has strengthened the skill set of its Board in this area of expertise. It has inducted Board members with rich experience in the financial industry.
- In line with the Company’s policies, the board reviews its composition to ensure that the same is closely aligned with the strategy and long-term needs of the Company. In terms of the succession planning for the Independent Directors and keeping in mind the imminent maximum tenure guidelines as per the statutory provisions, new board members who are experts in their respective fields have been inducted to revamp the Board in a phased manner.
- The Board has enhanced gender diversity, with five out of fourteen members being women. The Board consists of two Independent Women Directors, which is higher than the statutory mandate.
The Board is also responsible for protecting and nurturing stakeholder interests through monitoring and strategic decision-making, laying impetus on innovation, integrity, performance, and resilience.
The Legal, Risk, Quality, and Compliance departments report to the Board of Directors. The detailed list of all committees is also shared on our website.
We have four Statutory Committees on the Board. These include:
a. Audit & Risk Management Committee
b. Nomination and Remuneration Committee
c. Stakeholders Relationship Committee
d. Corporate Social Responsibility Committee
Ethics & Compliance
PEL has instituted a Code of Conduct for Board members, Senior Management, and all employees as well as contractors (covering vendors and sub-vendors). It is mandatory for all stakeholders to abide by the Company’s Code of Conduct. It strives to foster an ethical culture that allows stakeholders to present their viewpoints without prejudice, always maintaining mutual respect and transparency. PEL has a vigil system in place under the whistleblowing policy. This system provides a platform for all stakeholders to report unethical behavior or non-compliance to the Code of Conduct in a fair and safe manner.
Enterprise Risk Management (ERM)
PEL has a dedicated ERM system for overall risk identification, assessment, management, and mitigation. The Risk Management Group (RMG) maintains and continually improves the risk policies. It also monitors, evaluates, and suggests mitigation measures for identified risks as per their degree of materiality, in line with the objectives of the Company.
Risk Management during the Pandemic
COVID-19 played a crucial role in underlining the need to have a strong risk management focus to mitigate the financial as well as sustainability impacts of such events in the future. Agility to adapt to changing conditions during the pandemic helped PEL to not only sustain but to build resilience, grow and tap new opportunities that emerged in the industry.
Employee health and safety were of utmost priority through the reporting year, and all measures were taken to avoid the spread of COVID-19 within the premises. PEL also offered employees a 'Work from Home' option wherever possible.
As PEL is responsible for producing lifesaving drugs that are categorised as 'essential,' it was imperative to keep all manufacturing units running with the highest safety measures. To maintain business continuity with disruptions, it was also important to secure the supply chain responsibly and sustainably as the Company scaled up the manufacturing of key products like painkillers, multi-vitamins, and sanitisers during the pandemic.
Quality Governance
Quality is an integral part of the Company's identity and is considered one of the most critical aspects of its brand value. It dictates the Company's culture, people, and policies. The Company employs a three-tier quality governance model to prevent dilution of the quality bandwidth while enabling central, regional, and local controls. To ensure due authority, the Quality team operates as an independent function and reports to the Board. The Quality team is competent, multi-layered, and capable of handling all types of compliance challenges. Quality continues to be the collective responsibility of all functions across the organisation.
Business Resilience
Responsible Procurement and Supply Chain
The Company has policies for sustainable procurement, which are in line with its commitment to continuously improve the social and environmental performance of its supply chain. Its responsible sourcing approach focuses on sustainability aspects along its supply chains for the benefit of people and the planet. Extensive dialogue and close cooperation with its suppliers are essential for achieving sustainable business, processes, and production practices.
PEL’s supplier base is one of its most important resources. It constitutes several stakeholders around the world and is a huge lever for accelerating its collective impact on a sustainable future. PEL maintains dialogue and collaboration with our suppliers to promote sustainable practices and respect for human rights along the value chain. It has defined a strategic framework built on the Company’s robust risk management and compliance approach.
PEL’s comprehensive supplier evaluation and selection process considers design, materials, manufacturing, logistics, service delivery, operations, maintenance, recycling, and disposal as critical parameters.
To reduce dependency on a single vendor and single country and mitigate risks of supply and cost, the Company has developed alternate vendors in each subcategory as part of its vendor de- risking strategy.
Supplier management and sustainable procurement are key factors to increase business resilience and thus as a measure of de-risking, PEL aims to increase supplier diversification, risk assessment, and evaluation of ESG performance. To achieve these, it has a comprehensive supplier evaluation process that considers several parameters like design, quality, materials, production, delivery, operations and maintenance, recyclability, and disposal. Further, its Sustainable Procurement Policy (SOPs) evaluates its suppliers based on regulatory compliances, labor policies, health and safety parameters, carbon footprint, and environmental stewardship. PEL’s policies provide guidance for sustainable procurement practices for its supply chain partners. PEL actively engages in supplier meets periodically to share industry best practices in EHS and build stronger relations with them.
IT Security, Data Protection & Privacy
PEL has secured its computers and servers with the latest versions of software and deployed anti-virus, anti-spyware protection, and firewalls on its systems. It has a strong cyber-security infrastructure and our data backup includes off-site or remote storage. To create awareness of cyber-security across its employee base, the Company conducts gamified online trainings that are mandatory and regularly publishes newsletters, posters, and emailers.
Innovations and Technology
The Company has a guiding vision called ASPIRE – 'Aspire to be a strategic partner through innovative solutions for rapid growth enablement' to drive its technology advancement. PEL’s Information Technology team works relentlessly toward transforming its business through implementing advanced technology solutions and spearheading digital initiatives and programs.
Research & Development (R&D)
PEL conducts extensive R&D activities to find new sustainable chemical alternatives for pharmaceutical and herbal products. Apart from developing other Active Pharmaceutical Ingredients (APIs), PEL is currently undertaking development activities for Oral Solids and Sterile Injectables.
Additionally, to reduce its carbon footprint, PEL is constantly researching ways to improve our manufacturing methods and is committed to reducing the waste generated from packaging and other areas during manufacturing.
PEL has also invested in the Piramal Swasthya Management and Research Institute, which undertakes research activities to bridge public healthcare gaps. It is led by the nation's vision of Universal Health Coverage and ending preventable deaths through innovative solutions. Piramal Swasthya is currently operational in 21 States through 35 innovative public healthcare delivery programs and has served more than 11.3 Crores beneficiaries. Piramal Swasthya is among the largest not-for-profit organisations in India.
In Focus: Strengthening ESG Performance at our Pharma Business
STAKEHOLDER ENGAGEMENT AND MATERIALITY
PEL conducts business keeping in mind the best interests of all its stakeholders when making decisions. It is vital for the Company to get regular feedback from its stakeholders which helps it understand their expectations and keep the momentum to create constant value. PEL engages meaningfully with its stakeholders to identify and solve their concerns in a systematic manner. Through this effort, PEL hopes to achieve economic and environmental sustainability and a future free of potential threats.
Based on its operations, business attributes and industry practices worldwide, PEL has identified its key stakeholders for its Pharma business: investors and shareholders, government and regulators, employees, suppliers and business partners, patients and customers, industry organisations, NGOs, and community members.
Engaging with our Stakeholders
| Category | Engagement Frequency | Key Concern Areas | Mode of Engagement |
| Investors and Shareholders |
Monthly/ quarterly/ half-yearly/ annually |
|
Investor calls and presentations, Conferences, One on one meetings, Annual reports, Press releases, Company website |
| Government and Regulators |
Quarterly/ Annually |
|
Legal filings, Industry representations and Forums |
| Employees |
Weekly/ Monthly/ Quarterly |
|
Online surveys, Town halls, Newsletters, Policies, Training, and Development |
| Suppliers and Partners |
Monthly/ Quarterly/ Annually/ Need basis |
|
Supplier performance evaluation, Supplier engagement forum, Procurement meetings |
| Patients and Customers |
Monthly/half-yearly/ annually |
|
Surveys, Web portals, Performance review meetings, Client meetings, Customer audits |
| Industry Organizations and NGOs |
tetete |
|
|
| Community |
Continuous/ Need basis/ Annually |
|
CSR Projects, Employee Social Impact Awareness Programs |
Materiality Assessment
PEL recognises the importance of taking action to resolve any issues faced by the Company. In FY 2022, PEL performed a materiality assessment for the pharma business by proactively engaging with the organisation's important external and internal stakeholders. Through this exercise, PEL identified key material topics from an ESG perspective that may significantly impact the Pharma organisation.
The key stakeholders involved in the assessment were the Company's top leadership, senior management, employees, customers, supply chain partners, and investors. It conducted interviews and surveys with the stakeholders, supplemented by secondary research on our peer companies and competitors. It collected input from different sources internally, including strategic business unit leaders.
Materiality Assessment Process
ESG STRATEGY FRAMEWORK OF OUR PHARMA BUSINESS
PEL aspires to be a sustainable organisation by implementing business strategies that create significant stakeholder value. PEL has established a dedicated ESG Purpose and Vision, which serves as a strategic guidance for its Pharma business. A comprehensive ESG strategy framework with an articulated vision helps the Company take its intent forward and demonstrates its unwavering commitment to serve society and create value for its stakeholders.
As part of the ESG strategy framework, PEL has defined four strategic pillars that enumerate the relevant components for sustainable growth of its Pharma business. These pillars are the foundation of its ESG strategy, allowing it to focus on and respond to aspects important to the Company. Through these pillars, PEL has identified primary ESG focus areas that are crucial to its operations. These focus areas assist the Company in formulating and delivering effective measures that enable it to maximise value creation for our stakeholders.
