Sustainability r e p o r t - Sabesp

Management Compensation GRI 4.5According to the Brazilian corporate law, the compensation paid to the membersof the board of directors, to the members of the statutory audit committee, andto the executive officers is defined as a whole, by the General Shareholders’Meeting.The compensation paid by the Company to its Board of Directors and officerstotaled R$2.6 million in 2009. An additional amount of R$900,000, related to thebonus program, was accrued in the period from January to December 2009.Internal auditThe Internal Audit department is an independent body, whose purpose is toevaluate the integrity, suitability, effectiveness, efficiency and productivity ofthe information technology and in-house control processes and systems. TheInternal Audit department has access to all documents, hardcopy and electronicrecords, system, facilities and individuals involved in the Company’s activities forthe proper fulfillment of its duties. The Internal Audit department reports to theCEO and its activities are overseen by the Audit Committee.Code of Ethics and Conduct GRI 4.8Our Code of Ethics and Conduct comprises the main guiding principles ofour activities, such as respect for society and the customers, respect for theenvironment and the people, integrity, competence, and citizenship. The Codedefines our relationship with our different stakeholders: directors, supervisoryboard members, officers, employees, customers, suppliers, shareholders,community, and society in general.In 2009, we prepared a manual with illustrative examples to build up awarenessand disseminate the Code, which was made available to our employees in severalformats. In addition, we restructured the Ethics and Conduct Committee, whichis responsible for ensuring the employee’s commitment with the Code and theCode’s continuous relevance, updating, and appropriateness, as well as guidingand suggesting the actions necessary for the companywide disclosure anddissemination of its principles.Adopting the Code of Ethics and Conduct is crucial for consolidating and expandingour conquered reputation of a socially responsible company.Whistle-blowing ChannelTo ensure compliance with the Code of Ethics and Conduct, we have an EthicsCommittee and an internal Whistle-blowing Channel, as well as a CorporateAccountability Procedure and an Ombudsman Office and a Customer Service thatreceive external complaints. The internal channel can receive anonymous whistleblowing. The results of the investigations are forwarded to the Audit Committee.Incidents are reported to the Ethics Committee, which takes preventive actions.In 2009, 172 whistle-blowing cases were registered, of which 41 percent isconcluded and 59 percent is under analysis. These reports refer to:••alleged irregularities in processes involving connections and operating water andsewage services - 37%;••alleged inappropriate behavior, such moral harassment, discrimination, sexualharassment, and unfair treatment - 27%; HR4••situations involving several administrative proceedings, such as theinappropriate use of vehicles, product inventories, tender bids, and procurement- 29%; and••alleged irregularities in the management of construction contracts and servicesprovided by building contractors - 7%.In 2009, the risks related to cases of administrative irregularities, violations of theCode of Ethics and Conduct and/or alleged corruption were mapped in BusinessUnits, using an information system, to identify the major incidents by process.In general, there was a significant decrease in the number of occurrences. Thistrend was stronger in processes involving suspected fraud in the commercialrelationship with customers and cases of misconduct. HR4••Also in 2009, the executive departments were called to expedite the necessaryactions to resolve occurrences confirmed by investigations. The meetings onthe use of the action plan monitoring system were attended by approximately80 professionals, directly or indirectly involved in the matter, most of whichwere superintendents and managers with the task of multiplying the knowledgeamong their subordinates. SO2 SO3••As a result of the accountability processes applied, the Units committed to ActionPlans focused on the improvement of work processes, adjustment of internalcontrol, and review of operating and corporate procedures. When necessary,some penalties were applied to employees. Contractors and suppliers, and weinitiated proceedings for the reimbursement of amounts to Sabesp. SO480 Relatório de Sustentabilidade 2009 81