Governance
At Stryker, we are committed to doing what’s right. Good corporate governance is essential. We conduct our affairs in compliance with all applicable laws and regulations according to the highest ethical standards. 102-16
Our mission and values, code of conduct and code of ethics are the foundation from which we embark on our CR journey.
Our Board of Directors considers environmental, social and economic risks in enterprise risk management and strategy development and delegates responsibility to Stryker leaders who direct local management responsible for implementation. 102-19 In February 2021, we amended our Governance and Nominating Committee Charter to give this Board Committee oversight responsibility of corporate responsibility matters. 102-18b
Our expanded Corporate Responsibility Steering Committee includes three leadership team members who report to the CEO, and we have developed a charter to instill accountability. 102-20a The Steering Committee oversees goals setting and CR reporting. 102-32
Our mission and values, code of conduct and code of ethics are the foundation from which we embark on our CR journey.
The Steering Committee and other leadership team members provide regular updates to the Governance and Nominating Committee, bi-annual updates to Stryker’s leadership team and annual updates to the full Board of Directors. 102-20b; 102-27; 102-31
Stryker regularly engages with shareholders and considers proposals when properly submitted based on our mission and values. Proposals come to a vote at our annual meeting when common ground is not found. 102-21; 102-29
Corporate governance information, including our bylaws, charters, guidelines and policies, is available on stryker.com, and we include further details about governance topics in our proxy statement. We provide periodic disclosures in our SEC filings.
A global Speak Up! campaign and an Integrity Matters week took place in October 2020 to shine a spotlight on the importance of speaking up about ethical issues. Based on benchmarking with other companies, Stryker has had a higher walk-in rate for reporting matters or concerns versus calling the ethics hotline. The Speak Up! campaign encouraged employees to make their voices heard and reinforced our anti-retaliation policy, reporting options and that every report is taken seriously.
Time and money spent on doing business the wrong way is time and money not spent on meeting customer and patient needs — doing what’s right in the right way matters for everyone.
At Stryker, we are committed to conducting our affairs ethically and lawfully. Our code of conduct and code of ethics establish policies and procedures intended to guide employees, officers and directors in the performance of their duties and responsibilities and ensure compliance with the company’s commitment to ethical and lawful conduct. Our focus on doing what’s right stems directly from our mission and values and joins all employees in protecting our customers and our business. 103-2
Code of conduct
Our code of conduct applies to all employees, officers and directors of Stryker and our domestic and foreign subsidiaries. It is the first of our 13 corporate policies, available in 23 languages on our website.
Failure to observe our code of conduct or any other company policy may result in disciplinary action, including termination of employment where appropriate, and could constitute a violation of law that might result in civil or criminal penalties. Stryker reports incidents of government enforcement actions related to non-compliance when required. 206-1; 419-1
Code of ethics
Our code of ethics applies to Stryker’s principal executive officer, president, principal financial officer, principal accounting officer, and controller and is supplemental to the code of conduct. The code of ethics addresses transparent reporting requirements and compliance with applicable laws, rules and regulations. Stryker’s guide on Interactions with Healthcare Professionals (HCPs) was used as a model by the industry association AdvaMed in updating their ethics code in January 2020. In turn, Stryker has endorsed, adopted and certified to the industry code on interactions with HCPs.
Ethical marketing
In our code of conduct, we explicitly state our commitment to accurately represent our products and services and comply with applicable regulatory and legal requirements governing our products and services’ marketing and sale. Our Corporate Policy 5: On-Label Product Promotion provides further guidance and direction on our commitment by making it clear that Stryker employees, contractors, consultants and other third parties acting on Stryker’s behalf may only promote Stryker products for uses consistent with the label. SASB
Risk assessment
Stryker has various programs and processes to identify and assess a broad range of strategic, financial, operational and compliance risks, including the risk of anti-competitive behavior, anti-trust and monopoly practices, and acts when necessary. The vice president, risk management administers our enterprise risk program. The risk programs, related activities and governance are designed to oversee efforts to identify emerging risks and implement comprehensive initiatives where appropriate to manage those risks. 205-1
Training
Multi-layered training focused on the code of conduct, including what’s expected of employees, business partners and the company, is the subject of a broad enterprise-level compliance program communication and engagement campaign.
Stryker employees certify to the code of conduct on an annual basis and undertake yearly compliance training. In 2020, this training and associated certification exceeded the 95 percent e-learning completion rate target. 205-2
Small group training that enables continuous improvement is usually held in person with the local teams, businesses and countries, and moved to virtual platforms in 2020.
Advice and concerns
Stryker has an ethics hotline to provide employees and non-employees with multiple avenues to raise concerns or allegations of non-compliance, confidentially and anonymously, if desired. Appropriate individuals receive reports and are responsible for handling these reports professionally and privately. The ethics hotline committee has oversight responsibility of the hotline, and receives regular reports on key trends and critical issues. The chief compliance officer provides the Governance and Nominating and Audit Committees of the Board of Directors a quarterly overview. 102-17; 102-33
Human rights
Stryker respects all people’s rights, values a diverse and inclusive workforce and is committed to treating all employees with dignity and respect. Our employees are expected to maintain a workplace that is free of discrimination, intimidation and unlawful harassment. Suspected or known conduct such as discrimination, harassment, fraud, unethical or unlawful conduct or retaliation must be reported. Our vice president, chief human resources officer oversees human rights policies and procedures for Stryker employees. 103-2
Aligned with our mission, values and strategic imperatives, our Quality Policy sets the direction for quality within our organization.
Stryker designs quality into all our processes and products and strives to meet and exceed global regulatory standards. We certify all our manufacturing and design sites to ISO 13485:2016, the international standard for medical product quality systems.
We stand behind our products and address issues if they arise. We have a robust quality data program that includes key process indicators for different dimensions of quality. This data is used to manage the day-to-day quality activities and is also regularly reviewed with executive leadership. Foundational to our quality management system is our continuous improvement program. 416-1
At its core, continuous improvement empowers employees to solve problems that they encounter in their day-to-day work. Stryker has approximately 2,500 employees certified to lead continuous improvement projects identified through internal and external audits, customer feedback and post-market surveillance. All projects conclude with a documented, evidence-based effectiveness check.
Stryker labels all products according to U.S. Food and Drug Administration and other regulatory guidance in the markets where sold. 417-1
Quality is first in all we do. Stryker provides training for every employee who impacts quality to understand their impact and how they can help ensure quality. This year we organized 132 events across 46 sites — with more than 800 participants — to celebrate and reinforce our strong quality culture.
Quality Policy
At Stryker, quality is first in everything we do. We are driven to make healthcare better for our customers by providing innovative products and services that meet regulatory requirements through our effective quality system.
We consider global excellence a growth strategy to advance innovation and reach more patients. By focusing on the resources and talent in key global markets and strengthening alignment among franchises, country teams and global functions, we make investments where appropriate to enhance our global market position.
In 2020, efforts centered on upgrading our indirect channel business and governance model to align with our growth strategy. Indirect Channel Management (ICM) will provide global oversight, alignment and consistency in managing indirect channels (IC) across our geographic reach, maintaining robust channel management processes for sustainable growth and ensuring that all IC partners operate to the highest professional standards required by Stryker. We established a new Global IC Governance Committee to review and address restricted party decisions and manage the country entry and exit process. The Global ICM function, together with the ICM Finance function, are examples of aligning teams with our growth strategy.
“We have an opportunity to raise the bar on the way we look at and get indirect channels to work alongside us,” said Laurence Hipkin, Vice President, Global Indirect Channel Management. “Anyone that sells a product or represents Stryker needs to demonstrate and live our mission and values. Our job is to instill that to those who interact with HCPs and customers on our behalf.”
Laurence leads the dedicated ICM team. Launched in October 2019, the team provides global standards and processes that hold our indirect channels to the highest professional standards we expect at Stryker.
“Stryker is a growth company and has thrived on allowing businesses to run independently, and that can sometimes result in overly complicated market approaches; with over 2,500 channel partners generating over 20 percent of our global revenues, we need to get it right. We want to set a new standard and strengthen our alignment, allowing us to serve our customers better and to create longer-term growth relationships with our indirect channel partners.”
Laurence draws an analogy from his love of classic cars. “If you put better brakes on a car, in theory, you can go faster,” he said. “Upgrading our management of indirect channels will help us to grow faster with partners who are aligned with our goals and our mission and values.”
We consider global excellence a growth strategy
Our suppliers partner with us in our efforts to make healthcare better. We are committed to conducting our affairs ethically and lawfully, and we expect that the businesses we work with will do the same. Therefore, we strive to select suppliers and vendors that share our commitment to honesty, integrity and corporate responsibility.
Responsible procurement goals
Increase supply chain transparency and supplier diversity
Our supplier code of conduct and PO terms and conditions communicate the expectations we have for our suppliers in several key areas, and strict adherence is a requirement for doing business with us. The code addresses non-discrimination, child labor and young workers, forced, involuntary labor, and human trafficking, safe working environments, immigration laws and proper documentation, wages and benefits, working hours, and freedom of association. Procurement staff are trained annually on the supplier code of conduct to ensure they can assist our supply partners in meeting our expectations. The latest training launched in December 2020 and completion rates will be reported in our 2021 report. 412-2
We expect our suppliers to share our commitment to human rights and equal opportunity in the workplace and require that they conduct their employment practices in full compliance with all applicable laws and regulations. We require that our employees who most frequently visit or interact with suppliers take annual training on the prevention of modern slavery in our supply chain, which educates them on risk factors, indicators and reporting methods. For more information, please see our disclosures in response to the California Transparency Act and U.K. Modern Slavery Act.
We also believe in the responsible sourcing of the materials that go into our products, including Tin, Tantalum, Tungsten and Gold (“3TG”) that may come from the Democratic Republic of the Congo and surrounding nations. We publish our efforts in this area and our SEC filings in our statement on conflict minerals. Additionally, we are members of the Responsible Minerals Initiative, whose mission is to provide companies with tools and resources to make sourcing decisions that improve regulatory compliance and support responsible sourcing from conflict-affected and high-risk regions.
In 2020, we made significant progress in furthering our supply chain management efforts. We created a Procurement Center of Excellence, furthering our efforts with supply chain transparency and supplier diversity, and initiating human rights and environmental assessments for targeted portions of our supply base. 407-1; 408-1; 409-1; SASB
Our efforts to strengthen these areas will continue in 2021. We will further centralize our data collection capabilities and tools to enable greater transparency and oversight and work to create a standardized supplier risk assessment.
Supplier diversity
We believe diverse companies contribute to a strong supply base, similar to the diversity of our employees, our customers, the communities in which we live and work and the patients and caregivers we serve. Our supplier diversity champions, key sourcing personnel located at our largest North American sites, lead us in realizing the benefits of a diverse supply base by developing awareness and processes focused on considering minority-, women-, veteran-, disability- and LGBTQ-owned and small businesses in our sourcing activities. In addition, we participate in outreach and develop diverse suppliers through our partnerships with the National Minority Supplier Development Council (NMSDC), the Women’s Business Enterprise National Council (WBENC) and several regional organizations. Our diverse supplier spend is shown below.
Supplier quality management
We measure the performance of our suppliers both in terms of the quality of product they deliver and their overall capabilities. We believe that fostering strong partnerships with our suppliers with a shared focus on quality delivers the best results.
Suppliers working with Stryker complete an onboarding process that identifies the requirements each must meet. Supply chain quality is overseen by our global supplier quality team, who are responsible for compliance to regulations and standards like ISO13485, monitoring, auditing and improving our suppliers. 103-2
From a quality management perspective, our suppliers are divided into those that provide products and services that can impact our product quality (approximately 7,000), and those that do not. Direct and indirect suppliers with potential to impact quality are managed through our quality-controlled approved supplier list, and are classified by category and risk. Suppliers with a higher category/risk classification require an audit and supplier agreements to be onboarded.
Per our Supplier Monitoring and Quality Performance Review (QPR) process, suppliers subject to audits are tracked in our Supplier Audit Management system. In 2020, approximately 1,000 audits were completed. Our QPR tool tracks product and audit nonconformances, corrective and preventive actions, product field actions, supplier defects per million and nonconformances not in Stryker’s control, among other metrics. Based on the results of the monitoring and the QPR review, additional actions are taken to improve quality performance.
Supplier spend North America (in $MM) |
2020 |
|
Diverse supplier (total) |
$240 |
|
Small business (total) |
$667* |
|
| * Excludes those suppliers also qualifying as diverse. | ||