Ethics and compliance make up the foundation of our governance structure, which is intended to ensure that we do business and act with integrity toward our customers, suppliers, shareholders, communities, regulators and within our organization.
Our corporate governance and board composition
We believe that the effectiveness of our governance framework is largely a function of the highly qualified, experienced and diverse Board of Directors (Board) and leadership teams, which are focused on driving Avnet’s long-term success. Board directors have diverse characteristics, experiences, perspectives and skills, which help the Board create sustainable value for our shareholders and other stakeholders. At the end of FY23, we are proud to have had 10 highly qualified directors on our Board, collectively bringing a broad range of experience in areas such as CEO leadership, international operations, technology and electronic components industry, and legal and regulatory compliance.
Our Board composition reflects broad gender, race, ethnic, sexual orientation and geographic diversity. Avnet believes that valuing diverse backgrounds and perspectives both at the board level and throughout the organization makes our business more resilient. The Corporate Governance Council (CGC) considers diversity when filling Board vacancies and proposing director nominees for shareholder election.
BOARD OF DIRECTORS DEMOGRAPHICS
| DEMOGRAPHICS | # | PERCENTAGE |
|---|---|---|
| Men | 7 | 70% |
| Women | 3 | 30% |
| Non-ethnic | 5 | 50% |
| Ethnic | 5 | 50% |
| LGBTQ+ | 1 | 10% |
| Independent | 9 | 90% |
| Average Tenure | 5.4 years | - |
| Average Age | 64 | - |
Please review our 2023 Proxy for more information on our Board of Directors.
Governance model provides oversight and alignment for ESG program
Our governance structure supports the coordination of environmental and social efforts across all areas of our business to advance our long-term operational and financial success. The Board oversees and guides our ESG program and reviews the full program annually, at a minimum. The Board allocates oversight of certain ESG-related issues to appropriate committees, as outlined below:
BOARD OVERSIGHT
| BOARD OF DIRECTORS | ||
|---|---|---|
| Oversight of all enterprise risk management of ESG-related areas (strategic, operational, financial, legal, information technology and reputational) and the strategic alignment. | ||
| CORPORATE GOVERNANCE COMMITTEE | AUDIT COMMITTEE | COMPENSATION AND LEADERSHIP DEVELOPMENT COMMITTEE |
| Oversees and reviews corporate governance and ESG program and initiatives, and reviews and approves of annual sustainability report. | Oversees ethics and compliance program, enterprise risk management and cybersecurity. | Oversees overall corporate compensation structure, policies and programs, as well as policies and programs related to talent, leadership, culture, diversity, equity and inclusion (DEI). |
MANAGEMENT RESPONSIBILITIES
| AVNET LEADERSHIP TEAM | ||
|---|---|---|
| Responsibility for execution of sustainability strategy and implementation of sustainability initiatives within key ESG-related areas. | ||
| ESG GOVERNANCE COUNCIL | GLOBAL DEI COUNCIL | CORPORATE ETHICS AND COMPLIANCE COMMITTEE |
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The Corporate Governance Committee (CGC) of the Board has primary oversight of corporate governance, including corporate social responsibility and ESG. It monitors the effectiveness of our ESG program and initiatives, offers advice and counsel to management, and makes recommendations to the Board. The Audit Committee oversees Avnet’s Ethics and Compliance Program, enterprise risk management, and cybersecurity. The Compensation and Leadership Development Committee oversees our corporate compensation structure, including risks related to our compensation structure, policies, and programs related to talent, leadership and culture, and DEI.
With oversight from the Board and the CGC, the Avnet Leadership Team (ALT) approves and provides the resources to execute our ESG strategies and objectives. The ALT established an ESG Governance Council composed of the chief financial officer (CFO), chief people officer (CPO), general counsel and regional business president, all of whom report directly to the chief executive officer (CEO). At least biannually, the ALT reports on the ESG program during board committee meetings. The ESG Governance Council assists the larger ALT in setting and implementing ESG- and sustainability-related strategies, monitoring sustainability topics, implementing sustainability policies, and reviewing and approving the corporate sustainability report and other disclosures.
The ESG Governance Council meets quarterly to oversee and support the ESG Working Team, a cross-functional group composed of global representatives from different levels of management that meets monthly to create and implement our ESG strategy and goals.
Our Ethics and Compliance Program
Avnet’s Ethics and Compliance (E&C) Program is designed to prevent, detect and respond to legal and compliance risk and misconduct, and we continually evaluate ways to refresh, refine and reinforce our approach. Among other things, the E&C Program includes the following core elements:
- Written standards of conduct, policies and procedures
- A compliance officer and compliance committee(s)
- Training and education
- Communication and awareness
- Internal monitoring and auditing
- Confidential reporting options for whistleblowers through the Ethics Alertline
- Prompt investigations and corrective action
The strategic road map for our E&C Program was updated in FY23 to extend through FY25. It maintains our key focus areas and priorities of training, awareness and the Code of Conduct Advisor (CCA) program, in addition capturing the refresh of our Code of Conduct and introduction of a recognition program, among other initiatives.
Avnet’s annual compliance training program alternates between Code of Conduct and privacy and security training (for all employees), and anti-corruption and export compliance (for the majority of employees) every other year. In FY23 (CY22), the global completion percentage for the annual compliance training program, which included both anti-corruption and export compliance, was 99.6%.
Avnet’s Code of Conduct is reviewed by the Board annually and is refreshed approximately every three to four years, with broad stakeholder input, Board oversight and senior management approval. During FY23, we refreshed our Code of Conduct, which was published globally in 18 languages in September 2023.
Our Ethics and Compliance goals are aligned to the Ethics and Compliance Program’s strategic roadmap.
Scorecard of Avnet's Ethics and Compliance Goals
| Topic | FY23 Goals | FY23 Performance | FY24 Goals |
|---|---|---|---|
| Increased employee awareness of ethics and compliance | Refresh internal ethics and compliance communications program |
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Refresh internal ethics and compliance communications program |
| Ethics and compliance training | Develop and implement a manager toolkit to underscore “tone at the middle” |
Development complete and initial implementation targeted for November 2023 | Target global completion rates of 97% for the annual compliance training program covering the following: • Code of Conduct • Privacy & Security |
| Ethics and compliance included in job descriptions and onboarding | Implement cadenced program to employees who have embraced “owning” compliance (”everyday heroes”) |
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Refresh Global Anti-Corruption Policy and program, and review the process for gifts, gratuities, travel and entertainment |
| Code of Conduct | Publish refreshed Code of Conduct |
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For more information on our Ethics and Compliance program and other resources including our Ethics Alertline, Code of Conduct and Policies, visit our Ethics and Compliance site.
