Overview
Corporate Compliance
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Corporate Compliance
Global commitment to compliance and preventing corruption
Bayer will not tolerate any violations of the law. A comprehensive corporate compliance system is in place requiring all employees of Group companies to act responsibly and fully observe applicable law. Legal compliance is taken very seriously, as is demonstrated by Bayer’s numerous activities in this area and the global anti-corruption campaign launched in 2007.
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| Dr. Roland Hartwig, Head of Law & Patents, Insurance at Bayer AG and Group Compliance Officer “Our commitment to abide by the rules applies throughout the Bayer Group, to all countries and to all employees.” |
Clear standards of conduct
The Bayer Group published a comprehensive compliance program in 2004 entitled the “Program for Legal Compliance and Corporate Responsibility at Bayer.” The standards it sets are numerous, including a definitive ban on anti-competitive conduct and corruption as well as rules on non-discrimination, the protection of intellectual property, product safety, occupational safety and environmental protection. “Our commitment to abide by the rules applies throughout the Bayer Group, to all countries and to all employees. We acknowledge and accept the possible effects of this stance on local business opportunities,” Hartwig explains.
Effective compliance structure
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“One step we took in 2007 in response to the last audit by Corporate Auditing was to establish a Group Compliance Committee, which facilitates Groupwide steering of our compliance system,” explains Hartwig. He himself chairs this committee, reporting directly to Bayer’s Chief Financial Officer.
Group-wide campaign
“Bayer will not entertain any business deals that involve bribery. No amount of additional revenues can justify illegal or unethical business practices.” Those were the words of Group Management Board Chairman Werner Wenning when Bayer’s Group-wide communications campaign on compliance issues was launched in August 2007. Bayer managers the world over were provided with specially developed training materials in German, English and Spanish and called upon to raise their employees’ awareness of the need for compliant behavior. Since the campaign began, Bayer has already given almost 70,000 of its employees training on compliance- related issues, particularly in the area of corruption prevention.
Varied training programs
In addition, the subgroups and service companies conduct their own compliance training, addressing regional and industry-specific topics as well as issues of significance to the entire Bayer Group. “When deciding on the focus of our training measures, we follow a risk concept that is partly based on the Corruption Perceptions Index of Transparency International, and we actively involve the local Compliance Officers in planning,” notes Hartwig. Starting in 2008, Bayer plans to work with an outside provider on adding more web-based learning opportunities to its training repertoire.
Local compliance hotlines
In 2007 Bayer also began expanding its existing system of local compliance hotlines. Today, hotlines are already available to a large proportion of Bayer employees to enable them to anonymously report any suspected violations to an independent unit and seek counsel in their native language. In the future, the contact information of local Compliance Officers and personnel will be available to all employees via the intranet. By using the hotlines to solicit information and counsel as well as report suspected violations, Bayer employees are demonstrating their increasing awareness of compliance issues.
Violations will not be tolerated
The message of Bayer’s compliance program is clear: zero tolerance for violations. Should violations be suspected despite the measures taken to ensure compliance, there are a number of possible ways to report them. The consequences for violators range from a reprimand to immediate termination, depending on the severity of the case. Any proven compliance violations will affect managerial staff’s performance reviews. Hartwig stresses: “Managers who fail to demonstrate that they took adequate measures to prevent violations will also be penalized.” On no account may performance targets be agreed on that conflict with the compliance program.
In spite of all these efforts, violations were committed in 2007 by individual Bayer employees and business partners. In the case of proceedings against a former service provider to Bayer and certain Bayer employees, who are under investigation by the Cologne public prosecutor’s office for bribery, Bayer has already terminated all contracts with this provider and suspended the business relationship indefinitely. Some of the Bayer employees involved have already been dismissed. “We reserve the right to take further action pending the results of the investigation,” Hartwig comments. In proceedings brought by the European Commission in 2007 against five rubber producers, including Bayer, concerning collusion on prices, Bayer turned state’s evidence and was granted immunity from prosecution for cooperating with investigators.
In spite of all these efforts, violations were committed in 2007 by individual Bayer employees and business partners. In the case of proceedings against a former service provider to Bayer and certain Bayer employees, who are under investigation by the Cologne public prosecutor’s office for bribery, Bayer has already terminated all contracts with this provider and suspended the business relationship indefinitely. Some of the Bayer employees involved have already been dismissed. “We reserve the right to take further action pending the results of the investigation,” Hartwig comments. In proceedings brought by the European Commission in 2007 against five rubber producers, including Bayer, concerning collusion on prices, Bayer turned state’s evidence and was granted immunity from prosecution for cooperating with investigators.
In compliance with the Corporate Governance Code
Bayer also shows how seriously it takes corporate compliance by consistently satisfying all of the recommendations of the German Corporate Governance Code. Compliance with the Code, including, in particular, the new recommendations issued on June 14, 2007, was an important aspect of the Board of Management’s and Supervisory Board’s work in 2007. As a result of these efforts, Bayer was able in December 2007 to renew its declaration that the company is in full compliance with the Code.
Ongoing commitment to compliance
We are currently revising our compliance program to more accurately target our communications on these issues in the Bayer Group. For example, the new version will contain an updated, detailed description of the Compliance Officers’ responsibilities. Bayer will continue to regard compliance as a key issue going forward.
The integrity of companies is essential to their acceptance by society
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| Professor Josef Wieland, HTWG – Institute for Intercultural Management, Values and Communication, Constance, Germany |
To be successful, compliance management needs to combine a number of elements. First, it requires a clear code of conduct that applies to everyone. The principles embodied in this code must be effectively explained to the target audience and firmly established by way of agreements on performance targets, communications activities and training courses and be integrated into the company’s risk management system. Of crucial importance, of course, is the message put across by corporate management, which must be clear, consistent and uncompromising.
Bayer has developed a comprehensive compliance system over the years. The important thing now is to continually monitor its implementation both within and outside the company. Compliance is an ongoing process that must be kept alive over time, irrespective of established routines, and supported by a strong corporate and leadership culture. That is the true art of compliance.
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