Management Report & Annexes | Report on Corporate Governance

18.3 Compliance

Bayer manages its business responsibly and in compliance with the statutory and regulatory requirements of the countries in which it operates.

We define compliance as legally and ethically impeccable conduct by all employees in their daily work – because the way they carry out their duties affects the company’s reputation. Bayer does not tolerate any violation of applicable laws, relevant codes of conduct or internal regulations.

The Board of Management is unreservedly committed to corporate compliance and Bayer will forgo any business transaction that would violate our compliance principles. These principles are enshrined in our Corporate Compliance Policy, which is available in 42 languages. This document details our commitment to fair competition, integrity in business dealings including zero tolerance of corruption, the principles of sustainability and product stewardship, the upholding of foreign trade laws and insider trading laws, the separation of business and private interests, proper record-keeping and transparent financial reporting, fair and respectful working conditions, and avoidance of all forms of discrimination. Every employee is required to immediately report any infringement of this policy (except in France where this requirement does not apply due to national law).

Managerial employees have a vital part to play in implementing the Corporate Compliance Policy. As role models, they must help to ensure that this important code of conduct is adhered to in practice. Managers may lose their entitlement to variable compensation components and be subject to disciplinary measures if systematic violations of applicable law entailing loss or damage to Bayer have occurred in their sphere of responsibility and could have been prevented if they had taken appropriate action. Compliant and lawful conduct forms part of the performance evaluations of all managerial employees.

Bayer’s Corporate Auditing department regularly verifies adherence to the Corporate Compliance Policy. In 2013, 205 audits, including 52 compliance audits, were performed on the basis of a risk-oriented audit plan that takes potential corruption and other risks into account. Such audits were either preventive or incident-related. Observance of the Corporate Compliance Policy is also a focus of all regular ­audits. The head of Corporate Auditing regularly attends the meetings of the Audit Committee of the Supervisory Board and provides it with a list of conducted audits and their outcomes at least once a year.

The head of the Bayer Group’s compliance organization is the Group Compliance Officer, who reports ­directly to the Chairman of the Board of Management. The Group Compliance Officer reports regularly to the Audit Committee of the Supervisory Board on any confirmed compliance violations. The subgroups and service companies each have their own compliance officer, who is responsible for ensuring that the respective subgroup or company adheres to Group-wide standards and any further subgroup- or industry-specific standards that may apply. Operational coordination of Group-wide compliance activities is the task of the central Compliance Department, which was expanded in 2013. There are central Compliance Officers in 35 countries and country groups, supported where necessary by further compliance functions. Their role is to advise employees on lawful and ethically correct behavior in business-­related situations.

The compliance organization operates in accordance with international standards such as the OECD ­Recommendations of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions.

Compliance is crucial to the success of our business. In 2013 Bayer adopted a Group-wide Compliance Charter to integrate compliance even more closely into all operating units and their work processes with the aim of making the compliance organization an even stronger partner for our operational business. The priority is to prevent compliance violations from occurring. Extensive communication and training activities are designed to help employees develop a permanent awareness of compliance issues and the associated risks.

limited assurance

Online annex: 3-18.3-1

Through our extensive training activities on specific aspects of compliance, we aim to ensure employees are permanently aware of the meaning of compliance, its importance for Bayer, and how they can avoid inadvertently violating compliance principles.

The web-based training program on the Corporate Compliance Policy is an integral part of the official onboarding process for new managers. They are requested to take this training within three months of becoming a manager or joining Bayer. In 2013 it was taken by 2,800 managers, which was about 50% of the ­managers newly hired or appointed during the year.

The web-based training program entitled “Anti-Corruption” has been translated into 10 languages and adapted for different media formats. It is already available in 78 countries and has been completed by some 55,000 employees, or about 48% of the total workforce.

At the same time, the HealthCare subgroup has developed a separate online training program relating to the compliance manuals for pharmaceutical products and medical devices to provide preventive training about specific compliance risks. These training modules outline the basic rules for responsible and ethically correct dealings with members of the medical professions, the promotion of HealthCare products, non-reciprocal benefits, and the exchange of services with people working in the health care sector and at medical facilities.

In 2013 we again ran an extensive communication campaign about compliance aimed at providing all employees with further information, explaining who is now available to advise them under the new business partnering concept, and raising awareness for compliance-critical situations. A quarterly newsletter for employees is published on the compliance intranet site.

Bayer’s intranet site and internal print media reported widely on the new mandatory web-based ­anti-corruption training program, the setting-up of a new email address for employees’ questions relating to compliance, the Compliance Charter, the tasks and structure of the new central global compliance organization, and the new ICM@bayer project. ICM stands for Integrated Compliance Management, a new Group-wide system through which the systematic, risk-based approach to the identification of compliance risks is to be developed further and mapped in a closed management system. The goal is to move away from an event-driven approach to a preventive one.

Since 2012 Bayer has used short videos depicting typical compliance-critical situations as an additional communication tool. Employees can view these on the compliance website. The films currently available focus on anti-corruption, conflicts of interest and equal opportunities for everyone and show typical key compliance scenarios.

Compliance was also a focus of communication and training activities at the subgroups and service companies in 2013.

We have established hotlines worldwide through which compliance violations can be reported. This can also be done anonymously. In 2013 the compliance organization registered 72 reports via the central compliance hotline and email address. Of these, 20 were from Germany and 52 from other countries; 58 reports were received by email (24 of them anonymously), 12 by telephone (10 anonymously) and 2 anonymously by regular mail. Suspected compliance violations may also be reported to the Compliance Officers, to Bayer’s Corporate Auditing Department or via local hotlines set up by the country organizations. All suspected compliance violations in the Group are recorded according to uniform criteria and processed according to the rules set forth in the Directive on the Management of Compliance Incidents.

Last updated: February 28, 2014  Copyright © Bayer AG