2017 Integrated Report – Departure into a new era

Compliance

Compliance is an integral element of the corporate culture at DB Group. The compliance management system is based on national and international legal requirements and established standards, such as the Institute of Public Auditors in Germany PS 980 auditing standard. DB Group also applies the directive of the Federal Government on corruption prevention in the German Federal Administration Court.

The compliance management system aims to ensure that compliance risks are identified quickly and that appropriate countermeasures are im­­­­plemented. We continuously monitor our compliance management system and make any necessary adjustments. Compliance is a key area of internal control system monitoring. Intra-Group auditors therefore review the compliance management systems within DB Group as part of the internal control system audits under the German Ac­­count­­ing Law Modernization Act (Bilanzrechtsmodernisierungsgesetz; BilMoG).

Our compliance activities in DB Group focus on preventing corruption and corporate crime in the form of fraud and embezzlement, as well as consistently combating it. Specific compliance instruments have been developed to protect the company, employees and executives.

Compliance instruments

In order to achieve our compliance goals, we maintain various instruments and are continually improving them. This includes binding directives, risk and process analyses, special communication measures and consulting.

Binding directives provide the framework that is anchored in continuous communication and training at DB Group. Compliance regulations were simplified both in content and language during the year under review and the previous year, and were made more user friendly through FAQ catalogs.

The established compliance risk atlas was supplemented with a compact compliance annual report to the Group Management Board during the year under review. The two together provide a substantial overview of compliance risks for DB Groupʼs business activities: risk exposure of business units, service units and holding company functions of DB Group are described separately, and available risk reducing factors and countermeasures are demonstrated.

Compliance risk analyses are an element of risk management at DB Group and are conducted by the business units and service units. A Group-wide survey of compliance risks is conducted in accordance with governance requirements set by Group management. The compulsory framework concept contains minimum requirements for planning, conducting, reporting and follow-up.

The compliance communication was supplemented by other items, including a movie, in which the CEO and the chief compliance officer set the “Tone from the Top.” The movie is freely accessible on both the Internet and intranet.

External audit of the compliance management system

The compliance management system underwent a Group-wide independent review by an auditing and consulting company during the year under review for corruption and economic crimes in the form of fraud and em­­­bezzlement in DB Group. During the review, the compliance management system was first examined at the Group management level and then in the business units. This is intended to guarantee that the new system satisfies the legal provisions and requirements of the relevant audit standard IDW PS 980. An unqualified opinion was issued for the audit at the Group management level in the year under review. The audits of the business units also observed the requirements of ISO 19600. The final opinions will be available in 2018.

Business partner compliance

Successful long-term business operations require the careful selection of business partners and suppliers who must then be informed of the DB Group values and commit to collaboration based on shared values. DB Group has developed different formats in order to increase awareness among its business partners and to more firmly anchor sustainable actions in the supply chain. The core topics in this respect are integrity, legal standards and ethical issues. In addition to corruption prevention, this also includes anti-trust compliance and human rights. Compliance e-learning for business partners is accessible at no cost online and provides information about integrity, binding legal standards and ethical matters. DB Group also offers a special compliance dialog program for its medium-sized business partners to discuss mutual understanding of compliance and how it is organized.

Integrity and human rights training programs

Three different e-learning courses are available to our employees and executives: “DB Code of Conduct” and two special e-learning units on the topic of anti-corruption (“DB Corruption Prevention” and “DB Refresher Course on Corruption Prevention”). E-learning on the DB Code of Conduct includes the topics of integrity (anti-corruption) and human rights. Executives are required to complete e-learning. In selected companies and divisions, participation in e-learning is also mandatory for all other em­­ployees due to risk. DB employees have free access to e-learning in several languages.

As in previous years, Group-wide on-site training was also conducted during the year under review.

Training sessions for executives and employees

2017

2016

2015

Participants

14,408

13,095

6,137

Risk-based selection of participants, especially from typical risk areas (for example sales and distribution, procurement, construction supervision).

Top management was also briefed by the heads of the Group compliance, audit and legal functions for the first time as part of a joint awareness offensive. The program will continue in 2018.

Whistle-blowing management in DB Group

In DB Group, the Works Council Agreement “Whistle-blowing management” and the “Group Speaker Committee Agreement” (Konzernsprecher­ausschussvereinbarung) govern how to handle whistle-blowing tip-offs that are received. The processes implemented protect whistle­­­-blowers. Clearly defined requirements regarding the rigor and relevance of whistle-­­blowing tip-offs serve to take account of the interests of the persons concerned.

There are various ways of submitting a whistle-blowing tip-off. These include the electronic whistle-blower system, which can be used in seven (from 2018: 15) languages and is available in all business units. The whistle-­blower system was further modified in the year under review so that tip-offs can be submitted even more easily on privacy and human rights violations. Three trusted lawyers legally bound to secrecy, an ombudswoman and the whistle-blowing management team are also available.

Corruption reporting and mitigation measures

Our central whistle-blowing management received and examined allegations of corruption in the double-digit range in the year under review. Remedial actions were introduced whenever they were necessary.

Compliance with antitrust laws and preventing anti-trust damages

On-site training courses ensure that executives and employees are kept aware of anti-trust law. The formats of the training courses are individually tailored to the requirements of the business units and the central units. The target group includes all executives and employees who are in contact with competitors or have other roles that are critical with regard to competition. The compliance, audit and legal heads also took up the issue under the awareness offensive. The training courses are supplemented, in particular, by regulations specific to business units and close cooperation with (anti-trust) legal experts.

Anti-trust damage prevention measures are an important component of anti-trust compliance. To this end, DB Group introduced a comprehensive anti-trust damage prevention system in 2014. An important part of the system is to use contractual conditions in markets where anti-trust violations are most likely, which oblige suppliers to introduce or maintain anti-trust compliance programs.

Human rights

Responsibility to society

DB Group places great importance on respecting and promoting human rights. DB Groupʼs regulations reflect these high standards, in particular by applying the DB Code of Conduct and the DB Code of Conduct for Business Partners. Our particular areas of focus include fair labor conditions, respect for workersʼ rights, anti-discrimination measures and the prohibition of any and all forms of child or forced labor. In addition, DB Group has committed itself to comply with the principles of the UN Global Compact. A statement was submitted during the year under review for the first time in accordance with the conditions of the UK Modern Slavery Act

We have implemented suitable measures for the application of our own standards and we will continue to develop them. A fundamental distinction is made between measures effective within DB Group and measures effective in the supply chain.

Measures within DB Group

Within DB Group, the core of the management approach to human rights is the identification of relevant risks with respect to our business models and the specific country risks with regard to human rights.

102-12In addition to the activities related to the supply chain, one area of focus is the “Social Minimum Standards” of the DB Schenker business unit, which has global operations and is thus exposed to greater geographical risks. This policy specifies the DB Code of Conduct and is based beyond legal requirements on the principles and recommendations of the International Labor Organization (ILO) and the UN Global Compact. Compliance with the social minimum standards is regularly audited on-site by intra-Group auditors at selected locations as part of an annual audit process.

DB Group also has a range of instruments that include, in particular, the e-learning course on the DB Code of Conduct and central whistle­­blowing management. Central whistle-blowing management and the three lawyers are also available at all times, even to persons outside the Group.

Specific employees and executives of DB Group can also personally contact the ombudswoman regarding human rights. A follow-up process is in place to examine alleged violations of human rights.

A campaign was initiated in DB Group during the year under review to deal with sexual harassment in the workplace. DB Group has several contact centers where employees can turn in incidents of this nature and where they can obtain assistance.

The topic of human rights is also an integral part of DB Groupʼs stake­holder dialogs. In addition, DB Group is involved in the German UN Global Compact network and in the working groups of econsense.