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External Reviews: Transparency International

External Reviews

Embedding anti-corruption ethics into the culture of an organisation and integrating compliance into the business model is essential in both practice and law.

Internal Controls

Is the design and implementation of the anti-bribery and corruption programme tailored to the company based on an assessment of the corruption and bribery risks it faces?

With the appointment of Dr. Donatus Kaufmann in 2014 as Executive Board member responsible for Legal & Compliance the Compliance function initiated a broad-based process for the strategic development of our Compliance approach. Starting point was a broad-based risk analysis that was carried out in the entire Group on a bottom-up basis. The aim was to make the specific challenges for implementing an effective Compliance programme visible for each and every unit, particularly in our priority regions, and to create the conditions for the efficient management of our Compliance activities. This also included a detailed analysis of all Compliance risks actually confronting us. With our bottom-up risk assessment, we developed a risk map which creates a significant benefit and has a major importance for our daily work.

The risk analysis and the correlating risk map are continuously updated with the help of internal and external audits as well as with the results and experiences from workshops and business advice in our daily Compliance work. This leads to a continuous re-assessment of Compliance risks at thyssenkrupp.

Our Compliance approach has not only been certified as "suitable", but also as "effective" and thus the highest rating - as certified by independent specialized experts. We were one of the first companies in Germany to be certified according to the IDW testing standard PS 980.

Important related documents and links:
Audit reports

Does the company review its anti-bribery and corruption risk assessment procedure and update it when gaps and issues are identified?

As stated above under 2.1 we developed a risk map with our Group wide bottom-up risk assessment in 2014, which is continuously updated with the help of internal and external audits as well as with the results and experiences from workshops, and business advice in our daily Compliance work as well as the results of the annual Group-wide assessment of the internal control system.

Based on our holistic understanding of the subject of Compliance, we also started with our strategy “Compliance 2020” initiative in the fiscal year 2013/2014: our ultimate goal is to establish Compliance in a more comprehensive and sustainable way throughout the Group. “Compliance 2020” also contains a specific focus on the areas of anti-corruption and anti-bribery. The initiative contains numerous measures including the further development of our global training concepts, the detailed implementation of Compliance into our business processes, as well as a target group-oriented communication.

Over the past few years, we have further conducted an extensive analysis of the cooperation with our sales agents (especially in the marine sector). This is in particular due to media-effective cases such as the "Israel" case, which made us aware of potential improvements in our Compliance programme, but also serves to illustrate our approach to further developing our Compliance programme:

Due to the “Israel” case inter alia, we today carry out extensive Compliance checks before hiring sales agents. By means of complex verification processes, we have the opportunity to identify risks as early as possible and to minimize them as far as possible. If there are indications of irregularities, we investigate them in full at any time and may sort out doubtful business partners from the outset. Furthermore, we insist on very clear contractual terms with our sales agents, especially with regard to the adherence of antitrust and anti-corruption laws as well as the performance records to be delivered.

Important related documents and links:
Compliance strategy 2020
Audit reports

Is the company´s anti-bribery and corruption programme subject to regular internal or external audit, and are policies and procedures updated according to edit recommendations?

It is particularly important to us to continuously exchange ideas with external experts. Our Compliance approach has not only been certified as "suitable", but also as "effective" and thus the highest rating - as certified by independent specialized experts. We were one of the first companies to be certified according to the IDW testing standard PS 980. It is written in our Annual Report 17/18, p. 97, 98, and therefore certified by an auditor, that our Compliance programme comprises the three elements “inform & advise”, “identify”, and “report & act”. „Identify“ refers to the aspect, that in the reporting year, our Compliance Officers once again conducted proactive and event-driven audits and investigations. The aim of these is to regularly examine critical business operations based on a risk-oriented, structured audit process.

Furthermore, pursuant to the German Commercial Code (HGB = Handelsgesetzbuch) an independent auditor has to also assess the company’s tools against bribery and corruption for the mandatory independent auditor’s report on the consolidated financial statements.

At thyssenkrupp, every internal and external audit report contains recommendations to business processes as well as individual behavior. These are constantly reviewed by our Corporate Compliance Department to further evolve and update our set of guidelines and policies, training material etc. In the end, internal and external audits are part of our regular “Plan-Do-Check-Act” improvement cycle to regularly re-evaluate and adapt our policies and procedures as well as the whole Compliance management system.

Important related documents and links:
Annual Report 17/18

Does the company have a system for tracking, investigating and responding to bribery and corruption allegations or incidents, including those reported through whistleblowing channels?

The Compliance Organisation at thyssenkrupp also comprises its own Investigations Department which – in close collaboration with internal auditing – systematically tracks, investigates and responds to bribery and corruption allegations or incidents, explicitly including those reported through our various whistleblowing channels.

Extract from the annual report 16/17, p. 95:

“In a healthy corporate and management culture, commitment and shared values go hand-in-hand. Violations of the law or internal rules are not compatible with our understanding of Compliance. The following rules therefore apply unequivocally:

  • We systematically investigate all reports of legal violations and clear up the facts.
  • Employees who report possible legal violations in good faith enjoy special protection from unfair treatment.
  • Any violations identified are stopped without delay.
  • Any violations identified are systematically and appropriately sanctioned as necessary, regardless of the name and function of the person involved.”

Bona fide reports help counteract violations at an early stage and limit the damage for our company, our employees, and our business partners. We have therefore set up several channels for contacting us – anonymously if required – to report infringements. This system for reporting information is open to all thyssenkrupp employees as well as third parties such as customers, suppliers and others. thyssenkrupp and the Corporate Function Compliance safeguard the interests of the whistleblower not only through this secure Whistleblowing System, but also by providing assurances that all information received by the Corporate Function Compliance at thyssenkrupp AG will be treated in confidence. We also provide assurance that all means at our disposal will be used to protect whistleblowers acting in good faith from any disadvantages as a result of their disclosures.

During its investigations, thyssenkrupp will also strive to protect the legitimate interests of other persons affected by a disclosure. Casting suspicion on another person can have serious consequences for that person. It is therefore essential that the Whistleblowing System is used responsibly.

Important related documents and links:
Annual Report 16/17
Submitting a report

Does the company have appropriate arrangements in place to ensure the quality of investigations?

Our Compliance Officers in the Investigations Department have a professional background in either law or economics or other related studies. They continuously receive trainings covering updates of applicable laws and investigation techniques. In case of complaints in the investigation procedure, the Head of Investigation Department and the Chief Compliance Officer are overseeing complaints. The Compliance Function is also in the scope of potential audits of Internal Auditing.

To ensure independent investigation at all times, our Investigation Department is further strictly separated from the preventive part of our Compliance Organisation in charge inter alia for Compliance advice.

For verification, see Appendix 1/7 of external Compliance Auditing IDW PS 980.

Important related documents and links:
Audit reports

Does the company’s investigative procedure include commitment to report material findings of bribery and corruption to the board and any criminal conduct to the relevant authorities?

Material findings of bribery and corruption are reported to the thyssenkrupp AG Board and to the Supervisory Board according to a clearly defined process.

A cooperative relationship with public authorities is important for us. thyssenkrupp is considering itself a good corporate citizen. To provide a recent example: in the investigations carried out by the Israel state attorney in connection with naval projects thyssenkrupp shared internal findings with the relevant public authorities in Germany and Israel by handing over the preliminary internal investigation report.

Important related documents and links:
Compliance (Annual Report 17/18)

Does the company publish high-level results from incident investigations and disciplinary actions against its employees?

We publish high-level investigation results in an aggregated way also publicly. Depending on the case at hand and subject to legal requirements and restrictions, we also consider publicly reporting or commenting on individual actions.

On average, we have received a lower three-digit number of whistleblowing reports annually over the last years. We investigate every single case thoroughly. In case of proven violations of our policies or even legal violations, action is taken to remedy the violation immediately, risks are eliminated or at least mitigated and individual sanctions on employees imposed which might range from warnings to immediate dismissals. Where appropriate we also consider suing former employees for damages they have caused to thyssenkrupp.

As an example of the transparent way in which we also communicate incidents to the public, we refer to an interview with our Management Board Member Dr. Dontatus Kaufmann on November 17, 2018, who commented as follows on the question of the extent to which our whistleblowing system is used:

“How much is your whistleblower system used?”

Kaufmann: “We have around 120 reports a year, some of them anonymous, but only a small proportion of which turns out to be really Compliance-relevant. More important are the 15,000 requests for advice from employees to the Compliance team every year. This shows that Compliance is already very well integrated into our business processes… For example, when the steel joint venture with Tata was initiated, the experts repeatedly sought advice on how to deal with the competitor. Tata remains a competitor until the transaction is completed. The exchange of sensitive data can quickly become an antitrust problem. It is the task of our more than 75 Compliance employees to provide orientation here and to design the processes.”

Important related documents and links:
Interview with our Management Board Member Dr. Dontatus Kaufmann on November 17, 2018 and RP-Online

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