Sustainability Report 2017

Compliance

Why this topic is important to us

We understand compliance as the adherence to all applicable laws, internal policies, internationally recognized standards of behavior and voluntary commitments in all our business activities. We view compliant behavior as central to successful business development. Integrity and compliance are therefore integral components of Bilfinger’s strategy and corporate culture. We don’t compromise in this regard. For this reason, the creation and maintenance of a first-class compliance system is of the utmost importance. Here, the focus is on anti-corruption, anti-trust and data protection, because these areas can impact our business activities significantly.

As deficits in our compliance system could lead to considerable legal consequences, substantial financial penalties and damage to our reputation, compliance is of central importance to us. We have learned that lesson through a case in the past: Due to violations of the US Foreign Corrupt Practices Act (FCPA) in years prior to 2005, it was agreed in 2013 with the US Department of Justice (DoJ) in a Deferred Prosecution Agreement () that a compliance monitor be put in place to oversee our compliance system. In 2016, the DPA was extended until the end of 2018. Through the integration into our corporate departments and business units as well as through the support of renowned advisors, we are working to meet the obligations and objectives from the on time.

The concept we pursue

Compliance is of great importance to the CEO and the entire Executive Board. The Corporate Legal & Compliance department is headed by the General Counsel and Chief Compliance Officer. He reports directly to the CEO/Chairman of the Executive Board.

The compliance program developed by Corporate Legal & Compliance is targeted at preventing compliance violations, detecting early any type of misconduct and reacting quickly and consistently to any detected transgressions. In doing so, the compliance program covers all business areas and processes relevant to Bilfinger.

Compliance targets

Compliance targets (graphic)

Our compliance program is built on integrity in dealing with customers, suppliers, business partners and colleagues. It forms the basis for our corporate culture. In 2017, in order to further anchor the significance of compliance in the company, Bilfinger introduced a new Code of Conduct which is binding for all employees worldwide. Furthermore, from the beginning of 2017, numerous new Group Policies have been formulated and implemented. These contain rules and regulations for employees for compliant behavior in certain situations at work, e.g. when dealing with third parties, receiving or presenting gifts as well as dealing with conflicts of interest.

Management takes on a vital role for compliance and within the scope of our corporate culture: managers must act as role models, and employees must be able to orient themselves on the correct and responsible behavior of their supervisors. For this reason, an individual integrity assessment is included in the annual performance evaluation of managers; this is part of their annual dialogue on career development. Furthermore, variable compensation for managers at management levels 1 and 2 takes into account an individual integrity factor. This factor is determined and taken into consideration annually with regard to the extent a manager displays integrity and compliance in his daily actions, and how much he actively supports and promotes them in his organization and sphere of influence.

The Compliance Review Board (CRB) serves in sustainably establishing compliance as a leadership priority in all business units. The CRB controls and monitors the structure and implementation of our compliance system. It is comprised of the Executive Board as well as a number of heads of corporate functions and meets at least quarterly under the chairmanship of the General Counsel and Chief Compliance Officer. Since September 2017, the CRB has also been supported by divisional compliance review boards, which control and monitor the implementation of the program in the individual business divisions.

In each of our approximately 200 subsidiaries, we employ at least one compliance manager. Furthermore, internal control systems (ICS) are implemented in all legal entities. They take into account the specific risk profile and the respective business requirements at the location when structuring the compliance and control measures. An internal ICS officer is responsible for this at every business division and each subsidiary.

The area of Internal Audit & Controls also assumes control functions. As part of anti-corruption audits, it verifies the implementation of the compliance policies and processes in the individual business units.

How we achieve our goals

A detailed analysis repeated at regular intervals and an assessment of compliance risk factors in the divisions and entities of the Group is a key aspect of our compliance program. This forms the basis for an appropriate risk classification and the resulting program of compliance measures for the mitigation of potential risks.

In 2016, we put all legal entities, i.e. 100 percent of the business volume of Bilfinger, through a comprehensive compliance risk assessment and analyzed them accordingly. On this basis, since 2017 we carry out an annual specific update of the risk landscape of individual companies which are prioritized on the basis of centrally and decentrally recorded key indicators. For each individual legal entity, specific measures for the management of risks are developed and implemented. From the individual compliance risk assessments we derive the compliance risk profile from Bilfinger on the basis of which specific mitigation measures that are to be implemented Group-wide are defined.

The goal of the compliance program is, above all else, to prevent future misconduct. To this end, Bilfinger relies primarily on information, communications, clear policies, training, supporting compliance IT tools as well as specific, practical compliance accompaniment and consulting for employees. In addition to the regular analysis and evaluation of compliance risk factors, increasing our employees’ awareness of possible compliance violations is also a focus. For this reason, we expanded and added content to our compliance training program in 2017. The uniformly organized training modules take into account both on-site trainings and e-learning programs in order to maximize the range of our training measures. We do not only convey knowledge, but also explain compliance-relevant questions on the basis of case studies.

Acting with integrity

The 10 golden rules

Clear, concise, transparent: The 10 golden compliance rules from Bilfinger bring together the most important guidelines for acting with integrity. They are based on the Bilfinger Code of Conduct and are valid for all staff –no matter if they are a manager or an employee, where they work and what job they do.

Acting with integrity (photo)

In the period from July 2016 to December 2017 alone, more than 60 compliance-specific communications activities took place – in the intranet and in newsletters as well as live events in the form of town-hall meetings at management conferences or as part of compliance surveys. Furthermore, compliance road shows and workshops were also implemented. Our Integrity Days took place for the first time in 2017. More than 250 participants from the top three management levels, as well as further employees, took part in the two-day event.

Total number of employees trained in the 2016/2017 training cycle

 

 

Number of persons target group

 

Number of trained persons

 

Share

1

Status: February 7, 2018 Target group: All active employees with a PC workstation that have been with the company for more than three months.

2

Status: December 31, 2017 Target group: Exposed functions, purchasing, accounting and ICS employees.

E-learnings E-learning module ‘anti-corruption & bribery’

 

14,149

 

13,117

 

93%

E-learnings E-learning module ‘Code of Conduct’1

 

14,149

 

12,587

 

89%

On-site training ‘anti-corruption & bribery’2

 

3,502

 

3,333

 

95%

Since 2016, all employees also have access to a central Compliance Help Desk that offers support in all compliance-related questions.

Table
Number of inquiries to the Compliance Help Desk

 

 

2017

 

2016

 

 

Number

 

Share

 

Number

 

Share

Inquiries received by the Compliance Help Desk in 2017. In 2016: July (start) until December

*

Includes, among other things, personnel matters, taxes and accounting, depreciation, corruption and competition law for which fewer than ten inquiries were received for each.

Gifts and invitations

 

374

 

37.7%

 

45

 

34.4%

Third party management

 

358

 

36.1%

 

n.a.

 

n.a.

Guidelines and internal regulations

 

111

 

11.2%

 

50

 

38.2%

Contract structure

 

23

 

2.3%

 

n.a.

 

n.a.

Fraud, breach of trust and money laundering

 

17

 

1.7%

 

3

 

2.3%

Conflicts of interest

 

15

 

1.5%

 

n.a.

 

n.a.

Compliance trainings

 

13

 

1.3%

 

8

 

6.1%

Donations and sponsoring

 

11

 

1.1%

 

n.a.

 

n.a.

Other*

 

71

 

7.1%

 

25

 

19%

Total

 

993

 

100%

 

131

 

100%

thereof reports of suspected compliance violations

 

23

 

2.3%

 

9

 

7%

Chart
Number of inquiries to the Compliance Help Desk
Inquiries to the Compliance Help Desk (pie chart (switch))

Bilfinger relies on the cooperation with business partners throughout the world for the provision of our services. Compliant behavior on the part of our business partners is therefore an indispensable requirement. Following the registration and risk classification of our business partners, the existing process to evaluate their integrity was comprehensively revised and adjusted in a risk-oriented manner over the course of 2017 (Third Party ). In such an integrity audit, the business units from Bilfinger and their purchasing departments are supported by the Compliance department in the risk evaluation.

In addition to prevention, the early detection of potential misconduct is a key component of the Bilfinger Compliance Program. A diverse range of internal sources are used for this purpose. There is a whistleblower system in place for the receipt, documentation and processing of suspicious cases in connection with possible violations of our Code of Conduct. Our employees and external parties can, on a confidential basis and if desired also anonymously, provide information on potential misconduct on the part of Bilfinger employees. Results from Internal Audit & Controls, Compliance and Human Resources as well as data from Bilfinger’s due diligence processes also serve to identify suspected cases.

Information on compliance violations, investigations initiated and employment-related consequences

 

 

2017

 

2016

1

Reports in the period from January 1 to December 31 of the respective year.

2

Includes investigations as a result of information received in the financial year and previous years.

3

Includes disciplinary measures as a result of investigations in the financial year and previous years.

Indications of compliance violations1

 

125

 

129

Investigations initiated2

 

97

 

113

Disciplinary measures as a result of investigations3

 

37

 

approx. 20

The Allegation Management Office deals with all relevant notifications related to suspicious cases from both internal and external sources, beginning with irregularities identified within the scope of internal audits through to cases that are communicated confidentially (whistleblowing). In cooperation with the Compliance Organization, the Allegation Management Office conducts a preliminary review of the information received and forwards it to the Independent Allegation Management Committee for evaluation and a decision on the steps to be taken next. The Independent Allegation Management Committee – a committee of experts from Corporate Legal & Compliance, Internal Audit, Tax and Human Resources – evaluates each reported suspected case and, where necessary, initiates internal investigations. In this context, all involved persons and/or the respective suspicious cases are dealt with fairly, consistently, transparently and sustainably, irrespective of status or position.

If misconduct is identified, the Disciplinary Committee headed by the member of the Executive Board responsible for personnel, decides on the measures and sanctions that are to be taken. Possible sanctions range from an informal warning through to immediate termination including negative financial consequences. The same misconduct consistently leads to the same sanctions, regardless of the position or importance of an employee.

Bilfinger Integrity Days

Doing the right thing

What does integrity mean for me? What am I doing every day to meet these standards? These and many more questions were discussed and answered at the Bilfinger Integrity Days which were held at the end of July 2017. Managers from all divisions and regions discussed with the Executive Board and with external presenters how the values of the Mission Statement and the Code of Conduct can be anchored throughout the company and in the minds of employees. In addition to presentations and workshops, the more than 250 participants had the opportunity to expand their knowledge with the help of information stands and to put what they know to the test in a compliance quiz.

Bilfinger Integrity Days (photo)

How we counter risks

Compliant behavior is of utmost importance for us. Violations of the law, of internal policies, internationally-recognized standards of behaviour or voluntary commitments would not only lead to a significant impact on our reputation, but also result in substantial fines, among other things. We address and mitigate these risks with our comprehensive compliance system and the measures presented here. Further information can be found in the  Annual Report (chapter B.2.6.3 Compliance).

Dr. Klaus Patzak (quote-portrait)

“Integrity is the foundation for long-term success. The only good business is honest business. Our Group Mission Statement clearly states our objective: We never compromise on safety and integrity.”

Dr. Klaus Patzak, CFO Bilfinger SE
DPA
Deferred Prosecution Agreement
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DPA
Deferred Prosecution Agreement
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Due diligence
A review to determine strengths, weaknesses and risks conducted with an appropriate degree of thoroughness
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