Compliance

The basic precondition of every sustainable business activity is observance of all the relevant laws, regulations, voluntary commitments, and internal guidelines. We refer to such rules-based behavior as “compliance.”

As a member of the UN Global Compact, Daimler joined other internationally operating companies in committing itself to uphold and actively promote the Compact’s ten principles. These principles include the struggle against corruption.

Compliance organization strengthened. In 2011 we oriented the Group Compliance unit more strongly toward the Group’s divisions. As a result, the Group’s units and divisions are integrated more intensely into the compliance management process. The divisional Chief Compliance Officers help the employees in their divisions take responsibility for compliance in their daily work. They report to the Group’s Chief Compliance Officer, who in turn reports to the head of the corporate function Integrity and Legal and the Daimler AG Supervisory Board. Our Group compliance organization comprises about 160 employees worldwide, approximately 74 of whom work at Group headquarters.

Compliance management system improved. Although Daimler assigns top priority to compliance with all of the relevant laws, regulations, and rules of behavior, it is never possible to entirely eliminate individual violations of the rules. That’s why we put in place the necessary basic conditions and develop measures to protect the Group and its employees from unethical decisions and employee misconduct in order to promote behavior that is in line with the law. In order to reduce compliance risks, and in particular to prevent corruption, we have introduced new processes and systems. In addition, we have revised some of the preventive measures that already exist.

• The Group Compliance unit defines the Group’s annual compliance program on the basis of a systematic risk analysis. In order to assess the risks within the business units, this unit uses both qualitative (e.g. estimates of the business environment) and quantitive indicators (e.g. statistical data concerning the Group).
• In 2011 we substantially restructured and improved our process of identifying integrity-related suspicions and eliminating risks to integrity involving our business partners (compliance due diligence). This is a core element of our Business Partner Integrity Management system.
• We have also restructured our process for preventing corruption in our business dealings with state and government-related institutions, and in doing so we have improved the cooperation between the sales units and the Group Compliance organization.
• The effectiveness of the compliance program that has been implemented within the Group’s units and companies is regularly evaluated by means of a standardized control system and is also regularly monitored by the internal review structure.
• Our employees are continually informed about the significance of compliance and the goals of the compliance program. The Group’s top managers regularly state their views regarding compliance issues at events and in our internal print and online media. Newly appointed managers at Daimler receive a separate introduction to the topic of compliance.
• In addition, Daimler offers a comprehensive compliance training program. More than 50,000 employees from the subsidiaries and the sales units completed the web-based training program on corruption prevention in 2011. In more than 150 face-to-face training sessions, about 4,400 employees deepened their understanding of corruption prevention. We identify the target groups of these face-to-face training sessions on the basis of the annual risk assessment of the Group’s companies and units.
• In 2011 we developed a new training program concerning antitrust law. Approximately 16,500 managers and selected employees from the relevant business units all over the world have already completed this web-based training program. By the end of 2011, about 654 managers had taken part in the advanced face-to-face training sessions on antitrust law.
• Since the beginning of 2011 we have also been offering compliance training sessions for our external partners, our joint venture partners, and companies in which Daimler is a minority shareholder. In these sessions we inform them about possible minimum requirements of a compliance management system that would ensure compliance with the rules governing business relationships.

Contact persons for employees. Our employees can turn to the Compliance Consultation Desk (CCD) if they have specific questions on how to avoid bribery. In 2011 the whistleblower system was thoroughly reformed. One important innovation is that in the future the Business Practices Office (BPO) will focus on serious violations of the regulations and cases that cause major damage to the Group. The BPO has also expanded its range of services. Since 2011 it has been receiving confidential tips regarding suspected misconduct via various access channels worldwide in a variety of languages.

The BPO decides whether to initiate an investigation using defined criteria. It considers, for example, whether the case involves a criminal act and whether the reputation of the company is being seriously threatened. Every possible case of misbehavior is dealt with according to the principles of fairness, consistency, transparency, and sustainability. Binding regulations are in place concerning the protection of whistleblowers.

Starting on February 1, 2012, whistleblowers in Germany also have the option of taking their concerns to Prof. Dr. Winfried Hassemer, a neutral intermediary who acts as an ombudsman. The obligation of lawyers to maintain confidentiality ensures that the identity of the whistleblower in question will not be made public without his or her permission.