The Business Conduct Guidelines are the centerpiece of our internal set of regulations and binding around the world for all employees and the members of the Managing Board. They must also be observed by the members of the Supervisory Board, where applicable. A completely revised and updated version of the Business Conduct Guidelines took effect in January 2009.
Siemens requires of all its managers and employees that they always conduct themselves in accordance with all applicable laws and regulations and the Company’s internal guidelines. The cornerstone of compliance for any company is the unequivocal directive by the senior management to all employees that all laws and regulations must be observed, accompanied by the equally clear warning that violations will not be tolerated. Besides requiring all managers and employees to observe the law, the Business Conduct Guidelines also stipulate precise rules to ensure compliance with competition laws and anti-corruption laws, the correct handling of donations, the avoidance of conflicts of interest in the exercise of job functions, compliance with the prohibition against insider trading and the protection of company assets.
The Siemens Compliance System also encompasses numerous other company-wide rules that supplement the Business Conduct Guidelines.
At Siemens, contributions in the form of sponsoring, donations, memberships and other contributions without consideration are subject to uniform company-wide regulations. The purpose of these regulations is to maintain a clear separation of our business activities from our corporate citizenship, stakeholder engagement and marketing activities. The Siemens Guideline stipulates the following rules, among others:
As of fiscal year 2010, all contributions in the form of donations, sponsoring, memberships and other contributions without consideration must be processed using a uniform, company-wide tool (SpoDoM). This tool guarantees a simple and transparent process for the approval and registration of all relevant activities. This tool also supports compliance with relevant laws and regulations.
Although hospitality and gifts are customary and legitimate aspects of day-to-day business activities, they may not exceed certain limits. All our managers and employees are obligated to observe clear internal rules on this subject.
At Siemens, all contributions requiring approval, including invitations to entertainment events and other contributions (such as gifts and meals, in particular) must be approved using the above-mentioned SpoDoM tool. Before making any contributions to government officials or related persons, they must be checked against a scorecard to ensure compliance with the applicable rules and regulations.
As stipulated in Section B.2 of the Siemens Business Conduct Guidelines, no employee may directly or indirectly offer or grant any improper advantages, whether monetary or non-monetary, to third parties in connection with the Company’s business dealings. An additional internal guideline provides binding supplementary rules applicable to the Company’s dealings with public-sector employees. Managers and employees are obligated to avoid even the appearance of dishonesty and impropriety. In particular, the Siemens Business Conduct Guidelines prohibit the offering or granting of monetary or non-monetary advantages to public-sector employees.
Upholding high standards of compliance is especially important in the international project business.
Siemens’ worldwide project business is subject to strict approval rules. In making the decision to proceed with a given project, the Company systematically evaluates a wide range of legal, ethical, technical, economic, commercial and contractual criteria. To ensure compliance with the rules applicable to the project business, Siemens has implemented a uniform, worldwide tool to govern the project approval process. That tool is designed to ensure the high quality of every decision to propose a project and the terms of that project. As a first step, project applications are assigned to a risk category, which determines the departments to be involved and the reviews to be conducted before the final approval is granted.
Business partners such as sales partners or consortium partners, for example, can possibly pose compliance-related risks. Therefore, all business units of our company must take appropriate measures before entering into business dealings with partners to ensure that the business relationship is appropriately reviewed and managed. To meet these demands, Siemens mandates the company-wide use of a tool to evaluate the integrity of all potential business partners on the basis of risk considerations. In the first step, a risk category is assigned to the prospective business relationship and an intensive review is conducted on that basis. The decision on whether to enter into a business relationship and what form it will take is made on the basis of the results of that review.
Compliance is crucially important in managing a complex supply chain. To guarantee uniform high standards in our supplier relationships, we impose a contractual obligation on our suppliers to abide by our Code of Conduct for Siemens Suppliers. In addition to basic requirements pertaining to human rights, labor standards, environmental protection and occupational safety, the Code also requires suppliers to comply with all relevant laws and regulations and refrain from corruption.
Siemens applies a consistent supplier management approach, which also encompasses the company’s sustainability requirements, which are set out in the Business Conduct Guidelines. We employ various monitoring instruments to verify suppliers’ compliance with our requirements. The company’s suppliers also have the option of undertaking to observe their own code of conduct, if that is at least equivalent to the Code of Conduct for Siemens Suppliers.
Siemens introduced the Code of Ethics for Financial Dealings in 2002 as a means of fulfilling Section 406 of the Sarbanes-Oxley Act. The Code of Ethics for Financial Dealings encompasses all rules of conduct applicable at Siemens for the purpose of ensuring the proper handling of financial dealings, including, for example, the “dual control principle” that has always been applied at Siemens. The Code of Ethics for Financial Dealings must be observed not only by the Chief Executive Officer and Chief Financial Officer, but by all employees entrusted with business administration tasks.
Before the acquisition or sale of a company, corporate unit or equity interest, potential compliance risks for Siemens must be evaluated and reduced through suitable measures. Therefore, all investment or disinvestment decisions must first be subjected to a compliance due diligence review.
The project manager in charge of an M&A transaction must ensure that the compliance due diligence review to be conducted as part of the overall due diligence process is performed in good time before the investment or disinvestment is submitted for approval. The compliance due diligence review is conducted in close coordination with the responsible M&A and compliance departments. The project manager is further required to ensure that the findings of the due diligence review are adequately considered in the negotiations, particularly during the drafting of the contract.
In the case of affiliated companies, joint ventures or minority interests, appropriate compliance standards must be contractually assured and implemented.
Siemens expects its employees and business partners to report compliance violations that come to their attention. The internal guideline for reporting compliance violations makes it clear that no retribution or sanctions against whistle-blowers will be tolerated. The guideline does not constitute a legal obligation for employees to report misconduct.
The regulations are meant to support people who report actual or threatened violations of applicable laws and regulations, the Siemens Business Conduct Guidelines or other compliance-related Siemens guidelines. In addition, they are intended to remove any stigma or negative consequences that may be associated with such reports. Reports made in good faith are extremely valuable to Siemens and its employees.
Compliance is a binding obligation for all employees. Therefore, the Business Conduct Guidelines stipulate that any employee guilty of non-compliant conduct will have to reckon with disciplinary consequences due to the breach of obligations under the employment contract, regardless of the penalties prescribed by law. An internal regulation defines the basic principles, procedural rules and criteria applicable throughout the Company for decision-making in disciplinary procedures. Depending on the type and severity of misconduct, the following disciplinary measures may be applied:
Appropriate measures in response to non-compliant conduct are assessed and decided either by the Corporate Disciplinary Committee (CDC), consisting of members of the worldwide top management, within the framework of a global disciplinary procedure at corporate level, or by the responsible management and HR organization within a shortened CDC procedure or general disciplinary procedure.
In order to ensure the implementation of Siemens’ standards in companies in which Siemens holds a majority interest (so-called affiliated companies), all such companies are required to implement clearly defined principles in their companies. Thus, the senior management of an affiliated company of Siemens is obligated to take the following steps, among others:
2011-Feb-24 | Author