Compliance as a group-wide basic principle designed to warrant adherence to the law as well as internal corporate policies represents an essential element of corporate governance that impacts each and every area of day-to-day business within the group. All GEA managers and employees are obliged to make sure that no compliance violations are committed in their respective areas of responsibility.
As early as 2007, the Executive Board and the European Works Council of GEA Group Aktiengesell¬schaft as well as the European and International Metalworkers’ Federation developed and adopted the basic principles of social responsibility (“Codes of Conduct“). The latter apply to all group employees worldwide. In these Codes, GEA inter alia pledges to respect people’s inalienable human rights, equal opportunities and the principle of non-discrimination, the freedom of association for workers, the prohibition of child and forced labor as well as fair wages and working conditions.
Integrity system (whistleblower system)
A professional integrity system represents an effective tool for guaranteeing and monitoring compliance with the basic principles of social responsibility as well as adherence to compliance rules and regulations. Since 2014, GEA has offered its employees and third parties the certified Business Keeper Monitoring System (BKMS), a secure portal that may be used for reporting such violations.
The integrity system does not constitute a general platform for voicing complaints. It merely embraces selected reporting categories that imply particular risks to the company, its employees and any other stakeholders. These categories include corruption, fraud and breach of trust, money-laundering, violations of anti-trust and competition law, export control regulations, data protection as well as accounting regulations. Breaches of the Codes of Conduct come under a distinct reporting category that also includes reports on potential human rights violations.
In 2017, a total of three reports were filed under the BKMS falling within the remit of Human Resources.
Processes designed to prevent compliance violations figure prominently in GEA’s compliance scheme. For this reason, individuals in close contact with the customer, such as sales agents, have to undergo strict risk vetting for the purpose of corruption prevention prior to entering into a contract with GEA. In countries with a higher risk of corruption, a compliance officer must approve the conclusion of such a contract if commission rates exceed a certain limit or if other predefined risk criteria apply. Sponsoring and donations are subject to specific internal authorization schemes. For instance, all donations and sponsoring activities exceeding the amount of EUR 5,000 have to be approved by a competent member of the group’s Executive Board; all amounts greater than EUR 10,000 require the approval of the full Executive Board.
Within the framework of its standard, selective and special audits, Group Internal Audit also checks compliance aspects. 2017 saw the performance of 23 audits at GEA sites worldwide. Group Internal Audit is tasked with protecting corporate assets, verifying process efficiency and compliance, as well as checking the completeness and documentation of dossiers. This also includes compliance audits in the fields of anti-corruption and export control. In 2017, the audits performed by Group Internal Audit were supplemented by the group auditor’s focus on compliance, which represented one of the key audit areas.
If employees violate compliance rules, such non-compliance is punished depending on the degree to which the individual can be blamed as well as the severity of the case. The sanctions imposed range from a reprimand to a warning letter and may ultimately lead to the termination of employment. In very severe cases, GEA reserves the right to sue the person in question for damages and/or report the violation to the competent authority.
If there is a risk of investigative or regulatory proceedings of fundamental importance being instituted by a prosecuting or regulatory agency against a group company or a GEA employee in connection with his or her service for the company, this must be immediately reported to the Global Corporate Center.
GEA uses a risk matrix to ascertain whether fines may be significant (see page 109). A risk and, thus, a fine is deemed significant if it exceeds an amount of EUR 10 million. In 2017, no significant fines were imposed on GEA.
Codes of Conduct
Together with its European Works Council, GEA Group Aktiengesellschaft adopted Codes of Conduct (principles of social responsibility) back in October 2007. They outline a binding set of values, principles and modes of behavior that govern corporate conduct at GEA.
With these ethical and legal standards, GEA has made a clear commitment to free and fair global trade as a vital precondition for sustained global economic growth. Wherever possible, the Group supports measures designed to combat underdevelopment in Third World countries while fully accepting its corporate social responsibility.
Likewise, GEA welcomes the principles of the UN Global Compact initiative and endorses all internal and external corporate responsibility initiatives taking place within the framework of the advancing process of internationalization. The Group has pledged to respect human rights and the core labor standards developed by the International Labour Organization (ILO). In addition, GEA fully complies with the OECD guidelines for multinational enterprises.