First and foremost, responsible entrepreneurial conduct means legally compliant conduct. All activities of Merck KGaA, Darmstadt, Germany must comply with statutory rules and regulations worldwide. Violations might not only entail legal prosecution, but could also seriously harm our corporate reputation, meaning its standing as a business partner or employer. Therefore, compliance with statutory rules and regulations has top priority for us. Compliance for us also means acting in accordance with the ethical principles defined in the our Values. Merck KGaA, Darmstadt, Germany wants to do “good” business, that is, operate profitably, but at the same time also meet high ethical standards.
Globally binding rules of conduct
Our is a compulsory set of rules for all employees. It explains the principles for interacting with business associates, general partners, colleagues, and employees, as well as with the communities in which we operate. Thus, it supports all employees in acting ethically – not only in their interactions with one another, but also outside the company.
Our Social Charter supplements the Code of Conduct with globally valid principles regarding human rights as well as the core labor standards of the International Labour Organization (ILO). The managing directors of our legal entities are responsible for ensuring that these principles are adhered to. We also expect our business partners worldwide to follow these principles.
We support compliance with statutory and company-internal rules and regulations through our compliance organization. The central Group function Compliance, with the Group Compliance Officer (GCO) and other specialists, is responsible for maintaining and further developing the compliance program.
In the legal entities abroad, local compliance officers are responsible for implementing the compliance measures. They are advised by the Merck KGaA, Darmstadt, Germany Group function and provided with training documentation, among other forms of support. The approximately 80 local compliance officers at this time report to the GCO at regular intervals. The GCO in turn reports at least once a year to the Executive Board, with a focus on the status of compliance activities, compliance risks, and serious compliance violations. The Executive Board informs the supervisory bodies at least once a year about the key compliance issues.
Central SpeakUp Line
All employees are called upon to report compliance violations to their supervisor, Legal, HR or other relevant departments. Employees can report violations by telephone or via a web-based application in their respective national language, free of charge and anonymously, via the SpeakUp Line, a central reporting system.
The received reports are reviewed by the GCO and submitted to the Compliance committee for coordinating the necessary investigation of the facts. The Compliance committee consists of senior representatives of the Internal Auditing, Compliance, Group Security and Human Resources departments. It monitors the processing of reported incidents and initiates, if necessary, corresponding corrective measures. Disciplinary actions are also taken, where needed, against the employee who has violated a compliance rule. These actions may range from a simple warning up to dismissal of the employee, depending on the severity of the violation.
Altogether 29 compliance-related reports were received via the SpeakUp Line in 2011, and 20 in 2012. In five cases each in 2011 and 2012, the alleged violation of our rules of conduct was confirmed. Most cases were undisclosed conflicts of interest between employees and third parties; this led to disciplinary actions. In two cases, the behavior of our business partners did not meet our expectations with respect to compliant and responsible business conduct. For this reason, we terminated the business relationship in both cases.
The Group Compliance function conducts audits in cooperation with Internal Auditing. The audits focus on the existence and quality of compliance guidelines, processes and structures. In addition, our sites are reviewed for violations of our Code of Conduct and Social Charter. The topic of corruption and the requirements of the Social Charter are an integral part of our standard audit program and are audited within the scope of general audits at our sites. Altogether 28 audits were conducted to check for corruption in 2011, and 40 in 2012. In addition, a total of 26 sites in 26 countries were audited on Social Charter topics in 2011, and 40 sites in 35 countries were audited in 2012. During the audits, violations of working hour regulations were found in one case. Management at the site took measures to prevent such violations in the future.
Compliance training courses
Our regular compliance training provided as classroom and online courses has a high priority. Employees at all levels of the hierarchy are trained in topics related to the Code of Conduct, such as corruption, competition law and handling conflicts of interest. Employees are sensitized to the consequences of compliance violations and are shown ways to avoid them. The training plan is regularly updated and adapted in response to new developments. For example, a corresponding course was added in 2011 as a result of the UK Bribery Act. Depending on the course content, some courses on specific topics are offered only to employees above a certain global grade.
Altogether 29,597 employees participated in 82,597 online courses on various compliance topics in 2012, and 19,263 employees participated in 34,433 courses in 2011. In addition, numerous classroom courses on compliance topics were held worldwide in order to provide employees with effective training on local topics in particular.
Many of the online courses dealt with anti-corruption: We trained 22,890 employees on anti-corruption in 2012, and 13,399 employees in 2011. This included 10,164 employees with management responsibility in 2012, and 7,540 employees with management responsibility in 2011.