Compliance

In the long term, a company can only be successful if it acts with integrity, complies with statutory provisions worldwide and stands by its voluntary undertakings and ethical principles even when this is the harder choice. Our Compliance organization supports this approach.

OUR UNDERSTANDING OF COMPLIANCE

We adopt a preventive compliance approach and foster a corporate culture that stops potential breaches before they occur. Group Internal Audit and Group Security as well as the Human Resources and Group Legal departments are responsible for the necessary investigative measures and responses. The guidelines laid down in the Volkswagen Group’s Code of Conduct are of essential importance here. These have been communicated at all consolidated brand companies and can be accessed by all Group employees via the Volkswagen portal.

14 Chief Compliance Officers, 175 Compliance Officers and 500 employees in 49 countries safeguard our integrity.

The Group Chief Compliance Officer reports directly to the Chairman of the Group Board of Management. He is supported in his work by 14 Chief Compliance Officers who are responsible for the brands, the Financial Services Division and Porsche Holding GmbH, Salzburg (Austria), as well as some 175 Compliance Officers in the Group companies. Compliance forms an integral part of the Governance, Risk & Compliance (GRC) organization in which around 500 employees are currently employed in 49 countries. Networking of the organization is regularly promoted by measures including regional workshops.

Compliance Risk Assessment

The risk management system, the internal audit system and the compliance management system are closely interlinked through the Governance, Risk & Compliance (GRC) approach. Potential compliance risks are identified and assessed by the standard GRC process that is in place across the Group. As a result, in the reporting year some 2,000 assessments of potential compliance risks and the relevant remedial measures were reported across the Group. More specifically, these included risk assessments on the topics of anti-corruption, competition law and antitrust law. Based on the findings, preventive measures are drawn up and the appropriate compliance programs defined. In 2013 more than 500 tests were staged to evaluate the effectiveness of these measures.

Expansion of Compliance in 2013

Compliance activities in 2013 focused on expanding the GRC organization and on anti-corruption measures in China. To this end a China Compliance conference was held in Beijing in May 2013. The conference provided an opportunity to train the local management, assess the specific situation in China from a compliance perspective and develop future local compliance strategies in workshops. In addition, at German companies measures were introduced to prevent money laundering. These comply with the new requirements of the Geldwäschegesetz (GwG – German Money Laundering Act), which came into force in 2012. In the reporting year, risk-based training on competition and antitrust law was provided for employees in Germany and abroad.
Compliance is integrated into a variety of operational processes. For example, since 2010, all new employment contracts entered into between Volkswagen AG on the one part and both management staff and employees covered by collective agreements on the other have included a reference to the Code of Conduct and the obligation to comply with it. The integrity of Volkswagen Group suppliers is systematically examined through a Business Partner Check based on the “Volkswagen Group requirements regarding sustainability in its relationships with business partners (Code of Conduct for business partners)”.

Prevention through Information and Training

To raise employee awareness of compliance-related issues we use both traditional communication channels such as employee magazines and information stands, and electronic media such as intranet portals, apps, blogs, audio-podcasts and online newsletters. Information events for employees at all levels of the hierarchy are a particularly important means of communication. In 2013 over 200,000 employees across the Group took part in 4,319 classroom and online courses on the topics of compliance in general, money laundering, the Code of Conduct, competition and antitrust legislation, human rights and combatting corruption. Online E-Learning programs and classroom training are firmly anchored in existing corporate processes. At Volkswagen AG, for example, completion of the online training module on the Code of Conduct has been mandatory for all new employees since July 1, 2012.
Employees of all brand companies and a large number of Group companies are able to obtain personal advice about compliance issues, usually by contacting the compliance organization via a dedicated e-mail address.

COMPLIANCE TRAINING COURSES

No. of participants Group-wide   2013   2012  
Classroom training      
General compliance 69,426 18,945
Code of Conduct 28,420 16,543
Anti-corruption 13,494 6,119
Money laundering 2,585 n.a.
Human rights 881 n.a.
Competition and antitrust law 4,202 3,852
Total participants 119,008 45,459
E-Learning programs      
General compliance 4,917 n.a.
Anti-corruption 31,608 19,228
Code of Conduct 34,148 7,835
Money laundering 2,678 n.a.
Human rights 8,891 n.a.
Competition and antitrust law 1,224 n.a.
Other topics n.a. 3,842
Total participants 83,446 30,905

Checks, Audits and Sanctions

Group Internal Audit and Group Security regularly and systematically monitor compliance with the rules, carrying out random checks irrespective of any suspicion of non-compliance and investigating whenever breaches are actually suspected. The worldwide ombudsman system in place since 2006 can be used to report any breaches or suspicions (particularly regarding corruption) in nine different languages to two external lawyers appointed by the Group. Naturally, the people providing the information need not fear being punished by the Company for doing so. In 2013, the ombudsmen passed on 30 reports by people – whose details remained confidential if requested – to the Volkswagen Group’s Anti-Corruption Officer, the Head of Group Internal Audit. In addition, the Anti-Corruption Officer received information on a further 65 cases directly. During local internal audits of the brands and Group companies, 251 reports of suspected fraud were submitted. 24

Over 200,000 employees attended compliance training in 2013.

All information is followed up. All breaches of the law or internal regulations are appropriately punished. In 2013 action was taken against a total of 101 employees across the Volkswagen Group as a result of findings of investigations based on information received. In 54 of these cases worldwide, the employee’s contract was terminated. Moreover, during the reporting year, five contracts with business partners were terminated or not renewed because of infringements related to corruption.
The basis for the auditing program of Group Internal Audit and of 19 other local audit functions at the brands and affiliated companies is provided by a risk-oriented assessment of the Group’s core business processes. In the process, all Volkswagen Group companies are systematically classified in terms of risks which, from the point of view of the auditors, are relevant to the audit. The topics with the highest risk levels are integrated into the auditing programs. In 2013 a total of 1,745 audits were conducted at 246 companies (including Volkswagen AG). Among other things, the audits cover internal control mechanisms for the prevention of corruption (four-eye principle, segregation of functions), the existence of compliance guidelines and preventive measures. In addition, Group Internal Audit has set up a Continuous Monitoring unit. This is tasked not least with supporting the documentation of the effectiveness of the internal control system, based on structured data analysis of financial and/or other upstream systems. Further information on compliance at the Volkswagen Group can be found in our current Annual Report.