Compliance

Bayer manages its businesses responsibly and in compliance with the statutory and regulatory requirements of the countries in which it operates. We define compliance as legally and ethically impeccable conduct by all employees in their daily work, because the way they carry out their duties affects our company’s reputation. We do not tolerate any violation of laws, codes of conduct or internal regulations. Compliance is essential for our long-term economic success. Covestro has established its own compliance organization and an internal audit department with systems and processes similar to those at Bayer. This chapter does not include compliance information for Covestro.

Global Corporate Compliance Policy

The Board of Management is unreservedly committed to compliance, and Bayer will forgo any business transaction that would violate the compliance principles in force throughout the Bayer Group. These principles are enshrined in our (Corporate) compliance comprises the observance of statutory and company regulations on lawful and responsible conduct. Policy, which was revised in 2016. The new version is currently being rolled out to Bayer companies in all countries.

Online annex: A 4.2-1

limited assurance

In our Corporate Compliance Policy we commit ourselves to the following principles:

  • Antitrust: fair competition in our markets
  • Anticorruption: integrity in our business dealings at all times
  • Corporate responsibility: sustainability, safety and product stewardship
  • Foreign trade law: observance of relevant trade controls
  • Insider trading: safeguarding of equal opportunity in securities trading
  • Accurate books and records: complete and detailed recording of our business activities and financial transactions
  • Fairness and respect at work: treating one another with fairness and respect
  • Intellectual property: safeguarding our own intellectual property and respecting that of others
  • Avoiding conflicts of interest: separation of business and personal interests
  • Privacy: precautions to protect and secure personal data

Every employee is required to observe these rules and to immediately report any violation of the Corporate Compliance Policy. This general reporting requirement does not apply in France due to peculiarities of national law.

Bayer’s senior managers serve as role models and therefore have a vital part to play in implementing the Corporate Compliance Policy. They may lose their entitlement to variable compensation components and be subject to further disciplinary measures if violations of applicable law or internal regulations have occurred in their sphere of responsibility. Compliant and lawful conduct also factors into the performance evaluations of all managerial employees.

Adherence to the (Corporate) compliance comprises the observance of statutory and company regulations on lawful and responsible conduct. Policy is among the subjects covered in all audits conducted by Bayer’s Internal Audit. The planning of these audits follows a function- and risk-based approach that also takes a Corruption Perceptions Index (CPI) Since 1995, NGO Transparency International has produced an annual index of countries – 176 in 2016 – by the perceived level of public-sector corruption. The CPI ranks countries according to the extent to which public servants and politicians are believed to engage in bribery and to grant or accept undue advantage. into account. The largest companies, which together account for about 80% of Group sales, are generally subjected to on-site audits at three-year intervals. A total of 171 compliance audits were completed in 2016, of which 36 were preventive or incident-related audits. The head of Internal Audit and the Group Compliance Officer regularly attend the meetings of the Audit Committee of the Supervisory Board, presenting a summary of conducted audits and their outcomes at least once a year.

Established compliance organization

The Bayer Group’s compliance organization is headed by the Group Compliance Officer, who regularly reports directly to the Chairman of the Board of Management and to the Audit Committee of the Supervisory Board. A central compliance department supports the Group Compliance Officer in steering and implementing the Group-wide compliance activities. This department is staffed with specialized compliance business partners whose responsibilities include establishing business- and industry-specific standards in the divisions, Group functions and service companies. In addition, at least one compliance business partner is available at each site to answer questions from all employees regarding lawful and ethical behavior in business-related situations.

The mission and goals of Bayer’s compliance organization are set forth in a Compliance Charter. This relies on early prevention and forms the basis for proactive, risk-based collaboration within the company. For compliance to continue developing as a permanent, active part of Bayer’s corporate culture, it needs to remain firmly anchored in all units and in all work processes. The Group-wide compliance management system is based on partnerships with the operational business and features dialogue, transparency and continuous improvement. It also includes the systematic punishment of compliance violations.

Compliance violations can be reported – anonymously if desired – via a compliance hotline that has been set up worldwide and which is also accessible to the general public. In 2016, the compliance organization received a total of 220 reports in this way (including 159 anonymous reports), with 9 reports coming from Germany and 211 from other countries. Alternatively, suspected compliance violations may also be reported to the respective compliance functions in Germany or the country organizations, or to Internal Audit. All cases are recorded according to uniform criteria throughout the Group and dealt with under the rules set forth in Bayer’s Policy on the Management of Compliance Incidents.

Online annex: A 4.2-2

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Where an investigation confirms that a compliance violation has occurred, the company has a graduated set of measures at its disposal. These include a verbal warning or written reprimand, transfer to a different unit, cancellation of a planned promotion, a reduction in the short-term incentive payment, downgrading to a lower collectively agreed pay rate or managerial contract level, and ordinary or extraordinary termination. Bayer also reserves the right to assert further claims against the employee for cost reimbursement or damages and/or initiate criminal proceedings. The action taken in a particular case depends on the gravity of the compliance violation and on applicable law.

Group target:

annual compliance training for close to 100% of Bayer managers

Comprehensive compliance training and communications

Group-wide training programs tailored to requirements and target groups, along with extensive communications activities, help to further raise the employees’ awareness for compliance issues and the risks involved. At the same time, this training familiarizes them both with the Corporate Compliance Policy and with statutory regulations. We have set a Group target requiring all Bayer’s managerial employees worldwide to complete at least one compliance training program each year. In 2016, this was achieved by 33,659 employees or around 97% of Bayer managers.

Online annex: A 4.2-3

limited assurance

The aim of these targeted training programs is to ensure that employees do not overstep boundaries out of ignorance or uncertainty. Our compliance training programs reflect the main compliance risk areas and are available in various formats to meet the training needs of different employee groups. Some take the form of web-based training (WBT) programs, while others involve face-to-face training sessions or workshops.

In 2016, we implemented a new global web-based training program in 44 countries on the subject of “Fairness and respect at work.” This program, currently available in 9 languages, has already been completed by 32,141 employees.

New hires and employees switching to different areas of responsibility within Bayer regularly undergo training according to their functions.

In view of the particularly strict compliance rules in health care, we offer special training programs for the employees working with stakeholders in this field.

In 2016, compliance was again the subject of wide-ranging internal communications activities, one area of focus being the presentation and global distribution of the newly updated Corporate Compliance Policy. Employees were given additional information on various compliance-related topics, with a focus on “fairness and respect in the workplace.”