Compliance

With our Group-wide Compliance Program, we aim to ensure adherence to legal regulations and the company’s internal guidelines. We have integrated compliance into our “We create chemistry” strategy. Our employee Code of Conduct firmly embeds these mandatory standards into everyday business. Members of the Board of Executive Directors are also expressly obligated to follow these principles.

Code of Conduct

forms core of our Compliance Program

More than 59,000

employees participated in compliance training

104 audits

conducted internally on compliance

Based on international standards, BASF’s Compliance Program combines important laws and company-internal policies – which themselves often exceed legal requirements – to create a framework that regulates how all BASF employees interact with business partners, officials, colleagues and society. At the core of our Compliance Program is the global, standardized Code of Conduct that we distributed to all employees. It describes our guidelines for proper conduct and comprises not only topics like corruption and antitrust laws, but also issues such as human rights, labor and social standards, conflicts of interest and trade control, as well as protection of data privacy.

Abiding by compliance standards is part of responsible leadership. This has been expressly embedded in our values, where we state: “We strictly adhere to our compliance standards.” We are convinced that compliance with these standards will not only avoid the disadvantages associated with violations, such as penalties and fines. We also view compliance as the right path toward securing our company’s long-term success.

Our efforts are principally aimed at preventing violations from the outset. To this end, all employees are required within a prescribed timeframe to take part in basic compliance training, refresher courses and special tutorials dealing with, for example, antitrust law or trade control regulations. Training takes place in different formats, including face-to-face training, e-learning or workshops. In addition, we introduced a new e-learning program on compliance in 2014. In total, more than 59,000 employees worldwide took part in around 65,000 hours of compliance training in 2014.

BASF’s Code of Conduct Our actions are based on behavior compliant with the Code of Conduct, which comprises important laws as well as company-internal policies that often exceed legal requirements.

BASF’s Code of Conduct (graphic)

Monitoring adherence to compliance principles

  • Central role of Chief Compliance Officer and compliance officers
  • 50 external hotlines worldwide
  • Compliance Management System audited internally

BASF’s Chief Compliance Officer (CCO) manages the implementation of our Compliance Management System, supported by 89 compliance officers worldwide. The CCO regularly reports to the Board of Executive Directors on progress in the program’s implementation as well as on any significant findings. Furthermore, the CCO reports to the Supervisory Board’s Audit Committee in at least one of its meetings each year on the status of the Compliance Program as well as any major developments. In the event of significant incidents, the Audit Committee is immediately informed by the Board of Executive Directors.

We particularly encourage our employees to actively and promptly seek guidance if in doubt. For this, they can consult not only their managers but also dedicated specialist departments and company compliance officers. We have also set up 50 external hotlines worldwide which our employees can turn to anonymously. We make sure that all concerns are processed and answered within a short amount of time.

In 2014, 276 calls and emails were received by our external hotlines (2013: 304). Concerns involved topics ranging from questions on personnel management and handling of company property to information on the behavior of business partners. We launched investigations into all cases of suspected misconduct that we became aware of. Confirmed violations were penalized, up to and including dismissal. This involved making sure that the necessary action was taken in accordance with standardized company criteria. A notification was sent to the appropriate authority in one case of suspected corruption.

BASF’s Corporate Audit department monitors adherence to compliance principles, covering all areas in which compliance violations could occur. They check that employees adhere to regulations and make sure that the established processes, procedures and monitoring tools are appropriate and sufficient to minimize potential risk or preclude violations in the first place. In 2014, 104 Group-wide audits of this kind were performed (2013: 111), predominantly in the areas of antitrust law, imports and exports, and gifts and entertainment.

Our compliance management system itself is also regularly audited, most recently in August 2014. If compliance audits demonstrate a need to optimize procedures or hone control measures, we implement them immediately. Furthermore, we intensified the audits of our business partners in the area of sales. The audits’ content and scope are prescribed by a global directive.

Even outside of our company, we support the respect of human rights and the fight against corruption: We are a founding member of the United Nations Global Compact, and are committed to our responsibility in accordance with the U.N. Guiding Principles on Business and Human Rights. As a member of Transparency International Deutschland and the Partnering Against Corruption Initiative (PACI) of the World Economic Forum, we assist in the implementation of these organizations’ objectives. As a member of the U.N. Global Compact LEAD, we report in accordance with the Blueprint for Corporate Sustainability Leadership. This action plan comprises measures to support the U.N. Millennium Development Goals, addressing topics such as transparency and stakeholder engagement.