Merck 2014 Annual Report Download - page 159

154 CORPORATE GOVERNANCE → Statement on Corporate Governance
Values and compliance
Based on a corporate culture that places the fundamental company
values – courage, achievement, responsibility, respect, integrity
and transparency – at the center of our entrepreneurial actions,
the Code of Conduct helps those involved in the business process
to implement the values when dealing with one another on a daily
basis.
The company has created the Code of Conduct as a set of rules
and regulations intended to help our employees to act responsibly
and to make the right decisions in their daily work.
The Code of Conduct explains the principles for dealings with
business associates, general partners, colleagues and employees,
as well as the communities in which we operate. Thus, it supports
all employees in acting ethically – not only in their dealings with
one another, but also outside the company. The Code of Conduct
is thus the main set of rules of our compliance program.
To the Group, compliance means observing legal and
company- internal regulations and the basic ethical principles
anchored in the company values. With the Code of Conduct and
the various unit-specific ethical compliance rules, the values are
integrated into daily work and business practice. The Code of Con-
duct is binding on all employees, both at headquarters and in the
sub sidiaries. The Compliance Office monitors observance of the
Code of Conduct with support from corresponding auditing and
training programs throughout the Group. All employees are called
upon to report compliance violations to their supervisor, Legal, HR
or other relevant departments. The company created the position
of Group Compliance Officer (GCO) in 2002. This employee is re-
sponsible for setting up, maintaining and further developing our
global compliance program. By taking appropriate measures, the
GCO and his team, including regional and divisional compliance
officers, help to lower the risk of serious legal violations of, for
instance, antitrust law or anticorruption rules. A further focal area
of the Compliance program is ensuring legally and ethically
correct dealings with medical professionals and adhering to the
transparency requirements. Since October 2013, the Group Com-
pliance Officer has agreed extensive measures with the affected
areas of the company in order to establish an internal framework
of rules as well as the corresponding approval and documentation
processes that ensure truthful publication. The role of the Group
Compliance Officer is reflected in the subsidiaries, which ensure
that compliance measures are implemented in the countries. By
reorganizing the Compliance function, as of 2013 Compliance
tasks in the regions are largely performed by full-time Compliance
Officers. As a result, a higher level of compliance expertise is
based locally and the increasing tasks, above all in the pharma-
ceutical sector, are taken into account. At the same time, the
management structure was streamlined and the reporting lines for
the countries were consolidated regionally. Regular regional and
global compliance meetings are held to promote the exchange of
information within the compliance organization. Newcomer train-
ing seminars were introduced in 2010 for newly appointed com-
pliance officers. These seminars serve to build up compliance
expertise and strengthen cooperation within the compliance or-
ga nization. This Group-wide network is used to steer the global
compliance program.
Within the scope of this program, a high degree of importance
is attached to regular compliance seminars of the Compliance
Training Plan of Merck KGaA, Darmstadt, Germany, which are
conducted as Web-based training courses and on-site events. By
presenting various training topics, particularly on the Code of
Conduct, corruption, antitrust and competition law as well as
health care compliance, they serve to sensitize employees and
management to the consequences of compliance violations and to
show ways of avoiding them. Since the company set up a central
SpeakUp line, employees have been able to report compliance
violations by telephone or via a Web-based application in their
respective national language. The SpeakUp line is available
24hours a day, free of charge. Case numbers enable anonymous,
two-way communication. The reports received are individually
reviewed. If a compliance violation exists, corresponding correc-
tive action is taken based on concrete action plans. If necessary,
disciplinary measures are taken. These can range from a simple
warning up to the dismissal of the employee who violated a com-
pliance rule. In 2010, the company set up a compliance committee
to guide these processes. The Compliance Committee consists of
members from various Group functions; they are involved in re-
viewing compliance violations and introducing countermeasures.
The joint work in the Compliance Committee enables processes
between the various Group functions to be optimized. Further sig-
nificant elements of the Compliance program include requirements
on locally identifying and assessing risks and reporting these,
both within the subsidiary abroad and to the Group functions.
Group Compliance regularly reviews and assesses the implemen-
tation status of the Compliance program at the subsidiaries abroad.
In cooperation with Group Internal Auditing, the Compliance
Office regularly reviews the implementation of Group-wide com-
pliance measures at the subsidiaries abroad. The audits regularly
focus on the local compliance structure, the compliance measures
taken, as well as the existence of corresponding compliance
guidelines and processes.
The Compliance department reports regularly to the Executive
Board, informing it of the status of compliance activities (including
training status), compliance risks and serious compliance violations.
The Executive Board informs the supervisory bodies at least
once a year about the key compliance issues.
Risk and opportunity management
The Executive Board, the Supervisory Board and the Finance
Committee are regularly informed about the current risk portfolio
of the Group and the individual companies. More detailed infor-
mation can be found in the Report on Risks and Opportunities on
page 122.