Compliance & Audits
In the context of business compliance and governance, companies are faced with a growing number of rules and regulations from legislators and financial markets regarding business management and controlling. In view of the increasing requirements and growing complexity, Henkel has merged previously decentralized compliance functions and appointed a Chief Compliance Officer in 2007. The Chief Compliance Officer steers the application and further development of our codes and standards. He also monitors the implementation of internal and external requirements and reports on compliance directly to the Management Board Chairman. In so doing, he is supported by the internal audit department, which he heads, and by some 50 locally appointed compliance officers all over the world. They organize regionally coordinated training courses to ensure that information flows smoothly, and that requirements are acted on and implemented. They also report violations and the actions taken in response. In view of the increasing complexity of international data protection regulations, our corporate data protection officer has been part of our compliance organization since 2009, with responsibility for steering this theme centrally for Henkel.
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In November 2009, all Henkel data protection officers came together for a one-day workshop in Düsseldorf to discuss how to manage employee, customer and consumer data more efficiently. Together they drafted a corporate data protection guideline, which incorporates the latest international legal requirements.
Implementation of our standards
Regular audits at our production and administration sites and, increasingly, audits of our subcontractors and logistics centers are important for the implementation of our environment and social standards. The audits are a key instrument for identifying risks and potential improvements and play a crucial role in the transfer of knowledge. In 2009, we carried out a total of 110 audits. Integrated safety, health and environment (SHE) audits took place at a total of 35 sites, where we initiated 502 binding corrective actions. The identified shortcomings included, for example, the absence of the prescribed personal protective equipment and poorly accessible escape routes. These cases underline the need to continuously raise awareness of safety measures
In the course of audits, a total of approximately 2,130 individual actions were agreed with Accounting, Purchasing, Sales/Distribution, Marketing, Information Technology and Production, in order to make processes and workflows even safer and more efficient. Implementation of the agreed actions and the widespread communication of examples of best practice are steered and monitored by our Corporate Internal Audit department.
Compliance Hotline
Since 2007, our internal reporting and complaints channels have been augmented by a compliance hotline, which was set up to enable employees to report major infringements of our codes and standards. It is run by an independent external provider and is currently available in 38 countries. In particular, it should be used when incidents cannot be cleared up directly with the employee concerned or a supervisor. Regular evaluations show, however, that very few complaints are reported via the hotline. The established internal reporting channels and direct contact points in the company are still used much more frequently.
Zero tolerance for violations of regulations
Improper conduct is never in Henkel’s interest. It undermines fair competition and damages our trustworthiness and reputation. Not least, our employees attach great importance to a correct and ethically impeccable business environment. Unfortunately, determined perpetrators of fraud can identify loopholes in compliance systems – as Henkel had to recognize in 2009, when fake contracts with fraudulent intentions came to light. In the interests of clearing up the case as quickly as possible, Henkel cooperated closely with the public prosecutor’s office. We react forcefully to violations of laws, codes and standards. Where necessary, we initiate appropriate disciplinary measures. In 2009, 18 employees received written warnings, and 67 contracts were terminated.
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Our corporate culture is based on our commitment to respect the personal dignity and guard the privacy rights of all our employees and to apply the principles of equality and fairness. We clearly emphasized our support for the protection of human rights when we introduced our Code of Conduct in 2000 and when we joined the United Nations Global Compact in 2003. Our Social Standards, which we published in 2006, express in concrete terms what we stand for. Through presentations, training courses and e-Learning, we ensure that our globally binding social standards are firmly anchored throughout the company and applied in our day-today activities. In the course of our routine audits, we check compliance with our social standards at selected sites. Because of their strategic importance, we will be including these social standards in our annual compliance reporting from 2010 onwards.
