Siemens 2008 Annual Report Download - page 125

Corporate Governance Report: Compliance Report 29
From November 2007 to February 2008, we engaged a personnel consulting rm to assess our compliance of-
cers’ competencies and to make recommendations on how to strengthen the organization. The resulting report
has become an important guideline for personnel development within the compliance organization. As a conse-
quence of the ndings, we will develop a future-oriented compliance ofcer prole and the appropriate training
programs. In addition, compliance will be established as an important step in management careers.
Our compliance ofcers are required to participate in a four-day introductory program where they not only gain
a working knowledge of Siemens’ compliance policies but also learn how to enforce compliance regulations in
difcult situations within their respective operating units.
At two Global Compliance Ofcer Conferences – one held in October 2007 in Berlin and the other in April 2008
in Mumbai – we encouraged the Company-wide exchange of best practices and stronger global cooperation
within our compliance network. Regional compliance conferences were also held in South America, Asia and the
Middle East.
As of scal 2008, compliance had also become an integral part of the bonus system for top executives and com-
pliance ofcers. The new compliance component of the bonus is based on the degree of fulllment of three
criteria: implementation of compliance controls; speedy investigation and sanctioning of compliance violations;
and the results of an employee compliance perception survey. This new incentive system impressively demon-
strates that compliance responsibility rests with management, supported by our compliance organization.
Avoiding corruption risks
In the rst quarter of the scal year, we introduced a comprehensive compliance control system centered on
improving the ght against corruption. The system consists of ten so-called Focus Areas which are broken down
into 104 control elements. These include, for example, the organizational framework relating to legal confor-
mity, the detection and reporting of suspected cases, communication measures, and training and consulting
courses to ght corruption. The system also includes controls for project acquisitions and the execution of pub-
lic sector contracts, for gifts and gratuities, hospitality and donations, and for payments, cash and bank
accounts.
In a rst phase, we introduced this system by late March 2008 in designated high-risk units – over 100 com-
panies with large business volumes, public-sector customers and/or locations in countries that Transparency
International ranks as particularly susceptible to corruption. We subsequently installed the system in more
than 500 less risk-prone units by late September 2008. The system is subject to internal and external audits.
Another preventive measure to avoid corruption risks was to upgrade the IT-based process for approving
customer projects (Limits of Authority), in particular for public sector customers, by integrating a compliance
module into the process.
We have intensied our compliance controls outside of the company as well. At the end of July 2008, we intro-
duced a new tool to check the integrity of business partners who act as intermediaries between Siemens and end
customers (Business Partner Compliance Due Diligence Tool). Our business units use this tool to initially assess
the compliance risk of the business partner. Depending on the resulting risk classication, the decision and
release process is then pursued at different levels of responsibility in cooperation with the compliance organi-
zation.