Compliance Management

As a global group, SGL Group has particular responsibility for dealing with its employees, customers, business partners, shareholders and the public. The SGL Group’s Code of Conduct is an integral component of our management and corporate culture, and given this background it sets standards for responsible, legally compliant behavior. This includes our compliance with internal and external regulations and that ethical and sustainable principles govern our activities. We also attach great importance to observing human rights at our sites. As a result, we have undertaken to comply with the principles of the UN Global Compact.

SGL Group’s compliance program includes the Code of Conduct as well as additional internal requirements and policies for various target groups and specific topics such as the Antitrust Compliance Policy, the Program for Export Controls, the Whistleblower Policy, the Code of Conduct for Suppliers and Sub-contractors, and the Anti-corruption Program (see “Combating corruption”).

Our top-level objective for compliance is that all of our employees know and respect the requisite regulations, in order to reduce the risk of breaking the law, thus avoiding possible damage for the SGL Group. As a result our compliance policies are a fixed part of our documents for new hires, and are issued to all of our new employees. In regular twice-yearly reporting by our Local Compliance Representatives (LCRs), we have them confirm that this process is operating correctly. In addition, the confirmation of receipt which provides written documentation that the employee is aware of the regulations in the Code of Conduct, is filed in the employee’s file.

The Chief Compliance Officer is responsible for the SGL Group’s compliance strategy and monitoring the structures and processes in the Compliance Management System (CMS). He reports directly to the CEO. He is supported in his work by the Group Compliance department. The organization also includes the SGL Group’s Compliance Network, which comprises Regional and Local Compliance representatives.

The effectiveness and efficiency of the CMS is constantly reviewed, and this enables the SGL Group to react in a reasonable manner to new statutory requirements and changes in its business environment. In this regard and in agreement with the Compliance Committee, the Group Compliance department identifies and defines any action that may be required and measurable objectives approved by the Board of Management. The results and the resulting downstream activities are summarized as part of an annual review.

Regular risk assessments form part of an effective compliance management system. The topics that Group Compliance defined as being core compliance risks (antitrust law, anticorruption, export control and customs and protecting business secrets) are regularly reassessed together with the business units' management, and the suitability of the existing compliance program is reviewed. The compliance risk assessment for core risks performed in the second half of 2016 together with the Business Units was completed in 2017 together with selected Corporate Functions. For further information on the compliance risk assessment and the material risks for the SGL Group please refer to the Corporate Governance and Compliance Report and the Opportunity and Risk Report.

Compliance topics are regularly documented by the Local (LCR) and business unit (BU) Compliance Representatives as part of our compliance reporting process. Semi-annual and annual LCR/BU questionnaires allow us to confirm that the compliance program is being implemented at our local sites and within the business units. The results from the evaluation of the questionnaires are discussed with the Board of Management, as well as the Supervisory Board’s Audit Committee and Governance and Ethics Committee, and also form the basis for the reorientation of compliance activities.

The SGL Group aims to create an environment in which all compliance matters can be discussed in an open manner. As a result, our employees are encouraged to discuss all issues concerning integrity with their superior, the Compliance department or a member of the Compliance Network. In addition, over and above the existing communication and reporting channels, we also have a whistleblower system in the form of the Compliance Helpdesk. This allows employees to transfer information on potential compliance infringements confidentially according to our Whistleblowing policy; the Whistleblowing policy also regulates binding protection for the whistleblower.

Group Compliance reviews reported compliance-relevant issues as part of the internal compliance review. In doing so it ensures that non-compliant actions and violations are prevented and recognized in good time, that our company’s activities comply with the applicable laws and statutory provisions, and that potential for improving our internal business activities is identified.

During the period under review SGL Group dealt with all of the notifications of potential violations with regard to anti-trust law, anticorruption, export controls and customers, protecting trade secrets, and anti-fraud which could result in financial damage or damage to the Group’s reputation. These were all processed without exception in order to be able to derive and implement concrete activities if required. We are convinced that the components of compliance management presented as well as our monitoring processes are also suitable for ensuring behavior in line with the law in all of the SGL Group’s areas in future.

Our transparent compliance culture is an integral part of our corporate culture. We promote this using target-oriented compliance training sessions. Our employees participate regularly in mandatory training sessions on the Code of Conduct which are offered by Group Legal & Compliance as face-to-face and e-learning sessions. Our employees also have access to all of the group-wide policies and training documents relevant for compliance, the Code of Conduct which was revised in 2017 and which is available in 9 languages, information on the Compliance Network as well as additional materials in the intranet.

As part of the Compliance Days, it was possible to further strengthen compliance awareness with the motto “Do it right - do it compliant” last year, reinforcing the compliance culture as part of our corporate culture. The training activities offered at all of SGL’s sites are geared to all of our employees and included both information on the updated Code of Conduct and also on central compliance-related topics. During the reporting period so far 31 of 32 sites successfully participated in the initiative. In the offered trainings with our Code of Conduct as a core topic 1,347 out of 1,746 white collar employees participated on a voluntary basis. In addition team meetings were conducted where supervisors trained their employees to the respective topic. Furthermore training sessions were offered for blue collar employees and so far 81% of the employees participated1).

In addition to the activities described above, we have been performing a voluntary, group-wide employee survey on compliance topics since 2016. The survey is initially geared to employees around the world who have a company e-mail address.

This allows us to gain valuable feedback on the structure of our compliance program and compliance activities. The next survey is scheduled for 2018 and will include employees from all over the world.


1) At 4 sites, the compliance days in the production area had not been completed at the time of reporting. The location numbers were not included in the survey.

Anti-corruption and bribery

SGL attaches great importance to its excellent relationships with customers and suppliers. We demand and promote transparent, legal processing of all of our company’s transactions. We do this to create trust and secure business relationships over the long term.

Our principles for fighting bribery and corruption are defined in our Code of Conduct, which applies throughout the entire group, in our Anti-corruption training concept and in our Policy for Gifts and Entertainment (G&E Policy). Our G&E Policy stipulates, for example, that tangible and intangible benefits which are made to a person or which are received by a person, must be in line with our policy and respect our business partners’ rules and regulations. As already presented above in the Compliance section, our top-level objective also applies here - that all employees must be informed about all key policies and also uphold these.

SGL Group has a group-wide Business Partner Compliance Process (BPC) to monitor the risks and control of the work flows when dealing with intermediaries. This process includes having the new intermediaries go through a multi-stage check prior to signing the agreement. In addition to new intermediaries, existing intermediaries are also subject to regular reviews depending on risk category. This allows the BPC to ensure and increase transparency when working with intermediaries. Our BPC process and its implementation were subject to a regular audit last year.

In view of the constantly further developing underlying statutory conditions, SGL Group continuously optimizes its training content and constantly identifies training requirements. Anti-corruption was also a focus topic, which was addressed and communicated as part of the compliance days (see Compliance, page 14). In the subject-specific brief training sessions 1,318 out of 1,594 employees participated representing 83% of the target group. Especially employees from sales, purchasing and marketing functions are part of the target group. As part of the regular training plan for 2017 further trainings were conducted at selected sites as well as during regional meetings of business units and Corporate Functions. During these trainings 192 employees were trained.

The introduction of the eLearning Anti-corruption program will be completed in 2018. All employees in defined areas of the SGL Group have to participate in this training. In addition, we also plan to expand our Business Partner Compliance program and to implement additional compliance controls as part of our internal control system (ICS).

Responsibility for the supply chain

As one of the leading companies on the market, the SGL Group produces and sells its products all over the world and has a wide variety of business relationships. We expect that our business partners also undertake to behave legally, ethically and sustainably to the same extent as is the case for the SGL Group for the duration of the cooperation. In order to guarantee this, we have introduced a Code of Conduct for Suppliers and Sub-contractors (Supplier Code of Conduct). In addition to conduct rules which must be upheld with regard to integrity, combating corruption among suppliers as well as social and environmental standards, it also includes requirements for dealing with so-called conflict materials and a binding acceptance of the UN Global Compact principles.

Global Purchasing is responsible for implementing and applying the Supplier Code of Conduct which was introduced in 2015 and is anchored in SGL Group’s general purchasing conditions. As part of the successive roll-out, the code was issued to risk-relevant target groups which had been defined in advance based on their proportion of the annual purchasing volume. We also request new suppliers who are stored in the SGL Group’s system, to sign the code and our purchasing policy as part of the contractual documents, or to present equivalent compliance standards. In future, as part of the supplier selection process, compliance with ecological and social standards will pay a more important role. The supplier assessments we have performed to date focused on process quality, risk, delivery stoppages and availability, economic stability, protection of expertise, as well as the management systems in place, and these criteria will be expanded in 2018 to cover corresponding social and environmental standards as part of our revision of our supplier management. During the period under review two subsidiaries and thus both business units in the SGL Group participated in a Together for Sustainability audit (TFS), an initiative by leading chemicals companies and which also reviews the activities implemented within the SGL supply chain.

The SGL Group has production facilities in a large number of countries, and delivers products to customers all over the world, which is why avoiding risks connected with trade activities and customs regulations is of major importance. These risks comprise potential limitations regarding deliverability, tax evasion, customs and other duties as well as fines and delinquencies. We aim for our compliance processes to ensure that the exchange of goods and technology and the use of services correspond to the respective internal and external requirements. This principle is reflected in the Global Trade Policy, which applies throughout the group, and also in the SGL Group’s process instructions for the preparation, optimization and execution of all trade activities, for control mechanisms and also for the management and monitoring of risks and responsibilities.

Our export executives and export control delegates are responsible for export controls in our companies and units. Our compliance program for export control has been working with an IT-based compliance module since 2009. This supports the efficient monitoring of export transactions. Our export control processes are also a key component of the Compliance Risk Assessment (see Compliance, page 14). We aim to thus ensure that international treaties and national laws are always upheld for international transactions and inter-company transfers. In addition, our employees must make themselves aware of the local laws and regulations on export controls and customs before embarking on any business travel.

What is more, we ensure that our employees are aware of all of the relevant export compliance regulations and that they regularly undergo additional training. Binding face-to-face training sessions and workshops are held in this regard every year. In addition, in 2017 the SGL Group updated its existing eLearning program for export controls and added additional global and regional aspects.

Please refer to the section on Compliance on page 14 for information on the SGL Group’s anticorruption activities and on doing business in line with regulations.


Group Compliance


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