Combating Corruption and Bribery
Within the context of the statutory requirements in the Non-financial Group Declaration, this aspect includes one material topic: “Governance and compliance” (see materiality matrix).
Governance and Compliance
The foundation of our business model is based on reliable, transparent and trustworthy corporate governance, which the company manages and monitors responsibly and independently. Its function as a role model is decisive in terms of building and cementing credibility – and therefore trust among our stakeholders. This also applies with respect to legally compliant conduct. Trust can be built through reliability if all rules are followed systematically – both those set out by law and, in particular, also those that we impose on ourselves. By contrast, any abuse of trust can damage the reputation and the business success of the company.
As a result, our governance endeavors are geared toward the establishment and implementation of, and systematic compliance with, a transparent and modern system of rules. Group-wide policies and business principles serve as a framework: Our business philosophy, our Code of Conduct, the Business Partner Code, and our Management Board’s Declaration of Respect for Human Rights act as the maxims guiding us in our actions. We live up to this attitude with our independent Supervisory Board and our commitment to the principles of the German Corporate Governance Code.
The compliance management system (CMS) supports the corporate governance‘s direction and guards the company against misconduct. At Vonovia, the CMS is based on three pillars: prevention, identification and reaction. These pillars are underpinned by an extensive system of measures and processes as part of the compliance program. The basis takes the form of the Compliance Guidelines, which follow the Principles for the Proper Performance of Reasonable Assurance Engagements Relating to Compliance Management Systems (IDW PS 980).
In the 2021 fiscal year, we carried out a Group-wide, web-based compliance risk analysis at the level of senior company executives (excluding Deutsche Wohnen). As part of this analysis, information was requested on the topics of active and passive corruption, money laundering, antitrust law, social compliance and IT/data security. The aim of the survey was to systematically evaluate compliance risks, increase comparability between the countries in which Vonovia operates and identify potential areas of focus for further development of the CMS. Potential improvements were stated in the areas of money laundering and IT security, whereas the company was viewed as being well placed or very well placed in the other areas. Social compliance was evaluated as the most secure area. Compliance management identifies a catalog of measures from the findings, including a comparison of material compliance risks with the Group risk management system and an expansion of the training catalog for compliance-related topics. With a view to enabling the transfer of best practice, the Austrian process for determining beneficial owners will be rolled out to Germany, as the Austrian requirements are more stringent in this regard.
Regular training sessions are the cornerstone for preventing misconduct before it happens. A comprehensive catalog of regular and mandatory training events is already firmly established and has been adapted for the various internal target groups. Procurement, for which the issue is particularly relevant, receives special training on corruption and criminal law pertaining to corruption, for example. As certain compliance seminars could not be held in the previous year due to the coronavirus pandemic, we digitalized and, in some cases, reworked further seminars in the reporting year. For example, the Code of Conduct and data protection seminars, including progress tests, are now available online to all employees in Germany (excluding Deutsche Wohnen). As such, implementation of the corresponding training content is ensured.
The complaints management and whistleblower protection system, expanded in 2021, has now entered regular operation. Bolstered by Group policies on preventing and tackling corruption, on preventing money laundering, on the whistleblower system and on the compliance guidelines, the anonymous Whistleblower hotline is not only available to employees, but also to external parties such as customers and business partners, in both German and English. It complements and extends the existing system of the independent ombudsman. The hotline is also integrated within the partner portal for business partners. The externally prepared whistleblower report is included with the company’s compliance report.
The Chief Executive Officer (CEO) is responsible for implementation of the CMS. A Compliance Committee comprising the Compliance Officer (Legal department), Compliance Managers, the ombudsperson and representatives of the Internal Audit, Risk Management and HR departments and members of the works council regularly updates the system in line with current requirements and is responsible for its ongoing development. In this context, the Compliance Officer acts as a central contact point within the company for compliance-related questions and suspicions. He reports to the CEO on a regular basis, and also on an ad hoc basis when special cases arise. His activities are supported by the compliance managers and specialists in the individual departments. The CMS applies to the entire Group (excluding Deutsche Wohnen).
The Supervisory Board regularly receives comprehensive information about compliance issues and corruption along with existing guidelines and processes. The compliance report, which is forwarded to the Audit Committee via the Compliance Officer (following prior consultation with the CEO), provides information about potential breaches, measures and training relating to corruption.
In the 2021 fiscal year, there were individual suspected cases of corruption, which we investigated diligently. None of the cases were confirmed. Furthermore, several other compliance violations or suspected cases were reported, although these can be described as minor in total.
Deutsche Wohnen also reports on breaches in the areas of corruption and bribery. Due to identical definitions, the related key performance indicator can already be regarded on a consolidated basis. As part of the integration process, the Vonovia CMS will be rolled out to Deutsche Wohnen, with existing processes, policies and guidelines adapted accordingly to reflect Group guidelines.
Material Performance Indicator – Total number of proven cases of corruption (in Germany)
Material performance indicator
Total number of proven cases of corruption (in Germany)
- *Including Deutsche Wohnen (including the Care and Assisted Living business activity).