Compliance with international rules and the fair treatment of our business partners and competitors are among the guiding principles followed by our Company. Volkswagen’s commitment has always gone beyond statutory and internal requirements; voluntary obligations and ethical principles also form an integral part of our corporate culture.

The Volkswagen Group is also active in the fight against corruption and other illegal economic activity outside of the Company. Since 2002, we have been a member of the United Nations Global Compact, working with around 10,000 participating companies from more than 130 countries to create a more sustainable and fairer global economy.

Commitment to compliance at the highest level

Compliance is a cornerstone of sustainable business – a view expressly shared by the Company’s management. Speaking to an audience of more than 5,000 at a management event in 2013, Chairman of the Board of Management of the Volkswagen Group, Prof. Dr. Martin Winterkorn, emphasized this point: “Operating a sustainable business means we continue to take the subject of compliance seriously. We do not break the law, or other rules and regulations! This applies to all our brands and in all regions. Volkswagen enjoys an excellent reputation internationally. It is our responsibility as managers to ensure that it is upheld.” Other members of the Group Board of Management and brand boards of management also called on the workforce to comply with the rules during the past fiscal year.

Preventive compliance management system

Compliance is an important part of the Governance, Risk and Compliance (GRC) organization in the Volkswagen Group (see the Report on Risks and Opportunities). As part of this, Volkswagen adopts a preventive compliance approach and aims to create a corporate culture that stops potential breaches before they occur by raising awareness and educating employees. Group Internal Audit and Group Security regularly perform the necessary investigative measures, systematically monitor compliance and perform random checks regardless of any suspicion of infringements, as well as investigating specific suspected breaches. Responses are implemented by the Human Resources and Group Legal departments. These processes are closely interrelated, in line with the concept of a comprehensive compliance management system.

Various bodies support the work of the compliance organization at Group and brand company level. These include the Compliance Board at senior management level and the core Compliance team, which ensures coordination with the functional areas.

Focal points in 2013

Each year, detailed compliance risk assessments are carried out across the Group as part of the standard GRC process. The results are factored into the risk analyses performed by the Volkswagen Group, the brands and the companies, and into the Compliance Program planning.

Compliance activities in 2013 focused on anti-corruption measures in China and on expanding the GRC organization. The China Compliance conference was held in Beijing in May 2013 to prophylactically tackle the subject of preventing corruption in the Chinese Group companies. The Conference was sponsored by the member of the Group Board of Management responsible for the China function and President and CEO of Volkswagen Group China, as well as the CEOs of the Chinese joint ventures FAW-Volkswagen Automotive Company Ltd. and Shanghai-Volkswagen Automotive Company Ltd. All three stressed in their speeches that compliance is a key element of corporate responsibility, helps to safeguard a company’s image, and has a direct positive impact on business growth. Among other things, the conference provided an opportunity to train the local management, assess the specific situation in China from a compliance perspective and develop future local compliance strategies in workshops.

The Group Chief Compliance Officer is now supported by 14 Chief Compliance Officers, who are responsible for the brands, the Financial Services Division and Porsche Holding GmbH, Salzburg, as well as 175 compliance officers in the Group companies. In total, staff in 49 countries are employed in the GRC function.

Work of the Governance, Risk and Compliance organization

The GRC organization provided information on various compliance issues to the Group’s brands and companies over the year, using a wide range of traditional communication channels. These include reports in various employee magazines produced by the brands, companies and locations and information stands at works meetings. Electronic media such as intranet portals, smartphone apps, blogs and newsletters are also frequently used to provide compliance information. For example, International Anti-Corruption Day in early December was used at Volkswagen AG as an opportunity to launch a poster campaign highlighting the topic of corruption. The campaign was accompanied by articles in employee magazines, as well as a short animated film on the intranet.

Building on its Code of Conduct, Volkswagen has produced guidelines on various compliance topics. These cover anti-corruption – including checklists and the express prohibition of facilitation payments – and competition and antitrust law. These information documents were provided to employees either in paper form or electronically (on the intranet and the employee portal, for example) and made available to all brands to be adapted to their respective specific requirements.

There are also Group-wide directives on dealing with gifts and invitations, as well as on making donations.

We have communicated the Code of Conduct to all consolidated brand companies and established it as a fundamental part of our corporate culture. It is also increasingly being integrated into our operational processes. For example, since 2010, all new employment contracts entered into between Volkswagen AG on the one part and both management staff and employees covered by collective agreements on the other have included a reference to the Code of Conduct and the obligation to comply with it. In addition, since 2012, all new Volkswagen AG employees have been required to complete an e-learning program on the Group’s Code of Conduct. The subject of human rights is an integral part of this training program.

Training on competition and antitrust law is provided to specific target groups. For example, it is a core component of the training provided to sales and procurement employees.

Due to the new requirements of the Geldwäschegesetz (GwG – German Money Laundering Act), a money laundering prevention concept has also been rolled out at the Group companies based in Germany.

The Company considers the excellent reputation enjoyed by the Volkswagen Group in the business world and among the public to be a precious asset. To safeguard its reputation, Volkswagen verifies the integrity of its business partners (business partner check). This check allows us to find out about potential business partners before entering into a relationship with them, reducing the risk of starting a cooperation that could be damaging to the Company or its business.

Providing information to employees at all levels continues to be a core component of our compliance work. Across the Group, approximately 119,000 employees attended events on the topics of compliance, the Code of Conduct, anti-corruption, human rights, anti-money laundering, and competition and antitrust law in 2013. E-learning programs are also an established means of providing employee training. Around 31,600 employees successfully completed the e-learning program on avoiding conflicts of interest and corruption in 2013. Certain Group companies have special e-learning programs on topics such as anti-money laundering. Around 158,000 employees have taken the opportunity for professional development by participating in e-learning programs on compliance issues since 2009.

Employees of all brand companies and a large number of Group companies are able to obtain personal advice about compliance issues, usually by contacting the compliance organization via a dedicated e-mail address. In 2013, employees made extensive use of the IT-based information and advisory tool launched at Volkswagen AG’s German locations in 2012.

The Group-wide ombudsman system can be used to report any breaches or suspicions (particularly regarding corruption) in nine different languages to two external lawyers appointed by the Group. Naturally, the people providing the information need not fear being sanctioned by the Company for doing this. In 2013, the ombudsmen passed on 30 reports by people – whose details remained confidential if requested – to Volkswagen AG’s Anti-Corruption Officer. In addition, the Anti-Corruption Officer and the head of Group Internal Audit received information on a further 65 cases directly. During local internal audits of the brands and Group companies, 251 reports of suspected fraud were submitted. All information is followed up. All breaches of the law or internal regulations are appropriately punished and may lead to consequences under employment law, including dismissal.

Effectiveness review

We review the effectiveness of the compliance measures taken at the Volkswagen Group’s brands and companies annually using an integrated survey, which forms part of the standardized GRC process. We check the effectiveness of selected countermeasures as well as management controls used to manage compliance risks. In addition, the continuous improvement of the compliance management system is ensured through independent reviews by the Group Internal Audit function at the units and the regular exchange of information with external bodies, for example.