Compliance and Audits

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. In so doing, he is supported by our interdisciplinary Compliance and Risk Committee, the Corporate Internal Audit department, and by some 50 locally appointed compliance officers all over the world. Since 2009, our corporate data protection officer has been part of our compliance organization. Together this team coordinates the flow of information and helps our employees to implement our requirements – for example, through training courses designed to take local challenges into account. The Chief Compliance Officer reports infringements, as well as the measures taken to deal with them, directly to the Chairman of the Management Board.

Photo Dirk-Stephan Koedijk, Member of the Henkel Sustainability Council for Compliance

“We are convinced that only honest business is good business. Our codes and standards are binding for all employees at all sites, as well as for our suppliers and other business partners. Our managers must fulfill a special role: They must serve as an example by visibly acting in an ethically and legally impeccable manner. Only then will compliance become a guide for the day-to-day actions of all employees.”

Dirk-Stephan Koedijk
Member of the Henkel Sustainability Council for Compliance

Read the complete interview with Dirk-Stephan Koedijk

Compliance as a management task

Since we operate on a global scale, our employees are confronted with a variety of legal and value systems. Many of our employees work in countries where, according to surveys by organizations such as Transparency International, there is a greater risk of encountering corrupt practices. Henkel resolutely opposes infringement of laws and standards, and rejects dishonest business practices. To impart clear rules of conduct to our employees, and especially to avoid any conflicts of interest in everyday work situations, our compliance training focuses on courses and communication measures. Compliance issues are addressed in depth as early as the official welcoming seminar for new managers. They are also an integral part of all seminars of the Henkel Global Academy. Newsletters for special target groups and articles in employee newspapers make a further contribution to knowledge transfer in this area. Given their position within the company, our managers bear a special responsibility to set an example for their staff. Only if our managers are seen to act in an ethically and legally impeccable manner can compliance be transformed from a bureaucratic system of rules and regulations into a guide for the actions of all employees. Regular training courses are organized by the Corporate Internal Audit department to familiarize our top managers with our corporate standards. We also make increasing use of e-Learning to cover a wide range of themes and simulate everyday decision-making situations.

Photo Compliance workshop in Chennai, India

In November 2010, representatives of local top management and the responsible compliance officers attended a two-day compliance workshop in Chennai, India. This was the last in a series of training workshops held in the course of 2010, which were attended by a total of 220 staff with compliance-related responsibilities worldwide.

Results of our audit program

Regular audits at our production and administration sites and, increasingly, audits of our subcontractors and logistics centers are important for the implementation of our codes and standards. The audits are a key instrument for identifying risks and potential improvements and make a significant contribution to knowledge transfer. In 2010, we carried out 78 audits at our sites.

In the course of the audits, a total of 2,314 individual actions were agreed with Accounting and Human Resources, Purchasing, Sales/Distribution, Marketing, Information Technology and Production, in order to make processes and workflows even safer and more efficient. Integrated safety, health and environment (SHE) audits took place at 35 sites, where we initiated 602 binding corrective actions. In 2010, the audits program for maintaining our social standards was carried out at 13 Henkel sites in Argentina, Brazil, Chile, China, Colombia, Egypt, India, Japan, Peru, Taiwan, the Ukraine, the USA, and Venezuela. Violations of work rules and deficits in timekeeping were revealed at two of the audited sites. Potential improvements in communication and documentation were identified in a few individual cases. For example, our Social Standards were not always directly accessible to all employees at all sites. In general terms, it has been observed that the core requirements of our Social Standards, such as those relating to the minimum working age and the establishment of employee representation, are now also regulated by local legislation in many regions.

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 73 countries. It should be used, in particular, 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 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. We react forcefully to violations of laws, codes and standards. Where necessary, we initiate appropriate disciplinary measures. In 2010, 26 employees received written warnings, and 62 contracts were terminated.

My Report
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