Combating Corruption and Bribery

Within the context of the statutory requirements in the Non-financial Declaration, this aspect includes one material topic: “Governance and compliance” (see materiality matrix).

Governance and Compliance

Reliable, transparent and trust-based corporate governance form the foundation stones of our business model. Securing the trust of our customers as well as the trust of our employees and all other key stakeholders is our top priority. This calls for a management level that leads and monitors the company independently and with a sense of responsibility. The “tone from the top” is crucial to establishing our credibility. The same applies to compliance with laws and regulations. Trust can only 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. If trust is abused, on the other hand, this can soon pose a threat to the company’s reputation – and as a result to its commercial success.

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 the Declaration of Respect for Human Rights act as the maxims guiding us in our actions. https://investoren.vonovia.de/en/corporate-governance/compliance-and-policies/attitude

We are also committed to the principles set out in the German Corporate Governance Code and ensure that our Supervisory Board is independent. https://investoren.vonovia.de/en/corporate-governance/corporate-governance-declaration/

A good compliance management system also makes a key contribution to a company’s sustainable development and value creation. As a result, the Management Board (CEO) is responsible for the implementation of the Compliance Management System (CMS).

Vonovia’s CMS is based on three pillars: the “prevention” and “identification” of and “reaction” to any misconduct. These pillars make up an extensive system of compliance measures and processes as part of the compliance program. Our Compliance Guidelines, which are consistent with the Principles for the Proper Performance of Reasonable Assurance Engagements Relating to Compliance Management Systems (IDW PS 980) and also take the implementation principles for the UK Bribery Act 2010 into account, form the basis. The focus of our appropriate and effective CMS is on preventing misconduct. The program, which has already been firmly implemented, is evaluated and enhanced on an ongoing basis. Regular training sessions support our preventative work. Procurement, for which the issue is particularly relevant, receives special training on corruption and criminal law pertaining to corruption.

In 2020, Vonovia focused on establishing a system to prevent and combat corruption: A new anti-corruption policy and a policy designed to protect whistleblowers form the basis for these efforts. The existing system featuring an independent ombudsman is to be supplemented and expanded to include a hotline that allows whistleblowers to remain anonymous. An additional anti-money laundering policy addresses the particular field of money laundering in the real estate sector and also supports efforts to combat abuse in this area. https://investoren.vonovia.de/en/corporate-governance/compliance-and-policies/compliance-anti-corruption

We need supplementary and more in-depth training in order to make the frameworks that have been put in place and the corresponding awareness of corruption issues an even more established part of our corporate culture. The coronavirus pandemic meant that it was not possible to conduct as many of these sessions as we would have liked in 2020. There is potential for improvement here that we intend to exploit in 2021.

The CMS is developed further by the Compliance Committee and is adapted to reflect the latest requirements. The Committee meets several times a year and its members are the compliance officer, compliance managers, the ombudsperson, and representatives from the internal audit, risk management and HR management departments and the works council. The Compliance Officer (from the Legal department) is the central point of contact for compliance matters and suspected cases. 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.

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 2020 fiscal year, there were isolated suspected cases of corruption, which we investigated diligently. None of the cases were confirmed. There were also several other nonmaterial compliance violations or suspected cases. This demonstrates that our established system functions well: Cases are reported and addressed and corresponding consequences ensue.