Corporate Governance, Compliance and Anti-corruption
Challenges, Opportunities and Risks
In light of both social and legal changes, Vonovia has established new business areas in recent years. Digitization is becoming an increasingly important aspect of our processes and offers, for instance. In the composition of the Supervisory Board this presents a challenge, but also an opportunity, to increase its expertise in areas that will be important in the future by bringing new members on board, thereby broadening Vonovia’s range.
Vonovia is currently preparing for the upcoming changes to German stock corporation law resulting from the implementation of the second shareholders’ rights directive (ARUG II), and the associated revision of the German Corporate Governance Code (GCGC). As significant changes in remuneration policy and the associated reporting including presentation to the shareholders is expected (known as “say on pay”), it is currently vital that Vonovia follows these developments closely. 102-12
Compliance and Anti-corruption
With the increase in construction activity, a supplementary field of activity has opened up for Vonovia in which we will face new challenges, opportunities and risks. Procuring subcontractor services that are performed outside of our processes is a particular challenge. The risks primarily relate to compliance with labor and social standards by construction companies and their subcontractors. We can reduce the majority of these risks in advance by fulfilling many of the technical construction work steps with our own technical service. This lessens Vonovia’s dependency on external construction companies and can even exclude them if they do not comply with sustainability criteria. We can also better ensure our high quality standards by performing the majority of services ourselves across the Group.
We minimize risks by adhering to our general terms and conditions of purchasing and the Business Partner Code, and we also take additional measures, such as establishing a structured supplier management system to generate further security. The procurement department frequently updates the existing regulations in order to minimize these risks, and published the latest version in 2018. As part of this, we requested numerous documents and other forms of proof from our subcontractors, and we monitor their validity on an ongoing basis to reduce risks further. We developed and implemented a standard audited process for new construction procurement in the reporting year.