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Compliance.

  • 24 international subsidiaries represented at International Compliance Days.
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  • Group Policy on Avoiding Corruption revised.
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  • Customer Contact Compliance program implemented at several international subsidiaries.
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Telekom's business is based on the principles of integrity and respect. Compliance, which is understood as the lawfulness of corporate activities, therefore plays a significant role at our company. Telekom is clearly committed to the ethical principles set out in the Guiding Principles and in the Code of Conduct.

All compliance management activities are in line with legal regulations and with Telekom's Privacy Code of Conduct, a policy on handling personal data at the Deutsche Telekom Group.

Download : Privacy Code of Conduct

Compliance management certified.

The key elements of the compliance management system are as follows:

  • Establishment of a compliance organization in all major Group units
  • Risk-based derivation of a compliance program and its consistent implementation through policies, training and consulting offers
  • Appropriate response to breaches of compliance

The Group's compliance organization was certified by independent auditors on December 31, 2010 in terms of adequate implementation of minimum requirements and implementation specifications defined by Deutsche Telekom. Recertification is planned by 2013.

Central responsibility for compliance organization.

Responsibility for the compliance management system has top priority at Telekom. In line with the high relevance of the topic, a separate Board of Management department for Data Privacy, Legal Affairs and Compliance was created in 2008.

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Group-wide structures have been making efficient compliance management possible since 2005. The compliance organization consists of the Chief Compliance Officer, the Compliance Committee and the central and local Compliance units. The compliance organization develops Group-wide standards, tools and processes to guarantee compliant conduct at the company.

Compliance Committee provides internal consulting.
The Compliance Committee consists of executives from the following areas:

  • Compliance
  • Legal
  • Data Privacy
  • Internal Audit 
  • Human Resources

The purpose of the committee is to establish and monitor structures for a functional compliance management system and to advise the Board of Management on all relevant questions about compliance. The Chief Compliance Officer is the chairman of the Compliance Committee.

Compliance Officer plays key role in compliance management.
The Chief Compliance Officer reports to the Group Board of Management member for Data Privacy, Legal Affairs and Compliance. He plays a key role in setting up the compliance management system and maintaining its functionalities in the long term. The Chief Compliance Officer informs the Board of Management and the Audit  Committee of the Deutsche Telekom Supervisory Board about current compliance activities at the Group. According to the German Corporate Governance Code, the Audit  Committee is responsible for compliance issues. The Chief Compliance Officer has the right to contact the Audit  Committee directly and can also be directly commissioned by it.

International collaboration improved.

The Group Board of Management and the respective bodies of the affiliated companies must ensure an appropriate compliance organization. The Group Compliance Management (GCM) unit supports these bodies in this task. The legal basis for this are contracts between the Telekom Group and its direct subsidiaries, the Intra Group Compliance Agreements, which define the rights and obligations of both parties.

Different legal practices and cultural values in the various countries where Deutsche Telekom is active represent a significant compliance challenge. In line with the Group's international structure, strategic issues are discussed with an International Compliance Advisory Team and a shared vision is defined. The International Compliance Advisory Team is a "trend-setter" of sorts, as it provides incentives for designing and implementing balanced compliance structures at the Deutsche Telekom Group.

We have been promoting Group-wide cooperation for years with the International Compliance Days, an annual meeting of the representatives of all compliance organizations of the international subsidiaries. 115 representatives from 24 countries followed the invitation by the central Compliance department to come to Bonn on September 8-9, 2011. This was the seventh meeting of this kind, and this time the future focus of compliance activities and possibilities to optimize international cooperation were on the agenda. The next International Compliance Days will take place in Bonn in April 2012.

Compliance policies revised and implemented.

The Group Policy on Avoiding Corruption and Other Conflicts of Interest (or Anti-Corruption Policy) and the Group Policy on the Acceptance and Granting of Benefits (or Benefits Policy) were revised during the reporting period.

The Anti-Corruption Policy serves as an overarching policy and a link between the Code of Conduct and the detailed rules of the more specific policies which regulate the acceptance and granting of undue benefits, sponsoring, donations, benefits extended in the political sphere, dealing with consultants, the ban on insider trading and anti-competitive agreements. In addition, it defines the organizational obligations and measures to prevent corruption and other conflicts of interest. The Benefits Policy governs how to handle gifts, entertainment and invitations to events in business relationships.

These policies are now becoming effective and mandatory throughout the Group. We first obtained the resolutions of the executive bodies in the national Group units and then made the policies known to employees at the national level. At the international level, the process will involve greater outlay because we must first check whether the policies comply with relevant national laws. The introduction is being accompanied by communication and training campaigns.

Employee training for strengthening compliance.

The Group Compliance Management area conducted e-learning sessions as well as individual attendance courses for managers and employees on issues such as the Code of Conduct, general and risk-specific compliance topics and accepting and granting benefits.

Additional web-based training courses on the principles of ethical business conduct will be completed in 2012. For example, in May 2012 we will start an anti-corruption e-learning course where employees can learn about the Anti-Corruption Policy and refresh their knowledge from earlier training courses. This e-learning course will subsequently be adapted as necessary and introduced at the international subsidiaries.

New e-learning module raises awareness of anti-trust risks.
Anti-trust compliance requirements are on the rise. In order to reduce the risks, we are making our employees aware of the possible consequences of non-compliance with anti-trust laws. The plan is to provide a new e-learning module on this topic for Telekom employees in Germany in Q2 2012. This will also be launched internationally in the course of 2012.

E-learning module on compliance basics.
We will launch an e-learning module designed to raise awareness of compliance in April 2012. It will deal with the basics and requirements in the most important fields of compliance and will introduce users to our Guiding Principles, our Code of Conduct, applicable legal regulations as well as internal policies. The training offer will be available to all employees in Germany, and also internationally where necessary.

Internet portals for prevention and advice.

Ask me!
In order to prevent compliance risks, we set up the "Ask me!" portal in 2008. Here employees can ask compliance-relevant questions, for example regarding the Code of Conduct or laws and internal policies. "Ask me!" offers reliable information that employees can use in their daily work.

Tell me!
We are dependent on the input of our employees, business partners, customers and other stakeholders when it comes to investigating violations of internal policies, laws or codes of conduct. "Tell me!" is a portal that is also accessible to external parties which can be used to report misconduct via e-mail, phone and fax. Despite the fact that we delisted from the New York Stock Exchange in 2010, we will continue to operate this portal—even though we are no longer obligated by law to provide a public reporting system.

Promoting compliance in customer contact.

Promotion of integrity and legally correct conduct in customer contact supports Deutsche Telekom's goal of being perceived as the most highly regarded service company in the industry. That is why we initiated the Customer Contact Compliance Program for the promotion of integrity in customer contact in 2010. The focus is need-based advice and effective implementation of measures tailored to different distribution channels and countries. We initially started the program at Telekom Deutschland and then at Magyar Telekom.

After successful implementation in these two countries, the initiative was rolled out at other international subsidiaries in 2011. Suitable action plans have been integrated into Deutsche Telekom's annual compliance program. Sustainable implementation is consistently monitored.

Investigations of suspected corruption.

Telekom employs a zero tolerance policy when it comes to corruption. Violations are systematically investigated and prosecuted in order to create maximum transparency.

Review of contracts in the F.Y.R.O. Macedonia and Montenegro.
The audit of the financial statements of Magyar Telekom for the 2005 financial year identified contracts for which it was not possible at the time to fully ascertain an appropriate business background. The Audit  Committee of Magyar Telekom then commissioned an independent law firm to investigate the lawfulness of these contracts. Magyar Telekom and Deutsche Telekom reached an agreement with the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) in 2011 to resolve investigations into alleged breaches of the U.S. Foreign Corrupt Practices Act (FCPA). Additional information can be found in the 2011 Annual Report.

Review of irregularities in T-Systems International's sponsorship activities.
An internal investigation that was triggered by an anonymous tip gave rise to the suspicion that an arrangement violating compliance regulations had been made in the context of the business relationship between T-Systems International GmbH and a major car manufacturer to reward sponsorship involvement by awarding future contracts for IT services. Due to this, T-Systems International GmbH immediately terminated employment of its former CSO, the responsible sales manager and an external consultant and sent the internal report to the prosecutor's office responsible for further review. On the basis of the report, the public prosecutor initiated a preliminary criminal investigation, which resulted in charges being brought to the Regional Court in Stuttgart. The Regional Court is now ruling on opening the trial.

Major ongoing litigation.

Deutsche Telekom is party to several proceedings both in and out of court with government agencies, competitors, and other parties. The proceedings mentioned in the 2011 Annual Report are of particular importance from Deutsche Telekom's point of view.

Respect for human rights as an ingrained practice.

Respecting human rights is a matter of course at Telekom and is a principle that is entrenched and practiced worldwide. Our Code of Conduct, which applies Group-wide, stipulates our requirements for ethical conduct. The Social Charter  adopted in 2003 defines Group-wide regulations regarding how to deal with employees and suppliers. The Charter is based on the principles of the United Nations Global Compact , the conventions of the International Labour Organization (ILO) and the Organization for Economic Co-operation and Development (OECD). We check compliance with the Charter's regulations in an annual survey.

Beyond compliance with human rights, we also heed labor rights in all of the markets where we are active and in some cases even set higher standards. Minimum standards for dealing with our employees are also defined by the Telekom Diversity Policy, whose aim is to prevent discrimination based on gender, age, disabilities, ethnic origin, religious beliefs and sexual orientation.

Employee relationships.

As Deutsche Telekom is represented in over 50 countries of the world, it is not possible to name a generally applicable example of our high standards. Labor legislation is too different in the individual countries. Nevertheless, Deutsche Telekom offers its diverse international staff worldwide a general framework and a global cultural structure with its Employee Relations Policy. This means that the Group is committed to minimum standards applicable to employee relations worldwide and at the same time takes account of national legislation, different cultural backgrounds and needs. The Employee Relations Policy defines the core elements of Deutsche Telekom's human resources policy and describes what we stand for in our relationships to our employees around the globe. These relationships are characterized by our shared values and are derived from our five Guiding Principles as well as from additional Group policies. The Employee Relations Policy also includes statements regarding HR development, responsible change management, health and sustainability, fair pay, work and life balance, leadership, diversity, the ban on discrimination, communication and relations with employee representatives.

One example is T-Mobile USA. The international subsidiary complies with U.S. labor law without any exception, including the policies and legally specified processes regarding the right to set up and join a trade union. These policies reflect the right to freedom of association. T-Mobile USA does not prevent any of its employees from setting up or joining a union and does not discriminate against those who do. To date, however, a large majority of staff at T-Mobile USA have chosen not to be represented by a union. Voting on union recognition has only taken place at two facilities in the north eastern United States, each of which has less than 20 employees. Employees in Connecticut decided in favor of union representation whereas employees at another facility in Long Island (NY) voted against it. Both voting processes were conducted in strict compliance with U.S. law and results were confirmed by the National Labor Relations Board.

In addition, individual subsidiaries have introduced activities that go above and beyond local standards and legislation. At T-Systems South Africa, for example, regular interchange takes place between management and employees although no labor union is represented at the company. This is known as "Employee consensus seeking approach" and helps take account of employee interests in the corporate decision-making process at an early stage.

In addition, our health and safety management system is deployed in 17 countries and we have coordinated its introduction at a total of 30 international subsidiaries. The next step will be to develop joint standards together with universities, institutes, employer's liability insurance organizations and partner companies that go beyond current labor rights and will be effective for the entire Telekom Group worldwide.

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