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 in the Group's business activities.
Compliance, which is understood as the lawfulness of corporate activities, plays a significant role in the Group's business activities. Telekom has clearly expressed its committment to complying with ethical principles and current legal standards. These are firmly integrated into Telekom's Guiding Principles and Code of Conduct. Telekom has been practicing comprehensive compliance management since 2005 to make sure conduct throughout the Group is ethical and complies with legal provisions. 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.
Responsibility for compliance management activities lies with the top management level at Telekom in the Board department for Data Privacy, Legal Affairs and Compliance. At the operative level, the compliance organization is comprised of the Chief Compliance Officer (CCO), the Compliance Committee as well as central and local compliance units.
The CCO is responsible for setting up the compliance management system and maintaining its functionalities in the long term. He reports directly to the Board Member for Data Privacy, Legal Affairs and Compliance and has the right, in consultation with said Board member, to send reports to Deutsche Telekom AG's Board of Management as well as the Audit Committee.
Members of the Compliance Committee include managers from the areas of Compliance, Legal Affairs, Data Privacy, Internal Audit , Human Resources and Security. The committee helps central and local compliance units in developing and implementing a compliance program. It also encourages company departments that deal with compliance topics to share experiences and information with each other.
The Group Compliance Management department (GCM) holds central responsibility. It develops Group-wide standards, tools and processes to guarantee compliant conduct at the company.
Affiliated companies are responsible for conducting local compliance management activities and are supported by the CCO in matters such as case processing, reporting and designating a compliance officer. These companies may have widely differing business models and represent the different phases of a company's development, from start-ups to market leaders. In 2013, Telekom developed a tool kit for maturity-based compliance to give these companies guidance on compliance management based on their current situation.
Telekom conducts wide-scale measures to raise employee awareness of compliance management requirements. Managers also act as faciltators and discuss the topic with their employees. Between January and April 2013, Telekom conducted a Group-wide survey on compliance among mid-level managers. More than 4,000 managers from 32 business units participated in the survey. They provided information on a number of topics, including how they perceive compliance and how they deal with concrete compliance cases. We thoroughly analyzed the responses and used them to come up with different measures including expanded compliance training offers tailored to the information needs of our employees as well as accompanying communication initiatives.
Telekom has set up two online portals called Ask me! and Tell me! for questions and tips on the topic of compliance. Employees can find reliable information on laws, internal policies and codes of conduct relevant to their daily activities on the Ask me! portal. The Tell me! portal helps clear up cases involving violation of legal or internal regulations. Both employees and external parties such as business partners and customers can notify us of any violations by e-mail, phone or fax.
The ICT industry is characterized by dynamic change. Companies need to constantly update their core business, tap into potential in growth markets, realize innovative business ideas and open up new business fields. As a result, Telekom's Group companies that have to tackle these challenges are extremely varied. Depending on the business model, size and risk situation, these companies need different compliance management solutions.
That is why we developed a toolkit for maturity-based compliance in 2013. The purpose of the toolkit is to define compliance management system requirements at the different Group companies, taking their economic development, business strategies and risks into account. We classified the companies based on their current life cycle phase (from start-up to market leader) and their specific compliance risks in a matrix. Depending on their classification, we defined minimum compliance requirements for affiliated companies on a sliding scale and specified how the compliance management system is to be set up, structured and monitored.
The compliance management system helps guarantee compliance, i.e., the lawfulness of our corporate activities. Key system components include:
- Establishing a compliance organization in all major Group units
- Risk-based derivation of a compliance program and its consistent implementation through policies, training, consulting offers, and communication measures
- Compliance controls and compliance due diligence (analyzing compliance risks involved in acquisitions)
- Making sure that the company responds appropriately to violations
Auditors certified Deutsche Telekom's compliance management system at eight Telekom companies in Germany in 2012 and at 13 international companies in 2013 in accordance with IDW audit standard 980. The audits focused heavily on anti-corruption. This certification is proof that the certified compliance management systems used by the companies listed below is effective when it comes to identifying corruption risks and preventing violations.
Companies were selected based on materiality and risk aspects and include the following:
- Deutsche Telekom AG
- T-Systems International
- DT Kundenservice
- DT Netzproduktion
- DT Technischer Service
- Telekom Shop Vertriebsgesellschaft
- Detecon International
- Magyar Telekom
- Makedonski Telekom
- T-Mobile Macedonia
- Crnogorski Telekom
- Slovak Telekom
- T-HT Hrvatski Telekom
- Albanian Mobile Communications
- T-Mobile Czech Republic
- T-Mobile Polska
- T-Systems Iberia
Different legal practices and cultural values in the countries where Deutsche Telekom is active represent a significant compliance challenge. The increasingly dynamic development of global ICT markets and intensified international competition also influence Telekom's compliance strategy.
In line with the Group's international structure, strategic issues are discussed with an international Compliance Advisory Team and a shared compliance approach is defined. The team is a trend-setter, as it provides an impetus for designing and implementing balanced compliance structures at the Deutsche Telekom Group. We have also been promoting Group-wide compliance collaboration for years with our International Compliance Days, an annual meeting of the representatives of all compliance organizations from our national companies. Around 120 experts from 25 countries met on April 24th and 25th, 2013 in Bonn to discuss the challenges that accelerated market and innovation processes pose to compliance management.
Top scores for compliance in Hungary and Greece.
Critical stakeholders monitor the compliance efforts of our national companies closely. In 2013, for example, Transparency International (TI) compared the transparency of the anti-corruption reporting of leading companies in Hungary and Greece. Our national companies scored exceptionally well. Magyar Telekom got the best score among 50 listed Hungarian companies in all three of the categories assessed by TI with a total of 9.8 out of 10 possible points. OTE came in first in all of Greece in the category, "Disclosure of anti-corruption program." TI assessed the anti-corruption activities of all Greek companies with a revenue of over one billion euros.
All Group units regularly audited for risk of corruption.
We take a wide spectrum of internal measures to prevent and fight corruption. All of the 135 fully consolidated, personalized and operational companies of the Deutsche Telekom Group undergo a compliance risk assessment at least every two years. 108 of these companies even conduct an annual compliance risk assessment. The assessment helps us identify and evaluate compliance risks and develop appropriate prevention measures. This involves defining which specific threat each risk poses to the company and identifying what has already been done to mitigate this risk. If necessary, additional measures are developed to reduce the risks to a manageable level, as defined by the risk strategy. Responsibility for the compliance risk assessment lies with the management of the respective Group company. Our central compliance organization provides support and advice in these matters.
More than 19,000 employees trained to fight corruption.
Following our 2009/2010 anti-corruption campaign, Deutsche Telekom conducted a second major anti-corruption campaign in 2012 and 2013 for its employees. Depending on the actual corruption risks involved in employees' work, they were offered attendance training or e-learning courses. More than 3,400 employees attended face-to-face training courses in Germany and internationally. Almost 16,000 employees in Germany attended e-learning courses. This corresponds to a participation rate of 72 percent.
Investigation based on clear criteria.
Deutsche Telekom has specified clear criteria for investigating suspected cases of corruption. The company only starts investigations if a violation of legal or internal regulations is reported with a sufficient degree of detail. We thoroughly investigate any tips that meet these requirements. Any violations we uncover during our investigation are punished appropriately, to the point of termination of the employment relationships for good cause. Claims for damages may also be asserted. Any weaknesses identified in the internal control system during the investigation are systematically analyzed and remedied.
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 2013 Annual Report are of particular importance from Deutsche Telekom’s point of view.