20. Conduct that Complies with the Law and Policy

The company discloses which measures, standards, systems and processes are in place to prevent unlawful conduct and, in particular, corruption, how they are verified, which results have been achieved to date and where it sees there to be risks. The company depicts how corruption and other contraventions in the company are prevented and exposed and what sanctions are imposed.

Werner & Mertz attributes the company's success to its unwavering commitment to sustainability and the trust consumers and customers have in its products and brands. In striving to remain successful, we place great value on an integrally sustainable way of doing business which, we firmly believe, can be achieved only with integrity and in compliance with statutory regulations.  With various compliance activities and measures, we enforce our corporate conduct, which we continuously improve and develop by consistently pursuing our compliance goals. To that end, Werner & Mertz has established a Compliance Program whose elements are oriented toward IDW PS 980.  

Business activities of the W&M Group do not give rise to an increased risk of corruption or bribery. In the past no incidents of this sort have been identified. We therefore see no need for action beyond the current activities. They are focused on preventive compliance to fight corruption and bribery.  Strict rules against corruption and bribery are laid down in the Code of Compliance and in Compliance Guidelines and employees are schooled accordingly. Infringements are not tolerated and are penalized with disciplinary actions. Furthermore, Compliance Management closely examines and evaluates the corruption risk in the export business within the scope of the compliance risk analysis. Given our integrally sustainable corporate approach, the business relationships of the Werner & Mertz Group are based on trust and long-term partnerships which positively counteracts the risk of potential corruption.

Role and Function of Compliance Management
In 2018 Compliance Management in the organization was strengthened with the introduction of the Group’s own compliance function. With that move the company reacted to the growing external legal requirements while taking into account the growth and internationalization of its business. Compliance activities to date were consolidated to increase professionalism in compliance and thereby more effectively and efficiently make progress on relevant topics and processes. The International Compliance Manager was set up as a staff position that reports to the CEO and functions as a business partner in the organization. The manager is responsible for the establishment and further development of a Compliance Management System tailored to the needs of Werner & Mertz.

Compliance Culture 
Our compliance program seeks to strengthen the compliance culture, which is derived from the target culture and the understanding of leadership as practiced in the Werner & Mertz Group. Its  purpose is to ensure that the meaning and value of compliance and lawful conduct are respected and considered indispensable by executives, managers and employees. This attitude is shaped by the shareholders' Compliance Commitment and supported by our models for roles and competencies at the executive level.  

Our actions and convictions are sharper and more specific in the Compliance Guidelines revised in 2019 and the Code of Conduct updated in 2020. Besides legal and regulatory compliance guidelines, the documents contain special topics such as the prohibition of bribery and corruption, conduct in the market and competition, money laundering prevention and, most importantly, company-specific compliance rules.      
Werner & Mertz also has a Code of Conduct for business partners (see Criterion 14), which also covers the above-mentioned compliance subjects and business ethics topics such as respect for human rights, prohibition of child labor and forced labor, discrimination ban and many others.  In 2020 Werner & Mertz engaged its suppliers in discussions of these issues.  

Compliance Processes
The company's compliance processes are laid down according to the methods of modern process management in a process map and defined in part. An important process is the compliance risk analysis, which is conducted in a successive, standardized process in order to ensure consistent quality in information collection and evaluation.  

Furthermore, each manager is required to design the processes for which he is responsible in such a way that potential compliance risks are minimized by means of "in-process control" or by specifically defining the guiding principle "compliance".  Every manager makes sure that appropriate mechanisms are provided as needed and are approved by Compliance Management.
  
Prevention, Detection and Sanctioning of Compliance Violations
Employees and executives are informed by clear regulations in the form of guidelines, fact sheets, checklists or other means of communication, such as the onboarding process. Managers are  addressed again in the Management Handbook, annual conferences, in Business Unit meetings or management meetings. Employees and managers also are required to go through different compliance training sessions, including traditional classroom training and workshops on the Compliance Guidelines, the Code of Conduct or a selected topical subject.  Some training on special compliance subjects may be completed via e-learning. In that case, the training concept and plan are to be approved by Personnel Development. The company has the goal of training close to 100 percent of employees. Raising awareness is meant to prevent misconduct. Because these goals will first be worked out and agreed to at the end of the reporting year, progress to the goal cannot yet be determined.   

Compliance assessments are conducted in order to detect compliance violations. The test program for that purpose is agreed to with the company committee every year. Werner & Mertz does not tolerate any violations and handles information leading to their disclosure responsibly and professionally. Werner & Mertz is currently working on the implementation of a whistle blower system and is revising the reporting process.