ElringKlinger AG

Compliance Management System

Basic principles of the compliance management system

Given the global nature of its business activities, ElringKlinger is subject to national legislation as well as various political, social, and cultural conditions. ElringKlinger has a compliance management system (CMS) in place for the early prevention, detection, and penalization of violations of applicable guidelines and laws as well as to ensure integrity. This compliance management system is based on the principles of prevention (PREVENT), detection (DETECT) and clarification as well as penalization of compliance-related violations (RESPOND).

Overview of the basic principles of the compliance management system
Overview of the basic principles of the compliance management system
Overview of the basic principles of the compliance management system

Structure and essential elements of the compliance management system

The structure of our CMS is essentially based on national and international standards for compliance management systems. The CMS implemented at ElringKlinger AG has the following elements:

Essential elements of the compliance management system
Essential elements of the compliance management system
Essential elements of the compliance management system

1. Compliance culture

The appropriateness and effectiveness of the CMS is determined to a large extent by the compliance culture at ElringKlinger. The Management Board's clear commitment to compliance ("tone from the top") is of key importance when it comes to enshrining compliance within the ElringKlinger Group as a whole. Business at ElringKlinger is based on and guided by statutory requirements, internal standards, and regulations arising from the German Corporate Governance Code, as stated in the Declaration of Conformity issued by ElringKlinger.

Misconduct and compliance-related violations are sanctioned on a case-by-case basis by implementing the appropriate organizational, disciplinary, and legal (labor and, if applicable, criminal) measures. Civil law claims for damages are examined and asserted if necessary.

2. Compliance goals

The CMS implemented within the ElringKlinger Group is geared towards compliance with statutory requirements, defined corporate codes and codes of conduct, and internal Group guidelines. The CMS is designed to prevent or minimize potential claims for damages, damage to the company's reputation, and legal sanctions against the ElringKlinger Group as well as personal liability on the part of employees and governing bodies of the ElringKlinger Group. In addition to this fundamental objective, the CMS is aimed at delivering legal certainty within the company and providing orientation for all ElringKlinger employees with regard to conduct that complies with defined rules.

3. Compliance risks

The process of identifying and assessing compliance risks forms the basis for the development of an appropriate compliance program. Risks of legal and regulatory infringements within the ElringKlinger Group are analyzed, assessed, and managed as part of the Group-wide risk management process.

4. Compliance program

ElringKlinger AG's compliance program encompasses all guidelines initiated and issued by the compliance organization as well as measures implemented that are aimed at preventing breaches of regulations on the one hand and at identifying risks of compliance breaches in good time and clarifying and sanctioning them on the other. The compliance program of ElringKlinger AG essentially consists of the following elements:

5. Compliance organization

The compliance organization of the ElringKlinger Group determines the structural and procedural measures associated with the CMS and provides the necessary resources to ensure an effective system. The compliance organization at ElringKlinger is made up of the Chief Compliance Officer and the compliance officers with regional or local responsibilities.

6. Compliance communication

An essential prerequisite for compliance with laws and guidelines throughout the company is not only that such regulations actually exist but also that they are effectively communicated to all employees and are fully embraced at all levels. At ElringKlinger, various communication channels (including the intranet, staff magazine, etc.) are used to ensure the appropriate communication of the guidelines and conduct applicable within the company. In addition, targeted training is used to raise awareness of correct behavior among the intended target group. Another essential component of this fundamental CMS structure is the continuous communication of the "tone-from-the-top" principle at the individual group levels. 

7. Compliance monitoring and improvement

Organizational principles can only be successful if they are accompanied by appropriate control measures. The appropriateness and effectiveness of the CMS within the ElringKlinger Group is monitored on an ongoing basis. If systemic weaknesses or compliance-related violations are identified in the course of monitoring, these are reported to the management of ElringKlinger AG. The Management Board of ElringKlinger AG holds overall responsibility and is committed to adapting and refining the existing CMS to changing circumstances and the possibility of evolving risk exposure.