Compliance - Merck KGaA, Darmstadt, Germany Corporate Responsibility Report 2017

Internal audits on corruption and Human Rights Charter

2014

2015

2016¹

2017
The Group

2017
thereof Merck KGaA, Darmstadt, Germany²

1	Includes Sigma-Aldrich as of 2016
2	Includes global audits which are conducted at the headquarters in Darmstadt and/or the management of the audited function is reporting into KGaA.

Number of audits relating to corruption

% of audits relating to corruption

Number of audits relating to the workplace requirements of our Human Rights Charter

In 2017, we audited 16% of all Group subsidiaries (status June 2017, excluding minority holdings), covering approximately 30% of all sales generated between the third quarter of 2016 and the second quarter of 2017.

In 2017, during 45 of our audits conducted in 22 countries, we additionally reviewed workplace parameters as per our Human Rights Charter. No violations were identified.

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Reported compliance violations

2014

2015

2016¹

2017
The Group

2017
thereof Merck KGaA, Darmstadt, Germany

1	Includes Sigma-Aldrich as of 2016

Total number of reported compliance violations

Number of reported compliance incidents

Number of confirmed cases

confirmed cases by category

Violation of the Human Rights Charter

Bribery and Corruption

Violation of the Pharmaceutical Guidelines

Violation of Data Privacy and Confidentiality Guidelines

Manipulation of Business Documents

Violation of cartel laws and fair competition rules

Infringements in the areas of finance, accounting and banking

Theft and fraudulent Actions against the Group

Other violations of Compliance Principles for the relations with Business Partners of the Group

Other violations of values, internal guidelines or legal requirements

In 2017 there was a total of 14 confirmed compliance cases, 2 of which were already reported in 2016, but closed in 2017.

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Compliance training

2014¹

2015

2016²

2017
The Group

2017
thereof Merck KGaA, Darmstadt, Germany

1	In Q1 – Q3 2014, Group Compliance performed a thorough analysis and review of its Compliance Training Program. No courses were scheduled for these quarters.
2	Includes Sigma-Aldrich as of 2016
3	Includes contractors, external supervised workers (e.g. temps) and contract partners working on-site who were trained on anti-corruption guidelines (2017: 3,699).
4	As of 2016, we are also reporting the training rate by region. No such data was tracked for the preceding years.

Total number of persons trained on anti-corruption guidelines³

7,519

20,404

29,764

17,044

2,326

Total number of employees trained on anti-corruption guidelines

5,496

17,378

25,889

13,345

1,450

% of employees trained on anti-corruption

by employee category

Number of Role 2+ employees trained on anti-corruption

3,071

12,747

14,379

7,080

635

% of Role 2+ employees trained on anti-corruption

% of employees below Role 2 trained on anti-corruption

by region (%)⁴

Europe

–

North America

–

not applicable

Asia-Pacific (APAC)

–

not applicable

Latin America

–

not applicable

Middle East and Africa (MEA)

–

not applicable

In order to address the special responsibility held by management personnel, as well as by staff with HR responsibility, these employees are increasingly receiving training on anti-corruption guidelines. This applies to all employees rated Role 2+.

Our compliance and anti-corruption principles are communicated to all our business partners, who undergo a Business Partner Risk Management (BPRM) process.

Training increased in 2016 due to the initial integration of employees of Sigma-Aldrich, a company acquired at the end of 2015.

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Legal actions

2014

2015¹

2016

2017
The Group

2017
thereof Merck KGaA, Darmstadt, Germany

1	Includes Sigma-Aldrich as of 2015
2	As published in the annual reports, the herein listed total number of legal actions refers to the significant legal risks as per the company’s definition. The significance of legal risks is based on potential negative effects on projected financial objectives as well as on the probability of occurrence.

Total number² of legal actions pending or completed (for anti-competitive behavior, violations of anti-trust or violations of monopoly legislation)

pending

completed

For further information please see our annual reports:

Annual Report 2014, pages 130-131 and pages 213-215, no. 48
Annual Report 2015, pages 128-129 and pages 212-213, no. 27
Annual Report 2016, pages 135-136 and pages 228-229, no. 26
Annual Report 2017, pages 148-150 and pages 252-254, no. 27

Compliance

Adherence to laws and regulations as well as to voluntary codices that are internal to Merck KGaA, Darmstadt, Germany. Compliance is a component of diligent corporate governance.

Role

Merck KGaA, Darmstadt, Germany uses a market-oriented system to rate positions within the company. To facilitate consistency across the organization, each position is assigned a specific role, with an overarching job architecture classifying each role as one of 11 levels, 15 functions and an array of career types (Core Operations, Services & Support Groups; Experts; Managers; Project Managers).

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