Rheinmetall AG

Based on public information, there is evidence that the CEO has issued one strong statement in the last two years, which promotes the company’s whole ethics agenda. This statement can be found on the company’s website and CSR website. The company therefore scores 1. To score higher the company would need to have published several strong statements from the CEO or Chairman in the last two years that promotes its ethics and anti-corruption agenda. Alternatively, the company would need to have published one statement from the CEO or Chairman in the last two years, which supports the company’s strong stance against corruption.

Based on public information, there is no readily available evidence that the company’s CEO demonstrates a strong personal, external facing commitment to the ethics and anti-corruption agenda of the company. In articles dating from 2012 and 2013 CEO Armin Papperger briefly mentions the company’s compliance guidelines and transparency, but TI assesses this to be insufficient evidence of a personal commitment. Similarly, the company’s former CEO held the position of President of the ASD (2011-2012) and he is reported to have assisted with the preparation of the common industry standards (CIS). However, there is a lack of information to substantiate this, as evidence suggests that the CIS were adopted in 2007.

Based on public information, there is no readily available evidence that the company’s CEO demonstrates a strong personal, internal-facing commitment to the ethics and anti-corruption agenda of the company.

Based on public information, there is evidence that the company publishes a statement of values representing high standards of ethical business conduct, including integrity, honesty, openness, and transparency. These values are explained in company documents and on the company’s website.

Based on public information, there is evidence that the company is a member of the ASD Business Ethics Committee, the Berufsverband der Compliance Manager (BCM) and the Deutsches Institut für Compliance (DICO).

Based on public information, there is evidence that the Executive Board and the Audit committee have overall responsibility for the compliance policy of the company. The Chief Compliance Officer reports directly to the CEO – who is a member of the Executive Board – and regularly informs the Audit Committee and plenary assembly of the Supervisory Board. The Audit Committee deals specifically with compliance issues, but there are no clear terms of reference detailing what this responsibility entails. The company therefore scores 1.

Based on public information, there is evidence that the company has appointed Chief Compliance Officer Dr. Andreas Beyer, with responsibility for implementing the company’s ethics and anti-corruption agenda. The Chief Compliance Officer has a direct reporting line to the CEO.

Based on public information, there is limited evidence of regular Board level monitoring of the performance of the company’s ethics and anti-corruption agenda. TI notes that the Chief Compliance Officer presented the compliance report for 2013 to the Audit Committee and gave an overview of the status of the compliance organisation. The company therefore scores 1. To score higher the company would need to provide further information regarding the compliance report, including evidence that it forms part of a major periodic review process that occurs at least annually.

Based on public information, there is no readily available evidence of a formal, clear, written plan in place on which the review of the ethics and anti-corruption agenda by the Board or senior management is based.

Based on public information, there is evidence that the company has a formal process for review and where appropriate updates its policies and practices in response to actual or alleged instances of corruption. The company website clearly states that the compliance team reviews the compliance management system if any breach of compliance regulations is suspected or discovered, and updates it at regular intervals in the light of new findings.

Based on public information, there is limited evidence that the company has a formal anti-corruption risk assessment procedure implemented enterprise-wide. TI notes that the company states that compliance is one of the risk aspects in decision-making processes, of the company’s strategic, operational and day-to-day business practices. The company therefore scores 1. To score higher, the company would need to provide further information regarding the anti-corruption risk assessment, including how it should be applied and who owns the mitigation plans.

Based on public information, there is limited evidence that the company has a formal anti-corruption risk assessment procedure for assessing proposed business decisions. The company states that as part of corporate governance and compliance, extensive and detailed due diligence checks must be performed when acquisitions or joint venture activities are initiated. The company therefore scores 1. To score higher the company would need to provide evidence of how these due diligence procedures should be applied and provide information on anti-corruption risk assessment procedures for other business decisions, such as moving into new markets.

Based on public information, there is evidence that the company conducts due diligence that minimises corruption risk when selecting or reappointing its agents. The company therefore scores 1. To score higher the company would need to provide evidence that the due diligence is refreshed at least every 3 years and/or when there is a significant change in the business relationship.

Based on public information, there is no readily available evidence that the company has contractual rights and processes for the behaviour, monitoring, control, and audit of agents with respect to countering corruption. TI notes that company contracts include provisions that sales agents must regularly provide proof that their remuneration is in reasonable proportion to the services they provide.

Based on public information, there is no readily available evidence that the company makes clear to contractors, sub-contractors, and suppliers, through policy and contractual terms, its stance on bribery and corruption and the consequences of breaches to this stance. TI notes that the company states business partners should ‘apply and take into account’ the principles contained in the Code of Conduct, but it is not clear that contracts contain provisions to this effect and the consequences for non-compliance.

Based on public information, there is no readily available evidence that the company explicitly addresses the corruption risks associated with offset contracting.

Based on public information, there is no readily available evidence that the company conducts due diligence that minimises corruption risk when selecting its offset partners and offset brokers.

Based on public information, there is some evidence that the company has an anti-corruption policy that prohibits corruption in its various forms. The company states on its website that it has a zero-tolerance approach to corrupt business practices. However, the company does not publish a policy document or code of conduct that expands and explains this statement. The company therefore scores 1. To score higher the company would need to provide evidence that it explicitly addresses the forms that corruption might take, including bribery, kickbacks and facilitation payments.

Based on public information, there is evidence that the company’s anti-corruption policy is explicitly one of zero tolerance.

Based on public information, there is evidence that the company's ethics and anti-corruption policies are easily accessible to Board members and employees on the company intranet. However, there is no readily available evidence to suggest that third parties have access, preventing the company from scoring higher. The company therefore scores 1.

Based on public information, there is insufficient evidence that the company’s ethics and anti-corruption policies are easily understandable and clear to Board members, employees and third parties. The Code of Conduct does not specifically pertain to ethics and anti-corruption, and other policies are not publicly accessible.

Based on public information, there is evidence that the company’s ethics and anti-corruption policies explicitly apply to all employees and the Executive Board.

Based on public information, there is evidence that the company has a policy on potential conflicts of interest that applies to both employees and Board members. However, TI notes that a clearly worded definition and examples of potential conflicts of interest are not provided. The company therefore scores 1.

Based on public information, there is evidence that the company has a policy for the giving and receipt of gifts to ensure that such transactions are bona fide and not a subterfuge for bribery. The Corporate Compliance Officer states in the company magazine that the company has a traffic light system for gift exchange. However, TI is unable to fully analyse the policy as it is not publically available. The company therefore scores 1. To score higher the company would need to provide clear evidence that it sets upper limits on the acceptable value of gifts and/or specific thresholds necessary for senior authorisation.

Based on public information, there is evidence that the company has a policy for the giving and receipt of hospitality to ensure that such transactions are bona fide and not a subterfuge for bribery. The Corporate Compliance Officer states in the company magazine that the company has a traffic light system for hospitality exchange. However, TI is unable to fully analyse the policy as it is not publically available. The company therefore scores 1. To score higher the company would need to provide clear evidence that it sets upper limits on the acceptable value of hospitality and/or specific thresholds necessary for senior authorisation.

Based on public information, there is no readily available evidence that the company has a policy that explicitly prohibits facilitation payments.

Based on public information, there is some evidence that the company regulates political contributions in order to prevent undue influence or other corrupt intent. The company states that donations to political parties must gain approval from the Executive Board. The company therefore scores 1. To score higher the company would need to provide guidelines on the application of the regulations and recipients must be publically declared.

Based on public information, there is no readily available evidence that the company has a clear policy on engagement in lobbying activities.

Based on public information, there is no readily available evidence that the company prohibits charitable contributions, or regulates such contributions.

Based on public information, there is limited evidence that the company provides written guidance to help Board members and employees understand and implement the firm’s ethics and anti-corruption agenda. Employees have access to compliance guidelines and a Code of Conduct. The company therefore scores 1. To score higher the company would need to provide evidence of written guidance that contains examples to illustrate particular situations.

Based on public information, there is evidence that the company has an explicit anti-corruption module as part of its compliance training programme. However, TI notes evidence suggests that only particular employees recieve this anti-corruption training.

Based on public information, there is evidence that anti-corruption training is provided in some countries where the company operates or has company sites. The company therefore scores 1. To score higher the company would need to provide clear evidence that anti-corruption training is provided in all countries where the company operates or has company sites.

Based on public information, there is no readily available evidence that the company provides targeted anti-corruption training to Board members.

Based on public information, there is evidence that the company provides tailored compliance training for procurement and sales staff. However, the link between tailored training for procurement and sales staff and an anti-corruption element is only made implicitly. The company therefore scores 1. To score higher the company would need provide further information explaining how the tailored training has an anti-corruption element and whether such tailored training is also offered to employees who have other high risk functions.

Based on public information, there is no readily available evidence that the company has a clear and formal process by which employees declare conflicts of interest, as employees are only directed to inform their managers of any potential conflicts of interest. To score on this question the company would need to provide evidence that employees must declare conflicts of interest to their managers formally and in writing, or to an independent department.

Based on public information, there is evidence that the company may apply disciplinary procedures to employees, Directors and Board members found to have engaged in corrupt activities. The company therefore scores 1. To score higher, the company would need to use wording that stresses an explicit commitment to apply disciplinary procedures such as ‘will’ rather than ‘may’.

Based on public information, there is evidence that the company has some channels to report concerns or instances of suspected corrupt activity, including the legal department and the Chief Compliance Officer. However, few details are provided and contact details are not well-publicised. The company therefore scores 1. To score higher the company would need to provide evidence of independent sources for employees to report to and the ability for employees to report anonymously.

Based on public information, there is evidence that across geographies all employees have access to more than one reporting channel. These whistleblowing channels include the Chief Compliance Officer, compliance officers in the company, and the legal department.

Based on public information, there is insufficient evidence that the company makes efforts to ensure that employees are comfortable reporting concerns. To score on this question the company would need to provide evidence of further efforts to ensure whistleblowing is not deterred and evidence of detailed analysis of whistleblowing data or independent employee surveys.

Based on public information, there is evidence that the company has well-publicised resources available to all employees where help and advice can be sought on corruption-related issues. For example, employees can contact compliance officers, the Chief Compliance Officer or the legal department.

Based on public information, there is evidence of a commitment to non-retaliation for bona fide reporting of corruption. However, there is no readily available evidence that disciplinary measures are applied to employees who breach this policy. The company therefore scores 1.