Annual Report 2017

Integrity, compliance and legal responsibility

For Daimler, integrity, compliance and legal responsibility are not merely abstract concepts — they are inseparable from our daily business activities. That is because only those who act responsibly can achieve sustained success over the long term. For us, this involves more than just obeying laws, as we also seek to align our activities with shared principles and values.

Organizationally established at the highest level

Because of their strategic significance, we have combined the responsibilities for integrity, compliance and legal affairs within a single area headed by a member of the Board of Management. This division supports the business divisions and units in their efforts to ensure that these issues remain an integral component of their organizations. We view integrity and compliance as firm elements of our corporate culture that contribute to our company’s lasting success and are already a natural part of our daily business. The basis for this is our Integrity Code, which defines guidelines for our everyday business conduct, offers our employees orientation, and helps them make the right decisions even in difficult business situations. The Integrity Code is supplemented by other in-house principles and guidelines.

A culture of integrity

Integrity is one of the four corporate values that form the foundation of our business activities. For us, integrity means acting in accordance with ethical principles. This also includes our determination to ensure compliance with all applicable laws, internal regulations and voluntary commitments. We expect all of our employees and business partners to adhere to the principles of our culture of integrity out of a sense of conviction. Our goal is to make integrity a permanent part of our corporate culture.

Organization of integrity management

The Integrity Management unit is responsible for the long-term promotion of the culture of integrity at our company. The unit’s experts for change management, corporate-responsibility management, training, consulting and communication develop innovative and employee-focused approaches that promote a culture of integrity at the company. These experts also support disseminators throughout the Daimler organization in their integrity-related activities. The unit’s goal is to further establish and maintain a common understanding of integrity in order to reduce risks and help ensure the sustained success of the company. The Head of Integrity Management reports directly to the member of the Board of Management responsible for Integrity and Legal Affairs.

Our Integrity Code forms the basis of our business conduct. The Integrity Code is one of the most important results of the employee dialogues we have been conducting since 2011. It is based on a shared understanding of values agreed upon with our employees, and it lays out the principles for our everyday business conduct. These principles are based on compliance with laws. They include fairness, responsibility, mutual respect, transparency and openness. The Code applies for all employees of Daimler AG and the Group and is available in 23 languages. A guide is available on the Group’s intranet to support the employees in their application of the Code in everyday situations, providing answers to frequently asked questions. (See daimler.com/sustainability/integrity/at-a-glance)

Requirements for management staff

Our Integrity Code also defines requirements for executives and managers, who are expected to serve as role models in terms of ethical behavior and to provide employees with orientation. To help them optimally fulfill their responsibilities, the new web-based Integrity@Work training program includes a management module that is compulsory for all management staff and which communicates a shared understanding of the role of our executives and managers with regard to integrity, compliance and the law. Furthermore, selected seminars during the training of new managers and the further training of senior executives include modules on the subject of integrity.

In addition, integrity and compliance requirements are important criteria for the target achievement of our executives. They are also part of the agreed objectives for the remuneration of the Board of Management. (See Remuneration Report)

Contact and advice center

Our “Infopoint Integrity” is available to our employees around the world as a central contact and advice center. The Infopoint team offers advice on integrity-related issues in the daily working environment and puts employees in touch with the right contact partner if necessary. A worldwide network of local compliance and legal contact persons is also available to our employees.

Communication measures

We conduct an ongoing open dialogue with our employees in order to ensure that ethical behavior continues to be established in the company’s daily business. We regularly address integrity issues in our internal media and make a wide range of materials available to our business units. During the year under review, we introduced an app that provides information on integrity, compliance and legal affairs. We also place great value on face-to-face discussions. For this reason, we regularly conduct individually designed dialogue events with employees at all levels of the hierarchy, as well as with external stakeholders. These events are held both in Germany and at our locations abroad.

We use various event formats to get employees to think about integrity by approaching the issue from different perspectives. At these events, we also increase the participants’ awareness of the importance of making ethical decisions. For example, we conduct business simulations that enable employees to experience and discuss the relevance of integrity to daily business operations from a new viewpoint. The things we focused on in 2017 included events that addressed the topic of integrity in technical fields. We also have a network of integrity contact persons who help the business units address specific issues in a targeted manner. In addition, we produce target-group-specific materials for managers who wish to raise awareness of integrity and potential ethical dilemma situations in their departments.

Compliance and legal responsibility

Compliance is an indispensable part of the culture of integrity at Daimler. For us, compliance means acting in accordance with laws and regulations. Our objective here is to ensure that all Daimler employees worldwide are always able to carry out their work in a manner that is in compliance with applicable laws, regulations, voluntary commitments and our basic values, as is set out in binding form in our Integrity Code. Our compliance activities focus on adhering to all applicable anti-corruption regulations, the maintenance and promotion of fair competition, adherence to legal and regulatory stipulations related to product development, the observance of and respect for human rights, compliance with data protection laws and our own data protection policy, adherence to sanctions and the prevention of money laundering. Our Legal and Compliance department advises and supports all of our corporate units worldwide with regard to their business operations, processes and services, in order to minimize legal and business risks.

Our Compliance Management System (CMS) serves as the foundation

Our Compliance Management System (CMS) is designed to prevent inappropriate or illegal behavior by Daimler and its employees. The measures needed for this are defined by Group Compliance and the Legal department in a process that also takes the company’s business requirements into account. Our CMS consists of basic principles and measures that aim to ensure compliant behavior throughout the company. The CMS is based on national and international standards and is applied on a global scale at all Daimler AG units and majority holdings. The systematic minimization of compliance risks is also extremely important, and for this reason we analyze and assess the compliance risks of all our business units every year. These analyses are based on centrally compiled information on all business units; specific additional details are taken into account in line with the given risk assessment. The results of the analyses form the basis of our risk management.

More detailed information on the Daimler Compliance Management System can be found in the “Non-Financial Report” section of this Annual Report. (See Compliance)

In order to ensure an independent external assessment of our Antitrust Compliance Program, KPMG AG Wirtschaftsprüfungsgesellschaft audited the Compliance Management System for antitrust law in accordance with the 980 standards of the Institute of Public Auditors in Germany. This audit, which was based on the principles of appropriateness and effective implementation, was successfully completed at the end of 2016.

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