How important are compliance and transparency for a global company like Daimler?
Both are very important, and their importance is increasing. Of course, our main aim is to provide our customers with excellent products. Safe and stylish cars are the hallmark of our brand. But how a company conducts itself in the marketplace is equally important in terms of its image. We know that misconduct can have economic consequences. So we aim to do business ethically and maintain decent standards of conduct.
Why is transparency becoming more important?
Societies are becoming more sensitive to this issue, not only since the financial crisis. In many countries, the law has changed and more openness and stricter controls are now required. The new media play a key role in this context because people now have easier and faster access to information. If a company doesn’t operate ethically, word gets around very quickly.
"It's about integrity, about values such as fairness and decency"
Have there been any cases of this at Daimler?
Yes, there have been incidents of rule-breaking and corruption at Daimler. In 2010, we were called to account by the US financial regulator and the US Department of Justice and were fined 185 million dollars. In addition, former FBI Director Louis Freeh was appointed as an independent corporate compliance monitor for three years. We learned from this experience.
What has been your greatest challenge to date?
Explaining compliance and restoring our workforce’s faith in the concept across the company. Incidentally, we prefer to use the term ‘integrity’. Compliance simply means keeping to the rules, whereas we focus more on the values that should guide our conduct, such as fairness and decency in our cooperation with others. For us, it’s about having a compass to guide our employees, even in difficult situations. And that’s a huge undertaking. For example, we have developed a new transparent code of conduct and streamlined all our corporate rules.
"Compliance is not there for show"
Aren’t compliance officers simply there for show?
That would simply be about creating the right image. But that’s not how we do business. And anyway, in our case, that would be too little, too late. At Daimler, compliance is not there for show. It’s an important element of our corporate agenda. Since we were called to account, our watchword has been: let’s step up – if we don’t, who will?
Are these values practised throughout the company?
We have made major progress, but there’s always room for improvement. Because we involved the workforce in many of the innovations, our employees now identify with our integrity rules, so they are achieving a high level of compliance.
"Limits of transparency in data protection and privacy"
How much of a problem is corruption at Daimler?
There are very few cases of suspected corruption, and most of those which do arise prove to be unfounded. But that doesn’t make us permanently immune. On the contrary, we have an ongoing responsibility to tackle corruption, especially in countries where it is more widespread than it is here. In these countries, we have to provide our employees with guidelines explaining the forms of conduct that they should adopt to rule out any hint of misconduct on their part. On the other hand, we don’t want comprehensive surveillance – we’re not a police state.
Where do the limits to transparency lie, from your perspective?
In data protection and privacy. So we maintain statistics about breaches but we don’t name names: the data are anonymised. We don’t simply take action against specific individuals. We follow clear rules of procedure that comply with fundamental rights. This ensures that breaches are investigated in an effective and transparent manner. For example, we only look at an employee’s emails if there is a well-founded suspicion of misconduct. Personal rights are a sensitive issue and should not be confused with a misguided concept of transparency.
Christine Hohmann-Dennhardt was a member of the Board of Management of Daimler AG from 2011 to 2015, with responsibility for Integrity and Legal Affairs. A doctor of law, politician and former judge at the German Federal Constitutional Court, she holds an unusual position in Germany’s corporate world.
Interview: Friederike Bauer
published in akzente 2/15