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Conflicts of interest are a major risk in defence, where a small number of companies compete for high value, opaque and relatively infrequent contracts with a small number of customers.
Conflict of Interest
At thyssenkrupp, business decisions are made exclusively in the best interests of the Company. Any actual, potential or perceived conflicts of interest with personal matters or other business or non-business activities, including those of relatives or other related parties should be avoided. Should such conflicts nevertheless occur, they must be resolved in accordance with the law and Group policies. Conflicts must be dealt with openly and transparently.
Our Group Regulation Corruption Prevention provides detailed explanations concerning “Conflicts of interest”, which applies to all employees and board members:
Conflicts of interest may arise from any personal interests, which may exist in connection or conflict with the performance of the work for thyssenkrupp, e.g.:
Personal relation to or any other close relationship with business partners of thyssenkrupp in cases in which the employee places orders, gives approvals or the like with respect to such business partners.
Secondary employment at other companies or self-employment that infringes on the interest of thyssenkrupp.
Share ownership in competitors or business partners of thyssenkrupp that enables the exertion of business influence.
Placing of private orders for products and services with distributors, suppliers or clients of thyssenkrupp, especially if the employee exercises or is capable of exercising a direct or indirect influence on the business relationship of the respective business partner with thyssenkrupp.
The hiring of persons related to employees of thyssenkrupp if the respective thyssenkrupp employee is able to influence the hiring decision.
Direct reporting lines between thyssenkrupp employees being closely related to each other.
Employees must therefore declare any conflicts of interest to their superiors and the responsible Compliance Officer or Regional Compliance Officer in writing.
Without the prior written approval of their superiors, employees who are related to or maintain any other close relationship with business partners are not entitled to place orders, give approvals or the like to such business partners.
In cases where a conflict of interest may arise, employees of thyssenkrupp may only place private orders for products and services with distributors, suppliers or clients if the market price is paid and the payment is documented.
In the reporting year, there were no consulting or other service agreements between Supervisory Board members and the Company. Information on conflicts of interest and how they were dealt with is provided in the section “Report by the Supervisory Board”. Details of the other directorships held by Executive Board and Supervisory Board members on statutory supervisory boards or comparable German and non-German control bodies of business enterprises are provided in the sections of the same name under “Additional information”. Details of related party transactions are given in Note 22 to the consolidated financial statements.
Important related documents and links:
Group Regulation Corruption Prevention
Avoiding conflicts of interest
Our Group Regulation Corruption Prevention states that employees must declare any conflicts of interest to their superiors and the responsible Compliance Officer or Regional Compliance Officer in writing.
Without the prior written approval of their superiors, employees who are related to or maintain any other close relationship with business partners are not entitled to place orders, give approvals or the like to such business partners.
In cases where a conflict of interest may arise, employees of thyssenkrupp may only place private orders for products and services with distributors, suppliers or clients if the market price is paid and the payment is documented.
In case a conflict of interest which may arise is not declared in writing to the superior and the Compliance officer the employee will be sanctioned according to tk’s internal guidelines for violating the Group Regulation Corruption Prevention.
As an outcome of tk’s bottom-up risk assessment and the on-going compliance dialogues between the Compliance function and the group companies, tk has set up a de-centralised approach with regard to how to manage the topic conflict of interests in the local businesses. Therefore, depending on business models, particularities in the different industries and also differing local legal requirements, companies with a high risk in this area have implemented tailored processes matching their particular risks.
However, on a group-wide level tk has implemented a specific conflict of interest check in the compliance clearing process when assessing potential candidates for its top management positions. The respective declarations are kept centrally, accessible for those responsible for oversight of the process, i.e. the Chief Compliance Officer and the relevant Compliance Officers.
Important related documents and links:
see 3.2 Group Regulation Corruption Prevention
thyssenkrupp group-wide as a general principle does not employ serving politicians as directors, employees or consultants.
In order to reduce legal risks, potential conflicts of interest and to avoid reputational damage, on top of this general approach, thyssenkrupp Marine Systems has implemented a specific policy, “Employment of public officials”, in place that defines the process regarding the employment of public officials and former public officials. The policy distinguishes between different risk groups and includes scenarios for potential conflicts of interest. These risk groups reflect inter alia the (former) public sector position of the applicant, and the time passed since the applicant left this position.
The policy foresees the mandatory alignment with the Compliance function. It further provides that where a potential conflict of interest has been identified, the authority for which the official has worked/is working shall be informed before hiring the (former) public official.
If former public officials for whom potential conflicts of interest have been identified are subsequently hired a conflict of interest review takes place potentially resulting in the imposition of clear restrictions on their functional responsibility.
Furthermore, in our group-wide hiring process we explicitly demand a cooling off period for former serving politicians. Please see a screenshot of the relevant process description (Compliance in HR processes, page 13):
thyssenkrupp group-wide as a general principle does not employ serving politicians regardless of hierarchy level or function. However, as a specific outcome of tk Group’s bottom-up risk assessment thyssenkrupp decided to, on top of this general approach, install a specific policy in relation to government relationships for the Business Unit Marine Systems as a further preventive risk-mitigation measure.
In our Code of Conduct we state:
“We regard ourselves as an active corporate citizen and demonstrate our commitment in a variety of ways. Donations and other forms of corporate citizenship are carried out solely in the interests of the company. We make no financial contributions, in particular donations or sponsorships, to political parties in our home country or abroad, organizations related or similar to parties, individual office incumbents or candidates for political offices.
Political lobbying
Our political lobbying is centralized, open and transparent. We comply with the legal requirements on lobbying and avoid at all costs unfairly influencing government policy and legislation. We have voluntarily joined the European Union Transparency Register and comply with the European Union Code of Conduct.”
Important related documents and links: