Long-term success through compliance and integrity

Compliance Cockpit and compliance coaches, Whistleblower System and an integrity culture: How the interaction of Compliance Management System with a genuine compliance and integrity culture can create added value for Audi.

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Compliance comes first

“Trust is good, control is better” is an old saying. The emphasis is on “old,” because the motto at Audi is: “Control is good, trust is better.”

 

Lawful and compliant conduct and acting with integrity enjoy top priority at Audi. They are the basis for the brand’s reputation, for the trust of customers and business partners, for the well-being of employees and, last but not least, for sustainable business success.

 

“We regard compliance and integrity as two sides of the same coin that are inextricably linked,” stresses Jochen Keller, Head of Compliance Group Entities and Corporate Regulations at AUDI AG. All employees – both in Germany and at the international participations – are called upon to play their part. “This will help us cultivate what we’re ultimately striving for: a contemporary corporate culture in which the Audi values are honored worldwide, in which we work together constructively and in which there’s no room for a culture of fear.”

Operations & Integrity

Compliance

Compliance refers to the observance of legal provisions, internal company policies and voluntary commitments by the company, its bodies and employees.

Integrity

Audi understands integrity as responsible, entrepreneurial action geared towards values and principles that are recognized in society and agreed on within the company.

Audi Code of Conduct as foundation

The Audi Code of Conduct, the Group Essentials and the Code of Conduct for Business Partners serve as the foundation for this. “However, these three sets of guidelines alone are not enough. What we’re talking about here is a cultural change that we can’t simply prescribe or that will happen just because we publish documents about it,” Keller points out. “The real change has to take place in people’s minds, and so it has to be flanked continually by targeted training and communication measures on compliance and integrity.” Another element supporting the effectiveness of compliance and integrity activities at the Volkswagen Group brands is the Together4Integrity (T4I) program.

 

The Audi Board of Management has established a Compliance Management System (CMS) as a basic organizational framework. This encompasses the company’s principles, measures, processes and structures for permanent compliance with laws, internal provisions and rules of integrity.

Seven core elements of the Compliance Management System

Audi Compliance Management System

The Compliance Management System (CMS) is divided into seven core elements and combines aspects of compliance and integrity.

1. Compliance and integrity culture

  • Integrity management
  • Preparation/communication of the Code of Conduct
  • Promotion of a tone from the top

2. Compliance goals

  • Preventive advisory function as the Second Line

3. Compliance risks

  • Recording and evaluation of compliance risks in the company
  • Development and review of countermeasures

4. Compliance programs and processes

  • Risk prevention in compliance focal areas through target group-specific and needs-oriented consulting, communication and training measures

5. Compliance organization

  • Roles and responsibilities of the compliance and integrity functions
  • Structure of the compliance organization within AUDI AG as well as at relevant subsidiaries

6. Compliance communication

  • Defined reporting lines to the Audi Board of Management, the Group Board of Management and the Group Chief Compliance Officer
  • Risk-based compliance communication and training measures

7. Compliance monitoring/improvement

  • Monitoring of compliance measures within the divisions and at subsidiaries
  • Continuous and lasting improvement of the CMS

Audi Compliance Cockpit as an integrated IT platform

  

Jochen Keller, Head of Compliance Group Entities and Corporate Regulations at AUDI AG

Jochen Keller, Head of Compliance Group Entities and Corporate Regulations at AUDI AG

The challenge: All aspects of the CMS should receive equal attention throughout the Audi Group. To manage and track activities at Audi and its subsidiaries worldwide, an integrated IT platform has been established – the Audi Compliance Cockpit. With the aid of various modules, compliance officers are able, among other things, to adapt training courses to specific companies, help employees identify conflicts of interest or implement policies locally.

 

In addition, various maturity indicators, such as training rates or the implementation statuses of measures, can be documented and evaluated. This supports KPI-oriented management of compliance and integrity. Compliance coaches at AUDI AG support the Audi companies as a first point of contact. They act as partners for the local compliance officers and are the internal interface to the various departments at Audi. The local compliance officers, in turn, are multipliers within their organizations. “This self-perception also characterizes the collaborative model of the Compliance department within the Audi Group,” says Jochen Keller.

Averting risks and damage with foresight

Audi sees compliance and integrity as instruments of prevention, designed to avert risks and damage to the company in a proactive manner. This begins right at the top management level: The Board of Management, Supervisory Board and in particular its Audit Committee are regularly informed about compliance, integrity and risk management. This ensures that rapid and effective countermeasures can be taken if necessary.

 

An important part of the compliance program is the Whistleblower System. It allows employees, business partners, customers or third parties to report potential regulatory violations in connection with the Audi Group. Each year, the Audi Investigation Office receives hundreds of hints. More than two-thirds of the reports were filed non-anonymously. “We interpret this as a vote of confidence in the system and our functioning compliance and integrity culture,” says Jochen Keller.

Together4Integrity (T4I)

How integrity and compliance are firmly anchored at Audi:

As a holistic compliance and integrity program of the Volkswagen Group, “Together4Integrity” (T4I)  is one of the sustainable results of the US Monitorship. This program underpins the effectiveness of compliance and integrity activities across the brands and will run until 2025.

 

AUDI AG is responsible for rolling out and implementing the program in more than 40 subsidiaries and participations worldwide. The rollout at Audi is on track overall and will be completed by mid-2022.

 

Measures from the US Monitorship and Group functions are pooled in the T4I toolbox. Special T4I communication and participation formats for employees and managers support the further development of the corporate culture. Their individual implementation is managed independently by the respective companies.

“Profound awareness of compliance and integrity”

  

Claudia Scaramelli, Lamborghini Chief Compliance Officer

Claudia Scaramelli, Lamborghini Chief Compliance Officer

How does Audi succeed in practicing compliance and integrity in its international participations? What is important to take into account when working with different products, customers and cultures? Four Audi Group compliance officers from Europe, Asia and Latin America give representative accounts of their experiences.

 

“As a manufacturer of supercars in the luxury segment, we have a high degree of visibility – also and especially in the public eye. We are absolutely committed to keeping Lamborghini’s reputation strong. Part of our self-perception is that we fulfill the personal wishes and dreams of our customers. That’s why we sensitize our employees and business partners to the ethical principles on which we model our customer relationships.

Our compliance team acts as a business enabler, supporting Lamborghini’s commercial success. We also provide advice for all third-party relationships using an intensive due diligence process that focuses on retail, licensing and sponsorship activities. And when it comes to living compliance authentically at Lamborghini, we rely not only on regular training but also on the impact of clear, powerful statements from our management: We use tone-from-the-top formats to communicate the most important core messages, such as responsibility and transparency.

 

When employees get us involved to give advice – especially in the case of new projects – we can be sure that they have truly internalized the importance of adhering to the rules. Without the support of our co-workers and our compliance coach from AUDI AG, we would not be able to fulfill our role in this way. Our regular exchange is essential for finding solutions together – especially when it comes to questions that arise in our company for the first time.”

Wayne Ho, Risk & Compliance Manager, Audi Singapore

Wayne Ho, Risk & Compliance Manager, Audi Singapore

“Audi customers in Singapore expect top quality from our vehicles – and that also includes adherence to all compliance and integrity principles throughout the value chain. In Singapore, corruption offenses can result in severe penalties, not to mention damage to the reputation of the company and the brand. Because our management attaches great importance to compliance, I’m involved in all relevant meetings in my role as compliance manager.

 

I’m also in regular contact with my Compliance colleagues here in Asia and at the Audi headquarters to stay up to date with the latest developments. We use the Audi Compliance Cockpit to share best practices and leverage synergies. Once a quarter, I share information about studies on corruption cases or provide updates on local compliance measures in the ‘Compliance Bites’ newsletter. Information on lock screens is also a useful means of communication. Currently, messages about corporate culture or the Whistleblower System appear on the monitors.”

Aurora Claudia Quiñones Vazquez, Audi México Compliance Consultant

Aurora Claudia Quiñones Vazquez, Audi México Compliance Consultant

“The Volkswagen Group is held in high esteem in Mexico. When San José Chiapa was chosen as a new Audi production location, the people here were extremely proud. Add to that the fact that we started from scratch about nine years ago. For those who helped build up this location, it’s not just a job; it’s a personal matter. Sadly, people in other countries often associate Mexico with corruption, and indeed our country does not score well in Transparency International’s Corruption Perceptions Index. Corruption was and still is a problem in Mexico, but there are signs of improvement now that the government has introduced appropriate legislation.

 

Interestingly, it is precisely because of this history of corruption that many companies in Mexico already have a profound awareness of compliance and integrity, so our employees pretty much knew what we were talking about from the outset. Today, we see them incorporating the Audi values into all of their thoughts and actions. The topics of compliance and integrity are also addressed in detail in the onboarding process for new employees.

 

In Mexico, personal interaction is very important in order to build up trusting working relationships. That’s why we often convey information at meetings, in open forums or by video message. I believe two things are crucial to establishing a functioning compliance and integrity culture: trust and role models. Managers shouldn’t just talk the talk, they’ve also got to walk the walk.”

Paola Mocàvero, Ducati Chief Compliance Officer

Paola Mocàvero, Ducati Chief Compliance Officer

“Ducati is successfully involved in motorsport. As ambassadors of an exclusive motorcycle manufacturer, our race riders are also role models. The Ducatisti and we expect them to compete for victory in a sportsmanlike and courageous manner. But observing the rules both on and off the racetrack is also a form of coolness. After all, values such as respect, fairness and honesty matter just as much to all Ducatisti as the performance, sophistication and style of our motorcycles. This is something we communicate clearly when we talk about the strategic value of integrity.

 

As a company we act with integrity to build trust – with our customers, business partners and in the public. Ducati has 17 subsidiaries around the world. Aligning the business interests of our brand with the rules of the Audi Group and the applicable laws of the respective markets could be a challenge. However, a clear set of rules, practice-oriented training and our lessons-learned approach help us avoid careless mistakes that could jeopardize our reputation. As we see it, compliance is not bureaucracy, but rather consulting work based on trust and oriented toward our business purpose.

 

Ultimately, there is no business without compliance, but there is no compliance without business. For our work, it’s a great advantage that we are in close dialogue with Audi Compliance and the Audi Group brands Lamborghini, Italdesign and Volkswagen Group Italia.”

Audi Report 2021

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Audi Report 2021

Welcome to the Audi Report 2021, the combined annual and sustainability report from AUDI AG. This report combines financial perspectives as well as Environment, Social and Governance (ESG) issues in a unique and transparent manner.

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