During the merger of Dorma and Kaba in the financial year 2015/16, which was subject to scrutiny by governmental anti-trust agencies, the need and importance of a management approach to (anti-)competitive behavior became tangible.
Through its management approach, dormakaba aims to ensure compliance with the law by raising awareness through employee training and offering legal support and guidance. Enabling employees to comply with legal requirements will help avoid negative financial impact to the company and safeguard our reputation.
The company has a strong commitment regarding compliance with anti-trust regulations and ethical business dealings as stated in our Code of Conduct (CoC). The CoC, which is binding for all dormakaba employees, includes anti-competitive behavior in chapters 1 (Compliance with Laws and Regulations) and 10 (Fair competition and anti-trust law). The current policy is the C23 Competition Compliance Directive, effective since 26 September 2011. The Group Directive Anti-trust, approved by the General Counsel will come into effect in the financial year 2018/19 after final CEO approval and replace the aforementioned Directive. Group Compliance releases new Directives and further respective internal communication.
”If we lose business because we strictly adhere to our Code of Conduct, this is done for a good reason” Riet Cadonau, CEO dormakaba
It is each employee’s responsibility to comply with laws and internal regulations as per the CoC. It is the responsibility of the respective manager to ensure that employees know the respective regulations and understand expectations. Segment management offers the resources necessary to ensure appropriate compliance. Group Compliance develops the related training concept and provide the training material, which Segments may amend as necessary together with Group Compliance.
Internal and/or external lawyers provide advisory services on anti-trust and fair competition matters. In case of dawn raids or anti-trust proceedings, Segments give Group Legal immediate notice and then the issue is managed together. Group Legal regularly reports to the Board of Directors regarding anti-trust proceedings in such cases.
Group Compliance and Group Legal ensure key activities on the topic through two working streams: increasing awareness through training activities and offering advisory services.
As mentioned, Group Compliance develops training concepts and activities. However, the responsibility for carrying out the trainings lies within the Segments. This cross-functional and cross-departmental method further fosters the exchange of information on fair competition topics.
As part of the CoC trainings in the reported fiscal year, the basic rules of fair competition law were taught to over 80% of all dormakaba employees. Training for the remaining employees will take place in the financial year 2018/19.
Besides these general training activities, dormakaba developed tailored trainings for segments or critical job functions in which deeper knowledge of anti-trust law is necessary. This includes functions such as purchasing, sales and general management. A new e-learning module was launched in the financial year 2017/18. Group Compliance, Human Resources and direct managers can assign this training on a needs basis.
Group Legal offers direct anti-trust and fair competition consultancy whenever due diligence processes reveal related issues. Consultancy is mainly offered on strategic projects, but also occurs ad hoc. Duration of the actions depends on the related project or request. Particularly in Mergers & Acquisitions, reallocation of distribution or incentive programs, and pricing and market strategies, consultancy might be long-term. Actions are prioritized depending on impact on dormakaba and urgency.
See “Grievance Mechanism” for Anti-corruption.
Group Compliance informs Segment management about the training initiatives and about any projects planned within their Segments. They can then give feedback or state concerns in case they think the strategy or training content would need adjustments based on the local setting, or challenge proposed budget allocations. Further, within the company’s risk-evaluation process, the Segments can address risks, including any perceived gaps within internal organization and processes. In addition, Segment management can address related issues to Group Internal Audit within the regular audit planning and on an ad hoc basis. The evaluation method has not resulted in any negative results or necessary adjustments.