Legal Compliance and Corporate Responsibility

Corporate Compliance

Bayer manages its businesses responsibly and in compliance with the statutory and regulatory requirements of the countries in which it operates. We define compliance as legally and ethically impeccable conduct by all employees in their daily work, because the way they carry out their duties affects our company’s reputation. We do not tolerate any violation of laws, codes of conduct or internal regulations.

Global Corporate Compliance Policy

The Board of Management is unreservedly committed to compliance, and Bayer will forego any business transaction that would violate the compliance principles in force throughout the Bayer Group.

The global compliance management system is steered by a central compliance organization within the Bayer Group. This organization is headed by the Group Compliance Officer, who reports directly to the Chairman of the Board of Management and to the Audit Committee of the Supervisory Board on matters of this nature. The compliance organization is staffed with specialized compliance managers who are responsible for the corporate functions and for establishing businessand industry-specific standards in the divisions, business units and service companies.

Through our compliance management system, we want to ensure lawful and responsible behavior by our employees. Potential compliance risks are identified together with the operational units so as to achieve systematic and preventive risk detection and assessment. Risks are identified not just by the global functions (top-down), but also by the Bayer country organizations (bottom-up). Compiled findings about risks are entered into a global statistical database for compliance risk management that we use to develop suitable measures for specific processes, business activities or countries, for example. We assess our business partners to the same extent with regard to potential compliance risks.

Our compliance principles apply throughout the Bayer Group and are established in our Corporate Compliance Policy. Here we commit to uphold ten principles, particularly in antitrust and anticorruption
matters.

All employees are required to observe these principles and to immediately report any violation of the Corporate Compliance Policy. This general reporting requirement does not apply in France due to peculiarities of national law. Bayer’s senior managers serve as role models and therefore have a vital part to play in implementing the compliance principles. They may lose their entitlement to variable compensation components and be subject to further disciplinary measures if violations of applicable law or internal regulations have occurred in their sphere of responsibility. Compliant and lawful conduct also factors into the performance evaluations of all managerial employees.

Adherence to the corporate compliance principles is among the subjects covered in audits conducted by Bayer’s Internal Audit. The planning of these audits follows a function- and risk-based approach that also takes a corruption perceptions index into account. The largest companies, which together account for about 80% of Group sales, are generally subjected to audits at threeyear intervals. A total of 191 compliance audits were completed in 2017, of which 22 were preventive or incident-related audits. The head of Internal Audit and the Group Compliance Officer regularly attend the meetings of the Audit Committee of the Supervisory Board, presenting a summary of conducted audits and key findings at least once a year.

Comprehensive Compliance Training and Communications

To create a positive compliance culture in our company, we support all employees in conducting their professional activities with integrity and avoiding potential violations before they can occur. Bayer therefore organizes Group-wide training programs tailored to requirements and target groups, along with extensive communications activities on relevant compliance issues and risks. In addition, compliance managers are available worldwide to answer questions from all employees regarding lawful and ethical behavior in business-related situations. Employees can also discuss said matters with their supervisors, who serve as role models for compliance.

We have set a Group target requiring nearly all of Bayer’s managerial employees worldwide to complete at least one compliance training program each year. In 2017, this was achieved by 35,159 employees, or around 96.6%.