Principles of Legal Compliance

Companies invest a great deal of effort in putting written principles and value systems into practice. This might be in relation to customer orientation, openness, respect, or honesty, for example. If they are to become orientation points in everyday practice, they must be implemented and made routine by means of guidelines, processes, incentive systems, and other organizational measures. But this is only the first step. Leadership behavior, the example set by top management, and clear communication of the culture of values are of the essence.

From its modest beginnings as the “Workshop for Precision Mechanics and Electrical Engineering” established by Robert Bosch in 1886, the Bosch Group has developed into a leading global supplier of
technology and services. Throughout its history, the company has been guided by the values and ethics of its founder. These values and ethics include the principle of legality in particular. Robert Bosch himself
wrote in 1921: “In the long term, an honest and fair approach to doing business will always be the most profitable one. And the business world holds such an approach in much higher esteem than is generally imagined.” These words express a conviction to which we still feel committed today: the conviction that reliability, credibility, and legality are indispensable elements of our business success.

This firm commitment unites all Bosch associates worldwide, irrespective of national or cultural boundaries. Legality is one of those fundamental values of our company, and of paramount importance for the members of the board of management. All associates are expected to strictly adhere to legal requirements at all times.
Violations of the law are not tolerated at Bosch, and this applies without exceptions.

To emphasize the importance of this principle, the company’s attitude toward legal requirements and ethical issues is summed up in the Bosch Code of Business Conduct. The Code of Business Conduct is available to all associates as guidance for their conduct, and outlines the basic standards we seek to adhere to in our
work. The Code of Business Conduct and the Bosch values provide an excellent foundation for creating the trust that plays a key role in our business success.

Bosch is a participant in the UN Global Compact and its Ten Principles and has thereby committed to avert and combat corruption. Compliance at Bosch means that all business activities of the Bosch Group and its associates must comply with legal requirements, the Code of Business Conduct, and any further internal
guidelines (“Compliance Requirement”). All associates are responsible for ensuring that they adhere to the Compliance Requirement. Managers are obliged to take organizational measures to ensure the Compliance Requirement is respected within their areas of responsibility. In particular, they must ensure that the associates are familiar and in compliance with the regulations. Infringements are not tolerated and will incur disciplinary measures irrespective of the associate’s status in the company hierarchy.

As well as ensuring compliance with the legality principle, Bosch has also set itself the task of eliminating dangers to people and the environment, limiting its influences on the environment, and making economical use of resources. Processes, manufacturing facilities, and operating resources must comply with the applicable legal and internal requirements in respect of regulations concerning occupational health and safety, fire, and environmental protection. In addition, the protection of our own associates plays a very important role. We respect and protect the personal dignity of every individual and do not tolerate inadmissible discrimination. We categorically reject child labor within the Bosch organization and among our business partners.

Reporting compliance cases

It is up to every Bosch associate and every Bosch business partner to report any possible violations of the Compliance Requirement, in this way helping to limit the consequences of such violations and preventing similar misconduct from happening in the future. Such reports can be made to:
• a superior
• local compliance officers
• the Bosch compliance hotline
• directly to the compliance department

Reports can be made to the compliance officer or the Bosch compliance hotline whenever the associate wishes to avoid the involvement of a superior. The compliance officers in the respective regions and countries offer a neutral point of contact. Persons who report possible compliance issues to the best of their knowledge and in good faith do not have to fear any disadvantageous actions on the part of the company as a result of the report. If the person reporting still wishes to remain anonymous for fear of incurring a personal disadvantage as a result of the report, they may preserve their anonymity by reporting a possible violation of the Compliance Requirement via the Bosch compliance hotline, for example.
When a report is received, it is immediately forwarded to the attention of the responsible compliance officer in the region or country concerned. The compliance officer may involve other specialist departments at Bosch in the investigations. Once the investigations are completed, appropriate measures are taken, as necessary, to remedy the violation.

Training

Associates are offered a broad portfolio of internal training courses in the form of web-based and face-to-face training sessions. The training courses offered are compulsory for certain groups of associates and must be repeated on a regular basis. Compulsory web-based training courses that address the concept of compliance include the following kinds of topics:
• cartel law
• product liability
• export controls
• Code of Business Conduct

Verification and supervisory mechanisms

Another key component of the Bosch risk-management system is the internal auditing department. It encourages risk-awareness and helps to minimize risks. The internal auditing department provides worldwide support to the board of management as an independent auditor of the board’s performance of its managerial and monitoring functions, in particular with regard to the legality, compliance, and economic efficiency of business processes. This involves applying globally valid standards in consideration of regional, legal, cultural, and Bosch-specific requirements to internal audit processes, and constantly improving them.
The following are some of the supervisory mechanisms that have been put in place to oversee operations:
• principle of dual control
• personnel rotation in sensitive areas
• separation of operational and supervisory functions