Compliance Management in Germany
Definition of compliance in Germany
Until a few years ago, "compliance" was mostly just of interest for banks and financial services providers. As such, the word described different financial supervision law guidelines. Compliance includes intensified organizational, control and reporting duties in respect to the US Securities and Exchange Commission (Sarbanes-Oxley Act, as a response to gross failure of the supervisory bodies in various US corporate scandals), from which certain binding compliance duties – initially only for companies listed there – resulted. This change also affected several large German companies. Compliance has also become an important topic for small and medium-sized German companies without any intentions to go public are beginning to introduce compliance systems for good reason.
Good reasons for compliance systems
Compliance management will become a kind of "worldwide standard": There are liability risks for acting persons, which increase the risk of personal claims against management and supervisory bodies for damages arising through regulatory investigations and sanctions (as well as possible image damage as a consequence thereof). Those claims could have been prevented or defused by means of compliance systems. Revenue pressure on managers will continue to increase, which ultimately leads to their having to take even greater risks. Therefore, it is in the interest of managing directors and executive boards, but also supervisory bodies, to minimize their personal liability risks. An essential element in doing so is the introduction of a well-designed compliance management.
Compliance and Employment Law in Germany
Aspects relating to labor law initially arise in respect to introducing and implementing compliance regulations for employees (scope of the employer's right to issue directives, whistleblowing systems, co-determination of the works council, agreements between works council and management, assertion of claims for damages against employees or executive bodies). In addition, numerous guidelines on the content of compliance regulations are found, particularly in labor law and in social insurance law, the non-compliance with which entails substantial liability and sanction risks for the company and the acting executive boards and managing directors (employee assignment, posting of employees, working hours, remuneration, social security law, employee data protection, occupational safety, operational co-determination, work permits, company pension schemes). Moreover, specific duties requiring action also arise for the employer from labor law guidelines (measures for preventing discrimination, Section 12(1) General Equal Treatment Act and for the elimination of disadvantages, Section 12(3), (4) General Equal Treatment Act ).
Compliance with regard to other regulatory areas
In addition, companies and institutions must observe essential guidelines regarding the content for compliance rules from the following areas:
We implement compliance structures in your company
We handle the introduction of compliance systems in your company and ensure that the liability risks remain manageable. We structure the duties that are essential for your company and prepare them in checklists and employee manuals for your managers and employees. We carry out the necessary coordination with the works council and provide information to business partners and the general public. During the ongoing implementation, we perform the training of managers and certain groups of employees in your company. In addition, we assist you in establishing whistleblowing contact points as well as contact points for clarification in cases of doubt with regard to duties and prohibitions of individual employees in sensitive areas of law (for example, the prevention of corruption).
Your German Compliance Attorney
You want to establish a compliance system in Germany or check your current compliance structure? As German compliance lawyer, Attorney Dr. Eric Uftring is looking forward to answering all your questions regarding compliance according to German law. Please contact us by email (email@example.com) or phone (+49 (0)69 76 75 77 80).