BASF Report 2021 Corporate Governance – Compliance 172 more than 53,000 participants worldwide received over 79,000 hours compliance officers. The internal platform and the corresponding and make sure that the established processes, procedures and of compliance training in 2021. app also help employees to access advice by enabling direct con- monitoring tools are appropriate and sufficient to minimize potential For more information on the BASF Code of Conduct, see basf.com/code_of_conduct tact. In addition, we have set up more than 50 external hotlines risks or preclude violations in the first place. In 2021, 77 audits of worldwide that our employees can use – including anonymously – to this kind were performed Group-wide (2020: 61). Our compliance report potential violations of laws or company guidelines. We management system itself is also regularly audited by the internal Compliance culture at BASF enhanced and standardized these hotlines in 2021. An independent Corporate Audit department, most recently in November 2018. external company was engaged to manage all hotlines. In the future, Overall, the audits confirmed the effectiveness of the compliance We firmly believe that for corporate responsibility to be a success, the cases reported will be recorded and processed in one global management system. In cooperation with an external consulting there must be an active culture of living these guidelines within the system. In addition to local phone numbers, a new website now also firm, we developed a comprehensive action plan in 2021 to ensure company. Our compliance standards were consolidated in the makes it possible to get in contact online using a computer or the systematic, continuous optimization of the compliance manage- global Code of Conduct in 2013 and republished in June 2020 in smartphone. All hotlines and the website are also open to the public. ment system. our currently applicable global Code of Conduct. They are firmly Each concern is documented according to specific criteria, properly established and recognized. We expect all employees to act in line investigated in line with standard internal procedures and answered We monitor our business partners in sales for potential compliance with these compliance principles. Managers play a key role here – as quickly as possible. The outcome of the investigation as well as risks based on the global Guideline on Business Partner Due they serve as an example of and communicate our values and cul- any measures taken are documented accordingly and included in Diligence using a checklist, a questionnaire and an internet-based ture both internally and externally. To specifically address compli- internal reports. analysis. The results are then documented. If business partners are ance and integrity as a leadership task, a workshop series was held not prepared to answer the questionnaire, we do not enter into a in 2021 with more than 130 senior executives. In 2021, 277 reports were received by our external hotlines (2020: business relationship with them. A dedicated global Supplier Code 387). The information received related to all categories of our Code of Conduct applies to our suppliers, which covers compliance with of Conduct, including environmental and human rights issues, cor- environmental, social and corporate governance standards, among Monitoring adherence to our compliance principles ruption and handling of company property. We carefully investigated other requirements. As part of our trade control processes, we also all cases of suspected misconduct that came to our attention and, check whether persons, companies or organizations appear on BASF’s Chief Compliance Officer (CCO) reports directly to the Chair- when necessary, took countermeasures on a case-by-case basis. sanction lists due to suspicious or illegal activities, and whether man of the Board of Executive Directors and manages the further These included, for example, improved control mechanisms, addi- there are business processes with business partners from or in development of our global compliance organization and our Compli- tional informational and training measures, clarification and expan- countries under embargo. ance Management System. The CCO is supported in this task by sion of the relevant internal regulations, as well as disciplinary the Compliance unit and more than 100 compliance officers world- measures as appropriate. Most of the justified cases related to We support the United Nations’ Guiding Principles on Business and wide in the regions and countries as well as in the divisions, service personal misconduct in connection with the protection of company Human Rights and are constantly working to enhance our internal units and in the Corporate Center. Material compliance topics are property, inappropriate handling of conflicts of interests or gifts and guidelines and processes in keeping with these principles. For regularly discussed in the compliance committees established at invitations. In such isolated cases, we took disciplinary measures in example, there is an internal guideline to respect international global and regional level. The CCO reports to the Supervisory accordance with uniform internal standards and also pursued claims labor and social standards that is applicable throughout the Board’s Audit Committee in at least one of its meetings each year on for damages where there were sufficient prospects of success. Group. Outside of our company, too, we support respect for human the status of the Compliance Program as well as any major develop- In 2021, violations of our Code of Conduct led to termination of rights and the fight against corruption. We are a founding member ments. In the event of significant incidents, the Audit Committee is employment in a total of 32 cases (2020: 31). This relates to diverse of the United Nations Global Compact. As a member of Transparency immediately informed by the Board of Executive Directors. employee groups, including executives. International Deutschland and the Partnering Against Corruption Initiative (PACI) of the World Economic Forum, we assist in the We particularly encourage our employees to actively and promptly BASF’s Corporate Audit department monitors adherence to implementation of these organizations’ objectives. seek guidance if in doubt. They can consult their supervisors, spe- compliance principles, covering all areas in which compliance viola- cialist departments, such as the Legal department, and company tions could occur. They check that employees uphold regulations