IAP 20 th Annual Conference Zurich, September 16, Plenary 3 Siemens Compliance Dr. Klaus Moosmayer

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1 IAP 20 th Annual Conference Zurich, September 16, 2015 Plenary 3 Siemens Compliance siemens.com/compliance

2 Siemens at a glance Close to customers all over the world Germany 10.9bn 115, % 33% 24% Share of total worldwide Europe (excluding Germany), CIS, Africa, Middle East 27.9bn 96, % 29% 25% Share of total worldwide Americas 18.8bn 70, % 20% 26% Share of total worldwide Asia, Australia Revenue by customer location Employees as of September 30, 2014 Production facilities with 15 employees 14.4bn 62, % 18% 26% Share of total worldwide All figures refer to continuing operations. CIS: Commonwealth of Independent States. Page 2

3 The disaster struck November 2006 headlines Possible scenarios Debarment from public tenders Penalties up to 10 billion Long-term damage to reputation and business Break-up of the company Page 3

4 Rapid reaction and implementation of our Compliance System, plus further development Immediate actions Implementation Support sustainable business Exchange of Leadership Team Tone from the top Independent investigation Centralization of bank accounts Settlement with authorities in Germany and in the U.S. Compliance program Compliance organization Compliance training Compliance tools Settlement with World Bank Continuous improvement Values & integrity Collective Action 2010 Active development of Compliance System/ external recognition ff. First funding round Integrity Initiative End of Monitorship (Dec. 15, 2012) Dow Jones Sustainability Index: Repeatedly highest rating in the category Compliance Second funding round Integrity Initiative Page 4

5 Tone from the top Important internal and external message The culture of a company and its values make the difference. People rightly associate Siemens with reliability, fairness and integrity. Joe Kaeser, President and CEO of Siemens AG Page 5

6 Our Compliance System Management responsibility is the focus We continuously develop the Compliance System further in order to adapt it to changing requirements according to our global business. Effective preventive measures such as risk management, policies & procedures, training & communication enable systematic misconduct to be avoided Management responsibility Explicit consequences and clear reactions support the prevention of misconduct, for example to punish wrongdoing and to eliminate deficiencies Effective Compliance work requires complete clarification: whistle-blowing channels Tell us and ombudsman, as well as professional and fair investigations Page 6

7 The Siemens Compliance Organization Clear roles & responsibilities Direct Direkte connection Anbindung an to den the CEO Roles Rollen of des Compliance Officers President and CEO Joe Kaeser * General Counsel Andreas C. Hoffmann Situation Chief Compliance Officer Klaus Moosmayer Company-wide Compliance organization in Headquarters, Divisions and Regions Tasks Continuous communication about the importance of Compliance for Siemens * Direct reporting line to Board of Management and Supervisory Board re compliance risks and measures. Page 7 Bundling of company-wide expertise for avoidance of corruption and other violations of fair competition, regarding data privacy and for anti-money laundering Governance for investigations and disciplinary response

8 Compliance in global business tasks and challenges Employees Business Partners Environment Dissemination of knowledge about regulations and processes Attitude and values lived out in practice Role and role-model function of executives are decisive factors Integrity Dialog Business partners as intermediaries to customers Examples: sales agents, system integrators, custom agents Risk-based Compliance due diligence of all business partners High risk of corruption in many countries where Siemens does business Countries with high annual growth also affected Collective Action Page 8

9 We must remain vigilant L Etat de São Paulo poursuit Siemens en justice Spiegel Online Versuchte Bestechung in Kuwait: Siemens deckt neue Korruption auf Bloomberg.com Siemens Agrees to Pay $10 Million to Settle New York Fraud Case As at: January 2014 Page 9

10 and determinedly pursue any cases that arise Stipulated standards The presumption of innocence applies, employee rights are safeguarded Works Council co-determination rights are protected Data privacy is observed Page 10

11 Summary and key messages Siemens: From crisis to effective compliance due to consequent internal reaction and close cooperation with prosecutors/ government authorities, Siemens managed a sustainable turnaround. The way forward based on the proposals of the Anti-Bribery & Corruption Task Force of the Business and Industry Advisory Committee to the OECD (BIAC): Internationally transmitting the message of reduced penalties for cooperating companies in cases of corruption would help strengthen enforcement: Voluntary self disclosure must be rewarded, and Compliance efforts by companies should be incentivized. Growing global challenges call for internationally applied laws and growing international alignment on enforcement activities addressing also the risk of multiple jeopardy for cooperating companies. Page 11

12 Thank you for your kind attention. Chief Compliance Officer of Siemens Siemens AG St.-Martin-Str Munich Germany Phone: +49 (89) siemens.com/compliance Page 12