As an internationally active Group, STADA is subject to a wide range of legal framework conditions. Adherence to these conditions forms the foundation of responsible, sustainable and successful corporate governance – because unlawful behavior or even the appearance of a breach of law can damage the reputation and market position of the Company in a lasting manner and cause significant financial loss. For this reason, the principles of transparent, responsible and value-oriented corporate governance determine the actions of STADA’s Executive and Supervisory Boards. Furthermore, in addition to legal requirements and further regulations such as the German Corporate Governance Code, for instance, the regulatory framework in which the Company operates encompasses the provisions of its Internal Control and Risk Management System, the STADA Code of Conduct and corporate policies on specific topics derived from it.
STADA’s Code of Conduct, its Corporate Governance Report including the Declaration of Compliance from the Executive and Supervisory Boards, as well as the Corporate Governance Declaration for STADA AG and the Group are published on the Company’s website at www.stada.com or www.stada.de.
STADA Code of Conduct
STADA’s Code of Conduct and corporate policies not only serve the Company itself, but also its employees in particular as guidance for correct behavior when confronting legal or ethical challenges in their daily work. Furthermore, they help to prevent corrupt behavior, among other things. The Code of Conduct contains binding behavioral guidelines on topics such as anti-corruption, fair competition, social aspects regarding tolerance and respect as well as dealing with media. In order to familiarize employees with the contents of the Code of Conduct, they are instructed by a compliance officer, for example, in the context of an interactive e-learning seminar including practical examples. Special guidelines have also been created for cooperation with members of the medical care profession and serve as a behavioral measure for appropriately dealing with, for instance, gifts, invitations and similar items, thus preventing any sort of misconduct.
An updated and expanded version of the Code of Conduct will be published in financial year 2018, taking into account local circumstances at international subsidiaries. The Code of Conduct is valid for all employees as well as for the members of the STADA Arzneimittel AG Executive Board and for all national and international subsidiaries controlled directly or indirectly by STADA.
In order to ensure compliance with applicable law, STADA implemented a comprehensive Compliance Management System comprising the main areas of anti-corruption, competition law, export control, money laundering and data protection.
A key component of the Compliance Management System at STADA is the Corporate Compliance Office, which acts as an independent and objective advisor. Its function is to protect the Company from damage to its financial position and reputation, to safeguard STADA’s management and employees from personal liability and to prevent the occurrence of competitive disadvantages. It pursues internal and external indications, clarifies issues while taking into account the principle of proportionality, issues recommendations on the optimization of intra-Group processes and regularly conducts exchanges of information with other corporate departments, particularly with Internal Auditing and Risk Management. Additionally, an Ombudsman is avail- able to employees as well as business partners and other third parties as a neutral and independent contact person for reporting suspicious cases. The Ombudsman’s contact details can be accessed on the Company’s website at www.stada.de or www.stada.com. His task is to receive confidential information and, with the consent of the information provider or anonymously, to forward it to the Compliance Office.
There are separate compliance departments that manage the topic locally in a decentralized manner and act as contact partners onsite. They support the Corporate Compliance Office and maintain an intensive dialog with it.
Through a regular review of the existing Compliance Management System, it is continuously optimized and the international exchange between compliance officers is intensified. In financial year 2017, an expanded reporting system for the subsidiaries was set up at the Compliance Office. As part of it, disclosures from subsidiaries regarding individual compliance topics are collected and evaluated in order to, in turn, derive new optimization measures from them. At the same time, an assessment and systematic review of the situation at individual locations regarding their deployments within the area of compliance (“readiness assessment”) has taken place since 2016 – with the goal of gradually strengthening the Group-wide compliance organization. At the end of 2017, this assessment was carried out in Germany, as well as at three international subsidiaries. This process will continue in financial year 2018.
Social Compliance Questionnaire
STADA also aims to increasingly place the same expectations on its business partners as it does on its own corporate governance. For this reason, in 2015, STADA created a social compliance questionnaire based on the Business Social Compliance Index (BSCI), with which, as a first step, the Company asked key suppliers about working conditions, ethical standards, environmental management systems as well as occupational health and safety, among other things. After the most important direct Asian suppliers were surveyed in reporting year 2017, the questionnaire will gradually be expanded to include all direct and, where appropriate, indirect suppliers.
STADA’s Serbian sales company Hemofarm, which has been carrying out this type of survey since 2014 and whose own company practices demonstrably met the BSCI Code of Conduct to a percentage of 97.6% in financial year 2016, serves as a model for the creation and implementation of the questionnaire.
In the current financial year 2018, the Company will release a Corporate Policy on the topic of “Environment, Health and Safety” (EHS) valid throughout the Group and implement a system that monitors compliance with the policy. The Corporate Policy will apply throughout the Group and specify directives on the topics of EHS and sustainability. Using these measures, the results of the questionnaire should, in the future, be observed in the supplier evaluation process and be adopted into the choice of suppliers.
Many contracts negotiated since 2016 and which have been concluded in connection with the production of finished goods include additional clauses on the topic of social responsibility. As part of this, STADA and its suppliers pledge to comply with the ten principles of the UN Global Compact.
Internal Control and Risk Management System
Further, STADA’s Internal Control and Risk Management System which has been designed to ensure the responsible handling of risks represents the basis for responsible corporate governance. It puts the Executive Board in a position to recognize Group-wide risks and market tendencies so that it can immediately react to relevant changes in the risk profile. In this regard, all departments are connected to the Risk Management System, thus allowing for comprehensive risk monitoring, including the monitoring of potential risks from non-financial areas.
The Internal Control and Risk Management System is subject, at regular intervals, to the annual audit, as well as Internal Auditing. The Internal Auditing department also supports the Executive Board as an independent body outside of daily business operations by evaluating Group-wide internal procedures and processes from an objective perspective and with the necessary distance. The goal is to optimize business processes, reduced costs, realize efficiency increases and to achieve internally determined goals by way of improved internal controls (see Annual Report 2017: Opportunities and Risk Report).