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Germany

Companies Act § 91 para. 2 AktG

The management board of a listed public limited company is obliged to take appropriate measures to avoid risks (early warning system for risks). Compliance may be a key component of risk management. The supervisory board is required to check whether the management is abiding by this obligation.

According to § 317 para. 4 HGB, the auditor has to include the early warning system for risks in the annual audit.

Link (German)

Insurance Supervision Act of 2016

To ensure the quality of the annual audit, Section 55b Paragraph 2 Point 7 prescribes processes that allow the employees to report potential or actual breaches of the Directive (EU) No. 537/2014 or of professional duties and potentially criminal acts and misdemeanours within the company to a suitable authority without jeopardising the confidentiality of their own identity.

Link (German)

Public Accountants Act of 2016

To ensure the quality of the annual audit, Section 55b Paragraph 2 Point 7 prescribes processes that allow the employees to report potential or actual breaches of the Directive (EU) No. 537/2014 or of professional duties and potentially criminal acts and misdemeanours within the company to a suitable authority without jeopardising the confidentiality of their own identity.

Link (German)

German Banking Act § 25a KWG from 2013

According to the implementation of an EU Directive, banks and financial institutions in the European Union must establish adequate measures, in order for their employees to be able to make confidential and anonymous report of criminally-relevant actions within the company. Employees who report such acts are to benefit from comprehensive protection.

Link (German)

Institute of Certified Accountants (IDW) Assessment Standard (PS) 980 from 2011

The Institute of Certified Accountants defines the basic principles for an orderly assessment of Compliance Management Systems by providing seven elements which an appropriate Compliance Management System must contain: Culture, aims, risks, programme, organisation, communication, supervision / improvement. The specific structure of the system is flexible and each individual one is different, depending on the requirements and demands in each case. The Assessment Standard offers Compliance employees guidelines and principles for abiding by laws, regulations, and self-imposed obligations in the context of a Compliance Management System. For companies, the Standard offers the opportunity to demonstrate its own efforts in the area of Compliance and to demand that its business partners also have corresponding measures in place.

Order issue (German)

German Corporate Governance Code from 2002

The rules applicable in Germany concerning company management and supervision are to be made transparent for national as well as international investors in order to strengthen the faith that these have in the management teams of German companies. The Code has a legal principle according to §161 of the Companies Act (AktG) due to its Declaration of Compliance. Listed companies must use their year-end accounts to demonstrate to what extent they have followed the recommendations. Anomalies must be justified. In its current version from 2013 in point 4.1.3 on the topic of Compliance, the Code demands the following: "The Management Board is to ensure that legal regulations and internal guidelines within the company are complied with and is to work towards this adherence using group companies (Compliance)". According to point 5.3.2, the Supervisory Board is strongly advised to set up an Audit Committee which is also to be concerned with the efficacy of the internal monitoring system, the risk management system, the internal auditing system, and the compliance system. 

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