Sound corporate governance

Sound corporate governance is fundamental to Linde’s sustainable success. Linde AG follows the most recent version of the German Corporate Governance Code presented by the Government Commission as amended from time to time and complies with the Code’s guidelines to a large extent. Any deviations are explained in our annual report.

33,000

training courses

Over 33,000 e-learning courses on our Code of Ethics – in 22 languages – had been completed by the end of 2011.

Global compliance programme

We continue to expand our global compliance programme to ensure that legal regulations and our voluntary commitments are upheld. Our most important goals here are preventing corruption and anti-trust infringements, as well as identifying and resolving circumstances or events that require further investigation. Doing this requires clear rules, informed employees and an international compliance system that enables us to identify and tackle suspected violations. The primary focus of our compliance programme is to prevent misconduct. At the same time, we actively encourage our employees to report any suspected violations of our Code of Ethics or other Group guidelines. We investigate every allegation.

Since 2008, Linde’s Head of Compliance has been responsible for developing the compliance programme, coordinating its execution and assessing the various compliance measures worldwide. The Head of Compliance is supported by compliance officers in the individual business units and regions. The Head of the Legal Department and the Head of Compliance regularly inform the Executive Board and the audit committee of the Supervisory Board about activities and progress within the compliance organisation.

When expanding our compliance programme, we also follow the recommendations of the United Nation’s Global Compact as well as Transparency International’s Business Principles for Countering Bribery.

In 2011, our compliance programme focused in particular on expanding the content and developing the technology of our e-learning offering. In 2012, we are launching a new online course on anti-trust law. This specialist course is targeted at around 13,000 Group employees. In 2011, our compliance activities also saw us implement new guidelines defining collaboration with business partners that act as mediators or representatives. Efforts in 2012 will concentrate on drafting global anti-corruption guidelines and organising classroom-based training courses on our Code of Ethics for employees who do not have access to computers.

Preventing violations

We inform employees about the legal regulations and other standards that apply to their particular areas of work. All employees receive a copy of the Code of Ethics when they start working at the company and must confirm in writing that they have read and understood it. In 2011, we arranged for our Code of Ethics to be translated into further languages.

Through classroom-based courses and our Group-wide e-learning platform, we familiarise our employees with our Code of Ethics. By the end of 2011, over 33,000 e-learning courses had been completed in 22 languages.

Between 2009 and 2011, over 4,500 employees in high-exposure areas participated in face-to-face training sessions worldwide. These courses focused primarily on anti-trust law, the avoidance of corruption and dealings with business partners.

Identifying misconduct

Employees wishing to report suspected violations of our Code of Ethics or other Group guidelines or make enquiries about these can contact their direct line manager or department head. Alternatively, they can contact a representative from the Internal Audit, Human Resources or Legal/Compliance departments.

Our Integrity Line global reporting system is one of the key pillars of our compliance programme. It enables employees and external stakeholders to report doubts and suspected violations – by anonymously if desired – by e-mail, telephone or regular post.

Every report is assessed by Linde’s Integrity Line Facilitator, who forwards allegations as appropriate to the Linde Integrity Committee. The committee comprises representatives from Internal Audit, Legal/Compliance, Corporate Responsibility and Human Resources departments. The committee examines the reports and determines further courses of action. Our Integrity Line policy outlines the exact protocol to be followed and ensures that reports remain confidential and data is protected. Reports of misconduct submitted via other channels are forwarded to the Integrity Line system to ensure that all cases are investigated following the same protocol.

In 2011, our Integrity Line was contacted 430 times (2010: 334). Each one of these contacts was assessed to determine whether it entailed a general enquiry or an allegation of misconduct. All concrete accusations were systematically investigated. Most of the reports were related to personnel topics (approximately 40 percent) and offences against property (approximately 30 percent). In additional to the regular consulting and auditing activities carried out by our compliance organisation, Internal Audit and HR management, 54 audits were instigated worldwide in 2011 as a result of reports to the Integrity Line (2010: 54 audits).

Consequence management

Linde employees who violate laws or regulations must be prepared to face sanctions. Repercussions for violations can range from dismissal to criminal prosecution or civil action. If an internal investigation reveals that a report is substantiated, we explore the measures that have subsequently been implemented – following a set protocol and timeframe. The responsible line managers are involved in this process and provide their input on a case by case basis.

If our compliance systems uncover any circumstances or events that appear to breach criminal or anti-trust law, we work very closely with the authorities. In 2010, we actively contacted the Munich public prosecutor’s office to share Internal Audit findings that called for further clarification. The findings in question involved joint projects with other companies that were investigated by the public prosecutor for suspected bribery. Linde was not found to be in breach of the law. The state prosecutor, however, did establish that external third parties acted unlawfully. Investigators estimated that Linde benefitted indirectly from these violations by a sum of money in the amount of EUR 35 million over the years. In 2011, Linde made a compensatory payment in this amount to redress the situation.

> More on legal proceedings in our annual report

Key figures comparison

Global Compact

This page contains information that is relevant to the ten principles of UN Global Compact.

© The Linde Group 2012