As part of a peer learning webinar on business partner compliance and third-party management Michael Volz, Head of Compliance Operations at Bilfinger SE, presented the topic using the practical example of Bilfinger.
In line with the UN Global Compact Network's three-step approach, external compliance measures follow internal measures taken by the company. These are essential to create a business environment with a mimimised risk of corruption. The aim of third-party management is therefore to establish an adequate risk management system for the engagement of third parties in the company.
Bilfinger SE is a member of the UN Global Compact Network and also implements its principles in the supplier management. As part of this, business partners are required to submit vendor declarations containing statements on compliance issues such as anti-corruption and conflicts of interest, but also on sustainability, e.g. social standards. In addition, depending on the risk, contractual clauses that contain special audit and cancellation rights are also established.
Volz emphasised the great importance of third-party management: surveys show that many compliance violations do not occur within companies, but rather among joint venture partners, agents and service providers.
Third parties thus might cause great economic damage to the company and lasting reputational problems. However, since third parties are often an integral part of the business process, the company is responsible to reduce potential risk factors. A risk-oriented selection and monitoring approach regarding business partners is therefore crucial.
Particularly prominent third parties, such as cooperation partners, sales agents and official intermediaries, are subject to processes of varying degrees of strictness, depending on the risk assessment. These include due diligence checks of different extent, the involvement of senior management, the use of extended compliance clauses and ongoing monitoring. During the webinar, Volz shared details of the digital compliance tool used by Bilfinger SE and answered questions from the audience.
The webinar was organised by the German Global Compact Network together with the German Institute for Compliance e.V. (DICO e.V.) and the Alliance for Integrity.
Author: Niklas von Hörsten