Compliance and Responsibility

The effectiveness of the compliance management system is continually reviewed and refined. The system is based on the model of the IDW PS 980 auditing standard of the Institute of Public Auditors in Germany, and focuses on preventing compliance violations. The anti-corruption section pursues the aim of preventing, detecting, tracking, and penalizing corruption within the company. As part of its regular checks and short-notice audits, the Group Audit department checks adherence to the compliance requirements in KION GROUP AG and its consolidated subsidiaries.

As in previous years, work continued in 2023 in the areas of anti-corruption, data protection and IT security, foreign trade and export control, combating money laundering, fraud prevention (particularly in cybercrime), D&O liability, and the responsibility borne by the executives. Anti-discrimination, whistleblower protection, and fostering a speak-up culture—or company culture in which questions and concerns can be openly expressed—were also focal points in the year under review.

The KION Group expressly supports the fight against all forms of corruption and bribery. To this end, it follows the approach of “prevent, detect, respond.” No confirmed cases of competition or antitrust violations were recorded in the reporting year. There were also no confirmed cases of active corruption by employees.

Multiple Reporting Channels

Actual or suspected violations can be reported in person, by phone, mail, email, or via an online form. All KION Group employees—as well as external stakeholders—can report potential compliance violations around the clock via an online form and a dedicated hotline, anonymously if they wish. The whistleblowing system is available worldwide, but is tailored as closely as possible to local conditions. The integrated case management system is designed to ensure that all incoming information is reviewed and that each individual case is processed systematically in line with the provisions in the EU Whistleblowing Directive. This system guarantees confidentiality and protection against retaliation.

The KION Group Compliance Committee is a cross-functional body made up of executives from the Corporate Compliance, Internal Audit, and Legal departments. This committee oversees the processing of reports of potential breaches and related investigations and confers on sanctions in the case of identified compliance violations.

The Compliance Committee of Linde MH in Germany provides employees with another independent point of contact that they can turn to when seeking advice or reporting potential violations. If anyone experiences or observes discrimination or harassment, they can get in touch with their responsible committee—and it goes without saying that this is in complete confidence. Similar bodies exist throughout the EMEA in accordance with national regulations. Compliance representatives are available to provide assistance at any time in all countries where Linde MH operates.

All reported suspected cases are systematically reviewed and any detected violations are investigated using effective control measures, for example regular or special audits. Any cases of misconduct are subject to disciplinary action. If necessary, the compliance management system is adjusted to prevent future violations.

As well as clear guidelines, there is also a wealth of information and a wide range of advisory services and training courses available. Through the work of compliance officers and representatives, Linde MH ensures that staff are always kept fully informed and up to date about all compliance-related issues and are aware of the importance of acting in line with the company’s values. All new employees of the KION Group are required to complete mandatory training on the KION Group Code of Compliance—either via e-learning or, for employees who do not have a work PC, via in-person training. In addition, employees whose work is critical to compliance, for example those in Sales and Procurement, regularly receive targeted live training.

The aim of this program is to provide all KION Group employees with regular training on the most important topics (anti-corruption, avoiding conflicts of interest, antitrust and competition law, anti-money laundering, whistleblower protection, data protection, IT security, and human rights). Changes in legislation or internal regulations are also incorporated into in-person training courses, as are any new findings from the compliance management system. The training program was expanded in 2023 to include an e-learning course on unconscious bias, speak-up culture, and whistleblower protection. Following on from this, employees without access to a PC will receive in-person training on KION’s whistleblowing channels and whistleblower protection in 2024, specially designed for the target group.

Before KION enters into a new business relationship, external business partners must be assessed and appropriate documents must be provided. The business partner’s economic background is checked and it is determined whether there are any other reasons not to establish a business relationship, for example because the business partner is on a sanctions list or there have been negative reports about them. In case of doubt, KION may refrain from doing business with this partner. KION also audits external partners based on a risk assessment.

The basic inspection is carried out using the business partner tool, which is managed by Corporate Compliance. The process involves checking customers and suppliers for certain indicators based on compliance lists. Corporate Compliance is responsible for performing this check against the relevant lists, as well as for evaluating the results and instigating any necessary measures. For external sales partners with a higher risk of corruption, such as dealers, importers, distributors, agents, or integrators, a multi-stage due diligence assessment is carried out by the responsible compliance officer before establishing the business relationship. In addition to identifying potential risks in the relevant country based on subindices from reputable international organizations, this assessment obtains information from the sales partners via due diligence questionnaires, through audits conducted using the business partner tool, and/or via external due diligence providers. The results of the due diligence assessment are subsequently communicated to the responsible teams—for example, senior management—along with any recommended actions, such as tighter contractual terms including a right to audit clause or additional monitoring of payment streams.

As part of a systematic analysis, the KION Group records and evaluates corruption and bribery risks on a regular basis throughout the Group. Money laundering, tax compliance, cybersecurity, and human rights risks are also assessed, as are the risks of non-compliance with competition laws. Non-financial risks that arise on an ongoing basis are screened, evaluated, and managed. Adequate measures are subsequently derived to eliminate both process and control weaknesses. The characteristics of the corruption perception index for the respective country, the size and structure of the local procurement or sales organization, and contact with public officials play an important role in the risk assessment. This analysis has already been completed for all Linde MH subsidiaries. There continued to be no significant compliance risks.

Data protection and information security are top priorities at Linde MH and are governed by guidelines applicable to the entire KION Group. The Data Protection Policy aims to implement technical and organizational measures to protect personal data, while KION’s Information Security Policy focuses on safeguarding the confidentiality, integrity, and availability of information with the objective of protecting the KION Group from related attacks. A range of Group works agreements and mandatory standards on topics such as IT security in the workplace and the management of IT systems, email, and the Internet are also in place. Samples and templates for the day-to-day handling of personal data and sensitive business information are also available. The Operating Units are responsible for implementing the central requirements. Those responsible for data protection and its coordination in the individual subsidiaries report to their respective management. At Group level, the Group Data Protection Officer reports to the Chief Compliance Officer, and the KION Group Chief Information Security Officer reports to the KION Group’s Chief Information Officer who reports to the Executive Board of KION GROUP AG.

Protecting sensitive, personal data is also an important responsibility, so secure and effective processes and systems have therefore been put in place to protect this information and ensure compliance with the relevant legislation. All staff are given training and receive regular updates via the Group intranet to ensure that they understand and remain up to date with basic data protection principles, their reporting obligations, and the Group-wide compliance reporting system.

There were around 63 million attacks on the KION Group’s IT network during the year under review, all of which were averted. An important factor in this success is the continuous scanning for vulnerabilities across the entire IT and operational technology infrastructure. Regular training on IT security issues, global anti-phishing campaigns, a monthly video series published on the Group intranet, and instructions for keeping IT infrastructure secure also play an important role in maintaining IT security standards.

Information Security Management System

At the end of 2022, KION started implementing an information security management system (ISMS) to ensure that sensitive information remains protected and the Group maintains its competitive position in the industry. The KION Group ISMS is based on ISO 27001 requirements (establishment, implementation, maintenance, and continuous improvement of documented security management processes) for the entire Group. A documentation framework has been established that sets out the requirements for information security.

In this context, the KION Group regularly analyzes potential or existing risks to information security. Where the risk analysis identifies an IT security risk or where there is deviation from a KION Group security standard, the risk is described and appropriate action is set out. Once the residual risk has been assessed, the risk owner decides on whether to accept the residual risk. It must then be reassessed regularly and safeguarded by means of renewed risk acceptance.

The Group Audit department regularly carries out special IT audits, which also cover information security.

In June 2024, the KION Group divisions responsible for the development, provision, and operation of its cloud-based fleet management systems obtained the ISO 27001 certification. The certified companies at Linde MH are Linde Material Handling GmbH and Linde Material Handling Ibérica, S.A.U. in Spain. TISAX¹ audits were conducted at the KION Group headquarters in Frankfurt am Main, Linde Material Handling headquarters in Aschaffenburg, and Willenbrock Fördertechnik GmbH in Bremen (also a Linde MH company) in 2023. In each case, these companies were found to be at a high degree of readiness in the first assessment, and the TISAX label was granted without conditions. As part of this assessment, the auditor had to be provided with around 200 different pieces of evidence, including information security standards, standard operating procedures, security concepts, and KPIs. In addition to the work underway at other sites that are set to be included in the ISMS scope in the course of the year, the spotlight will now be on maintaining this high level of information security that has been attained. Finishing touches to the safety concept will consist of ensuring that the building blocks of the system run smoothly in day-to-day business, for example, by conducting regular internal audits and reviews, managing information security risks, and planning and implementing improvements.

Footnotes:
[1] TISAX® is a cross-company assessment and exchange mechanism for information security in the automotive industry. The aim is to protect data and its integrity and availability in the manufacturing process and in the operation of trucks.