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Siemens and compliance – Recovery from disaster and a bright future
Since you are now one year in charge as Group CCO of Siemens, what has changed in your life?
As I am part of the Compliance management team since 2007, I am certainly not a newcomer but to be the global head is a fascinating experience: To lead such a diverse team of Compliance Officers and specialists from all over the globe provides you with a unique and holistic view of Compliance risks and challenges, success stories and failures – it gives you the „full picture“on Compliance.
After Siemens went through a pretty impressive transformation process in terms of Compliance, is there anything at all left today that may keep you and Compliance awake at nights?
Fortunately I sleep very well – but yes, of course there is the big question about the Compliance risks which we have not identified yet. I am not afraid about risks we already know – we can mitigate or remediate them. But you have always the challenge to keep pace with the internal development of the business of your company and with the external regulatory environment.
You are the Chair of the Anti-Corruption Taskforce of the OECD Business and Industry Advisory Committee. What are your challenges? Do you want to share your view on the launch of the OECD Foreign Bribery Report and what this exactly means for your team?
The OECD Convention on Bribery and especially the country monitoring system of adherence to and implementation of the Convention is in my opinion one of the most important international „tools“ in the fight against corruption. I am very thankful to be able to bring the business view to this table and especially to promote the idea that Compliance efforts and voluntary self disclosure by companies must be rewarded in order to incentivize companies to really invest in Compliance. If we succeed in this, then we have a chance to really „level the playing field“ for clean business.
Let me switch to a different topic: The challenges of leading a team of compliance officers in a changing world. How and where do you recruit your team members? Do you have any secret you can share about how to keep the employee fluctuation low and how you retain your best talent?
In our Compliance recruitment process we are looking for both, talents from the operational business and experienced Compliance professionals. I believe that only this „mixture“ provides you with the full spectrum of talents and knowledge you need in a high performing Compliance organization. How to keep them? We are currently expanding our internal job development and learning landscape for our Compliance staff worldwide to give our Compliance colleagues a perspective for staying in the Compliance function. But we are also supportive if a Compliance colleague wants to go back to business after having worked some years in Compliance, this is a very powerful success story. Several of our country CEOs are former Compliance Officers.
You studied law and have switched early in your professional life to Compliance. Looking today at the increasing number of law students and the lawyers working in private practice or in legal departments, who may consider switching to Compliance, what would you recommend them?
From my professional experience now during 15 years where I worked not only at Siemens but also at the beginning of my career in a law firm, there are two groups of lawyers: The (pure) „advisors“ and the „legal managers“. Nothing bad with advisors but if you want to succeed in Compliance as a lawyer, you better are interested in business processes and their implementation and you better know how to structure and lead a project. This is no „rocket science“ but you need lawyers who really want to learn and work that way.
What are your experiences with external counsel when working with Compliance?
More and more law firms are offering Compliance services, not only regarding internal investigations but also regarding advice on Compliance Management Systems. From my own learning I can say that only the ones who have done internal investigations are able to advice their clients also on preventive matters and risk assessment – and there are still not too many external counsels who can combine both. In addition the big audit companies have taken quite a big part of the cake due to their ability to effectively implement processes in business organization – something, even bigger law firms have still not learned sufficiently.
If you had three wishes, what would you appreciate to see with external counsel serving you as Compliance function? Any recommendations?
- Willingness and ability to understand the business and the company processes,
- Sufficient experience in both, case handling and preventive advice – all in high quality,
- and of course: cost efficiency.
What is the relationship between the General Counsel and the CCO at Siemens? Is there a clear line in terms of roles and what is Siemens‘ approach or to this regularly emerging question?
I lead the Compliance organization companywide and report to the General Counsel. But I also report directly to the Board of Management and to the Supervisory Board of Siemens. This is from my point a good set up which provides the Compliance function with the necessary independence. Of course there are other organizational blue prints and in the financial sector there is a growing trend to separate Legal and Compliance. At the end, it is important that the CCO has unrestricted access to the „C-Suite“ in the companies.
And how is the cooperation with Legal in terms of risk management reporting? Is there any alignment between the assurance functions or does compliance report separately upwards to the board/CEO?
Compliance Risk Assessment is one of our key work streams and we are trying to continuously improving our abilities here. The more we can mitigate in advance, the less we have later to investigate and sanction. We report our results into the Enterprise Risk Management System (ERM) of Siemens where all risk reporting is consolidated including the risks reported by the colleagues from the Legal department, e.g. on litigation matters. As members of the Siemens Corporate Risk and Internal Controls Committee the General Counsel and I are fully involved in the ERM process and the consolidated risk reporting to the Board.
Looking into the future, what kind of challenges do you see?
The main challenge is to be always one step ahead, regarding external regulatory developments – e.g. the growing importance of Anti-Money-Laundering Compliance for the non-financial sector – but likewise regarding the fast changing business environment. For Compliance there is never a dull moment, you have to stay awake and alert – to prevent upcoming risks to the extent possible and to professionally investigate
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and remediate individual compliance violations – which will always occur in organizations – even with effective Compliance systems in place.
Klaus Moosmayer has been since January 2014 the Chief Compliance Officer of Siemens AG and head of the global Siemens Compliance Organization. Before that (since July 2010) he served as Chief Counsel Compliance of Siemens AG and was responsible as Head of the Compliance Governance Organization for the legal Compliance management, Compliance policies, internal investigations, disciplinary sanctions, remediation and Compliance risk assessment. Since 2007 he was the Compliance Operating Officer of Siemens and had a leading role in developing the new Siemens Compliance Program. Before entering the Siemens Legal Department in 2000 he worked in private practice as a lawyer. He studied law at the university of Freiburg/Germany and was trained as an army officer. Klaus has published extensively on Compliance and white collar crime topics. He was appointed end of 2013 as the Anti-Corruption Chair of the Business and Industry Advisory Committee at the OECD (BIAC). Klaus was interviewed by Bruno Mascello.Read more interviews