code of conduct - zf · 2 code of conduct common principles for correct behavior content foreword...

Code of ConductCommon principles for correct behavior

2 Code of ConductCommon principles for correct behavior

Content

ForewordRights and responsibilitiesFair and free market behaviorCombating corruptionAvoiding conflicts of interestSocial responsibilityOccupational safety, health and environmental protectionProduct complianceHandling of informationNotices and reportsOur principles engageContact

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Dear colleagues,

With our recent business acquisitions and focused strategy, ZF has fortified its position as a global leader in the automotive industry, committed to excellence, honesty, integrity and behavior in accordance with all applicable laws. At ZF, compliance is an essential element in ensuring this continued excellence and the long-term success of our company. Illegal activities are unacceptable and not tolerated – without exception.

We place the upmost priority on appropriate, responsible and sustainable business behavior, which is the basis for the trust we have established with society and our customers, shareholders and business partners. We must continue to earn this trust each and every day. To do so, we must base our actions on the highest business and ethical standards and commitments, applicable laws and ZF policies.

Our Code of Conduct is the key to achieving and maintaining our direction, providing us with the foundation of our values and core principles. The Code of Conduct provides us with guidance when faced with questions about proper behavior and compliance. These values and core principles establish the ground rules that must guide us in our business decisions. It is critical that we not only read and understand these values and principles in our Code of Conduct, but that we also follow and live by them in our day-to-day business activities.

Together, we are responsible to maintain and grow the level of trust we have established every day.

Friedrichshafen, July 2018

Wolf-Henning Scheider Chief Executive Officer of ZF Friedrichshafen AG

Jürgen HoleksaMember of the Board of Management of ZF Friedrichshafen AG

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All ZF employees are personally responsible for uphold-ing the law and adhering to internal guidelines in their working environment. ZF’s top priority is observing statutory and regulatory provisions and internal guide-lines, as well as ensuring the resulting lawful and correct behavior. No business transaction ever justifies the trans-gression of legal and ethical boundaries.

We bear responsibility for our products and our work. We also have an ethical responsibility towards our employees, society, business partners, and the environ-ment. In order to fulfill this responsibility, we must all act in a way that is lawful, honest, and responsible.

In particular, our executive managers guarantee, within the scope of their authority, compliance with applicable statutory and regulatory provisions, internal guidelines, and the principles of this Code of Conduct. We expect all employees to inform themselves of the content of these guidelines and to adhere to them as well as to all

applicable laws and to urge their reports and colleagues do the same. ZF will not tolerate any infringements of internal guidelines or statutory or regulatory provisions and will pursue such infringements irrespective of an employee’s position in the company’s hierarchy.

We also expect our business partners to adhere to all applicable laws, generally accepted standards of social responsibility, and basic principles of integrity.

Rights and responsibilities

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Our company and all of us are responsible for adhering to applicable laws and internal guidelines.


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Fair competitionAll ZF employees are obliged to observe the relevant requirements of antitrust law and competition law. ZF bans any behavior that is aimed at or results in the hindrance, restriction, or distortion of free and fair competition.

Our competitive position is based solely on our business success factors, especially our innovative strength, quality, reliability, and fairness. Therefore, we always comply with applicable antitrust laws and regulations when dealing with our competitors, business partners, and end customers. In particular, we do not tolerate:

• Anti-competitive contracts, agreements, or collusion with current or potential competitors, including but not limited to agreements aimed at fixing prices or premiums, limiting the type or quantity of products or services delivered, bid rigging or subdividing markets;

• Abuse of a leading position in a certain market;• Vertical collusion or contracts (with suppliers or

customers) that set out to, or actually manage to, prevent or restrict free and fair competition in violation of applicable laws.

Export controlsWith our global activities and when tapping into new markets, we strictly follow international trade regula-tions and adhere to rules and regulations governing import and export controls, as well as any applicable economic embargoes.

We endorse, without restriction, the principles of fair and free competition as a fundamental component of the market economy.

02Fair and free market behavior

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Ban on corruptionCorruption is banned by international conventions, national laws, and internal guidelines. ZF does not tolerate any form of bribery among employees or busi-ness partners, or any business practices that could create the impression of improper influence. This applies irrespective of any alleged regional customs.

All ZF employees are prohibited from directly or in-directly demanding, accepting, offering, or granting advantages in business transactions if they are designed to dishonestly influence business procedures, or even if they merely create the impression of doing so. Par-ticularly in business dealings with public officials and authorities in Germany and abroad, we make sure our employees act with integrity. Please keep in mind that in many countries in which we operate, companies are often state-owned or state-invested. Employees of these companies may be deemed to be public officials, and should be regarded with specific caution.

Facilitation payments are not tolerated. Facilitation pay-ments are payments to public officials not required by law, with the purpose of inducing the public official to

accelerate or carry out an official act to which a right principally exists. The prohibition of facilitation payments applies irrespective of the fact whether such payments are restricted by applicable local laws or not.

Gifts, invitations, and other gratuitiesWhen it comes to providing or accepting gratuities in the form of gifts or invitations, we strictly ensure that they are not in any way illegal or inappropriate and that they do not even have the appearance of dishonesty or incorrect behavior. We also do not tolerate gratuities that could raise doubts about our integrity or appear to influence business decisions. Such appearance may be induced by gratuities of an improper value, scope, frequency and/or timing. These factors may create the impression that a consideration could be expected from the recipient of the gratuities. DonationsIn line with our corporate social responsibility, we make donations to promote education, culture, social or hu-manitarian causes, and sports. Donations must not be linked to any counter performance for ZF.

As part of our worldwide business operations, we do not tolerate any form of corruption.

03 Combating corruption


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SponsorshipWe use our sponsoring activities to regularly pursue our own, company related advertisement or public relations objectives. In this context, we ensure appropriate and transparent procedures.

Money launderingMoney laundering is a term used to describe the process of transferring money from illegal sources or business activity into legitimate channels so that its original sources cannot be traced, making it seem as if the money has been obtained legally. We undertake to assist in the international battle against money launder-ing and adopt applicable measures to comply with the relevant provisions.

Transparency and documentationWithin ZF, we stand for absolute transparency in all of our business dealings, decisions, and activities. We ensure this through written documentation and regular checks. Following our objective of successful and sus-tainable business activity, we attract customers with our products, innovations, quality, and service.

Both internal and external data acquisition, records, and reports must be truthful, correct, and complete. We expect our employees to exercise the utmost care in all processes as well as to observe valid standards.This particularly includes observing generally accepted accounting principles.

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Conflicts of interestWithin the ZF Group, we make decisions exclusively on the basis of business considerations and in the interestsof the company. We ensure that no impression of any non-businesslike conduct is given.

We expect our employees to remain objective in all cir-cumstances and to make sure that their judgment is not influenced by personal or family interests.

All ZF employees must immediately inform us about situations in which their personal interests collide with the interests of ZF and consult with the superiors responsible so as to ensure that appropriate actions are taken as a means to prevent or resolve the conflict of interest.

Secondary employment and participationsWe encourage and support voluntary activities of our employees in clubs or other institutions, provided that these activities are not contrary to the interests of ZF and do not infringe on duties set out in the employment con-tract. Secondary employment and (equity) participations in a company that does not belong to ZF or in another organization must not impair the interests of the ZF Group. These also require disclosure and prior approval in accordance with labor law regulations.

Avoiding conflicts of interest

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We make decisions in accordance with business considerations and in the interests of the company. We ensure that business decisions are not influenced by private or personal interests.


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Human rightsWe respect and support internationally recognized human rights. We are particularly committed to meet-ing our corporate and social responsibilities through our membership in the United Nations Global Compact.

We make every effort to create a climate between our employees and in contract with our business partners that is characterized by mutual respect, trust, tolerance, and fairness. We respect the dignity, privacy, and per-sonal rights of every individual.

Rejection of human trafficking, forced labor and child laborWe reject any form of human trafficking, forced labor, and child labor. All work performed within the ZF Group must be voluntary. We support the abolition of slavery, forced labor, and exploitative child labor. At ZF, we al-ways observe the minimum age for employment stipu-lated in national legislation.

Equality and equal opportunitiesWe do not tolerate any discrimination on the grounds of race, gender, religion, age, nationality, social or ethnic origin, pregnancy, disability, belief, sexual orientation, or political and trade union engagement, and other charac-teristics protected by applicable law.

These principles apply to the recruitment of new em-ployees, to employees with a valid employment contract, and to the professional promotion of our employees. To this end, the only decisive factors are performance, per-sonality, experience, capacities/skills, and qualifications.

05 Social responsibilityWe accept corporate and social responsibility and regard this as a key factor in our sustained corporate success.

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Within the ZF Group, we observe the valid statutory requirements and standards for a safe, healthy working environment and take appropriate measures to ensure this. Our employees must implement the statutory and internal health and safety and health protection require-ments during their work.

We respect our planet’s natural habitat and are commit-ted to conserving resources and reducing environmental pollution. This commitment to sustainable environmental protection forms the basis for our work.

According to these principles, we are committed to environmentally friendly product design, reducing the environmental impact of our business processes, continually improving our energy utilization and environmental efforts, and establishing ourselves as a global model.

06 Occupational safety, health and en vironmental protection

Safety at work, the preservation and promotion of health, fitness, and job satisfaction of our employ-ees, combined with the reduction of environmental pollution, are fundamental principles placed on business operations.


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Product compliance is an important priority for ZF.

ZF holds itself to the highest standards of legal and ethical conduct and is committed to making high quality products that are safe and comply with applicable laws, regulations, and standards. These principles are imple-mented through ZF’s policies, processes and structures, and all ZF employees are held to these standards.

07 Product compliance

“Lawful, honest, and responsible behavior is a central component of our corporate culture.”Board of Management, ZF Friedrichshafen AG

12 Code of ConductCommon principles for correct behavior

08 Handling of information

Protection of confidential informationOur capacity for innovation is a crucial success factor in international competition. For ZF, as a global technology leader, protecting intellectual property rights and exper-tise is therefore especially important.

It is for this reason that we ensure that sensitive busi-ness, technical, and financial information, know-how and trade secrets are appropriately protected and not passed on without authorization. To the same extent, we also respect the business secrets of our business partners and competitors.

Our employees are duty-bound to keep sensitive infor-mation and business secrets confidential.

Data protectionIn all business processes, we strive for the protection of rights to privacy, in conformance with the valid laws. Furthermore, we have established principles for handling personal data that must be observed worldwide.

IT securityThe availability and integrity of our IT systems is funda-mental. Personal and business-related data is protected against unauthorized access, loss, or manipulation using all of the technical and organizational means available. This is performed in consideration of appli-cable national legislation.

ZF has therefore established a documented, supported, approved and maintained process for an effective Information Security Management System (ISMS), which ensures protection of our expertise and that of our customers.

Insider informationInsider information is all nonpublic information that investors would consider significant to their investmentdecisions. Such insider information must be treated with strict confidentiality. It must not be made available to third parties. Acquiring or selling, or recommend-ing the purchase or sale of securities based on insider information is prohibited.

We secure and protect the confidentiality of sensitive information, data, and business secrets.

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We demand and promote transparent business activities. In line with this belief, our employees can contact us at any time in confidence.

As a means of protecting against company damaging actions, preventing fraud and other white-collar crime, and protecting employees, every employee is urged to report criminal conduct, deficiencies, or risks in the com-pany. Employees may use the usual reporting channels (superior, Compliance Organization, Human Resources department, audit department, or the person immedi-ately responsible for them). In addition, we provide an anonymous reporting channel for compliance breaches with the ZF Trustline:https://www.bkms-system.net/Trustline

Confidentiality of our employees‘ reports, questions and concerns will be preserved as much as possible. We follow up on all plausible reports and take preventive measures wherever necessary. Within this process, we reject any form of discrimination or retaliation against people who report such circumstances to us in good faith. However, intentionally using the ZF Trustline for abusive practice (e.g. by filing reports in bad faith) is also prohibited.

Misbehavior and infringements of applicable statu-tory and regulatory provisions, internal regulations, and the Code of Conduct will not be tolerated. When implementing any necessary measures we adopt the principle of proportionality, which means that in each case we carefully examine which consequences are appropriate, suitable, and necessary, including but not limited to termination of employment.

09 Notices and reports

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Our principles engage

Rights and responsibilities

Fair and free market behavior

Avoiding conflicts of interest

Occupational safety and health and environmental

protection

Notices and reports

Product compliance

Handling of information

Combating corruption

Social responsibility


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Contact

Our employees who have any questions or doubts on behavior in compliance with the aforementioned rules can contact their superior at any time. Additionally, the Compliance Organization, particularly the Compliance Helpdesk, is available to support our employees in all Compliance matters.

Contact complianceE-Mail: [email protected]

Our employees can find additional information on the intranet at https://sl.zf-world.com/Compliance

ZF Friedrichshafen AGZF Forum | HeadquartersLöwentaler Straße 2088046 FriedrichshafenGermany

www.zf.com

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