Nexia Ebner Stolz

Study: The Mittelstand Views Compliance as an Opportunity

Mana­ge­ment often has nega­tive asso­cia­ti­ons with the term "com­p­li­ance." At the same time – most recently since the serious com­p­li­ance vio­la­ti­ons at such com­pa­nies as Sie­mens, Tele­kom, ADAC and Volks­wa­gen – the anxiety over sub­stan­tial inci­dents in the area of com­p­li­ance runs deep among busi­ness lea­ders: there is a threat of major con­se­qu­en­ces for both the com­pany and the indi­vi­dual. Com­p­li­ance is thus an issue not only for major (DAX index) cor­po­ra­ti­ons, but also for the Mit­tel­stand. Accor­ding to a study done by Ebner Stolz in con­junc­tion with the F.A.Z. Insti­tute and Forsa, a pub­lic opi­nion pol­ling cen­ter, for the Mit­tel­stand, the hig­hest prio­ri­ties connec­ted with com­p­li­ance are con­for­mity with the law and the avo­i­dance of lia­bi­lity. Inc­rea­sin­gly, the Mit­tel­stand is also aware that com­p­li­ance can offer addi­tio­nal advan­ta­ges. At the top of that list are aug­men­ted secu­rity at 90%, inc­rea­sed tran­s­pa­rency at 88%, and impro­ved repu­ta­tion at 78%. As Dr. Uta-Maria Ohn­dorf, Mana­ging Direc­tor at Roche Diag­nostics in Bel­gium, a parti­ci­pant in our study, repor­ted, her own expe­ri­ence is that good com­p­li­ance pro­du­ces con­fi­dence, and not just in a finan­cially tan­gi­ble way; it also affords a clear com­pe­ti­tive advan­tage in the mar­ket­place.

Compliance© Thinkstock

In which areas is the intro­duc­tion of com­p­li­ance struc­tu­res most important for the Mit­tel­stand? Most fre­qu­ently men­tio­ned in this regard were data pro­tec­tion at 98% and IT secu­rity at 92%, clo­sely fol­lo­wed by emp­loy­ment law and tax law (at 86% and 82%). This is no sur­prise: accor­ding to our assess­ment, the tax aut­ho­ri­ties are well equip­ped for audits and use audi­ting soft­ware to sys­te­mati­cally ana­lyze the data in the ope­ra­tio­nal acco­un­ting sys­tem. Stef­fen Demuß, Direc­tor of Taxa­tion and Com­p­li­ance for copier manu­fac­tu­rer König & Bauer AG, con­firms our own obser­va­ti­ons and, as part of our study, exp­lains how a Tax Com­p­li­ance Mana­ge­ment Sys­tem at König & Bauer looks. Sönke Gooß, CFO of edding AG, adds that audi­tors pay parti­cu­lar atten­tion to volume taxes, sales taxes, wage taxes and trans­fer pri­cing.

How does the Mit­tel­stand put com­p­li­ance requi­re­ments into action inter­nally? These com­pa­nies take a far more casual attitude than major cor­po­ra­ti­ons. Thus, com­pre­hen­sive com­p­li­ance mana­ge­ment sys­tems are pre­sent in less than one-half of such com­pa­nies. Ins­tead, indi­vi­dual mea­su­res insti­tu­ted by mana­ge­ment or divi­sion direc­tors are most com­mon. This is jus­ti­fied by the struc­ture of the Mit­tel­stand, with its flat hier­ar­chies and direct chan­nels of com­mu­ni­ca­tion: com­p­li­ance mea­su­res can be pha­sed in gra­dually in indi­vi­dual modu­les, accor­ding to the deg­ree of risk. Smal­ler Mit­tel­stand com­pa­nies in parti­cu­lar have recog­ni­zed that they are lag­ging behind. Fifty-eight per­cent of such com­pa­nies have indi­ca­ted that invest­ments in com­p­li­ance will rise in the future.

With respect to intro­du­cing com­p­li­ance struc­tu­res, those com­pa­nies that have cle­arly defi­ned pro­ce­du­res have the advan­tage. Accor­ding to Dr. Ulrich Schulz, Exe­cu­tive Direc­tor for Com­p­li­ance at COR­PUS SIREO, a parti­ci­pant in our study, in such cases, these pro­ce­du­res can sim­ply be expan­ded to show where image issues, value streams and lia­bi­lity risks exist.

Com­p­li­ance struc­tu­res can be imp­le­men­ted bet­ter when the cor­rect resour­ces are used. Depen­ding on the size of the com­pany, these may include Excel spreads­heets, docu­ment mana­ge­ment sys­tems, or com­pre­hen­sive com­p­li­ance mana­ge­ment sys­tems. As Det­lef Bräuer, Direc­tor of Ope­ra­ti­ons for SER Solu­ti­ons Deut­sch­land GmbH, exp­lai­ned to Peter Ring­beck, Direc­tor of IT and Orga­niza­tion for DG HYP in Ham­burg, in a talk about imp­le­men­ting a docu­ment mana­ge­ment sys­tem, using appro­priate resour­ces makes pro­ce­du­res sim­p­ler and more effi­ci­ent for emp­loyees and easier for audi­tors to recon­struct.

The Mit­tel­stand can­not avoid cen­sure for neg­li­gent or even inten­tio­nally impro­per tran­sac­ti­ons (the lat­ter can exist even in the case of “ta­cit accept­ance”) sim­ply by intro­du­cing com­p­li­ance struc­tu­res. As the Federal Mini­s­try of Finance announ­ced in a recent let­ter, an inter­nal tax con­trol sys­tem can be one indi­ca­tor nega­ting the pre­sence of intent or neg­li­gence. But com­p­li­ance struc­tu­res and gui­de­li­nes must not be redu­ced to a “pa­per tiger.” Rather, the tone for com­p­li­ance must be set “from the top.” Ulrich Roth­fuchs, a com­p­li­ance offi­cer at DEKRA, regards com­p­li­ance as a mana­ge­ment func­tion, since com­mu­ni­ca­tion, authenti­city and cre­di­bi­lity are criti­cal to deter­mi­ning whe­ther people will get the mes­sage. Once the mes­sage is recei­ved, con­trol mea­su­res can return to the back­ground.

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