Good Governance and Energized Employees

LANXESS’s corporate culture is based on five central values: respect, ownership, trust, professionalism and integrity. These values apply always and everywhere – and to all employees. We seek to foster a corporate culture in which responsible and morally irreproachable actions and striving for performance do not contradict but complement each other.

Our central values, supplemented by operational guidelines and organizational structures – summed up as good corporate governance – enable our employees to act responsibly in their day-to-day work and thus turn a relatively abstract concept into a specific corporate success factor. At LANXESS, good corporate governance is embodied by a values-based and safety-conscious corporate culture, effective management systems and a commitment to internationally recognized principles of responsible management, such as the principles of the U.N. Global Compact.

We also ensure responsible business activities with our committee structure geared toward effective sustainability management and with our integrated management system that provides for the necessary global structures in all business processes.

For LANXESS, responsible corporate governance particularly implies compliance with legal and internal standards and ethical principles to which all employees must adhere. Our global compliance organization – comprising the Group Compliance Officer, the regional Compliance Officers, and a network of local Compliance Officers – supports all areas of the company in implementing appropriate measures to counter unlawful or unethical conduct within the LANXESS Group at an early stage and to prevent misconduct. The compliance organization is also available to all employees as a point of contact for any compliance-related issues. The direct reporting line from the Group Compliance Officer to the Board of Management guarantees that the Board of Management members receive regular information.

Our Corporate Policy lays out principles of responsible business operations and sustainable development and defines our general corporate philosophy and the expected conduct of all employees in relation to our stakeholders.

The LANXESS Code of Conduct, which is applicable throughout the Group, requires all our employees – across all organizational units, regions and hierarchy levels – to behave lawfully and with integrity. Through correct and proper conduct, each employee is responsible for helping to prevent harm to LANXESS and increase the company’s value over the long term. The code covers issues such as human rights, cartel and antitrust law, anti-corruption, data protection, occupational, product and plant safety, and environmental protection.

Other Group directives, such as the HSE directives and the guideline on incentives, define the specific application of regulations in the individual areas of compliance covered by the code and are binding for our staff throughout the Group. On the basis of these LANXESS directives, more detailed regulations that also take account of local requirements are defined at the operational level in standard operating procedures and process instructions etc. The applicable directives, standard operating procedures and guidelines are accessible to all employees. Employees are also regularly informed of new and updated regulations relevant to them. 

We demand the highest quality and safety from our products, services and actions, always considering the interests of customers, employees, suppliers and other business partners, shareholders and the public.

Throughout the world, we use a process-oriented, integrated management system that complies with the international standards ISO 9001 and ISO 14001 for quality and environmental management. This allows us to achieve our clearly defined goals efficiently, continuously improve our performance and further develop our company successfully and sustainably.

We see our employees as a source of value creation and creativity, and encourage their awareness and commitment to improvement.

Occupational health and safety are our top priority. We demand compliance with safety, health and environmental guidelines at our sites worldwide. We strengthen our employees' sense of responsibility for safety, health and the environment through communication, while motivating them to further their education and training in these areas.

We emphasize maximum safety within all of our operating plants, utilizing our uniform global standards for process and plant safety and regularly monitoring their compliance and effectiveness.

We recognize our responsibility for product safety as a continuous improvement for people and the environment. We monitor the health and ecological effects of raw materials and products worldwide. We support our customers in the safe and environmentally-friendly handling of our products and draw their attention to the risks associated with their use. We also demand responsible behavior from our suppliers and service providers.

We are committed to protecting the climate. Our goal is to minimize and avoid climate-damaging emissions as far as possible. To this end, we take into account the entire value chain from raw material use, energy generation and consumption as well as our own plant and synthesis processes through to the products, their transport and delivery as well as the recycling or disposal of products and raw materials.

We are committed to responsible and comprehensive environmental protection and continually work to improve our environmental performance. We research and develop environmentally-friendly products and processes to avoid potential environmental impacts. We report publicly on our progress in this area.

We strive for a successful partnership with our customers in accordance with our management guidelines. Our aim is to identify our customers' expectations at an early stage, react quickly to their needs and thus ensure their satisfaction on an ongoing basis. We see our suppliers and service providers as partners whose expertise and reliability are just as important to us in the selection process as compliance with our corporate principles.

We create trust in our business activities through open and respectful communication with our customers, employees, suppliers, shareholders and creditors, the authorities and the public.

Taxes play a crucial role in enabling governments to provide important societal services like health care, education, housing and infrastructure. While tax laws and implementation are the government’s responsibility, companies also play an important role as taxpayers. They must comply with the law, and also ensure responsible tax treatment. LANXESS believes that a responsible tax approach is an essential part of doing business sustainably in a robust, functioning society. We view the fulfillment of tax obligations as our commitment and obligation to society.

Our “Taxation at LANXESS” tax policy is based on the LANXESS Corporate Compliance Code and Code of Business Conduct. LANXESS has a robust governance framework based on the Articles of Incorporation, our Code of Conduct, our risk management system and our management framework, which includes Group requirements and directives. The LANXESS tax policy aligns with our normal business practices and reflects the geographical distribution of the company's activities. In 2017, the tax reform in the United States had an extraordinary impact on income tax in the AMERICAS region.

All LANXESS employees and externals have access to our "Speak Up" system – an anonymous tool to report violations or potential violations to the Compliance Organization. All reports are investigated and, if necessary, appropriate action is taken. The reporting party and the employees affected by a report remain confidential.

LANXESS business partners can also contact the Compliance Organization, and may report violations of the LANXESS Code of Conduct or other misconduct on the part of LANXESS.

You can contact the Compliance Organization as follows:

LANXESS Compliance-Helpdesk:
compliance-helpdesk@lanxess.com (in German or English)

Speakup - Report violations
The reporting channels for your country can be found on the SpeakUp website. You can report violations in a secure and anonymous way by phone or in writing:

https://www.speakupfeedback.eu/web/lanxess

In line with our values and operational guidelines, we are committed in all our markets and supply chains to promoting respect for human rights at all times and systematically preventing child and forced labor, for example. At LANXESS, human rights and ethical principles apply without restriction, even if they are not stipulated in the legislation of individual countries. Our target is formulated with corresponding clarity: in all areas over which LANXESS has control, there should be no breaches of human rights. We have included all relevant information on our commitment and on the measures established in the Group to protect human rights in the “LANXESS Position on Human Rights.”

Direct responsibility for ensuring that human rights are respected at all times lies with the respective management at our sites, supported by our global compliance organization and by the regional and local Compliance Officers. At Group level, human rights are subject to regular evaluation as part of our risk management system. For example, we conduct specific risk assessments in all national companies with regard to the potential risk of human rights violations. The general risk potential across the Group is determined annually, and national companies with elevated risk potential are subjected to an additional, comprehensive risk assessment at least every three years. This accounts for all fundamental risks of human rights violations, including such important risks as child labor, modern slavery and human trafficking. The risk assessments are coordinated by Group headquartersand carried out by the responsible departments at national level. The assessments confirm that there is a high level of awareness of the subject and that functioning mechanisms have been established to prevent violations of human rights.

Furthermore, all organizational units at LANXESS and their business activities are subject to regular internal and external audits. It goes without saying that these activities also include monitoring respect for human rights and – if necessary – the introduction of suitable measures to guarantee this.

Our Code of Conduct includes unambiguous instructions regarding the respect of human rights. The code, which all new employees receive with their employment contract, is also an aspect of general training measures. In addition, we hold training sessions geared toward specific selected human rights issues such as occupational safety. In the event of suspected human rights violations, our employees and external third parties can report them in various ways. For example, the Compliance Helpdesk and the “SpeakUp” reporting system can be used to notify the compliance organization – also anonymously if they wish.

We also expect our suppliers to commit to values and rules, especially the principles of the U.N. Global Compact and the ILO Labour Standards, and to establish adequate systems for ensuring legally compliant and responsible behavior. When we select new suppliers, it is essential for us that they acknowledge the principles on respect for human rights contained in our Supplier Code of Conduct or have established their own comparable regulations and management systems in line with the U.N. Global Compact. To flesh out our requirements, we revised the content of the Code during the reporting year and added additional topics. In connection with this, the name was changed to “Business Partner Code of Conduct.” We thus make it clear that we expect sustainable and ethical conduct not only from our suppliers.

In addition, we promote responsible action in the supply chain with our involvement in the Together for Sustainability (TfS) initiative, which we operate jointly with other international chemical companies. Under this initiative, companies that supply significant goods and services are regularly assessed in the context of TfS audits. These supplier assessments also cover compliance with aspects of our Business Partner Code of Conduct, such as compliance with human rights, including with regard to child labor and forced labor. In the reporting year, we received no indications of human rights violations by our suppliers. We have structures in place to follow up individual indications of rights violations as part of our established processes.

We have also established the necessary sales-related processes to fulfill our responsibilities. This particularly includes our processes for central product monitoring and for trade compliance, especially with regard to regulations for preventing dual use. We also systematically evaluate the impact of our products on people as part of our portfolio analysis.

All acquisitions of companies, interests in companies, or businesses are subject to a careful due diligence process to ensure that human rights are also respected by the target company.

Thanks to our long-standing, proven mechanisms for compliance with human rights due diligence obligations – both in our business operations and in the supply chain – we believe we are well prepared for the regulatory developments formalizing the protection of human rights in many regions of the world. Our “People & Governance” sub-committee has taken on the task of closely examining the growing legal requirements in an interdisciplinary team of experts and coordinating the necessary measures.

By signing the U.N. Global Compact, we have undertaken to actively counter all forms of corruption. This undertaking is also contained within the LANXESS Code of Conduct, wherein we make all employees aware of this topic. Our target is clear: no incidents. Prevention of corruption is part of our general compliance management system. In 2022, the existing guideline on incentives was revised and replaced with the new Group-wide anti-corruption standard. Organizational measures and regulations for setting up the compliance management system as well as responsibilities for implementation, support and continuous monitoring of the system are defined in a guideline applicable throughout the Group. The respective site management, supported here too by our global compliance organization and by regional and local compliance officers, is responsible for preventing instances of corruption at all times.

A Group-wide directive provides clear guidance regarding incentives. Our employees are prohibited, either directly or in connection with their professional duties, from offering personal advantages to the employees of other companies – in particular when initiating, awarding or handling an order or assignment. Our employees are likewise prohibited from accepting such advantages or requesting them for themselves. If an employee is offered such gifts, they must immediately notify their supervisor or the compliance organization. Exceptions may be made for customary occasional or promotional gifts that are symbolic in nature and of low value.

LANXESS must not grant advantages of any kind to public servants or other officials in Germany or abroad. When commissioning service providers who have contact with officials on behalf of LANXESS, employees must likewise ensure compliance with the prohibition on corruption. As a basic principle, we do not provide financial support to political groupings or parties. LANXESS is involved in large industrial associations, which we regard as fundamental to representing our interests. We disclose contributions and spending on political activities transparently.

Donations – depending on the value – require approval from the Communications central function or from the Chairman of the Board of Management of LANXESS AG, in both cases after prior consultation with the compliance organization.

To enhance our employees’ awareness of these rules of conduct, the issue of corruption is regularly covered by compliance training. In addition, we hold specific anticorruption training aimed at exposed professional groups and countries. In the reporting year, we recorded more than 6,000 participations in compliance training sessions worldwide. If there are indications of compliance violations, our employees and external third parties can contact the compliance organization – anonymously if they wish. Our Group-wide “SpeakUp” reporting system allows all employees or external third parties to report potential violations in writing or by telephone in over 20 languages and guarantees secure and anonymous communication between the compliance organization and the individual making the report.

The Corporate Audit function examines and monitors implementation of our measures to prevent corruption. It applies various analytical approaches and scopes here:

• Assessment of the risk of exposure to corruption as part of annual audit planning, and general monitoring of the internal control system: all business units
• Transaction monitoring to ensure compliance with company regulations with an influence on the prevention of corruption in the standard SAP system: at least 90 % of all transactions.

In 2022, we received no reports or other indications of cases of active corruption by LANXESS employees. Verified cases of LANXESS employees being bribed lead to appropriate disciplinary actions up to and including dismissal as well as consideration of further legal steps. In the reporting year, we received no reports or indications of such cases.

We also communicate our clear expectations for the prevention of corruption to our suppliers and service providers in our Business Partner Code of Conduct. It makes the clear demand that our suppliers must not engage in bribery, fraud or extortion. It is essential for us that they acknowledge the principles contained in the Business Partner Code of Conduct or have established their own comparable standards. If suppliers or service providers do not comply with these principles, this may lead to the termination of the contractual relationship.

LANXESS aims to be a sustainable chemicals company with long-term success driven by the personal commitment of each individual employee and by high-performing, diverse teams. Our goal is to enable our employees to shape their professional lives actively and to create a safe, productive and motivating environment. This makes us attractive to applicants of all ages and skill levels and enables us to counter demographic change and the shortage of skilled workers while also promoting a diverse workforce in which everybody feels included.

An HR strategy based on four pillars helps us to achieve our goal. We are continuously enhancing this in order to appropriately support our employees at all times in the diverse and sometimes complex change processes at LANXESS. In times of profound social and business transformation processes, change management is generally growing in importance. In particular, the increased M&A activities in 2022 entail organizational, cultural and personal changes for many of our employees. Another major driver of change is the consistent digitalization of our business processes. The continued M&A activities in the reporting year also required our employees to deal with organizational, cultural and personal changes. In times of constant change, a strong corporate culture is especially important. The motto for “Performance Culture Day 2022” was “We Win as a Team” – because we can only master the growing challenges together. The activities were intended to highlight the important role of diversity and inclusion, openness to other perspectives and feedback, and cross-divisional and cross-hierarchical communication. 

Information on life and work at LANXESS can also be found in our “Working at LANXESS” Background Paper.

We regard diversity as a strategic advantage. Therefore, we aim to enhance diversity at LANXESS and use its positive effects for our company and employees. An appreciative culture that is open equally to all people helps us to become more innovative and efficient and to attract and retain promising talents. Recognizing and appreciating diversity is therefore ingrained in our values, our guiding principles as well as our leadership principles.

We continued to follow our strategic “Diversity & Inclusion” (D&I) concept for promoting diversity, equal opportunities and inclusion in 2022. We are working steadily to make all HR processes D&I-compliant. We take a holistic view of D&I, focusing on aspects such as gender, nationality, age, disability and sexual orientation. In 2022, we particularly campaigned to raise awareness of unconscious bias. For example, we initi-ated various learning opportunities that look at unconscious patterns of thougth and offered "Unconscious Bias-e-Learning” in various languages.
Our second “Global Diversity & Inclusion Day,” which we hosted in November to mark the International Day for Toler-ance, was mainly about raising awareness of the needs of employees with disabilities. The program included a talk by motivation expert Janis McDavid on the topic of inclusion. 

In addition, gender diversity remains an important focus topic – with the clear target of increasing the proportion of women in the company. We sent an important signal in the reporting year with our commitment to the Women’s Empowerment Principles (WEP), a joint initiative by U.N. Women and U.N. Global Compact. The seven principles to empower women in the workplace provide clear guidelines for how employers can promote gender equality. These include equal pay for equal work, gender-specific measures for the promotion of women and zero tolerance for sexual harassment in the workplace.

A pilot project in Germany with four virtual events aimed to set up a network for women at LANXESS to make it easier for them to connect, communicate and inspire each other. The very first event reached around 100 participants, and the number of interested employees grew to more than 200 by the end of 2021. Several sub-groups (e.g. Women in STEM), mentoring pairs and a leadership team, which will organize the network itself from 2022, have already formed from among these participants. On the basis of this positive experience, we will also launch pilots for women’s networks in all other regions in 2022. 

In addition, the German Act on Equal Participation of Women and Men in Executive Positions in the Private and the Public Sector commits us to set targets in Germany for aspects such as the proportion of women at the two management levels below the Board of Management and to determine the target date for attainment of the proportion of women.

We have also set further targets above and beyond the legal requirements: Among other things, we want the proportion of women in management positions to be at least 30 % by the end of 2030. At the end of 2022, the proportion of women in management was 25.2 %.

Networks can make an important contribution to the promotion of diversity, equal opportunities and inclu-sion. WInX – our global “Women Initiative LANXESS” – connects women LANXESS across national borders. As part of this initiative, participants were able to network at virtual, hybrid and in-person events around the world. With a “Male Ally Workshop,” the German women’s network showed that the engagement of male employees is also important for gender diversity and equality. The workshop gave rise to the "HeForWinX" network group for men who are committed to supporting the women’s network in the future.

The significant development toward an employees’ market and the demographic challenges make recruiting an important strategic issue. Specialized LANXESS recruitment teams work in the U.S., China, India and Europe. In order to approach interesting candidates in both an active and a targeted manner, we have our own pool of active sourcing specialists.

Our recruitment process is highly digitalized. The software platform covers all processes from onboarding to the signing of employment contracts. It helps to make approaching and acquiring new talent standardized, transparent and candidate-focused. In EMEA, a video application tool was also piloted in 2022.

We continue to invest in a clear employer brand in order to highlight the advantages of LANXESS as a global and socially responsible employer. Our employer brand centers on authenticity and diversity. We communicate this brand via social media, where we share a mix of company, product and HR information in order to spark enthusiasm for our company among talented people from various functions.

Despite the difficult labor market situation, we thus filled a record number of vacancies in the reporting year. A total of 1,130 new employees joined the Group in the reporting year (1,714 including temporary employees). The new employees predominantly filled technical positions.

Our international graduate trainee program is a fundamental tool for securing talent in Germany. Exceptionally well qualified master’s graduates are prepared for challenging specialist and managerial tasks and can gather valuable experience in Germany and abroad. In addition to an engineering orientation, LANXESS also offers attractive areas of activity for economics graduates. Our young talent receive diverse practical learning opportunities as well as targeted training and opportunities for internal networking.

Training young people has always been hugely important to us, both in order to safeguard the company’s future and as part of our social responsibility. Vocational training is the basis of our strategy of developing specialist staff for the German sites from within our own ranks. In the reporting year, we celebrated a special milestone in this context: the thousandth apprentice was taken on as a permanent employee.

It is our aim to retain at least 80% of our apprentices after successful completion of their training. We reached this target again in the reporting year with a retention ratio of 85% (previous year: 83%).

Training will remain a key pillar of our HR policy in the years ahead. We are importantly demonstrating this with new, modern offerings. For example, we initiated various special campaigns to recruit apprentices. Candidates were able to sample working in LANXESS workshops at the “Technik Check” event and then complete the hiring process within a day. For the first time in a pilot project in 2022, two apprentices were hired as part-time industrial management assistants. This offering is aimed at people who cannot take on a full – time apprenticeship – e.g. because they have children or act as a relative’s career. The apprenticeship can be completed at a reduced 30 hours a week, without the duration of the apprenticeship increasing.

Outside Germany, we offer apprenticeship programs in several European countries, as well as Canada, Brazil and India, for example, in order to cover our requirement for young talent in those countries. In addition to our regular apprenticeship activities, we cooperated with the Iochpe Foundation in Brazil for the second time. Through this cooperation, we again enabled ten young people from disadvantaged backgrounds to take part in a nine-month training course at our production site in Porto Feliz. In India, the government supports an apprenticeship program to give more young people the opportunity to acquire qualifications required to work in the chemical industry. Within this framework, a total of 30 apprentices worked for us at the LANXESS sites in Nagda and Jhagadia in the reporting year. 

The increasing average age of our employees in conjunc-tion with the scarcity of young talent in some regions means that the competition for qualified employees is growing fiercer. Therefore, we have been investing in our own apprenticeship and management trainee programs for years in order to cover our requirements for specialist staff chiefly from our own ranks in the future. We offer attractive opportunities development in order to increase retention among the young talent. The personnel conferences introduced in 2020 for the production and tech-nology (P&T) workforce have become successfully established and a proven planning instrument. They take place annually and serve the purpose of strengthening rotations and development in operations in particular. In order to cater more closely to the personnel needs and challenges of P&T, various workstreams were launched in which HR and Business jointly devise solutions for talent acquisition, retention and development specifically in P&T.

The increasing average age of our employees in conjunction with the scarcity of young talent in some regions means that the competition for qualified employees is growing fiercer. Therefore, we have been investing in our own apprenticeship and management trainee programs for years in order to cover our requirements for specialist staff chiefly from our own ranks in the future. We offer attractive opportunities development in order to increase retention among the young talent. The personnel conferences introduced in 2020 for the production and tech-nology (P&T) workforce have become successfully established and a proven planning instrument. They take place annually and serve the purpose of strengthening rotations and development in operations in particular. In order to cater more closely to the personnel needs and challenges of P&T, various workstreams were launched in which HR and Business jointly devise solutions for talent acquisition, retention and development specifically in P&T.

In order to make the immense knowledge of our older employees available to subsequent generations, we successfully piloted a knowledge transfer program in 2021 and rolled it out in the reporting year. It aims to identify important departing knowledge carriers at an early stage, systematically record their often implicit knowledge, and ensure its structured transfer to subsequent generations – in both analog and digital format. The knowledge transfer program comprises various measures such as expert debriefings, learning tandems and a digital, plant-specific knowledge database. This “Plant Wiki+” was launched at a LANXESS plant for the first time in 2022 and is available to all employees of this plant as an intuitive reference work.

We use our global strategic HR planning process to simulate the long-term development of our global workforce. We use a planning tool to simulate the development of our workforce given various assumptions, from which we derive our requirement for new staff. The analysis includes data on retirements as well as voluntary turnover, with the data used for the analysis varying country by country. Our aim is always to identify staff shortages at an early stage. We also engaged with other qualitative aspects in the reporting year. For example, there was a workshop in which managers from P&T discussed the skills that employees will need in the future in order to tailor our learning and development offerings accordingly.

Our remuneration policy offers fair and competitive remuneration worldwide, chiefly based on relevant external benchmarks, level of professional experience and quality of work, regardless of the gender of the employees. We regularly reassess the fixed annual salary of our nonpay-scale employees on the basis of these factors in our annual salary review. Salary increases for our pay-scale employees follow the applicable collective agreements, likewise regardless of gender. The remuneration ratio of women and men is reviewed regularly and analyzed including other factors.

The difference between the average remuneration for men and women at LANXESS is less than ± 7% for all individual levels. These salary differences are influenced by further, non-gender-specific variables – such as professional experience, salary differences due to geography or function, or differing work histories. When the wage gap is broken down by age group – as a proxy variable for professional experience – the difference between men and women is usually even smaller. The goal of our HR policy is to have no differences in pay on the basis of gender. Our Diversity & Inclusion measures also contribute to this.

As part of the transparent remuneration in line with market conditions, LANXESS offers its employees bonus systems geared toward the company’s long-term success. In total, 86% (previous year: 86%) of LANXESS employees worldwide participate in our variable compensation systems. 

The central performance-based compensation component is the Annual Performance Payment (APP), which we provide above the pay scale and in most countries within the pay scale on top of fixed pay. This bonus payment is linked to our key controlling indicator, so requires the Group’s attainment of a defined EBITDA target. Further individual targets in areas such as safety and sustainability additionally apply to top management. In 2022, we shared around €136 million of our profits for fiscal year 2021 with our employees worldwide. Because of the challenges of the coronavirus pandemic, the bonus payment was lower than in previous years.

With the Individual Performance Payment (IPP), managers can also reward employees’ extraordinary individual achievements during the year in a prompt and unbureaucratic way.

In addition, we offer a long-term incentive program for our managers in Germany. There are similar programs in the U.S. and India. The Long-Term Stock Performance Plan (LTSP) consists of four tranches commenced each year and tracks the performance of the LANXESS share compared with the FTSEurofirst 300 Eurozone Chemicals Index, over a period of four years in each case. In addition, there is a Share Ownership Guideline for the Board of Management and our top-level managers. This guideline emphasizes trust in the strategy and long-term success of LANXESS. 100% of those eligible participated in the current LTSP program in 2022.

Another core element of our offering is the company pension plan for plugging potential gaps in provision in old age. The design of the company pension plan differs from country to country depending on the state pension system. LANXESS’s pension commitments often go beyond what is required by law. They are funded by employer and/ or employee contributions. In Germany, employees can voluntarily increase their pension and receive an additional grant from LANXESS. 73% of employees participate in the supplementary component of the current pension plan. Other offerings facilitate the transition into retirement such as the long-term account for pay-scale employees in Germany. The participation rate here remained at a high level of around 90%.

In addition to fair monetary remuneration, flexible working conditions and benefits are becoming increasingly important. As components of total remuneration at LANXESS, they make a material contribution to the wellbeing and productivity of our workforce. It is important to us that the benefits granted support our corporate targets, values and culture and address the relevant needs of our employees. When designing these benefits, we often go further than the respective statutory framework. In addition, we always aim to account for individual needs and life situations in the best possible manner.

All services apply to our core workforce. Even so, some individual services in the regions may have differing structures and be locally adapted to the needs of our employees. Our core workforce includes all employees with a permanent full-time or part-time employment contract. As of December 31, 2022, this was 93% (previous year: 94%) of our total workforce worldwide.

In line with our office-based employees’ desire for more flexible working and working-time models as well as greater transparency regarding existing options, we introduced and communicated global flexibility principles in 2018 under the heading “Xwork – Flexible Work.” A significant aspect of this flexibility for our office-based employees is the ability to work remotely. We laid the foundation for country-specific guidelines in this regard with a global statement on remote working adopted and released by the entire LANXESS leadership team in September 2021. With the statement, we want to recognize the lessons learned from the coronavirus pandemic and the increased remote working of some of our employees during this time. We have seen that, while many tasks can be carried out at home, in particular creative activities and team interactions in the office are indispensable for our joint success and the welfare of our employees. In our view, therefore, an average of four to eight days of remote working per month in addition to working in the office is compatible with our business interests – providing, of course, that the tasks are suitable for remote working. Guidelines to this effect were adopted in the U.S. and Great Britain, among other countries in 2021. In 2022, additional countries (e.g. India and CEE) adjusted their guidelines on remote working on the basis of the global statement.

The “flexitime” model derived for Germany from the Xwork principles aims to enable employees in senior management to work part-time in an intelligent way. In the Flexi-95 model, the level of employment is reduced to 95% with a corresponding adjustment to remuneration, meaning that a full-time worker is entitled to 13 extra days off per year. Corresponding models with levels of employment of 90% and 85% are also possible. As of the start of 2021, flexitime is now available to all non-payscale employees. In 2022, there were 179 participants, of which 49 in senior management.

These and other measures count toward our goal of 95% of all countries in which we operate having derived and implemented specific guidelines and/or corresponding models for flexible working conditions from our global “Xwork” principles. At the end of 2022, the coverage ratio was already 96% (previous year: 89%).

Work/life balance has become even more important under the persistently difficult conditions of the coronavirus pandemic. In 2022, we therefore made our employees in Germany a number of new offers regarding childcare, such as additional locations for reserved places at daycare centers. A total of 7% of the workforce in Germany aged between 20 and 40 were on parental leave for a time. Of this figure, 59% were fathers. 99% of the employees who ended a parental leave period in 2022 returned to a job at LANXESS, 97% of which still worked in the company at the end of 2022.

The legally defined framework for maternity rights and parental leave taken for granted in Germany and similar models in the European Union are by no means standard worldwide. Therefore, at our sites outside Europe, we are assessing whether we can introduce or expand countryspecific models for our employees. In Brazil and the U.S., for example, we offer parental leave programs that go beyond the respective legal requirements and allow our employees to spend time with their children on full pay.

Against a backdrop of demographic change, care is a major issue in Germany. The centerpiece of the LANXESS care model is caregiver leave, which allows our employees to reduce their working hours by more than their pay during the care period and to work off the hours commensurate with the pay they received after their return. Caregiver leave and time off have been used by 100 employees in Germany since the LANXESS care model was introduced. In addition, the supplementary long-term care insurance “CareFlex” was launched in Germany. We thus offer our pay-scale employees additional protection against the risks and strains that arise for the dependents and their families when care is required but are not covered by statutory long-term care insurance. The costs are borne entirely by LANXESS. From 2022, CareFlex will also be available to our managerial employees.

Committed and motivated employees are the key to long-term corporate success. Accordingly, we pay special attention to encouraging the commitment of our employees. Good management helps here, as do personal development prospects and company values with which the employees can identify. All these factors shape the LANXESS corporate culture, which we actively strengthen and develop with regard to the constant new challenges in our markets.

Since 2021, internally trained culture coaches have made an important contribution here. They start and supervise cultural initiatives in their own area and can be involved in major change processes. Regular performance culture touchpoints serve communication on cultural issues. For example, the cross-location Performance Culture Network in Germany meets online once a month for a critical discussion of culture issues.

Regular and structured feedback is another important element of our corporate culture. To this end, we use different survey formats to allow feedback relating to the satisfaction and commitment of the various employee groups. Among other things, we regularly conduct Groupwide surveys – most recently in 2020. 

In 2022, we carried out surveys in several European countries as well as in Canada, India, China and Brazil. 

In addition, we see the turnover rate on the basis of resignations as an important indicator of our employees’ commitment. Our goal is to continuously keep this ratio below 3.5% until the end of 2023. In 2022, the global voluntary turnover rate was 4.4% (previous year: 3.4%), meaning that we reached our target for 2022. In Germany, the rate was 2.8% (previous year: 1.8%). The percentage of employees who left our company of their own accord within three years of being hired stood at an average of 1.7% worldwide in the reporting year (previous year: 1.3%).

We rate our performance in relevant rankings and competitions as a further sign of our employees’ satisfaction and the attraction of LANXESS as an employer. In 2021, for example, we took 53rd place out of 100,000 companies in Germany in the “Leading Employer” ranking by the Institute of Research & Data Aggregation, which puts us among the “top 1%” of German employers. In Brazil, LANXESS was recognized as the best employer in the chemical and petrochemical industry for the third time in a row, 

while our Indian subsidiary received the prestigious "Great Place to Work" certification and the Golden Peacock HR Excellence Award. In China, we received the Top Employer award for our human resources work. We also won the HR Excellence Award for our knowledge management concept in 2022.

Only by constantly investing in training our employees and imparting clear, globally binding values and standards can we as a company keep on using the opportunities of changing markets successfully. Wide-ranging leadership and HR development tools enable and motivate our employees to act on the basis of our values, rethink issues, implement them quickly and devise solutions in a team.

In 2021, our priorities in Learning & Development lay in the virtualization of our existing offerings and in the introduction of further digital learning opportunities in order to ensure our employees’ continued development even during the pandemic. 

In 2022, we carried out some training face-to face again, but also continued to develop virtual formats. The experience of the last few years has shown us that hybrid formats yield the best results. After its successful launch in 2021, our digital learning plat-form “LinkedIn Learning” was rolled out internationally in the reporting year. This means that our employees now benefit from more than 18,000 additional digital learning opportunities for their professional and interdisciplinary development and the strengthening of future skills.

Globally, more than 95% of our workforce received training, including both basic and safety training, as well as further education to further their careers and skills in 2022. On average, our employees received at least 15 hours of training (previous year: 15 hours).

We also virtualized our leadership training and were thus able to provide it unchanged at times when physical meetings in larger groups were practically impossible. The aim of the programs is to embed our leadership principles more deeply worldwide and to strengthen our leadership culture. Depending on the experience of the participants, basic leadership techniques are conveyed, refreshed and translated into individual measures. Since management practice differs depending on the country and cultural environment, our training programs also take cultural differences into account and include the requirements of digital management.

We also worked hard on the issue of knowledge sharing and transfer. For example, we initiated different formats around the world in which employees could share their knowledge with interested colleagues. In addition, we have successfully advanced a project for knowledge transfer in production. Globally, several pilots were completed with expert debriefings and learning tandems, on the basis of which we are now planning the worldwide rollout for 2022.

With our global, cross-divisional and cross-hierarchical “compass,” “eXplorer” and “navigator” talent programs, we support particularly high-performing employees, retain them within the company and identify suitable successors for key positions at an early stage.

“compass” for employees at the start of their career, offers guidance for their future career path. The format encourages practical development measures. The core element is a Development Center, which as of 2020 can be carried out entirely virtually. “eXplorer” is aimed at employees who have the potential to develop toward major leadership roles at LANXESS in the next few years. Key topics include dealing with complexity, new forms of collaboration and digital and agile leadership principles. Whereas there used to be three face-to-face modules, these have been replaced by more frequent, shorter virtual meetings, which are supplemented by individual preparation and follow-up as well as experience-based learning in experimental project groups. The “navigator” program is aimed at managers with the potential to lead a business unit or Group function.

In 2022, our activities focused on the professionalization of the training formats virtualized in the previous year. While the study goals, key topics and study periods are to remain as unchanged as possible on the basis of the positive feedback from previous years, we have continuously optimized the teaching in light of the current challenges in order to strengthen personal communication and genuine interaction in the virtual framework.

Our commitment to increasing diversity at LANXESS is reflected in a specific target for the composition of the three talent programs. Every year, the programs’ participants should be at least 30% female and 40% non-German. With a total of 134 participants in 2022, the proportions amounted to 28% female and 55% non-German participants. We have therefore exceeded our target regarding intercultural diversity, while missing the target for gender equality. Because the programs can last for up to 18 months, double counting cannot be ruled out. We are planning numerous measures to build on the good results of the previous year regarding gender equality in 2023. These include expanded offerings especially for women in the areas of training, coaching, mentoring and networking and various campaigns to raise awareness of gender equality. When it comes to nominating talent, we will also make sure to identify enough female candidates.

International deployments are another key component of our systematic HR development. At the end of 2022, 39 employees – i. e. around 1% of our specialist and managerial staff – were deployed outside their contractual country as expatriates.

It remains our aim to build up local management with specialist knowledge and expertise and assign challenging tasks to suitable employees at our international sites. At sites outside Germany, 88% of our leadership positions are currently held by local employees.

Our occupational health management (OHM) aims to create a safe and healthy working environment, raise all employees' awareness of their own health, and motivate them to take responsibility for their own health-related behavior in their professional and private lives.

To mark World Health and Safety Day in April 2022, we held a series of health activities around the world, including presentations on topics such as stress management, regeneration and sleep, a healthy eating cooking class and ergonomics training. In addition, global health principles were adopted by the health teams as an integral part of LANXESS's corporate culture. This was accompanied by the launch of internal communication campaigns, videos with case studies, and a dedicated intranet page with contacts and offers.

Another focus in 2022 was on the topic of mental health. To this end, a global mental health week was held at the beginning of October, during which employees were able to try out offers such as business yoga or breathing exercises.

In Germany, occupational health management (OHM) operates in three fields of action:

• company integration management (BEM) for employees on long-term sick leave
• Area-specific occupational health management with a structured management approach for the respective companies and departments
• workplace health promotion with offers for all employees.

All three areas of activity were systematically addressed in the reporting year and strengthened in line with the company's overriding health objectives. In the area of occupational integration management, cooperation was initiated with an external service provider for case management with the aim of establishing uniform quality standards at all LANXESS sites throughout Germany and providing the growing number of eligible employees with a professional counseling service and sustainable reintegration promptly after their recovery.

We also offer our workforce at our international sites a wide range of measures to promote health and well-being. In addition to physical aspects, the issue of mental health is becoming increasingly important. Findings from neuroscience show that mindfulness-based stress reduction can prevent the consequences of chronic stress and improve well-being and teamwork. Mindfulness is equally important for safety culture. That is why we have been offering our employees worldwide an online mindfulness program with the global "mindful@LXS program" since February 2021.

We address the issue of occupational safety with our global safety initiative Xact. Its goal is to gradually raise LANXESS's safety culture to a higher level. Starting with top management, all employees are to work together to improve safety in the Group. We act out of the firm conviction that every occupational accident is preventable. As a concrete goal in the area of occupational safety, we aim to reduce the million-working-hour quota (MAQ) by more than half by the end of 2025 compared with the reference year 2016 (MAQ 2.0).

The focus of the Xact team's work remains on stabilizing and further developing a positive safety culture and a stronger focus on behavior-based safety. To this end, we have developed a systematic process that was launched globally in 2019: the Safety Culture Development Process (SCD process).

At the heart of the six-step process is a full-day focus group workshop facilitated by the Xact team. In this workshop, representatives from all hierarchical levels discuss the safety culture in their own company in depth. In this way, we can identify the individual strengths and weaknesses of each company and initiate targeted improvements.

An interim assessment shows that our employees find it positive to be able to make a personal contribution, to receive direct feedback from colleagues and managers, and to actively help shape the safety culture in their own area of activity. The greatest potential for improvement lies in the cultural causes of unsafe behavior. The characteristics that shape our LANXESS safety culture play a fundamental role here. These are:

• Leadership and role modeling safety
• Attitude toward safety/Accepting responsibility
• Learning and sharing/mistake culture
• positive reinforcement of safe behavior
• Communication/feedback culture

These cornerstones have been summarized by the Xact initiative in a guide entitled "How to make safety culture observable."

In general, we place great emphasis on active, continuous communication when it comes to safety-related topics. One important tool in this regard is the Xact Pulse Check survey, which we again conducted among all LANXESS employees in 2022. It offers them the opportunity to comment on how they personally experience important aspects of safety at LANXESS. Among other things, the anonymous survey is intended to determine whether all employees are receiving positive feedback on safe working practices - as is our goal - and whether supervisors are setting an example of the LANXESS safety culture.

According to the safety guidelines at LANXESS, each organizational unit, e.g. a plant, is required to conduct regular risk assessments and define suitable measures to protect against potential hazards. Employees receive appropriate training, and the training and measures are regularly monitored. In this way, we comply with legal requirements and protect employees, contractors and visitors to the site in equal measure.

We also want to achieve an improved common understanding of occupational safety with service providers who provide technical services for us, among other things, and therefore include them in our safety culture. For example, our partners must prove that they have their own safety management system and that all employees working for us have undergone specific safety training. Irrespective of this, we generally conduct personal safety briefings for employees of our partner companies.

Indicators for assessing occupational safety at LANXESS are the Recordable Incident Rate (RIR: number of reportable occupational accidents per 200,000 hours worked according to Occupational Safety and Health Administration [OSHA] rules) and the million-working-hour rate (MAQ) of lost-time accidents.

In 2022, the MAQ was 0.5 (as of January 26, 2023), below the already low level of the previous year and again within the range of our medium-term target of < 1.0.

In 2022, the MAQ was 0.5 (as of January 26, 2023), below the already low level of the previous year and again within the range of our medium-term target of < 1.0.

As in previous years, no fatal occupational accidents occurred in 2022. The RIR, which also includes accidents without lost days under OSHA rules, was 0.5 in 2022 (as of January 26, 2023), below the prior-year level of 0.7. The importance of occupational safety in the company has become increasingly entrenched in recent years, with correspondingly fewer serious accidents being reported on an ongoing basis.

We see the significant decline in the MAQ in recent years as evidence that the structured transfer of knowledge and the many measures relating to occupational safety at LANXESS are having a positive impact.

Dialog with chemicals social partners – works councils, trade unions and employer associations alike – as a principle of consultation in action is the global practice at LANXESS. As part of this, we also respect the freedom of association of our employees in accordance with the International Labour Organization (ILO) and the Global Compact and comply with collective bargaining agreements. We regularly seek dialog with employee representative committees in Germany, Europe and worldwide, provide information on our corporate objectives and involve employee representatives in organizational changes at an early stage.

In 2020, we came to an agreement with the Central Works Council and the German Mining, Chemical and Energy Industrial Union (IGBCE) on jointly designing the work of the future. A key element of the agreement is the regular communication between the parties on the design of the digitalization process at LANXESS.This dialog was continued in 2022, with regard to both the challenging economic situation and the further digitalization and introduction of new IT systems.

Fair dealings with employee representatives and trade unions are also a top priority for us outside Europe. At all our sites, we comply with International Labour Organization (ILO) standards with respect to our employees’ freedom of association. Where possible and in compliance with local laws and regulations, this includes regular exchange between local management and tradeunion representatives as well as binding, collectively agreed-upon regulations on remuneration and working conditions.