Deutsche Bank

Non-Financial Report 2017

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Active & Visible Leadership

Embedding our cultural values requires senior leaders to serve as role models and advocate the importance of culture and conduct.

Tone from the Top

Management Board members and their direct reports have featured in a series of videos, aligned to their focus areas, which have been shared internally to all staff via the intranet. These videos, coupled with e-mail communications to employees, reinforce key aspects of the bank’s cultural outcomes and set the example of open and honest communication for the organization to follow. Examples of video series include:

  • “Tower talks” with the CEO, Chief Administration Officer (CAO), and Chief Financial Officer (CFO)
  • Interviews of the Chief Regulatory Officer and the Global Head of AFC underscore the importance of employees to be the “greatest advocates to combat financial crime”.

Senior Ownership of Culture Topics

To sustain the tone from the top and complement it with leadership action, accountability for driving culture efforts in each division and infrastructure function is with the respective ExCos. This ensures that actions undertaken in each area are aligned with the business goals of the underlying division or function and address the prevailing cultural issues.

Empowering & Effective Managers

Increasing manager accountability and building trust between managers and their teams helps to build a more engaged and better performing organization, and promotes a working environment where open and honest communication is encouraged.

Leadership and Management Programs

We continue to invest in a broad suite of leadership development programs, targeting different levels of role responsibility. The programs focus on sharing our expectations of leaders and developing their skills to engage and motivate our people. Programs offered in 2017 included:

  • “Leadership fundamentals” for managers who are leading diverse teams and have a significant role to play in implementing the bank’s strategy
  • “Management fundamentals” and “Experienced manager essentials” for new managers and existing managers respectively, which lay out the bank’s expectations of managers and help them to develop skills to engage with teams, such as providing regular feedback, conducting development conversations, and learning how to lead teams
  • “Acceleration programs” for high-performing Vice Presidents and Directors, which provide training, coaching, and cross-divisional exposure to strengthen management and leadership capability and create a pool of future franchise leaders
  • “Change management training” to enhance change management capabilities for different levels of seniority, with areas of focus including understanding change, becoming change agile, and helping others

Total Performance

We have launched Total Performance (TP) to manage performance and career development at the bank. TP is an integrated approach, based on regular, meaningful two-way dialogue. In contrast to a single rating, TP indicators reflect employee experience, their contribution to business delivery and behavior (what and how), capabilities, and career and personal development. Regular meaningful conversations prompt discussions around poor performance (incl. misconduct) and ensure that action plans to address the issues are not neglected but implemented and reviewed regularly and development is supported and monitored.

Last year’s People Survey results reveal the impact of these efforts, with 68% of employees indicating that managers provide clear and regular feedback on strengths and areas for development (2016: +6%-points). Employees also believe that they have a better understanding of how they contribute to implementing our strategy (2016: +16% to 77%).

Inspired & Productive People

Encouraging positive conduct, sharing successes, and developing bank-wide processes to enable employees to perform better are key facilitators of the culture that we aspire to.

Consequence Management

The bank maintains a strong link between the expected behavior of its employees and the consequences of not meeting expectations. Consequences can include disciplinary sanctions for issues that arise from policy breaches or behavior below expected standards. There are guidelines how disciplinary sanctions should impact other HR-related processes such as compensation awards, promotions, performance management and key function holder appointments. Another example of potential consequences is a Red Flag. The Red Flags process monitors employee’s adherence to certain risk-related policies and processes. A breach leads to an appropriately risk-weighted Red Flag, which is considered in compensation, promotion, and performance management decisions.

Increasing Employee Engagement

Our #PositiveImpact campaign aims to create staff momentum around a common purpose and rebuild credibility and trust. This starts with creating a new dialog with stakeholders and repositioning our brand “to enable economic growth and societal progress,” and “to be a bank that creates a positive impact for clients, employees, investors, and society.”

Our employee barometer survey, a global survey on internal communications and the Deutsche Bank brand, showed that approximately three out of four agreed with the new purpose and almost 74,000 employees had engaged with the #PositiveImpact intranet hub six months after the campaign launched. Based on the db-employee barometer survey, positive employee perception of the bank’s brand increased to 47% in Q4 2017, compared to 37% in Q1 2017.

Responsible & Sustainable Business Practices

Developing a “controls mindset” and managing risk proactively as we grow our business, is critical to achieving our strategic objectives, particularly of becoming less risky.

Conduct Risk Framework

We manage and mitigate our conduct risk as part of our enterprise-wide risk management framework that is designed to deliver appropriate outcomes for our stakeholders. It is about treating customers fairly and acting with integrity in the financial markets where we operate. Our Group-wide Conduct Risk Management Framework has been designed to provide the bank’s senior management with a holistic view of conduct risk. Conduct risk is defined as “the risk that the firm’s employees or representatives or the firm’s business practices could inappropriately and adversely affect the bank’s clients, the bank, or the integrity of financial markets.” Our Code of Business Conduct and Ethics, together with other policies and procedures, set out the required standards of professional conduct expected from all employees. We will not tolerate misconduct or inappropriate or unethical conduct but, given the nature of our business and the markets in which we operate, we recognize that conduct risk will always exist. Businesses must have adequate and effective controls in place and mitigants to conduct activities in line with conduct risk appetite.

Risk Awareness and Ownership

Our desired culture includes fostering an environment where all employees are empowered and encouraged to act as risk managers. This expectation continues to be reinforced through communications campaigns and mandatory training for all employees. Our Risk Management Principles policy provides employees with an overview of our approach to risk management, and, in 2017, we also created a number of ‘I’m a risk manager’ videos, providing tangible examples of how employees in different roles across the bank contribute to effective risk management.

In 2017, we also introduced a principles-based assessment of risk culture, in particular focusing on risk awareness, risk ownership, and the management of risk within risk appetite. Assessment results are incorporated into existing risk reporting, reinforcing the message that risk culture is an integral part of effective day-to-day risk management.

Tackling Financial Crime

We are committed to supporting the development of effective regulations and procedures, as well as internal standards, to combat financial crime. This is further described in the chapter “Anti-Financial Crime.

Our employee survey indicated that 83% (an increase of 17% compared to 2016) of employees felt that they are able to manage risks effectively without compromising the bank’s principles, policies and procedures.