Short description

Bosch is one of the world's largest technology and engineering companies. Founded in Germany in 1886, it employs around 400,000 people and operates in more than 60 countries, producing everything from car components and industrial machinery to household appliances, power tools and heating systems. To do this, Bosch works with a very large number of suppliers, customers, distributors and other business partners all over the world. Through its Code of Conduct for Business Partners, Bosch expects all of them to act lawfully and ethically, for example by not paying bribes, not violating international sanctions and respecting human rights and the environment.

To make sure these expectations are met, Bosch continuously monitors its business partners. Specialised services scan news and other public sources and generate an "alert" whenever something might point to a problem, such as a partner being linked to a corruption investigation. Today, every alert is read and assessed by a compliance officer, a professional responsible for making sure that the company follows laws and ethical rules. Because the number of alerts is very large, Bosch is exploring an AI assistant that learns from thousands of past decisions made by these officers and suggests which new alerts deserve closer attention. The assistant is designed to err on the side of caution, to explain its suggestions and to leave the final decision to a person, in line with the Bosch code of ethics for AI.

Using AI in this way raises important questions. Could it treat some companies or countries unfairly? What happens if it relies on false information? Who is responsible if it misses a serious case, and what rights should the companies being checked have?

Full description

The Bosch Group is a global supplier of technology and services with its headquarters in Germany. It was founded in 1886 by Robert Bosch and today has around 400,000 employees working in more than 60 countries. Its activities are organised into four main areas: mobility (for example, parts for cars and other vehicles), industrial technology (such as factory automation), consumer goods (such as household appliances and power tools) and energy and building technology (such as heating and security systems). In Spain, the company operates through Robert Bosch España.

A company of this size depends on a vast network of business partners: suppliers of raw materials and components, distributors, service providers, customers and many others. The behaviour of these partners can directly affect the company's reputation and legal position, and, more importantly, the people and communities they interact with.

What is compliance, and why check business partners?

"Compliance" means following the law and the company's own ethical rules. Bosch sets out these rules in its Code of Conduct, which applies to all its employees and covers topics such as fair competition, the prohibition of corruption, data protection, respect for human rights, workplace safety and environmental protection. Bosch also has a separate Code of Conduct for Business Partners, which describes what it expects from the companies it works with. Among other things, partners are expected not to engage in bribery or money laundering, to respect export controls and international sanctions, to reject child and forced labour, to provide fair working conditions and to protect the environment.

How business partner screening works today

Bosch uses a process known as business partner screening. External screening services continuously monitor news articles, public registers, sanctions lists and other public sources. Whenever they find information that might be relevant to one of Bosch's partners, they generate an alert. An alert might report, for example, that a supplier's director is under investigation for fraud, that a distributor has been added to a sanctions list, or that a factory has been accused of mistreating workers.

Each alert is then reviewed by a compliance officer, who decides whether it is really relevant. There are several compliance officers for each geographical area. Many alerts turn out to be harmless: the news may refer to a different company with a similar name, or the issue may be minor or already resolved. When an alert is relevant, the officer may ask the partner for clarification, start a deeper investigation or, in serious cases, recommend ending the business relationship.

The problem

The number of alerts is very large and new ones arrive every day. Reading and assessing each one takes time, and much of that time is spent on alerts that turn out not to matter. This creates backlogs and means that a genuinely serious case may not be spotted as quickly as it should be. In addition, different officers may judge similar alerts in different ways, or the same officer may judge them differently on different days, which can lead to inconsistent treatment of partners.

The proposed AI assistant

Over the years, Bosch's compliance officers have reviewed a large number of alerts and recorded their decisions. This history can be used to train an AI system: by looking at many past examples, the system learns to recognise the patterns that distinguish relevant alerts from irrelevant ones. When a new alert arrives, the system estimates how likely it is to be relevant and helps officers decide which alerts to look at first. The assistant is designed according to four principles:

1. Caution first. Any such system will make mistakes. It can raise a "false alarm" by flagging an alert that is not actually important, or it can "miss" an alert that is important. Missing a serious case is considered far worse, so the system is designed to flag an alert whenever in doubt, even if this means more false alarms.

2. Explanations. The system should be able to explain, in understandable terms, why it considers an alert relevant or not, so that officers can check its reasoning.

3. Fairness checks. The system should be tested to make sure that it does not treat partners unfairly, for example by flagging companies from certain countries or regions more often without a good reason.

4. People stay in charge. The AI makes suggestions, but a compliance officer takes the final decision. This reflects Bosch's own code of ethics for artificial intelligence, which states that AI should be a tool that serves people and that decisions affecting people should not be taken by AI without human oversight.