Global standards

Ethics and anti-corruption
Our anti-corruption programme is embedded in the Company’s governance framework which outlines a set of operational standards that apply everywhere we operate.
Our programme is embedded in our Operational Framework, through key policies and processes below, including due diligence:
 
  • Advisers Policy – which governs the appointment, management and payment of third parties who are engaged to assist with our sales and marketing activities or the strategic development of the Group;
  • Gifts and Hospitality Policy – which governs the offering, giving or receiving of gifts or hospitality;
  • Conflict of Interest Policy – designed to ensure that personal conflicts of interest do not impair employees’ judgement and damage the Group’s integrity and interests; and
  • Facilitation Payments Policy – designed to ensure that facilitation payments are not paid and that the Group and its employees seek to eliminate the practice of facilitation payments.
 
Other policies include: Community Investment Policy; Finance Policy; Fraud Prevention Policy; Export Control Policy; Lobbying, Political Donations and Other Political Activity Policy; Offset Policy; and Procurement Policy, which include measures to address bribery and corruption risks.
The anti-corruption programme guides and supports our employees in making responsible decisions.
 
2020 total ethics enquiries
We collect data on ethics enquiries and dismissals for reasons relating to unethical behaviour.
 
During 2020, we received 1,119 enquiries, a decrease of 21.8% compared to 2019. This downward trend is attributed to the change in working patterns as a result of COVID-19. For example, working from home means people are less likely to observe poor behaviour in co-workers.
 
2020 ethics enquiries by type
Of the 1,119 enquiries received, 631 (56%) required investigation, 34% of which were substantiated. The top five categories for investigation were: employee conduct; accounting practices; management practices; Safety, Health and Environment; and anti-corruption. Of the 631 investigations for 2020, 537 were closed and 94 remain open. These will be closed out during 2021.
 
Six ethics enquiries were received about our suppliers. Four required investigation, of which one was substantiated and three are ongoing investigations.
 
2020 ethics enquiries by region
 
68.2% of ethics enquiries came from the US. The number of ethics reports varies by region. Factors influencing this include the number of individuals working in that region and the cultural propensity of individuals from that region to utilise Speak Up mechanisms.
 
2020 anonymity rate
We value openness, and strive to create a culture where people feel they can speak up freely. We measure this with two main metrics – anonymity rate and contacts made directly to one of our 207 Ethics Officers (one for every 386 employees) across our business. When someone decides to remain anonymous, it tells us that there may be a fear of retaliation. In 2020 our anonymity rate was 32% – down 3% from 2019, and well below the benchmark rate of 59%3.
 
45% of reports were made directly to Ethics Officers in 2020 – we particularly encourage this route for making reports, as it allows for an immediate response by someone familiar with the local situation.
 
2020 dismissals for reasons relating to unethical behaviour
 
In 2020, 236 employees were dismissed for breaches of the Code, an 8% decrease from 2019.
 
Our Code of Conduct training actively encourages all employees to speak up if they have a concern or talk to someone if they need guidance. We recommend employees talk to a colleague, their manager, HR or a Legal contact. We also actively promote our Ethics Officers and Ethics Helpline across our businesses, which means employees can raise issues or seek guidance in person and in confidence.
 
Footnotes:
1. BAE Systems Internal Audit has reviewed and confirmed effective systems, processes and controls are in place to collate and validate this data.
2. We have updated our ethics enquiry reporting categories internally to reflect trends in reporting and to achieve greater commonality in reporting categories across the business.
3. Navex 2020 anonymity benchmark.