The governance of our business is fundamental to BAE Systems. Our Operational Framework sets out our approach and the Policies and Processes to which we adhere.
Corporate Responsibility Committee
Our Board Corporate Responsibility (CR) Committee is dedicated to the oversight of many aspects of the Company’s performance in sustainability and takes a longer-term view in reviewing challenges and opportunities in this area.
The CR Committee meets quarterly and comprises independent non-executive directors. Its meetings are usually also attended by the Chairman, Chief Executive, Group General Counsel, Group Audit Director and Group Director Governance, Conduct & Sustainability.
The Committee has oversight of all corporate responsibility matters, including: health and safety, ethics and responsible business conduct, diversity and inclusion, stakeholder and employee engagement (including the requirement of the UK Corporate Governance Code to understand the views of employees), supplier conduct and the environment. As well as receiving regular updates on these areas, they undertake deep dive activities into areas of concern – such as when there has been a specific health and safety incident, or to further understand the specific challenges, and successes, of developing a diverse and inclusive workforce.
One area of particular focus for the Committee is the adherence to responsible business policies around the Group. Due to differences in regulatory regimes and different commercial arrangements, implementation of these policies in some markets can be more challenging than in others. The Committee is therefore interested in understanding how BAE Systems applies its responsible business policies when doing business in different markets, how responsible trading risks are managed and the decision-making process behind our presence in certain markets. The Committee looks for robust adherence to the policies and also how controls and compliance measures have been used to mitigate both operational and reputational risk.
At Board level, the CR Committee, along with the Audit Committee, reviews the Operational Assurance Statement completed by the businesses biannually. This provides a report on key financial and non-financial risks, including sustainability. In addition, they review the effectiveness of the Group’s risk management processes associated with the non-financial risk register.