Our anti-corruption programme is designed to ensure adherence to legal and regulatory requirements recognising the bribery and corruption risks that are faced by the Company.
The programme also provides our employees with practical guidance, helps them to understand what is expected of them and creates an environment in which they feel they can confidently, and confidentially if needed, ask questions and raise issues and concerns.
We continually check and test the effectiveness of our programme receiving both internal and external oversight and assurance, including encouraging feedback internally from our employees and externally rom independent third parties. Risk-based due diligence procedures have been implemented to address bribery, corruption and other financial and non-financial risk, and our policies include processes for risk-based internal and external approvals, ongoing monitoring and repeat due diligence.
We drive improvements in the programme annually to ensure it continues to meet best practice. Our anti-corruption programme also includes our Code of Conduct and ethics training.
Our anti-corruption programme is embedded in our Operational Framework, through the key policies and processes below:
Code of Conduct – which explicitly prohibits the giving or receiving of bribes by BAE Systems employees;
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 relevant policies include: Community Investment Policy; Finance Policy; Fraud Prevention Policy; Export Control Policy; Pursuit of Export Opportunities 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.
We collect data on ethics enquiries and dismissals for reasons relating to unethical behaviours.
During 2022, we received 1,196 enquiries, an increase of 0.6% compared to 2021.
Of the 1,196 enquiries received, 603 (51%) required investigation, 42% of which were substantiated. The top fine categories for investigation were: employee conduct, accounting charge practices, employee relations, management practices and safety, health and environment. Of the 613 investigations for 2022, 522 were closed and 91 remain open. These will be closed out during 2023.
14 ethics enquiries were received about our suppliers. Seven enquiries required investigation, six were substantiated.
60% 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.
We value openness, and strive to create a culture where people feel they can speak up freely. Our main metric is the number of enquiries made, and more specifically the number of enquiries per 1,000 employees. We also measure the proportion of requests for guidance compared to reports requiring investigation, anonymity rate and contacts made directly to one of our 311 Ethics Offices (one for every 349 employees) across our business. In 2022 out anonymity rate was 26% compared to 35% from 2021, well below the benchmark rate of 50%1.
In 2022, 243 employees were dismissed due to misconduct, which may include breaches of the Code. The majority of the 14% decrease from 2021 occurred in our US business, and whilst there is no specific event or circumstances which primarily contributed to this decrease, it shows that employees are complying with the Code and related policies on proper workplace conduct.
Footnotes:
Navex 2022 anonymity benchmark.
BAE Systems Internal Audit has reviewed and confirmed effective systems, processes, and controls are in place to collate, validate and report this data. Based on the procedures and the evidence obtained, nothing has come to its attention that indicates the disclosures have not been properly prepared in accordance with such systems, processes, and controls.
Our US business uses the Helpline as a mechanism for people to declare a conflict of interest (e.g. a family member also working at BAE Systems, or a second job) – these are not reports of inappropriate behaviour or requests for guidance, but a simple logging process. 2021 reports data has been restated to reflect the removal of those cases in our US businesses which were the formal declarations of conflicts of interest, bringing our US business in line with the Group.
