Reviewing our anti-corruption programme

Ethics and anti-corruption
Our success depends on us being trusted by all our stakeholders to uphold high standards of governance and business conduct.
Robust governance remains at the core of our business and underpins the sustainability of the business. This is enhanced by an unwavering commitment to ethical and responsible behaviour, in all aspects of what we do. Our industry is amongst the most highly regulated of any sector, and we always strive to comply with – and often exceed – applicable laws and regulations.
 
The effective governance of our business is fundamental to us. Our Operational Framework sets out our approach and the policies, processes and standards to which we adhere and apply everywhere we operate. Together with our Code of Conduct and Supplier Principles – Guidance for Responsible Business, these outline expectations for all our employees and business partners in support of our business, including our sustainability agenda.
 

Anti-corruption programme

To maintain the high standards of ethical conduct that our stakeholders expect, every employee must understand the vital role they have to play and conduct business in an ethical and responsible way. We have a zero tolerance policy regarding corruption in all its forms.
 
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 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 from 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. During 2021, we revised our online Gifts and Hospitality Register and refreshed job-specific anti-corruption training. Our anti-corruption programme also includes our Code of Conduct and ethics training.
 

Woolf Committee 

The Woolf Committee was convened in 2007 by Lord Chief Justice Woolf, to enhance the ethical practices at BAE Systems. Lord Woolf was asked, along with Philippa Foster Back, Director of The Institute of Business Ethics, Douglas Daft AC, ex Chair of Coca Cola, and Sir David Walker, former Chairman of Morgan Stanley International, to evaluate our ethical policies and processes and to make recommendations to become a world leading ethical business. BAE Systems undertook to implement all of the recommendations in advance of the completion of the review.
 
There were 23 recommendations in total, all of which were implemented within three years, and the practices introduced remain to this day but continue to be updated and reviewed as part of our ethics programme. They included our appointment of Advisers, the introduction of a global Code of Conduct, how we deal with facilitation payments, and the senior executive’s role in supporting ethical conduct, among many others. 
 
The Woolf Committee report and our responses to it over a three-year period are available on the right.


 
Improving industry standards

We play our part in supporting others too. We set an example for business partners and seek to help improve standards across our industry. The Company takes a proactive leadership role in its engagement with the defence industry, governments, NGOs and other interested parties to develop initiatives that will address the key ethical issues affecting the defence industry.
 
Examples of this include taking leadership positions on our industry body for ethics, the International Forum on Business Ethical Conduct (IFBEC) and in the US the Defense Industry Initiative (DII). We also regularly interact and support the Institute of Business Ethics (IBE) and Ethics & Compliance Institute (ECI), and are proactive members of both the Aerospace and Defence Industries Association of Europe and the Aerospace, Defence, Security and Space trade associations. Recent projects that we have collaborated on are the development of the IFBEC Model Supplier Code, supporting the IBE in its upcoming Training Good Practice Guide and developing the DII small business tool kit and supplier code of conduct.


 
External Indices – Transparency International

To be open and transparent about our responsible business practices, we report to a number of external organisations on environmental, social and governance issues. These range from investor related agencies, such as Bloomberg, MSCI and others, such as Transparency International (TI).  As well as assessing company practices, TI is involved in seeking to improve anti-bribery and corruption practice across the defence and security sector. They are, therefore, an important stakeholder for us to interact with and report to.  
 
In response to the questions we receive from stakeholders and to be as transparent as possible on this subject, we have produced a brochure explaining our approach to ethics and anti-corruption and this is available on the right.