By public info, this company is placed in Band B

Ownership

PUBLIC

Defence revenue, USD

19500m (2013)

Defence revenue, %

79% (2013)

Country

USA

Internal information

NO

Leadership 75%
1.
score
2

Does the company publish a statement from the Chief Executive Officer or the Chair of the Board supporting the ethics and anti-corruption agenda of the company?

Based on public information, there is evidence that the Chairman, CEO and President supports the ethics and integrity agenda of the company. Statements from the Chairman, CEO and President, which emphasise ethical standards and integrity, appear in the Corporate Responsibility Report, Standards of Business Conduct, Annual report, company website, and in guidance documents for business associates.

COMMENTS -+
2.
score
2

Does the company’s Chief Executive Officer or the Chair of the Board demonstrate a strong personal, external facing commitment to the ethics and anti-corruption agenda of the company?

Based on public information, the Chairman, CEO and President is a member of the Defense Industry Initiative (on Business Ethics and Conduct) Steering Committee. Furthermore, the Chairman, CEO and President has demonstrated active external engagement in anti-corruption matters on more than one occasion over the last two years in public speeches.

COMMENTS -+
3.
score
1

Does the company’s Chief Executive Officer demonstrate a strong personal, internal-facing commitment to the ethics and anti-corruption agenda of the company, actively promoting the ethics and anti-corruption agenda at all levels of the company structure?

Based on public information, there is some evidence that the Chairman, CEO and President has demonstrated an internal-facing commitment to the ethics and integrity agenda of the company over the last two years. TI notes that in 2013 the Chairman, CEO and President sent out messages to employees highlighting the company’s 2013 theme, “Ethics: The Foundation of Performance.” The company therefore scores 1.

COMMENTS -+
4.
score
2

Does the company publish a statement of values or principles representing high standards of business conduct, including honesty, trust, transparency, openness, integrity and accountability?

Based on public information, there is evidence that the company demonstrates its commitment to high standards of business conduct through the publication of ‘Our Vision, Values and Behaviors’. This document emphasises the importance of trust (Vision), honesty, accountability, openness, and equitability (Values), and transparency, integrity and openness (Behaviours). The company’s values are well publicised and explained, and have been translated into policies and codes.

COMMENTS -+
5.
score
2

Does the company belong to one or more national or international initiatives that promote anti-corruption or business ethics with a significant focus on anti-corruption?

Based on public information, the company is a member of the Defense Industry Initiative (DII) and International Forum on Business Ethical Conduct (IFBEC). The company also subscribes to the IFBEC Global Principles of Business ethics for the Aerospace and Defense Industry, which are based on the Common Industry Standards for European Aerospace and Defence.

COMMENTS -+
6.
score
2

Has the company appointed a Board committee or individual Board member with overall corporate responsibility for its ethics and anti-corruption agenda?

Based on public information, there is evidence that the company’s Policy Committee has overall corporate responsibility for its ethics and anti-corruption agenda.

COMMENTS -+
7.
score
2

Has the company appointed a person at a senior level within the company to have responsibility for implementing the company’s ethics and anti-corruption agenda, and who has a direct reporting line to the Board?

Based on public information, there is evidence that the Vice President of Global Corporate Responsibility is responsible for implementing the company’s ethics and anti-corruption agenda. This individual is identifiable by name: Sandra Evers-Manly.

COMMENTS -+
8.
score
2

Is there regular Board level monitoring and review of the performance of the company’s ethics and anti-corruption agenda?

Based on public information, there is evidence that the wider ethics agenda is reviewed on a regular basis. The ethics office reports quarterly to the Audit Committee of the Board and annually to the Policy Committee of the Board. The Board reviews the Principles of Corporate Governance at least annually to determine whether they should be modified in response to changed circumstances or legal or other requirements, or otherwise to be made more effective.

COMMENTS -+
8a.
score
0

Is there a formal, clear, written plan in place on which the review of the ethics and anti-corruption agenda by the Board or senior management is based, and evidence of improvement plans being implemented when issues are identified?

Based on public information, there is no readily available evidence of a formal, written plan on which the review of the ethics and anti-corruption agenda is based or examples of improvement plans that have been implemented when issues have been identified. TI does note that the Board reviews the ‘Principles of Corporate Governance’, which guides the company’s values and commitment to ethics and integrity, at least annually to determine whether changes should be made.

COMMENTS -+
9.
score
0

Does the company have a formal process for review and where appropriate update its policies and practices in response to actual or alleged instances of corruption?

Based on public information, there is no readily available evidence that the company has a formal process for review and where appropriate updates its policies and practices in response to actual or alleged instances of corruption.

COMMENTS -+
Risk management 43%
9a.
score
1

Does the company have a formal anti-corruption risk assessment procedure implemented enterprise-wide?

Based on public information, there is some evidence of a company risk analysis process, as identified in the 2013 Corporate Responsibility Report. However, there is limited detail provided about this process and no mention of mitigation planning related to the anti-corruption risk assessment. The company therefore scores 1.

COMMENTS -+
10.
score
1

Does the company have a formal anti-corruption risk assessment procedure for assessing proposed business decisions, with clear requirements on the circumstances under which such a procedure should be applied?

Based on public information, there is some evidence of a formal anti-corruption risk assessment procedure for assessing proposed business decisions. However, it is unclear how the procedure should be applied or to precisely which business decisions it applies. The company therefore scores 1.

COMMENTS -+
11.
score
1

Does the company conduct due diligence that minimises corruption risk when selecting or reappointing its agents?

Based on public information, there is evidence that the company conducts due diligence that minimises corruption risk when selecting agents. However, TI found no readily available evidence that this is refreshed at least every 3 years or when there is a significant change in the business relationship. The company therefore scores 1.

COMMENTS -+
12.
score
1

Does the company have contractual rights and processes for the behaviour, monitoring, control, and audit of agents with respect to countering corruption?

Based on public information, there is evidence that all employees, consultants, agents, contract labour, employees of limited liability companies, joint ventures, and anyone who represents the company in any capacity are required to adhere to the Values and Standards of Business Conduct, as well as U.S. and foreign laws and regulations. The wording of these policies is strict but TI has found no readily available evidence relating to contractual rights and formal processes to prevent or deal with violations. The company therefore scores 1.

COMMENTS -+
13.
score
2

Does the company make clear to contractors, sub-contractors, and suppliers, through policy and contractual terms, its stance on bribery and corruption and the consequences of breaches to this stance?

Based on public information, there is evidence that the company communicates its ethics and anti-corruption agenda down the supply chain. Anyone who represents the company in any capacity must adhere to the company’s Values and Standards of Business Conduct, as well as all U.S. and foreign laws and regulations. This document also makes clear the consequences of a contractor, sub-contractor or supplier breaching the company’s ethics standards.

COMMENTS -+
13a.
score
0

Does the company explicitly address the corruption risks associated with offset contracting?

Based on public information, there is no readily available evidence that the company explicitly addresses the corruption risks associated with offset contracting.

COMMENTS -+
13b.
score
0

Does the company conduct due diligence that minimises corruption risk when selecting its offset partners and offset brokers?

Based on public information, there is no readily available evidence that the company conducts due diligence that minimises corruption risk when selecting its offset partners and offset brokers.

COMMENTS -+
Policies & codes 92%
15.
score
2

Does the company have an anti-corruption policy that prohibits corruption in its various forms?

Based on public information, there is evidence that the company has an anti-corruption policy that prohibits corruption in its various forms. TI notes that the company prohibits the “offering or making of any improper payments of money or anything of value to any of our business associates” for anyone conducting business on behalf of the company. Facilitation payments are prohibited and it is a requirement that all employees complete an annual conflict of interest disclosure form. The company website states a commitment to “comply with anti-corruption laws in every country in which we operate” as well as a “zero tolerance for corruption”. Guidance on the Foreign Corrupt Practices Act provides a number of examples to help individuals to identify corrupt behaviour.

COMMENTS -+
16.
score
2

Is the anti-corruption policy explicitly one of zero tolerance?

Based on public information, there is evidence that the company has a zero tolerance policy towards corruption. The company also subscribes to the Global Principles of Business Ethics for the Aerospace and Defense Industry, which includes zero tolerance to corruption amongst its principles.

COMMENTS -+
17.
score
2

Is the company's anti-corruption policy easily accessible to Board members, employees, contracted staff and any other organisations acting with or on behalf of the company?

Based on public information, there is evidence that the company’s ethics and anti-corruption policies are easily accessible. The materials are publicly available in a variety of foreign languages on the company website. Employees also receive regular ethics communications and suppliers receive resources, including the ‘One Northrop Grumman Charter’ and an annual letter outlining the company’s ethics policies and code of conduct.

COMMENTS -+
17a.
score
2

Is the company’s anti-corruption policy easily understandable and clear to Board members, employees and third parties?

Based on public information, there is evidence that the company’s ethics and anti-corruption policies are written in accessible and comprehensible language.

COMMENTS -+
18.
score
2

Does the anti-corruption policy explicitly apply to all employees and members of the Board?

Based on public information, there is evidence that the company’s ethics policies, which include policies on corruption and bribery, vision, values, and behaviour, explicitly apply to all employees and members of the Board.

COMMENTS -+
20.
score
2

Does the company have a policy on potential conflicts of interest, and does it apply to both employees and board members?

Based on public information, there is evidence that all employees are required to disclose potential conflicts of interests on an annual basis. The designated disclosure form and associated conflict of interest notice provide clarification on potential conflicts of interest and confirm that these policies apply to board members as well as employees. Guidance for business associates indicates that any individual associated with the company is required to disclose potential conflicts of interest and obtain management approval.

COMMENTS -+
21.
score
1

Does the company have a policy for the giving and receipt of gifts to ensure that such transactions are bona fide and not a subterfuge for bribery?

Based on public information, there is evidence that the company has a policy for the giving and receipt of gifts. TI notes that the giving or receipt of gifts, entertainment, services or favours to actual or potential government representatives is prohibited. Anyone conducting business on behalf of the company is prohibited from offering or making improper payments of “anything of value” to business associates. All individuals associated with the company are prohibited from soliciting or accepting gifts, payments or gratuities from suppliers. Exceptions must be approved in writing by a “company officer”. Further, the Standards of Business Conduct indicates that business courtesies offered to commercial customers must “demonstrate good business judgement and be reasonable (for example not frequent or lavish)”. However, TI has found no readily available evidence of clear upper limits for gift exchange, audit procedures or authorisation processes. The company therefore scores 1.

COMMENTS -+
22.
score
1

Does the company’s anti-corruption policy include a statement on the giving and receipt of hospitality that ensures that such transactions are bona fide and not a subterfuge for bribery?

Based on public information, there is evidence that the company has a policy for the giving and receipt of hospitality. TI notes that the company prohibits the giving or receiving of services or favours to actual or potential government representatives. Anyone conducting business on behalf of the company is prohibited from offering or making improper payments of “anything of value” to business associates. All individuals associated with the company are prohibited from soliciting or accepting gifts or gratuities from suppliers. Exceptions must be approved in writing by a “company officer”. Further, the Standards of Business Conduct indicates that business courtesies offered to commercial customers must “demonstrate good business judgement and be reasonable (for example not frequent or lavish)”. However, TI has found no readily available evidence of clear upper limits for gift exchange, audit procedures or authorisation processes. The company therefore scores 1.

COMMENTS -+
23.
score
2

Does the company have a policy that explicitly prohibits facilitation payments?

Based on public information, there is a clear policy that explicitly prohibits facilitation payments except in cases where there is an imminent threat to an individual’s life, health or safety. Supplementary information is provided in ‘Foreign Practices Act, Test yourself’.

COMMENTS -+
24.
score
2

Does the company prohibit political contributions, or regulate such contributions in order to prevent undue influence or other corrupt intent? Does the company record and publicly disclose all political contributions?

Based on public information, there is evidence that the company regulates political contributions. The company engages in a number of political processes, including providing corporate political contributions to two national gubernatorial associations, and supporting public policy issues in-line with the company's objectives. These processes are transparent and accountable. The Policy Committee of the Board provides oversight of government relations strategy and activities. Management of participation in the political process is the responsibility of the Corporate Vice President of Government Relations who reports directly to the CEO. The company publishes annual spending reports for its political action committee, corporate contributions and trade association memberships on its website. Direct political contributions to candidates or their political action committees are prohibited.

COMMENTS -+
25.
score
2

Does the company have a clear policy on engagement in lobbying activities, in order to prevent undue influence or other corrupt intent, and discloses the issues on which the company lobbies?

Based on public information, the company actively engages in lobbying activities and these activities are regulated by the Policy Committee of the Board. Details of the company’s lobbying activities are publicly available through the Lobbying Disclosure Act Report online.

COMMENTS -+
25a.
score
2

Does the company prohibit charitable contributions, or regulate such contributions in order to prevent undue influence or other corrupt intent?

Based on public information, there is evidence that the company makes charitable contributions through the ‘Contributions Program’. The company also discloses detailed information about charitable contributions in its 2013 Corporate Responsibility Report.

COMMENTS -+
Training 80%
26.
score
2

Does the company provide written guidance to help Board members and employees understand and implement the firm’s ethics and anti-corruption agenda?

Based on public information, there is evidence that the company provides written guidance to clarify and elaborate on its ethics and anti-corruption policies. These documents are publicly available in a number of foreign languages and they include illustrative scenarios and examples.

COMMENTS -+
28.
score
2

Is anti-corruption training provided in all countries where the company operates or has company sites?

Based on public information, there is evidence that ethics and compliance training is provided globally to Northrop Grumman employees. The 2013 Corporate Responsibility Report notes that “more than 99%” of the company’s global workforce was trained in 2013.

COMMENTS -+
29.
score
0

Does the company provide targeted anti-corruption training to members of the Board?

Based on public information, there is no readily available evidence that targeted training is provided to Board members, or that training is refreshed regularly.

COMMENTS -+
30.
score
2

Does the company provide tailored ethics and anti-corruption training for employees in sensitive positions?

Based on public information, there is evidence that training for employees is tailored to their roles, responsibilities and associated risks. Business conduct officers, who are responsible for implementing the company’s ethics and anti-corruption policies, attend annual workshops which include sharing best practices, program updates, compliance and skill training and networking. Furthermore, the company holds monthly webinars to ensure that business conduct officers are knowledgeable on key topics.

COMMENTS -+
Personnel 86%
31.
score
1

Does the company have a clear and formal process by which employees declare conflicts of interest?

Based on public information, all employees are required to disclose potential conflicts of interests on an annual basis. The designated disclosure form and associated conflict of interest notice provide clarification on potential conflicts of interest and confirm that these policies apply to board members as well as employees. However, TI notes that the disclosure form is submitted to ‘immediate management’, rather than an independent department. The company therefore scores 1.

COMMENTS -+
32.
score
2

Is the company explicit in its commitment to apply disciplinary procedures to employees, Directors and Board members found to have engaged in corrupt activities?

Based on public information, there is evidence that the company explicitly states that it will apply disciplinary procedures to employees, Directors and Board members that violate its ethics and compliance policies.

COMMENTS -+
33.
score
2

Does the company have multiple, well-publicised channels that are easily accessible and secure, to guarantee confidentiality or anonymity where requested by the employee (e.g. web, phone, in person), to report concerns or instances of suspected corrupt activity?

Based on public information, there is evidence that the company provides multiple different channels for reporting suspected corrupt activity, as well as clear and appropriate reporting lines. Internal reporting includes local Business Conduct Officers, legal counsel, and human resources. In addition, employees can file anonymous reports via OpenLine.

COMMENTS -+
33a.
score
2

Are the whistleblowing channels available to all employees in all geographies?

Based on public information, there is evidence that employees from all geographies have access to multiple reporting and whistleblowing channels. Employees can raise concerns with their manager, local Business Conduct Officer, legal counsel, or human resources. In theory, employees can raise concerns via telephone (OpenLine) or online (ethicspoint). TI notes the ethicspoint website currently indicates that the company is not accepting reports from International employees through the OpenLine system.

COMMENTS -+
33b.
score
2

Does the company have formal and comprehensive mechanisms to assure itself that whistleblowing by employees is not deterred, and that whistleblowers are treated supportively?

Based on public information, there is evidence of a range of practices to ensure that whistleblowing is supported. In 2012, the company participated in the Defense Industry Benchmark survey, which indicated that fewer employees were observing misconduct and those who did were more likely to report actions. Employees also appeared to have gained confidence in reporting processes and reported less fear of retaliation. Usage of the OpenLine system is monitored and data is published in the internal employee ethics newsletter. Data relating to reports, investigations and outcomes from OpenLine is also published in the Corporate Responsibility Report. However, this data is limited to the OpenLine system and, as previously mentioned, this facility is not available to international employees.

COMMENTS -+
34.
score
2

Does the company have well-publicised resources available to all employees where help and advice can be sought on corruption-related issues?

Based on public information, there is evidence that employees have access to resources such as trained Business Conduct Officers, legal counsel, and telephone and online helplines (Openline), to provide them with guidance on anti-corruption policy.

COMMENTS -+
35.
score
1

Is there a commitment to non-retaliation for bona fide reporting of corruption?

Based on public information, there is evidence of a clear, enforceable, non-retaliation policy for bona fide reporting of corruption. However, the evidence that disciplinary measures are applied to employees who breach this policy is not assessed to be explicit in relation to the non-retaliation commitment. The company therefore scores 1.

COMMENTS -+