Finmeccanica S.P.A.

Based on public information, there is no readily available evidence that the company publishes a statement from the CEO or Chairman, supporting its ethics and anti-corruption agenda. Statements in the 2013 and 2012 Sustainability Reports are assessed to be insufficiently strong and do not directly address the issues of anti-corruption or ethics.

Based on public information, there is no readily available evidence that the company’s CEO or Chairman demonstrates a strong, personal, external facing commitment, to the ethics and anti-corruption agenda of the company. However, there is evidence that this engagement has been delegated to the Senior Compliance Officer Walter Vasselli, who is a member of the ASD Ethics Committee and the IFBEC Steering Committee. The company therefore scores 1. To score higher the company would need to provide at least two examples of relevant external engagement by the CEO or Chairman.

Based on public information, there is no readily available evidence that the company’s CEO demonstrates a strong, personal, internal-facing commitment to the ethics and anti-corruption agenda of the company.

Based on public information, there is evidence that the company publishes a statement of values representing high standards of ethical business conduct. As part of its ethics and respect values, the company stresses the need to work with responsibility, honesty, fairness, and transparency. The values form one of the pillars that comprise the company's ethics and compliance system. The company states that to ensure compliance with rules and regulations it has produced a range of compliance policies, including the Business and Anti-Corruption Ethics policy and the Code of Ethics, which form another pillar of the ethics and compliance system.

Based on public information, there is evidence that the company is a member of ASD and IFBEC.

Based on public information, there is evidence that the company has appointed the Control and Risks Committee and the Surveillance Body, with overall corporate responsibility for its ethics and anti-corruption agenda. The Control and Risks Committee is responsible for monitoring the internal control and risk management system. The Surveillance Body is responsible for overseeing compliance with the Code of Ethics, responding to whistleblowing reports and analysing compliance with Model 231. TI notes that each Group company also has an individual Surveillance Body with monitoring responsibilities.

Based on public information, there is evidence that the company has appointed the Senior Compliance Officer with responsibility for implementing its ethics and anti-corruption agenda. The Senior Compliance Officer reports regularly to the Control and Risks Committee and to the Board of Statutory Auditors, and is identified as Walter Vasselli.

Based on public information, there is evidence of regular Board level monitoring and review of the performance of its ethics and anti-corruption agenda. The company states that the development of the compliance programme is periodically presented during dedicated meetings to the Control and Risks Committee, the Surveillance Body and the Board of Statutory Auditors. The Control and Risks Committee is responsible for monitoring the internal control and risk management system and the Supervisory Body monitors compliance with Model 231. The Surveillance Body must report to the Board of Directors and the Board of Statutory Auditors biannually on Model 231. Also, TI notes that in 2013 the company commissioned the independently operated Flick Committee to review the company's ethics and compliance systems.

Based on public information, there is evidence of a formal, clear, written plan on which the Board’s review of the ethics and anti-corruption agenda takes place. The Surveillance Body must report to the Board of Directors and Board of Statutory Auditors on compliance with Model 231. The report must examine compliance over the period, critical issues that have emerged, possible updates to the Model, and plans for the upcoming year. Improvement plans are initiated in response to changes in the organisational structure or company operations, or in relation to the introduction of new rules and regulations.

Based on public information, there is evidence that the company appointed the Flick Committee – an external group – to examine the company’s ethics and anti-corruption agenda, in response to a corruption allegation. The Committee compiled a list of recommendations to be implemented by the company. Evidence suggests that on an ongoing basis the Board of Directors and the Surveillance Body is responsible for updating Model 231, in particular in response to significant violations.

Based on public information, there is evidence that the company has a formal compliance risk assessment procedure, which is implemented enterprise-wide and identifies anti-corruption risks. To mitigate these risks in 2013 the company developed a compliance programme that defines controls in response to regulatory risks, the company’s areas of operation and international standards. The Compliance Organisational Unit carries out preventative activity, such as offering regulatory risk management tools, training and the implementation of the company’s anti-corruption directives. The Internal Audit Department verifies these activities and monitors their application. Responsibilities are shared between the Group company and its individual companies. The company also has a risk assessment procedure for Model 231, though it is unclear if this is implemented via the same process as detailed for compliance risks.

Based on public information, there is limited evidence that the company has a formal anti-corruption risk assessment procedure for assessing proposed business decisions. The company conducts a risk assessment procedure before working with third parties and before commencing mergers and acquisitions. However, there is a lack of evidence on what this risk assessment procedure entails. The company therefore scores 1. To score higher the company would need to provide evidence of how this anti-corruption risk assessment procedure is applied and to what other business decisions.

Based on public information, there is evidence that the company conducts due diligence that minimises corruption risk when selecting or reappointing its agents. Contracts are renewed on an annual basis.

Based on public information, there is evidence that agents must conduct their business in compliance with the law, and the values expressed in the Code of Ethics and the Charter of Values, and must report their activities to the company. The company has the right to audit agents and terminate the contract if violations are discovered.

Based on public information, there is evidence that the company makes clear to contractors, sub-contractors and suppliers, its stance on bribery and corruption. This is carried out via the company's Code of Ethics, Charter of Values and Model 231. The company has rights to apply sanctions in the event of a breach of its contract.

Based on public information, there is evidence that the company addresses offset contracting corruption risk at a general level. Offset contracts are managed in regard to compliance risks, including the principles of the Charter of Values, the Code of Ethics and Model 231. The company therefore scores 1. To score higher the company would need to provide evidence that offset contracting corruption risk is explicitly addressed at more than a general level in the company’s offset policies, procedures and contractual terms.

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.

Based on public information, there is evidence that the company has an anti-corruption policy that prohibits corruption in its various forms. This includes the giving and receiving of bribes, facilitation payments, and corrupt gifts and hospitality.

Based on public information, there is evidence that the company has a zero tolerance policy of corruption.

Based on public information, there is evidence that the company’s ethics and anti-corruption policies are easily accessible to Board members, employees and third parties. The Charter of Values and the Code of Ethics are distributed to all new employees, and are available on the company’s website and intranet in English and Italian, along with the Model 321. Evidence suggests that all foreign Group Companies have ethics and anti-corruption policies in their respective native languages.

Based on public information, there is some evidence that the company’s ethics and anti-corruption policies are understandable and clear to Board members, employees and third parties. However, TI assesses the policies to be dense and use legalistic language. The company therefore scores 1. To score higher the company would need to provide evidence that its ethics and anti-corruption policies are written in easily understandable, comprehensible language.

Based on public information, there is evidence that the company’s ethics and anti-corruption policies explicitly apply to all employees and Board members.

Based on public information, there is evidence that the company has a policy on potential conflicts of interest. The policy applies to both employees and Board members, and includes a definition of a conflict of interest. The company therefore scores 1. To score higher the company would need to provide evidence that it provides several examples of potential conflicts of interest.

Based on public information, there is evidence that the company has a policy for the giving and receipt of gifts, to ensure that such transactions are bona fide and not a subterfuge for bribery. Gifts are forbidden unless they are of a modest value and are unable to be interpreted as a means to obtaining preferential treatment. The responsible authority of the company must approve all gifts in advance.

Based on public information, there is evidence that the company has a policy for the giving and receipt of hospitality, to ensure that such transactions are bona fide and not a subterfuge for bribery. Hospitality is forbidden unless it is of a modest value and cannot be interpreted as a means to obtaining preferential treatment. The responsible authority of the company must approve all hospitality in advance.

Based on public information, there is evidence that the company has a policy that explicitly prohibits facilitation payments. The company therefore scores 1. To score higher the company would need to provide evidence of guidance on how the policy is to be implemented in practice, such as in cases of personal danger.

Based on public information, there is limited evidence that the company prohibits political contributions. The company states in its Code of Ethics that it does not make any political contributions, but says in the 2013 Sustainability Report that political contributions are prohibited except when permitted by specific legislation. The company therefore scores 1. To score higher the company would need to provide evidence that it clearly prohibits political contributions, or that it regulates political contributions and publically discloses all recipients.

Based on public information, there is no readily available evidence that the company has a clear policy on engagement in lobbying activities, in order to prevent undue influence or other corrupt intent, or discloses the issues on which it lobbies.

Based on public information, there is limited evidence that the company regulates charitable contributions in order to prevent undue influence or other corrupt intent. Contributions to associations and companies must take into account the recipient's profile and the traceability of funds. The company provides a general overview of its charitable contributions, including an approximate annual total. The company therefore scores 1. To score higher the company would need to provide evidence that recipients of charitable contributions are publically declared.

Based on public information, there is limited evidence that the company provides written guidance, to help Board members and employees understand and implement the company’s ethics and anti-corruption agenda. The company makes courses on Model 231, the Charter of Values and the Code of Ethics permanently available for employees. The company therefore scores 1. To score higher the company would need to provide evidence of written guidance that is unambiguous and contains scenarios and examples.

Based on public information, there is evidence that the company has an explicit anti-corruption training module, as part of its ethics and compliance training programme.

Based on public information, there is limited evidence that the company provides anti-corruption training in all countries where it operates or has sites. The company states that a permanently available online course on the Charter of Values, the Code of Ethics and Model 231, with the latter two including an anti-corruption policy, is compulsory for all employees. However, in the 2013 Sustainability Report the company specifies that fewer than 10% of employees have received anti-corruption training. Similarly, it is unclear which employees receive training on the FCPA and the UK Bribery Act as part of the company’s Trade Compliance online training. The company therefore scores 1. To score higher the company would need to provide clear evidence that anti-corruption training is provided in all countries where it operates or has sites.

Based on public information, there is no readily available evidence that the company provides anti-corruption training to Board members. TI notes that the company states that management and personnel with powers of representation of the Entity receive ethics and compliance training. However, to score on this question the company would need to provide evidence that Board members specifically are trained.

Based on public information, there is some evidence that the company provides tailored ethics and anti-corruption training for employees in sensitive positions. 34 managers of operating companies received specific training on conflicts of interest and third party transactions, and employees in internal audit and the sales department receive advanced trade compliance training. The company therefore scores 1. To score higher the company would need to provide evidence of additional employee roles that receive tailored ethics and anti-corruption training.

Based on public information, there is evidence that the company has a clear and formal process by which employees declare conflicts of interest. When commencing employment with the company, all individuals must sign a declaration that no conflicts of interest exist. If a conflict of interest arises during employment it must be reported to the Surveillance Body.

Based on public information, there is evidence that the company has an explicit commitment to apply disciplinary procedures to employees, Directors and Board members, found violating its Code of Ethics, Charter of Values or Model 231. The company provides detailed information on the disciplinary procedures for employees, executives and Board members.

Based on public information, there is evidence that the company requests that employees report concerns or instances of suspected corrupt activity to the Surveillance Body by mail or email. Evidence suggests that employees can report anonymously, though it is unclear how this is facilitated. However, TI does not deem the Surveillance Body an independent channel despite it consisting of at least two external members, as it is a corporate body of the Company, and the Head of Legal & Corporate Affairs and the Compliance Organizational Unit is a member. The company therefore scores 1. To score higher the company would need to provide evidence that employees can report to at least one independent source.

Based on public information, there is evidence that across geographies, all employees have access to the Surveillance Body. The company therefore scores 1. To score higher the company would need to provide evidence of at least one more whistleblowing channel, which is available to all employees in all geographies.

Based on public information, there is no readily available evidence that the company has formal and comprehensive mechanisms to assure itself that whistleblowing by employees is not deterred, or that whistleblowers are treated supportively. The Surveillance Body is responsible for overseeing whistleblower reporting, but it is unclear what mechanisms are used to analyse the whistleblowing process.

Based on public information, there is evidence that the company has well-publicised resources available to all employees, where help and advice can be sought on corruption-related issues. The compliance office and the Senior Compliance Officer provide help and advice on compliance related issues.

Based on public information, there is evidence that the company has a non-retaliation policy for bona fide reporting of corruption. The company therefore scores 1. To score higher the company would need to provide evidence that disciplinary measures are applied to employees who breach this policy.