FINAL ASSESSMENT RAYTHEON COMPANY · RAYTHEON COMPANY The following pages contain the detailed...

RAYTHEON 09/10/14 WWW.RAYTHEON.COM

FINAL ASSESSMENT

RAYTHEON COMPANY

The following pages contain the detailed scoring for your company based on

public information.

The following table represents a summary of your scores:

Topic Number

of

questions

% score based

on public

information

Leadership, Governance and

Organisation

10 80%

Risk Management 7 85.7%

Company Policy and Codes 12 95.8%

Training 5 80%

Personnel and Helplines 7 78.6%

Total 41 85.4%


A1:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company has published a statement from the CEO in the last two years, specifically supporting its strong stance against corruption.

References:

Public:

Company website:

Message from Thomas A. Kennedy

‘When issues are black-and-white, the answers are obvious. But “when they are gray, walk away.” That is the approach we use at Raytheon to avoid business transactions when a deal raises ethical concerns we can’t resolve, or when we perceive there may be a corruption issue. We simply have zero tolerance for corruption, as we committed when we signed the Global Principles of Business Ethics for the Aerospace and Defense Industry. Our company value of Integrity makes clear our commitment to respect ethics, laws and regulations wherever we do business.

Raytheon has a rigorous Anti-Corruption Sustainment program, which continuously assesses our policies and internal controls and implements best practices to prevent corruption. The Raytheon anti-corruption team is focused to deter, detect and correct issues so that our reputation for integrity is never compromised.

We recently published an overarching anti-corruption policy which sets forth key anti-corruption elements found in many related policies, covering topics such as exercising due diligence before we engage international representatives or consultants, transparency in our books and records, and providing business courtesies. We also ensure that ongoing education programs, such as the FCPA (Foreign Corrupt Practices Act) Aware program available on this website, keep our employees knowledgeable and vigilant about risk in this area, and help ensure we remain faithful to our company values.

Our anti-corruption program is supported by the most senior executives of the Company. As


Chairman, I ensure that Raytheon’s anti-corruption initiatives are also reported regularly and reviewed with keen interest by the board of directors. Together, with our employees and others who represent us, we work to maintain a culture of integrity that will not be compromised. This website serves as an introduction to our anti-corruption initiatives and our unwavering commitment to ethical business conduct’.

http://www.raytheon.com/responsibility/stewardship/anticorruption/message/index.html

2013 Corporate Responsibility Report, p.3:

‘We are also defined by our commitment to the highest ethical standards, diversity and inclusion. Our Ethics and Business Conduct program reinforces and supports our culture of integrity through education, counseling and accountability, and our focus on diversity and respect supports a culture of inclusion that fully engages all of our employees so that they feel valued and empowered to perform at peak level for our customers and stakeholders. We know we are on the right track when both Woman Engineer magazine and Minority Engineer magazine ranked Raytheon on their lists of Top 50 Employers for 2013, and for the ninth consecutive time, we achieved a perfect 100 percent score on the Human Rights Campaign’s 2013 Corporate Equality Index. In addition, we are engaging with our global supply chain to extend our values to suppliers and subcontractors.’

Message from the Chairman and CEO

http://www.raytheon.com/media/2013-corporate-responsibility-report/

Code of Conduct, Message from the Chairman and CEO (2013), p. 2:

‘I encourage employees to review and refer to the Code. It can be an important part of your ethical decision-making toolkit. Take an “Ethics check,” and “check the Code,” when you are faced with a question, or have a concern about the right thing to do.

Thank you for doing your part in supporting Raytheon’s commitment to the highest ethical standards and values.

Sincerely,

Thomas A. Kennedy

Chairman and CEO

Raytheon Company’

http://www.raytheon.com/ourcompany/rtnwcm/groups/public/documents/content/rtn_ethics-code.pdf






A2:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company’s CEO and Chairman, Thomas Kennedy, has demonstrated a strong, personal, external facing commitment to its ethics and anti-corruption agenda. Specifically, the CEO and Chairman is on the DII Steering Committee. TI also notes the company’s Director of Business Ethics & Compliance is the Deputy Chair of IFBEC.

References:

Public:

2012 Sustainability Report:

http://www.raytheon.com/media/2012-corporate-responsibility-report/pdf/RAY_2012CRR.pdf

Statement from the CEO:

‘Building upon our VSGVs is the newly updated Raytheon Code of Conduct – the basis of our commitment to the highest ethical standards. The code is about individual accountability for ourselves, our suppliers, our partners and our customers; from the factory floor all the way up to our Board of Directors. Reflecting this “tone at the top” and our commitment to sound governance, we maintain a contemporary governance approach that promotes integrity, accountability, transparency and sound decision making’. DII website: DII Steering Committee ‘Thomas A. Kennedy Chief Executive Officer Raytheon Company 870 Winter Street Waltham, MA 02451’.




http://www.dii.org/dii-steering-committee IFBEC Website: Governance ‘Tim Schultz was appointed IFBEC Vice-Chair in August 2013. He is a Director of Business Ethics & Compliance for the Raytheon Company, helping develop their ethics and compliance education programs.’ http://ifbec.info/governance/

http://www.dii.org/dii-steering-committee

http://ifbec.info/governance/


A3:

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?

Score:

0

Comments:

Based on public information, there is no readily available evidence that the company’s CEO demonstrates a strong, internal-facing commitment to the company’s ethics and anti-corruption agenda. This commitment could include speaking at training events or chairing reviews of anti-corruption programmes.

References:

Public:

TI notes:

Company website: Message from Thomas A. Kennedy

‘Our anti-corruption program is supported by the most senior executives of the Company. As Chairman and CEO, I ensure that Raytheon’s anti-corruption initiatives are also reported regularly and reviewed with keen interest by the board of directors. Together, with our employees and others who represent us, we work to maintain a culture of integrity that will not be compromised. This website serves as an introduction to our anti-corruption initiatives and our unwavering commitment to ethical business conduct.’




A4:

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

Score:

2

Comments:

Based on public information, there is evidence that the company publishes a statement of values representing high standards of ethical business conduct, including integrity and honesty. The company explains these values and why they are important to the organisation, while also mentioning trustworthiness, accountability and transparency.

References:

Public:

Code of Conduct (2014), p.ii:

‘Our Values

People

Treat people with respect and dignity.

Welcome diversity and diverse opinions.

Collaborate with our fellow employees to improve their skills.

Recognize and reward accomplishment.

Foster teamwork and collaboration.

Integrity

Be honest, forthright and trustworthy.

Use straight talk; no hidden agendas.

Respect ethics, laws, and regulations.

Commitment

Honor commitments to customers, shareholders, suppliers, the community, and each other.

Accept personal responsibility to meet commitments; be accountable.

Excellence

Improve performance continually.

Achieve innovation in all that we do.


Stress quality, productivity, growth, best practices, and measurement.

Always strive to be the best.’

(p.4): ‘Responsibilities of leaders:

Act with integrity and serve as an ethical role model for others.

Promote a culture of compliance and integrity regarding policies, procedures, regulations, and laws.’

(p.10): ‘Maintain our Financial Integrity

The Company’s financial books, records, cost accounts, and financial statements shall properly document all assets and liabilities, accurately reflect all transactions, and be maintained in accordance with Company policy and applicable laws and regulations. Company funds may not be used for any unethical purpose.’

(p.11): ‘Accurately Charge Labor and Costs

Accurately charging labor, material, and other costs is essential to maintaining the integrity of customer billings, financial reporting, and planning.’

(p.18): ‘Abide by Antitrust Laws

We compete fairly and honestly, not through unethical or illegal business practices in restraint of trade which may reduce competition.’

(p.19): ‘Protect Our Reputation in the Global Business Arena: Anti-Corruption

Raytheon expects its employees, suppliers, consultants, representatives, and agents to protect the Company’s reputation for integrity in the global marketplace. Raytheon prohibits improper international business practices and complies with all applicable laws, such as the U.S. Foreign Corrupt Practices Act (FCPA), similar laws of host nations such as the UK Bribery Act, and related anti-bribery conventions.’

http://www.raytheon.com/ourcompany/ourculture/ethics/code/

Sustainability Report 2012: ‘We are committed to an integrated and collaborative approach to corporate governance that promotes integrity, accountability, transparency, engagement and sound decision-making processes in all aspects of our business and relationships with our shareholders, employees, customers, suppliers and communities’.

Statement from the CEO:

‘Building upon our VSGVs is the newly updated Raytheon Code of Conduct – the basis of our commitment to the highest ethical standards. The code is about individual accountability for ourselves, our suppliers, our partners and our customers; from the factory floor all the way up to our Board of Directors. Reflecting this “tone at the top” and our commitment to sound governance, we maintain a contemporary governance approach that promotes integrity,

http://www.raytheon.com/ourcompany/ourculture/ethics/code/


accountability, transparency and sound decision making’. 2013 Corporate Responsibility Report, p.5: ‘Values PEOPLE • Treat people with respect and dignity. • Embrace diversity and diverse opinions. • Collaborate with our fellow employees to improve skills. • Recognize and reward accomplishment. • Foster teamwork and collaboration. INTEGRITY • Be honest, forthright and trustworthy. • Use straight talk; no hidden agendas. • Internalize Raytheon’s Code of Conduct to support a strong company culture of ethics and the highest business standards globally. • Recognize your personal obligation to follow all laws, regulations and Raytheon policies. COMMITMENT • Honor commitments to customers, shareholders, suppliers, the community and each other. • Accept personal responsibility to meet commitments; be accountable. EXCELLENCE • Improve performance continually. • Achieve innovation in all that we do. • Stress quality, productivity, growth, best practices and measurement. • Always strive to be the best.’


A5:

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?

Score:

2

Comments:

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

References:

Public:

IFBEC website: http://ifbec.info/our-members/

DII website: http://dii.prod2.classfive.com/our-companies/dii-steering-committee/

http://ifbec.info/our-members/

http://dii.prod2.classfive.com/our-companies/dii-steering-committee/


A6:

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

Score:

2

Comments:

Based on public information the company has appointed the Audit Committee and the Public Affairs Committee with overall corporate responsibility for its ethics and anti-corruption agenda. The Audit Committee’s responsibilities include reviewing adherence to the company’s Code of Business Conduct and Ethics, and periodically reviewing procedures for complaints on unethical conduct. The Public Affairs Committee’s responsibilities include reviewing ethics policies and practices.

References:

Public:

Audit Committee Charter:

‘16. Establish and periodically review procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.

17. Review any matters relating to the integrity of management, including conflicts of interest, and adherence to the Company’s Code of Business Conduct and Ethics. In connection with these reviews, the Audit Committee will meet, as appropriate, with the general counsel and other Company officers and employees’. http://investor.raytheon.com/phoenix.zhtml?c=84193&p=irol-govCommittee&Committee=5052

Company website: Audit Committee Procedures

‘10. Code of Business Ethics and Conduct. Raytheon's Code of Business Ethics and Conduct applies to all of the directors, officers and employees of the Company and mandates strict compliance with all laws and regulations, including those designed to produce full, fair, accurate, timely, and understandable disclosure in the Company's periodic reports filed with the SEC and generally accepted accounting principles. Employees are to report to their

http://investor.raytheon.com/phoenix.zhtml?c=84193&p=irol-govCommittee&Committee=5052



management any violations of ethical conduct principles and to cooperate in any investigation of ethics violations. Annual acknowledgement of the completion of ethics awareness education and of the obligations set forth in the Code of Business Ethics and Conduct is required of all salaried employees, including officers and finance professionals.’

Company website: Public Affairs Committee Charter‘The Public Affairs Committee reviews, identifies and when appropriate brings to the attention of the board political, social and legal trends and issues that may have an impact on the business operations, financial performance or public image of the Company. The Committee also reviews, monitors and recommends to the board corporate policies and practices that relate to public policy, and monitors the Company’s compliance with various regulatory requirements.’

‘1. Review policies and practices of the Company and monitor compliance in areas of legal and social responsibility, pension plan performance, management and governance, and when appropriate report and recommend to the board such policies and practices including those involving:

-environmental protection

health and safety of employees

-ethics

-export control

-regulatory compliance (except financial matters)

-charitable contributions and community relations

-government relations and legislative policy

-political contributions and lobbying

-foreign and domestic consultants and representatives

-offsets

-crisis management and emergency preparedness

-government contracting and defense procurement policies’.



‘In addition to robust senior management engagement, our Board actively participates in the oversight of our corporate responsibility and sustainability efforts and initiatives. The Public Affairs Committee, a fully independent committee of the Board, reviews our policies and practices in the areas of legal and regulatory responsibility and public policy, including those involving environmental protection, health and safety of employees, ethics, export control, Foreign Corrupt Practices Act compliance, community relations, government relations and legislative policy, among other things.’




A7:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company has appointed Vice President Business Ethics and Compliance, Patricia J. Ellis, with responsibility for implementing its ethics and anti-corruption agenda.

References:

Public: Company Website: Ethics ‘Welcome to the Raytheon Business Ethics and Compliance Home Page. We at Raytheon are proud of our reputation for excellence: a reputation based on our commitment to the highest ethical standards. This home page is a reflection of our commitment to provide you quick access to pertinent information about Raytheon’s guiding business values and the Ethics Program. At Raytheon, all of our business relationships with customers, shareholders, employees, suppliers and host communities must rest on a foundation of integrity and trust. Our success is dependent on each individual’s commitment to these enduring values and no success is worth the expense of compromising ethical behavior. I encourage you to explore the features of this home page and let us know what you think. If you have any ideas or suggestions, please pass them on to us. We are ready to respond to your recommendations, concerns and questions. Patricia J. Ellis Vice President Business Ethics and Compliance’ http://www.raytheon.com/ourcompany/ourculture/ethics/index.html Company website: Foreign Corrupt Practices Act (FCPA) Awareness, Compliance & Education ‘Welcome! As Raytheon continues to grow internationally, it is incumbent upon our employees and representatives to conduct foreign business with the highest ethical

http://www.raytheon.com/ourcompany/ourculture/ethics/index.html


standards, comply with U.S. laws and regulations, and adhere to Raytheon’s internal policies and procedures. We created the Foreign Corrupt Practices Act (FCPA) information and resource portal to support these business objectives. Here, you can learn about the FCPA, understand the various components of Raytheon’s FCPA Education Program, and learn how you can stay connected with FCPA developments outside of Raytheon. Jay B. Stephens Senior Vice President, General Counsel and Secretary’ http://www.raytheon.com/responsibility/stewardship/anticorruption/fcpa/index.html Company website: Recognizing a Culture of Ethical Leadership ‘Raytheon has a comprehensive ethics education program to ensure that the company's values are reflected in the ethical awareness and conduct of its employees. The company's commitment to ethics education was recently recognized by the Ethics Resource Center's (ERC) presentation of the inaugural Carol R. Marshall Award during a ceremony on Capitol Hill. Raytheon Business Ethics & Compliance Vice President Patricia Ellis was presented the award by the ERC. Raytheon's Ethics team has applied innovative approaches to the company's education program including a popular online mini-series, EthicSpace, which raises employee awareness through a series of video episodes. Additionally, the team continues to evolve Raytheon's Ethics Checkpoint module and other employee education courses to reinforce the importance of ethics in the workplace. "Raytheon continues to foster a vibrant culture of integrity and high standards of ethical conduct," said Jay Stephens, Raytheon Senior Vice president, General Counsel and Secretary. "Our Company's values support a company-wide environment of compliance that is reinforced by an innovative ethics education program as well as the active commitment of our Board, our CEO, our Leadership Team and our employees." About the award Established this year as a posthumous honor to former ERC Board member Carol R. Marshall, the annual award recognizes a chief ethics and compliance officer for innovation and leadership in building or enhancing a corporate ethics and compliance program. The ERC selects a national leader who advances the ethics and compliance field and serves as a role model in the profession. Read more about the award and the ERC.’ http://www.raytheon.com/newsroom/feature/rtn12_cmrshlawd2.html Ethics Resource Centre website: Patricia Ellis of Raytheon is first recipient of ERC’s Carol R. Marshall award ‘Ms. Ellis, who became Raytheon’s Business Ethics & Compliance director in 1994, and was promoted to vice president of the function in 2000, has played the key role in the development of Raytheon’s ethics education programs including Ethics Checkpoint and EthicSpace initiatives. Prior to assuming responsibility for ethics and compliance, Ms. Ellis held a number of senior financial management positions at Raytheon. She joined the company in 1979.’ http://www.ethics.org/news/patricia-ellis-raytheon-first-recipient-erc%E2%80%99s-carol-r-marshall-award

http://www.raytheon.com/responsibility/stewardship/anticorruption/fcpa/index.html

http://www.raytheon.com/newsroom/feature/rtn12_cmrshlawd2.html

http://www.ethics.org/news/patricia-ellis-raytheon-first-recipient-erc%E2%80%99s-carol-r-marshall-award

http://www.ethics.org/news/patricia-ellis-raytheon-first-recipient-erc%E2%80%99s-carol-r-marshall-award


A8:

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

Score:

2

Comments:

Based on public information, there is evidence that the company’s Public Affairs Committee conducts a regular review of its ethics and anti-corruption agenda. This includes reviewing policies and practices in regard to offsets, political contributions, and foreign and domestic consultants and representatives. Evidence suggests that this review occurs at least annually, as the Committee meets quarterly.

References:

Public:

Sustainability Report 2012:

‘The Public Affairs Committee, a fully independent committee of the Board, reviews our policies and practices in the areas of legal and regulatory responsibility and public policy, including those involving environmental protection, health and safety of employees, ethics, export control, Foreign Corrupt Practices Act compliance, community relations, government relations and legislative policy, among other things. We believe that this level of Board engagement is indicative of our companywide focus on and commitment to corporate responsibility and sustainability’.

Anti-corruption sustainment programme: http://www.raytheon.com/responsibility/rtnwcm/groups/gallery/documents/digitalasset/rtn_164606.pdf


‘Raytheon’s Ethics Office works with the company’s Anti-Corruption Sustainment team, which regularly assesses our internal controls to ensure compliance with policies and related laws in this key risk area for international business.’

Company website: Public Affairs Committee Charter

http://www.raytheon.com/responsibility/rtnwcm/groups/gallery/documents/digitalasset/rtn_164606.pdf



‘The Public Affairs Committee reviews, identifies and when appropriate brings to the attention of the board political, social and legal trends and issues that may have an impact on the business operations, financial performance or public image of the Company. The Committee also reviews, monitors and recommends to the board corporate policies and practices that relate to public policy, and monitors the Company’s compliance with various regulatory requirements.’

‘The Committee meets quarterly or more frequently as needed. The Committee may invite to its meetings any director, officer of the Company or such other person as it deems appropriate in order to assist it in performing its responsibilities. The Committee reports its actions and recommendations to the board. The Committee may form and delegate authority to subcommittees where appropriate.’




-ethics

-export control






-offsets






‘16. Establish and periodically review procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.

17. Review any matters relating to the integrity of management, including conflicts of interest, and adherence to the Company’s Code of Business Conduct and Ethics. In connection with these reviews, the Audit Committee will meet, as appropriate, with the general counsel and other Company officers and employees’.






A8(a):

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?

Score:

0

Comments:

Based on public information, there is no readily available evidence of 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. The Public Affairs Committee conducts a regular review of the company’s ethics and anti-corruption agenda. However, the basis of this review is unclear, with no evidence suggesting a formal, clear, written plan is used.

References:

Public: TI notes: Corporate Responsibility 2012: ‘The Public Affairs Committee, a fully independent committee of the Board, reviews our policies and practices in the areas of legal and regulatory responsibility and public policy, including those involving environmental protection, health and safety of employees, ethics, export control, Foreign Corrupt Practices Act compliance, community relations, government relations and legislative policy, among other things. We believe that this level of Board engagement is indicative of our companywide focus on and commitment to corporate responsibility and sustainability’. Anti-corruption sustainment programme: http://www.raytheon.com/responsibility/rtnwcm/groups/gallery/documents/digitalasset/rtn_164606.pdf

Company website: Public Affairs Committee Charter

‘The Public Affairs Committee reviews, identifies and when appropriate brings to the attention of the board political, social and legal trends and issues that may have an impact on the business operations, financial performance or public image of the Company. The Committee also reviews, monitors and recommends to the board corporate policies and practices that relate to public policy, and monitors the Company’s compliance with various




regulatory requirements.’

‘The Committee meets quarterly or more frequently as needed. The Committee may invite to its meetings any director, officer of the Company or such other person as it deems appropriate in order to assist it in performing its responsibilities. The Committee reports its actions and recommendations to the board. The Committee may form and delegate authority to subcommittees where appropriate.’




-ethics

-export control






-offsets




Anti-Corruption Policy (October 2013), p.3:

‘Raytheon’s anti-corruption efforts are ongoing continuous, and regularly reviewed and revised as necessary. The process starts in the early stages of business development and continues throughout the life-cycle of any project or award. Toward that end the Company continues to conduct ongoing self-assessments of our anti-corruption policies, procedures, and controls and then monitors compliance with those anti-corruption standards via the internal audit process’.




A9:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company has a formal process to review and update its policies and practices, in response to actual or alleged instances of corruption. The company states that the Ethics Office is responsible for conducting investigations of alleged violations of the Code of Conduct, with resolution measures including instituting improved internal controls.

References:

Public: Corporate Responsibility 2012: ‘We also have formed an Anti-Corruption Sustainment Working Group to communicate, educate, monitor and assess the effectiveness of our policies, processes and internal controls to prevent and detect potential violations of anti-corruption laws. In 2012, the group continued to refine our anti-corruption processes and controls, reviewed best practices, and coordinated the completion of anti-corruption self-assessments and communication of results’. Anti-corruption sustainment programme: http://www.raytheon.com/responsibility/rtnwcm/groups/gallery/documents/digitalasset/rtn_164606.pdf 2013 Corporate Responsibility Report, p.7: ‘The company carefully monitors regulatory developments, company operations, the business environment, and emerging internal and external issues, and also uses benchmarking and evolving views of best practice, to help assess the efficacy of its ethics, compliance and risk management policies and programs.’ (p.9): ‘The Ethics Office also conducts investigations of alleged violations of our Code of Conduct and works with leadership to hold employees accountable if violations are




substantiated. The Ethics Office conducted more than 280 investigations in 2013. Resolution of investigations substantiating Code of Conduct violations range from termination of employment to instituting improved internal controls.’


‘Our Ethics Office conducts investigations of alleged misconduct and violations of the Raytheon Code of Conduct. Our Ethics Office partners with other Raytheon functions, as appropriate, including Human Resources and Internal Audit, to conduct investigations and address inquiries. In 2012, it received more than 6,000 contacts and conducted nearly 350 investigations. More than 90% of the contacts were from employees seeking advice or guidance.’


A9(a):

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

Score:

2

Comments:

Based on public information, there is evidence that the company has an enterprise-wide risk management programme. The top risks and associated mitigation plans are followed by senior management. Specifically the Ethics Office works with the Anti-Corruption Sustainment team to assess the company’s internal controls in regard to corruption. The General Counsel at each business unit is also responsible for the anti-corruption risk assessment process, including mitigation plans.

References:

Public:


‘In the current challenging business environment, we believe that sound risk management and oversight take on even greater significance than before. To ensure an appropriate focus on our evolving risk environment, we employ a rigorous, process-driven, enterprise-wide risk management program to identify, assess and prioritize a broad set of risks across the company, including emerging or changing risks. The top risks and associated mitigation plans are actively followed by senior management and reported periodically to our Board. We also manage risk through numerous controls and business processes embedded in the company’s operations’. These controls and processes help identify emerging risks and also serve as an integral component of our efforts to mitigate certain risks. We also review these controls and business processes with the Board and its committees’.

Ethics programme overview: http://www.raytheon.com/ourcompany/ourculture/ethics/ethics_over/index.html

‘Employees complete online learning modules relating to a wide range of legal requirements and other topics. To sensitize employees to key risks pertaining to our international growth strategy, in 2010 we launched a series of modules highlighting Foreign Corrupt Practices Act compliance subjects, which we call “FCPAware”. Over the past year, employees completed 56,000 FCPAware modules in addition to more than 157,000 modules on other compliance

http://www.raytheon.com/ourcompany/ourculture/ethics/ethics_over/index.html


topics’


‘Raytheon’s Ethics Office works with the company’s Anti-Corruption Sustainment team, which regularly assesses our internal controls to ensure compliance with policies and related laws in this key risk area for international business.’

Company website: Anti-Corruption Policies

‘56-RP: Internal Audit

The Company has established and maintains an Internal Audit organization that is independent and objective. Internal Audit brings a systematic and disciplined approach to monitoring, evaluating and improving the effectiveness of the risk management, financial and operational control, and governance processes throughout Raytheon. Internal Audit functions as an independent appraisal entity to evaluate Company activities and to assist by furnishing analyses, appraisals and recommendations concerning the activities reviewed. Raytheon’s Internal Audit Policy outlines the roles and responsibilities, procedures and requirements of Internal Audit as well as the roles and responsibilities of those organizations throughout Raytheon as they work with Internal Audit.’

http://www.raytheon.com/responsibility/stewardship/anticorruption/policies/#06

Sustaining an Effective Anti-Corruption Program public presentation – Tim Schultz (7 May 2014)

‘Risk Assessment: Internal Audit, business process owners and at enterprise level’

‘•General Counsel at each business responsible for self-assessment process, with support from each applicable function

•Framework of Raytheon’s self-assessments

-Provide tools to help Business Presidents and Function Leads fulfill their responsibility of ensuring that anti-corruption controls are in place and functioning effectively

-Assess the adequacy of the primary anti-corruption controls and applicable Raytheon policies at the business entities to determine if controls are in place and functioning effectively (leveraged ICE process), including a Supply Chain Management review of all purchase orders placed with foreign suppliers

-Utilize a balanced, risk-based approach to take into account the uniqueness of each business

-Enhance and/or establish consistent controls and procedures to ensure local standard operating procedures adequately address Raytheon’s anti-corruption policies and procedures

-Additional communication and education on Raytheon’s Anti-Corruption Sustainment Program

-Support quarterly anti-corruption compliance certifications which will evolve to include an annual verification of effectiveness of self-assessment; subject to Internal Audit review

•Approximately 2,500 items self assessed (80 locations)



•Identified 195 process improvements’.

Also details the controls that are put in place, such as due diligence on agents and education on anti-corruption

‘•Internal Audit conducts reviews to ensure that program has been implemented effectively;

•Internal Audit plays a key role assisting management in identifying improvement opportunities in Raytheon’s anti-corruption sustainment program; and

•Internal Audit acts as an advisor, when applicable, in all stages of the program’


A10:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company has a formal anti-corruption risk assessment procedure for assessing proposed business dealings. The company conducts due diligence for all international parties, including JV parties, customers, sales representatives, and offset providers.

References:

Public:


‘In the current challenging business environment, we believe that sound risk management and oversight take on even greater significance than before. To ensure an appropriate focus on our evolving risk environment, we employ a rigorous, process-driven, enterprise-wide risk management program to identify, assess and prioritize a broad set of risks across the company, including emerging or changing risks. The top risks and associated mitigation plans are actively followed by senior management and reported periodically to our Board. We also manage risk through numerous controls and business processes embedded in the company’s operations’. These controls and processes help identify emerging risks and also serve as an integral component of our efforts to mitigate certain risks. We also review these controls and business processes with the Board and its committees’.


‘Raytheon’s anti-corruption efforts are ongoing continuous, and regularly reviewed and revised as necessary. The process starts in the early stages of business development and continues throughout the life-cycle of any project or award.’


‘109-RP: International Industrial Cooperation (Offsets)


It is the company’s policy to satisfy all of its offset commitments in a manner which enhances the company’s international growth objectives while ensuring reputational and compliance risks are addressed. Raytheon’s International Industrial Cooperation (Offsets) policy sets forth the processes, responsibilities and procedures to satisfy international Offset requirements while complying with applicable laws and rules. Before entering into an offset arrangement, extensive party and transactional due diligence is conducted on all potential offset providers. The cornerstone of Raytheon’s due diligence process is to ensure that “red flags” are first identified through the diligence process, and then ensure these concerns are addressed — with the assistance of legal counsel as appropriate — in order to mitigate the potential corruption risks. The results of all due diligence reviews are documented and recorded in Raytheon’s 3D database, which provides companywide access to the results of all due diligence for review by all Raytheon employees’.

http://www.raytheon.com/responsibility/stewardship/anticorruption/policies/index.html#15


‘251-RP: Due Diligence for International Parties and Transactions

Raytheon’s Due Diligence for International Parties and Transactions policy sets forth the due diligence that must be performed for all international parties including: customers, suppliers, JV Parties, Sales Representatives, consultants and offset service providers; as well as international transactions. The cornerstone of Raytheon’s due diligence process is to ensure that “red flags” are first identified through the diligence process, and then ensure these concerns are addressed — with the assistance of legal counsel as appropriate — in order to mitigate the potential corruption risks. The results of all due diligence reviews are documented and recorded in Raytheon’s 3D database, which provides companywide access to the results of all due diligence for review by all Raytheon employees.’







A11:

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

Score:

2

Comments:

Based on public information, there is evidence that the company conducts due diligence that minimises corruption risk when selecting and reappointing its agents. Due diligence is updated prior to renewing international representative and consultant agreements, that are respectively limited to two and one years.

References:

Public:

Company anti-corruption policy: http://www.raytheon.com/responsibility/rtnwcm/groups/gallery/documents/digitalasset/rtn_160603.pdf

Due Diligence: ‘It is Raytheon’s policy to do the appropriate risk based diligence of all third parties and transactions both before and throughout the business relationship. The Company has established detailed, through procedures that provide a disciplined process for party and transactional due diligence for all business transactions with an international component. As set forth in Raytheon policy 251-RP, Due Diligence for International Parties and Transactions, due diligence must be performed for international agents and representatives as well as international transactions’.

http://www.raytheon.com/responsibility/stewardship/anticorruption/policies/index.html#22 ‘Raytheon’s Corporate Card Program Policy sets forth the limits, examples of authorized uses and unauthorized uses as well as documentation and approval requirements. It also forth monitoring requirements which direct that management takes an active role in monitoring the card activity of their direct reports’.


‘21-RP: International Sales Representative and Consultant Costs, Bidding, Accounting and






Payment of.

Raytheon’s Authorization and Processing of International Representative and Consultant Agreements policy sets forth direction on the appointment and use of International representatives and consultants; provides direction on due diligence review procedures applicable to all international representatives and consultants; and ensures that all international representatives and consultants are fully trained in, and comply with, the company’s Code of Conduct, other applicable policies and procedures, the Foreign Corrupt Practices Act, as amended (FCPA), and all other applicable U.S. and foreign laws.’



Raytheon’s Due Diligence for International Parties and Transactions policy sets forth the due diligence that must be performed for all international parties including: customers, suppliers, JV Parties, Sales Representatives, consultants and offset service providers; as well as international transactions. The cornerstone of Raytheon’s due diligence process is to ensure that “red flags” are first identified through the diligence process, and then ensure these concerns are addressed — with the assistance of legal counsel as appropriate — in order to mitigate the potential corruption risks. The results of all due diligence reviews are documented and recorded in Raytheon’s 3D database, which provides companywide access to the results of all due diligence for review by all Raytheon employees.’



‘81-0003-110 Authorization and Processing of International Representatives and Consultants

This policy provides direction on the appointment and use of international representatives and consultants, including applicable due diligence. The policy provides that the term of international representative agreements shall not exceed two years and shall not exceed one year for international consultants; due diligence reviews are updated prior to renewing international representative and consultant agreements. The policy also provides that standard agreements are used to monitor, control and audit international representatives and consultants, thereby countering corruption risk. The policy further provides that international representatives and consultants are trained and comply with the Company’s Code of Conduct, applicable policies and procedures and the Foreign Corrupt Practices Act (FCPA) and other applicable laws, including other applicable anti-corruption laws.’





A12:

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

Score:

1

Comments:

Based on public information, there is evidence that the company has contractual rights for the behaviour and control of agents, with respect to countering corruption. Representatives and consultants must comply with the company’s Code of Conduct and applicable anti-corruption laws. However, there is a lack of information regarding the monitoring and auditing of agents, as well as contractual rights to deal with the occurrence of violations. The company therefore scores 1. To score higher the company would need to provide evidence of such rights.

References:

Public:

Anti-Corruption Policy, p.3:

‘Before entering into an agreement with a third party over which Raytheon exercises control, Raytheon should, as appropriate, secure an acknowledgement from the third party of its understanding and agreement to comply with our anti-corruption policies and Raytheon’s Code of Conduct.’



This policy provides direction on the appointment and use of international representatives and consultants, including applicable due diligence. The policy provides that the term of international representative agreements shall not exceed two years and shall not exceed one year for international consultants; due diligence reviews are updated prior to renewing international representative and consultant agreements. The policy also provides that standard agreements are used to monitor, control and audit international representatives and consultants, thereby countering corruption risk. The policy further provides that international representatives and consultants are trained and comply with the Company’s


Code of Conduct, applicable policies and procedures and the Foreign Corrupt Practices Act (FCPA) and other applicable laws, including other applicable anti-corruption laws.’




A13:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company makes clear to contractors, sub-contractors, and suppliers, its stance on bribery and corruption and the consequences of breaches to this stance. All third parties must acknowledge that they understand and agree to comply with the company’s anti-corruption policies. International purchase orders contain warranties of compliance with applicable anti-corruption laws, and the company has the right to cancel the purchase order as a result of breaches of these warranties.

References:

Public:

Anti-corruption policy:

‘Raytheon policy 67- RP, International Procurement, details the process and procedures to be followed in conducting due diligence on international suppliers and contractors’


‘67-RP: International Procurement

It is the policy of the company to comply with laws and rules governing the export and import of products and technical data, (e.g., International Traffic in Arms Regulations (ITAR), and Export Administration Regulations (EAR)); implement internal FCPA controls designed to prevent and detect unlawful payments to foreign government officials and provide reasonable assurances that disbursements are commensurate with services rendered or goods and materials procured; accurately recorded in company books and records; and made for proper and lawful purposes. Raytheon’s International Procurement policy mandates thorough due diligence of all significant foreign suppliers. The level of due diligence depends of the supplier's and transactional risk profile. The cornerstone of Raytheon’s due diligence process is to ensure that “red flags” are first identified through the diligence process, and then ensure these concerns are addressed — with the assistance of legal counsel as appropriate — in order to mitigate the potential corruption risks. The


results of all due diligence reviews are documented and recorded in Raytheon’s 3D database, which provides companywide access to the results of all due diligence for review by all Raytheon employees.

Terms and conditions of international purchase orders require warranties of compliance with applicable anti-corruption laws and breach of these warranties are grounds for cancellation of the purchase order and other remedies.’


Anti-corruption Policy: 74-RP

‘Raytheon’s Code of Business Ethics and Conduct and Business Ethics and Compliance Program policy establishes that the company’s Code of Conduct and its companywide business ethics and compliance program are resources to articulate Raytheon’s expectations of its leaders, employees, suppliers, agents, consultants and representatives to undertake actions that are consistent with Raytheon's guiding business values, relevant laws and regulations, and company policies and procedures’.

Anti-corruption policy: Third Parties

‘Raytheon can be liable if it knew, or should have known, of improper activity by its agent, joint venture partner, supplier, contractor, intermediary, distributor, reseller, or other third party and failed to take appropriate steps to attempt to prevent such misconduct. Accordingly, the Company must exercise special care in working with third parties and never attempt or allow a third party to attempt to engage in conduct inconsistent with this policy. Before entering into an agreement with a third party over which Raytheon exercises control, Raytheon should, as appropriate, secure an acknowledgement from the third party of its understanding and agreement to comply with our anti-corruption policies and Raytheon’s Code of Conduct’.




A13(a):

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

Score:

2

Comments:

Based on public information, there is evidence that the company explicitly addresses the corruption risks associated with offset contracting. The company has specific policies in regard to offset contracting, for example policy 109-RP, International Industrial Cooperation.

References:

Public:



It is the company’s policy to satisfy all of its offset commitments in a manner which enhances the company’s international growth objectives while ensuring reputational and compliance risks are addressed. Raytheon’s International Industrial Cooperation (Offsets) policy sets forth the processes, responsibilities and procedures to satisfy international Offset requirements while complying with applicable laws and rules. Before entering into an offset arrangement, extensive party and transactional due diligence is conducted on all potential offset providers. The cornerstone of Raytheon’s due diligence process is to ensure that “red flags” are first identified through the diligence process, and then ensure these concerns are addressed — with the assistance of legal counsel as appropriate — in order to mitigate the potential corruption risks. The results of all due diligence reviews are documented and recorded in Raytheon’s 3D database, which provides companywide access to the results of all due diligence for review by all Raytheon employees’.



‘In addition, Raytheon policy 109-RP, International Industrial Cooperation (Offsets), sets forth the process, responsibilities and procedures to satisfy international Offset




requirements while complying with applicable laws and rules.’


A13(b):

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

Score:

1

Comments:

Based on public information, there is evidence that the company conducts due diligence to minimise corruption risk when selecting its offset partners and brokers. However, it is unclear if offset providers are included in the policy that specifies that international representatives and consultants undergo due diligence when renewing their agreements. The company therefore scores 1. To score higher the company would need to provide evidence that due diligence is refreshed at least every 3 years and/or when there is a significant change in the business relationship.

References:

Public:



It is the company’s policy to satisfy all of its offset commitments in a manner which enhances the company’s international growth objectives while ensuring reputational and compliance risks are addressed. Raytheon’s International Industrial Cooperation (Offsets) policy sets forth the processes, responsibilities and procedures to satisfy international Offset requirements while complying with applicable laws and rules. Before entering into an offset arrangement, extensive party and transactional due diligence is conducted on all potential offset providers. The cornerstone of Raytheon’s due diligence process is to ensure that “red flags” are first identified through the diligence process, and then ensure these concerns are addressed — with the assistance of legal counsel as appropriate — in order to mitigate the potential corruption risks. The results of all due diligence reviews are documented and recorded in Raytheon’s 3D database, which provides companywide access to the results of all due diligence for review by all Raytheon employees.’



Raytheon’s Due Diligence for International Parties and Transactions policy sets forth the due


diligence that must be performed for all international parties including: customers, suppliers, JV Parties, Sales Representatives, consultants and offset service providers; as well as international transactions. The cornerstone of Raytheon’s due diligence process is to ensure that “red flags” are first identified through the diligence process, and then ensure these concerns are addressed — with the assistance of legal counsel as appropriate — in order to mitigate the potential corruption risks. The results of all due diligence reviews are documented and recorded in Raytheon’s 3D database, which provides companywide access to the results of all due diligence for review by all Raytheon employees.’




This policy provides direction on the appointment and use of international representatives and consultants, including applicable due diligence. The policy provides that the term of international representative agreements shall not exceed two years and shall not exceed one year for international consultants; due diligence reviews are updated prior to renewing international representative and consultant agreements. The policy also provides that standard agreements are used to monitor, control and audit international representatives and consultants, thereby countering corruption risk. The policy further provides that international representatives and consultants are trained and comply with the Company’s Code of Conduct, applicable policies and procedures and the Foreign Corrupt Practices Act (FCPA) and other applicable laws, including other applicable anti-corruption laws.’





A15:

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

Score:

2

Comments:

Based on public information, there is evidence that the company has an anti-corruption policy that prohibits corruption in its various forms, including facilitation payments, conflicts of interest and gifts and hospitality.

References:

Public: Company anti-corruption policy: http://www.raytheon.com/responsibility/rtnwcm/groups/gallery/documents/digitalasset/rtn_160603.pdf ‘This policy reaffirms Raytheon’s longstanding commitment to ensure that those who conduct global business on the Company’s behalf do so with integrity, honesty, and in full compliance with applicable laws such as the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act of 2010 (UK Bribery Act) and consistent with the intent of anti-corruption conventions, including the Organization for Economic Cooperation and Development(OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the United Nations Convention Against Corruption. Raytheon’s policies, processes, and internal controls have been developed to promote compliance and to deter, detect, and correct violations. Our Code of Conduct and Business Ethics and Compliance program emphasize Raytheon’s expectation that its leaders, employees, and business partners will operate according to our guiding business values, core ethical principles, relevant laws and regulations, and Company policies and procedures. This policy reinforces that it is the responsibility of leadership, every Raytheon employee, and all those we engage to represent us to ensure that the Company conducts global business according to the highest ethical standards and in compliance with all applicable laws’. http://www.raytheon.com/responsibility/stewardship/anticorruption/policies/index.html#06

‘Raytheon has an overarching anti-corruption policy which articulates our zero tolerance for






corruption; this policy appears at the link provided. The anti-corruption policy also describes related policies and procedures, which further detail how the Company's internal controls operate to detect, prevent and correct issues related to this critical area of governance’.


‘Raytheon strongly discourages facilitation payments, and as a signatory to the Global Principles of Business Ethics for the Aerospace and Defense Industry, Raytheon has agreed to seek the elimination of facilitation payments. Accordingly, facilitation payments are prohibited by this policy and any requests for a facilitation payment should be promptly reported to the OGC.’

(p.2): ‘It is the policy of Raytheon Company to ensure compliance by its leaders, employees, and Covered Persons, including representatives, consultants and other contracted third parties, with the FCPA, the UK Bribery Act, and all other relevant anti-corruption laws.’

(p.4): ‘No employee will suffer adverse consequences for refusing to pay bribes or for complying with this policy even if it were to result in the Company losing business.’


‘124-RP: Conflict of Interest

It is Raytheon’s policy is to ensure a companywide, consistent approach with respect to the identification, disclosure, and resolution of conflicts of interest. Raytheon is committed to conducting its business with propriety, and our directors, employees, consultants and representatives must act fairly, impartially, and never place personal interests over their obligations to Raytheon. Directors, employees, consultants and representatives engaged by the company are responsible for recognizing and avoiding activities, investments or relationships which involve or could result in a conflict of interest or the appearance of a conflict of interest. Potential and actual conflict of interest disclosure requirements are imposed to enable the company to independently evaluate and determine whether a conflict of Interest may be properly managed or may disqualify the individual from engaging in specific duties or responsibilities, and to ensure that company standards of ethical conduct are maintained by its directors, employees, consultants, and representatives. Raytheon’s Conflict of Interest policy requires company directors, employees, consultants, and representatives to avoid conflicts of interest, or the appearance of such, between their obligations to the company and their personal affairs and to disclose certain matters identified in the policy should they arise.’



‘97-RP: Offering and Accepting Business Courtesies, Gifts and Other Gratuities

Business courtesies are occasionally appropriate in building and maintaining business relationships with government and commercial customers. However, when conducting




company business Raytheon employees must avoid even the appearance of currying favor, or any other misconduct, that may have an adverse impact on the reputation of Raytheon. Raytheon’s Offering and Accepting Business Courtesies, Gifts and Other Gratuities policy sets forth the process employees must follow before offering, giving, or receiving a business courtesy, gift, or other gratuity. While the dollar limits and approval procedures are set forth in that policy all employees must ensure that any business courtesy: i) is modest and appropriate for the occasion; ii) is necessary for a bona fide business purpose; iii) is in compliance with all applicable laws, policies and regulations. It is never permissible to offer or extend a business courtesy that could be reasonably interpreted as an attempt to obtain or retain an improper business advantage or that could embarrass, or negatively reflect on, Raytheon’s reputation.’


Code of Conduct:

‘Raytheon prohibits improper international business practices and complies with all applicable laws, such as the U.S. Foreign Corrupt Practices Act (FCPA), similar laws of host nations such as the UK Bribery Act, and related anti-bribery conventions. The FCPA prohibits offering anything of value to foreign officials for the purpose of influencing that foreign official or to secure any improper advantage in order to obtain or retain business, and the FCPA also requires strict internal accounting controls to prevent concealment of bribery or other financial transactions.’



A16:

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

Score:

2

Comments:

Based on public information, there is evidence that the company’s anti-corruption policy is explicitly one of zero tolerance.

References:

Public:

Company website: http://www.raytheon.com/responsibility/stewardship/anticorruption/message/index.html

‘We simply have zero tolerance for corruption, as we committed when we signed the Global Principles of Business Ethics for the Aerospace and Defense Industry. Our company value of Integrity makes clear our commitment to respect ethics, laws and regulations wherever we do business.’



A17:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company’s anti-corruption and ethics policies are easily accessible to Board members, employees and third parties. The company’s Anti-Corruption Policy, summaries of key anti-corruption policies, and the Code of Conduct are accessible on its website, with the latter available in multiple languages.

References:

Public:

Anti-Corruption Policy:


Company website: Anti-Corruption Policies:http://www.raytheon.com/responsibility/stewardship/anticorruption/policies/index.html#06

Raytheon Code of Conduct:









A17(a):

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

Score:

2

Comments:

Based on public information, there is evidence that the company’s ethics and anti-corruption policies are easily understandable and clear to Board members, employees and third parties. The Code of Conduct contains various scenarios to help illustrate the company’s ethics and anti-corruption policies. The Anti-Corruption Policy and related policies are written in accessible, comprehensible language without dense, legal terms.

References:

Public:

Code of Conduct:

‘Raytheon prohibits improper international business practices and complies with all applicable laws, such as the U.S. Foreign Corrupt Practices Act (FCPA), similar laws of host nations such as the UK Bribery Act, and related anti-bribery conventions. The FCPA prohibits offering anything of value to foreign officials for the purpose of influencing that foreign official or to secure any improper advantage in order to obtain or retain business, and the FCPA also requires strict internal accounting controls to prevent concealment of bribery or other financial transactions.’


Decision making model: http://www.raytheon.com/ourcompany/rtnwcm/groups/public/documents/content/rtn_ethics-actions.pdf


‘Raytheon strongly discourages facilitation payments, and as a signatory to the Global Principles of Business Ethics for the Aerospace and Defense Industry, Raytheon has agreed to seek the elimination of facilitation payments. Accordingly, facilitation payments are prohibited by this policy and any requests for a facilitation payment should be promptly



http://www.raytheon.com/ourcompany/rtnwcm/groups/public/documents/content/rtn_ethics-actions.pdf

http://www.raytheon.com/ourcompany/rtnwcm/groups/public/documents/content/rtn_ethics-actions.pdf


reported to the OGC.’

(p.2): ‘It is the policy of Raytheon Company to ensure compliance by its leaders, employees, and Covered Persons, including representatives, consultants and other contracted third parties, with the FCPA, the UK Bribery Act, and all other relevant anti-corruption laws.’

(p.4): ‘No employee will suffer adverse consequences for refusing to pay bribes or for complying with this policy even if it were to result in the Company losing business.’


‘124-RP: Conflict of Interest

It is Raytheon’s policy is to ensure a companywide, consistent approach with respect to the identification, disclosure, and resolution of conflicts of interest. Raytheon is committed to conducting its business with propriety, and our directors, employees, consultants and representatives must act fairly, impartially, and never place personal interests over their obligations to Raytheon. Directors, employees, consultants and representatives engaged by the company are responsible for recognizing and avoiding activities, investments or relationships which involve or could result in a conflict of interest or the appearance of a conflict of interest. Potential and actual conflict of interest disclosure requirements are imposed to enable the company to independently evaluate and determine whether a conflict of Interest may be properly managed or may disqualify the individual from engaging in specific duties or responsibilities, and to ensure that company standards of ethical conduct are maintained by its directors, employees, consultants, and representatives. Raytheon’s Conflict of Interest policy requires company directors, employees, consultants, and representatives to avoid conflicts of interest, or the appearance of such, between their obligations to the company and their personal affairs and to disclose certain matters identified in the policy should they arise.’





A18:

Does the anti-corruption policy explicitly apply to all employees and

members of the Board?

Score:

2

Comments:

Based on public information, there is evidence that the company’s Code of Conduct and Anti-Corruption Policy apply to all employees and Board members.

References:

Public:

Code of Conduct:

‘The Code applies to Company directors, officers, and employees, and in certain respects to suppliers, consultants, representatives, and agents’.


‘74-RP: Code of Business Ethics and Conduct and Business Ethics and Compliance Program

Raytheon’s Code of Business Ethics and Conduct and Business Ethics and Compliance Program policy establishes that the company’s Code of Conduct and its companywide business ethics and compliance program are resources to articulate Raytheon’s expectations of its leaders, employees, suppliers, agents, consultants and representatives to undertake actions that are consistent with Raytheon's guiding business values, relevant laws and regulations, and company policies and procedures.’



‘This policy reinforces that it is the responsibility of leadership, every Raytheon employee, and all those we engage to represent us to ensure that the Company conducts global business according to the highest ethical standards and in compliance with all applicable laws.’

‘All Covered Persons are subject to this policy.’




‘Covered Persons – Raytheon leaders, employees, and business partners employed by the Company, and, as described in Section 3.3 of this policy, third parties engaged by Raytheon.’


A20:

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

Score:

2

Comments:

Based on public information, there is evidence that the company has a policy on potential conflicts of interest, which applies to both employees and Board members. The policy clearly defines a conflict of interest and contains examples of potential conflicts of interest.

References:

Public:

Anti-corruption policy 124-RP:


‘It is Raytheon’s policy is to ensure a companywide, consistent approach with respect to the identification, disclosure, and resolution of conflicts of interest. Raytheon is committed to conducting its business with propriety, and our directors, employees, consultants and representatives must act fairly, impartially, and never place personal interests over their obligations to Raytheon. Directors, employees, consultants and representatives engaged by the company are responsible for recognizing and avoiding activities, investments or relationships which involve or could result in a conflict of interest or the appearance of a conflict of interest. Potential and actual conflict of interest disclosure requirements are imposed to enable the company to independently evaluate and determine whether a conflict of Interest may be properly managed or may disqualify the individual from engaging in specific duties or responsibilities, and to ensure that company standards of ethical conduct are maintained by its directors, employees, consultants, and representatives. Raytheon’s Conflict of Interest policy requires company directors, employees, consultants, and representatives to avoid conflicts of interest, or the appearance of such, between their obligations to the company and their personal affairs and to disclose certain matters identified in the policy should they arise’.

Code of Conduct (2014):

‘Avoid Conflicts of Interest, Disclose Potential Conflicts




Directors, officers, employees, suppliers, consultants, representatives, and agents are required to avoid conflicts of interest between their obligations to the Company and their personal affairs, or other business interest or relationships. Any relationship or activity which may influence, or appear to influence, performance of one’s duties to the Company must be disclosed to the Ethics Office or the Office of the General Counsel for review and resolution. A competing personal interest could interfere with the Company’s interest, for example, where an individual has a direct and personal interest in a transaction or situation that could affect his or her judgment and divide loyalty to the Company with loyalty to one’s own interest. Examples of such conflicts include: dual or prior employment by a customer, competitor, or supplier; placement of business where the employee or family member has a financial stake; acting independently as a consultant to a customer or supplier of Raytheon; or accepting anything of value not approved pursuant to policy from a supplier or potential supplier. Appearances are important, and avoiding the appearance of a conflict of interest should be our guide in this area.

Directors, officers, and employees are prohibited from personally taking opportunities for themselves discovered through the use of Company information, position, or property without the consent of the Board of Directors. No Company information, position, or property may be used for improper personal gain, and no director, officer, or employee may compete with the Company directly or indirectly. Actual or potential conflicts of interest must be disclosed and resolved in accordance with Company policy in consultation with the Ethics Office, the Office of the General Counsel, or, in certain cases, with the Board of Directors.

Q: I want to take a part-time job, but a co-worker said I need to have that reviewed and approved by the Company. This is my business, why does the Company need to know?

A: The Company needs to be sure your part-time work does not interfere with your Raytheon work or with any Raytheon business interest. We need to conduct a conflict of interest review to be sure your part-time work doesn’t involve a competitor, supplier or customer, or otherwise create issues of concern. Finally, the Company may want to remind you that no Company time or resources may be used for secondary employment. If there are no issues, or if any concerns can be effectively addressed, your proposed part-time job with another organization would likely be approved.

Q: I have a relative who works for a supplier to the Company. Is that a problem?

A: Not necessarily. If you have no involvement in making procurement decisions concerning this supplier, there probably is no issue. However, you are required to disclose this situation to management and the Ethics Office, so that the Company can ensure that placing or continuing business with the supplier is not influenced in any way by your family relationship and your position at the Company.

Q: I have a family member who works for Raytheon; do I need to disclose that relationship?

A: Yes. This allows the Company to ensure that no conflict of interest, such as supervising a family member, exists.’


A21:

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?

Score:

2

Comments:

Based on public information, there is readily available 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. All employees must ensure that gifts and gratuities have a bona fide business purpose, are appropriate for the occasion and are in compliance with all applicable laws, policies, and regulations. With supervisory approval and where there is no conflict of interest, employees are able to accept gifts worth up to $100; gifts worth more than $100 must be approved by the Ethics Office. Employees involved in purchasing goods and services must not accept gifts from suppliers worth more than $20. The company states that specific dollar limits and approval procedures are given in the gifts and gratuities policy.

References:

Public:

Code of Conduct:

‘Company business courtesies and conflict of interest policies require compliance with laws and the use of good judgment concerning giving or accepting gifts and other “things of value”. Employees involved in purchasing goods and services for the Company should not accept gifts from suppliers of more than nominal value (less than $20), such as promotional items, in order to avoid the appearance of favoritism. Gifts offered by employees to commercial customers must be reasonable and are also governed by Company policy. With supervisory approval and where there is no conflict of interest, other employees may accept gifts and other business courtesies up to $100 (U.S.) in value. Acceptance of any gift above $100 in value must be reviewed with and approved by the Ethics Office. Company policy allows accepting meals or entertainment so long as it is infrequent, not lavish, and supports Company business interests (such as relationship building with business partners). It is never permissible for Raytheon employees to solicit gifts or business courtesies.’


‘Raytheon policy, 97-RP, Offering and Accepting Business Courtesies, Gifts and Other


Gratuities, sets forth the process employees must follow before offering, giving, or receiving a business courtesy, gift, or other gratuity. While the specific dollar limits and approval procedures are set forth in that policy, all employees must ensure that any business courtesy: (i) is modest and appropriate for the occasion, (ii) has a bona fide business purpose, and (iii) is in compliance with all applicable laws, policies, and regulations. It is never permissible to offer or extend a business courtesy that could be reasonably interpreted as an attempt to obtain or retain an improper business advantage or that could embarrass Raytheon or negatively affect Raytheon’s reputation.’


A22:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company has a policy for the giving and receipt of hospitality, that ensures that such transactions are bona fide and not a subterfuge for bribery. All employees must ensure that gifts and gratuities have a bona fide business purpose, are appropriate for the occasion and are in compliance with all applicable laws, policies, and regulations. The company states that specific dollar limits and approval procedures are given in the gifts and gratuities policy.

References:

Public:

Code of Conduct:

‘Company business courtesies and conflict of interest policies require compliance with laws and the use of good judgment concerning giving or accepting gifts and other “things of value”. Employees involved in purchasing goods and services for the Company should not accept gifts from suppliers of more than nominal value (less than $20), such as promotional items, in order to avoid the appearance of favoritism. Gifts offered by employees to commercial customers must be reasonable and are also governed by Company policy. With supervisory approval and where there is no conflict of interest, other employees may accept gifts and other business courtesies up to $100 (U.S.) in value. Acceptance of any gift above $100 in value must be reviewed with and approved by the Ethics Office. Company policy allows accepting meals or entertainment so long as it is infrequent, not lavish, and supports Company business interests (such as relationship building with business partners). It is never permissible for Raytheon employees to solicit gifts or business courtesies.’


‘Raytheon policy, 97-RP, Offering and Accepting Business Courtesies, Gifts and Other Gratuities, sets forth the process employees must follow before offering, giving, or receiving a business courtesy, gift, or other gratuity. While the specific dollar limits and approval


procedures are set forth in that policy, all employees must ensure that any business courtesy: (i) is modest and appropriate for the occasion, (ii) has a bona fide business purpose, and (iii) is in compliance with all applicable laws, policies, and regulations. It is never permissible to offer or extend a business courtesy that could be reasonably interpreted as an attempt to obtain or retain an improper business advantage or that could embarrass Raytheon or negatively affect Raytheon’s reputation.’


A23:

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

Score:

2

Comments:

Based on public information, there is evidence that the company has a policy that explicitly prohibits facilitation payments. If facilitation payments are made they are reported to the Office of the General Counsel and recorded in the company’s records.

References:

Public: Anti-corruption policy: http://www.raytheon.com/responsibility/rtnwcm/groups/gallery/documents/digitalasset/rtn_160603.pdf ‘“Facilitation payments” are small payments intended to expedite otherwise routine government action such as processing visas or work permits or customs clearances. Facilitation payments do not include any discretionary action such as a decision whether, or under what terms, to approve a permit. While the FCPA does allow for a limited exception for facilitation payments many anti-corruption laws do not. Moreover, the distinction between an illegal bribe and a lawful facilitation payment can be very difficult to determine even by experienced counsel. Raytheon strongly discourages facilitation payments, and as a signatory to the Global Principles of Business Ethics for the Aerospace and Defense Industry, Raytheon has agreed to seek the elimination of facilitation payments. Accordingly, facilitation payments are prohibited by this policy and any requests for a facilitation payment should be promptly reported to the OGC. 5.6.2 Any exception to this policy requires: (1) advance written approval from the OGC after a thorough analysis of the applicable anti-corruption laws, and the surrounding facts and circumstances, and (2) a proper and accurate accounting for the payment in the Company’s books and records that is clearly marked “facilitation payment.” 5.6.3 This prohibition on facilitation payments is not intended to place the physical safety of people at risk.’




A24:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company regulates political contributions, in order to prevent undue influence or other corrupt intent. No contribution can be made to any state or local candidate, political committee or political party, without the approval of Raytheon's Political Expenditure Review Committee (PERC). The company discloses annual amounts for section 527 contributions and state and local contributions.

References:

Public:


‘Raytheon complies with laws and ethics regulations applicable to lobbying activities and ensures that any contributions made to political parties, officials, candidates, organizations, and charities are for a legitimate purpose and are in no way being used to secure an improper business advantage’.

Policy 63-RP Reporting political Contributions:

‘Raytheon shall comply with all reporting requirements under ITAR 22 CFR Part 130. Such regulations require that a report be submitted to the U.S. Department of State when Raytheon:

Applies to the U.S. Department of State for licenses or approvals for the permanent export of defense articles or defense services, valued at U.S. $500,000 or more, in support of international direct commercial sales; or

Enters into contracts or contract modifications with the Department of Defense (DoD) to supply, pursuant to a foreign military sale (FMS) contract, defense articles or defense services, valued at US$500,000 or more, for the armed forces of a foreign country or international organization.

Raytheon’s Reporting Political Contribution, Fees, and Commissions Involving Foreign Sales of Defense Articles/Services policy establishes the internal guidance and controls to assure


compliance with U.S. laws and regulations regarding the prompt reporting of fees and commissions in connection with foreign sales.

part 130.6 Political contribution - definition

Political contribution means any loan, gift, donation or other payment of $1,000 or more made, or offered or agreed to be made, directly or indirectly, whether in cash or in kind, which is:

(a) To or for the benefit of, or at the direction of, any foreign candidate, committee, political party, political faction, or government or governmental subdivision, or any individual elected, appointed or otherwise designated as an employee or officer thereof; and

(b) For the solicitation or promotion or otherwise to secure the conclusion of a sale of defense articles or defense services to or for the use of the armed forces of a foreign country or international organization. Taxes, customs duties, license fees, and other charges required to be paid by applicable law or regulation are not regarded as political contributions.’

Company website: Political Contributions and Lobbying Expenditures

‘Raytheon participates in the U.S. political process to ensure that the Company's interests as a leading member of the aerospace and defense industry, and as a large employer, are appropriately represented. The Company maintains a detailed oversight process to make certain that political contributions and lobbying expenditures are made in a legal, ethical, and transparent manner.

Raytheon Political Action Committee

The Company offers eligible employees an opportunity to make voluntary political contributions through the Raytheon Political Action Committee (RAYPAC), which supports candidates for federal office. RAYPAC is governed in accordance with Company policy by a Steering Committee comprised of senior management from each of the Company's business units as well as representatives from its government relations and legal functions.

RAYPAC is registered with the Federal Election Commission (FEC), and its activities are reported on a monthly basis. Contribution information may be found on the FEC website, www.fec.gov.

Raytheon also sponsors two state political action committees (PACs) to which eligible employees residing in those states may make voluntary contributions in connection with the local political process. These PACs operate under, and comply with, the statutes and regulations in effect in the state in which they operate. Contribution information can be found at the following state agency websites: Arizona Secretary of State and the California Secretary of State.

Direct Corporate Political Contributions

On a limited basis, the Company makes direct corporate political contributions to state and local candidates as well as organizations operated in accordance with Internal Revenue Code (IRC) Section 527. All of these activities are governed by a Company-wide policy. A fundamental principle underpinning this policy is Raytheon's commitment to the highest standards of ethical conduct. In accordance with Company policy, no contribution can be made from Company funds to any candidate, political committee or political party without


the approval of Raytheon's Political Expenditure Review Committee (PERC). In 2013 the PERC authorized one direct contribution to an individual candidate at the state and local level. There were no direct contributions during 2013 to Section 527 organizations.

2013 Corporate Contributions Summary

Section 527 Contributions

$ 0

State & Local Contributions

$ 5,000

Total 2013 Corporate Contributions

$ 5,000’.

‘Board Oversight

The Board of Directors, through its Public Affairs Committee which is composed entirely of independent directors, periodically receives reports on political and lobbying activities.’

http://investor.raytheon.com/phoenix.zhtml?c=84193&p=irol-political

http://investor.raytheon.com/phoenix.zhtml?c=84193&p=irol-political


A25:

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?

Score:

2

Comments:

Based on public information, there is evidence that the company has a clear policy on engagement in lobbying activities, in order to prevent undue influence or other corrupt intent. The company complies with all laws and regulations applicable to its federal lobbying activities, and issues periodic reports with state and local agencies, as required by relevant state and local laws.

References:

Public:

Anti-corruption policy 197-RP: Lobbying

‘This policy is designed to ensure compliance by Raytheon Company with all laws and ethics regulations applicable to the company’s federal lobbying activities and to ensure complete and accurate reporting of such activities under the Federal Lobbying Disclosure Act (LDA) of 1995, as amended by the Honest Leadership and Open Government Act of 2007. Raytheon’s Federal Lobbying Activities – Reporting and Disclosure policy provides guidance to ensure timely and accurate record-keeping, reporting, and certifications concerning the company's lobbying activities and the giving of gifts and payment of travel expenses of Members of the House or the Senate, all as required by the LDA’.



‘Raytheon complies with laws and ethics regulations applicable to lobbying activities and ensures that any contributions made to political parties, officials, candidates, organizations, and charities are for a legitimate purpose and are in no way being used to secure an improper business advantage’.

Company website: Political Contributions and Lobbying Expenditures



‘Raytheon participates in the U.S. political process to ensure that the Company's interests as a leading member of the aerospace and defense industry, and as a large employer, are appropriately represented. The Company maintains a detailed oversight process to make certain that political contributions and lobbying expenditures are made in a legal, ethical, and transparent manner.’

‘Lobbying Expenditures

Raytheon responsibly and lawfully engages in the legislative process to communicate its views on legislative and regulatory matters affecting the Company's business and its various constituencies. Federal lobbying activities are regulated by the Lobbying Disclosure Act (LDA). In full compliance with the LDA, the Company's lobbying activities and expenses, as defined by Section 162 (e) of the Internal Revenue Code, are disclosed to the U.S. Congress on a quarterly basis. In addition, the Company files semi-annual reports detailing certain Federal Election Commission Act (FECA) contributions, honorary contributions, presidential library contributions, and payments for event costs. These reports are publicly accessible at the U. S. House of Representatives Office of the Clerk website. The Company also files periodic reports with state and local agencies reflecting lobbying activities as required by relevant state and local laws. For the jurisdictions that provide online availability, the Company's filed reports, as of January 31, 2014, can be found at the following linked websites:

Arizona

California, including the City and County of Los Angeles

Indiana

Massachusetts

Mississippi

New York State, including the City of New York

Oklahoma

Texas

Virginia

Raytheon has in place sound procedures to assure the accuracy, timeliness, and oversight of its federal and state filings.’


A25(a):

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

Score:

1

Comments:

Based on public information, there is evidence that the company regulates charitable contributions, to ensure that they are not made to secure improper business advantage. However, it is not clear that the company discloses the recipients of such contributions. The company therefore scores 1. To score higher the company would need to provide evidence showing that recipients are publically declared.

References:

Public: Anti-Corruption Policy, p.3: ‘Raytheon complies with laws and ethics regulations applicable to lobbying activities and ensures that any contributions made to political parties, officials, candidates, organizations, and charities are for a legitimate purpose and are in no way being used to secure an improper business advantage’. Company website: Anti-Corruption Policies ‘117-RP: Corporate Contributions, and Matching Gifts Policy Charitable contributions and gifts of property or services made by the company to non-profit organizations qualified under Section 501(c) of the Internal Revenue Code must be made in accordance with Raytheon policies, applicable legal and ethical standards. Raytheon’s Corporate Contributions, and Matching Gifts policy sets forth the management and approval of charitable contributions and gifts of property or services to non-profit organizations, including grants made at the request of members of the board of directors and corporate management leadership team.’


A26:

Does the company provide written guidance to help Board members and

employees understand and implement the firm’s ethics and anti-corruption

agenda?

Score:

2

Comments:

Based on public information, there is 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 Code of Conduct contains numerous scenarios that illustrate how policies may be applied. In particular, three awareness videos that explain key company policies are permanently available for employees.

References:

Public:

Code of Conduct:


Awareness videos: http://www.raytheon.com/responsibility/stewardship/anticorruption/index.html


General explanations provided for company anti-corruption policies

http://www.raytheon.com/responsibility/stewardship/anticorruption/policies/index.html


‘Our Ethics education program also features a library of online compliance modules that provide in-depth treatment of subjects related to our business such as: export controls, hiring of former government employees, offering and accepting business courtesies, and various regulations governing the defense business. Employees completed more than 149,000 compliance modules in 2012.’



http://www.raytheon.com/responsibility/stewardship/anticorruption/index.html

http://www.raytheon.com/responsibility/stewardship/anticorruption/policies/index.html


A27:

Does the company have a training programme that explicitly covers anti-corruption?

Score:

2

Comments:

Based on public information, there is evidence that the company has a training programme that explicitly covers anti-corruption.

References:

Public:


‘Education Program

FCPA Aware Video Modules – A series of video modules that raise awareness about key aspects of the FCPA: due diligence, gifts and gratuities, offsets, and books and records.

FCPA Function-Specific Education – A series of function-specific online modules that provide detailed FCPA information and highlight function-specific, real-world FCPA scenarios.

LT Instructor-Led Sessions – Forums for the business leadership teams or extended leadership teams to receive additional FCPA information, reinforce video or other educational messages and encourage dialogue about critical issues.

Online Compliance Modules – Topics in our library of online ethics and compliance modules include: Global Bribery and Corruption, Understanding the FCPA, and the UK Bribery Act.’


‘We also continue to leverage our innovative education programs, such as our FCPAware program, which is directly communicated to employees engaged in global business activities to help ensure they are knowledgeable and vigilant about risk in this area.’

(p.8): ‘In 2013, employees completed more than 145,000 online compliance education modules.’

(p.9): ‘In 2013, we also produced our third edition of a series of video vignettes focusing on compliance with our anti-corruption policy and related laws, including the Foreign Corrupt



Practices Act. This edition, which we call FCPAware 3, was delivered to and completed by a target audience of more than 10,000 employees. This video series helps to emphasize the importance of following company due diligence processes when engaging international business representatives and appropriately recording all accounting entries in our books and records.’


A28:

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

Score:

2

Comments:

Based on public information, there is evidence that the company provides anti-corruption training in all countries where the company operates. Every business unit must ensure that periodic core anti-corruption training is completed by all applicable employees, both inside and outside the USA.

References:

Public:


‘Ethics Education

Our ethics education initiatives deliver innovative programs to guide employees’ ethical decision-making and communicate important ethics messages. The program’s success is evident in employee feedback. In our 2010 Employee Opinion Survey, the relevance and usefulness of ethics education was favorably rated by 82% of respondents.

We deliver ethics education to our employees through numerous vehicles. Each year, all employees participate in “Ethics Checkpoint” sessions with small groups of peers to study ethical dilemmas based on real workplace situations, presented in video vignettes. Employees learn to pause, take an ethics check, and then proceed with the best course of action. In 2010, our Ethics Checkpoint programs highlighted labor charging, product integrity and supplier relationships.

We also provide ethics education through our “EthicSpace” series of videoclips delivered by email to all employees. EthicSpace videos present meaningful and relevant ethics education in an entertaining and readily accessed format. EthicSpace topics for 2010 included appropriate use of company-issued credit cards, export control rules, and safety on the job.

Finally, employees complete online learning modules relating to a wide range of legal



requirements and other topics. To sensitize employees to key risks pertaining to our international growth strategy, in 2010 we launched a series of modules highlighting Foreign Corrupt Practices Act compliance subjects, which we call “FCPAware”. Over the past year, employees completed 56,000 FCPAware modules in addition to more than 157,000 modules on other compliance topics’.


‘In 2013, we also produced our third edition of a series of video vignettes focusing on compliance with our anti-corruption policy and related laws, including the Foreign Corrupt Practices Act. This edition, which we call FCPAware 3, was delivered to and completed by a target audience of more than 10,000 employees. This video series helps to emphasize the importance of following company due diligence processes when engaging international business representatives and appropriately recording all accounting entries in our books and records.’


‘Each Raytheon Business is responsible for ensuring that periodic core anti-corruption training is completed by all applicable employees both inside and outside the United States. In addition to core anti-corruption training, the Businesses are encouraged to conduct additional function-specific anti-corruption training (e.g., Finance, Supply Chain, Contracts) as appropriate.’

IFBEC Best Practices Training presentation (16 October 2013), p.7:

‘- Every two years for US employees in designated functions

- Every two years for all non-US employees (excluding production workers)

- Function-specific anti-corruption training

- International travelers must complete core training

- Anti-corruption awareness training in designated functions.’

http://ifbec.info/wp-content/uploads/2013/07/Raytheon-Best-Practices.pdf

http://ifbec.info/wp-content/uploads/2013/07/Raytheon-Best-Practices.pdf


A29:

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

Score:

0

Comments:

Based on public information there, is no readily available evidence that the company provides targeted anti-corruption training to Board members.

References:

Public:

NA


A30:

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

Score:

2

Comments:

Based on public information, there is evidence that the company provides tailored ethics and anti-corruption training for employees in sensitive positions. Business units conduct specific anti-corruption training for employees in areas such as finance, supply chain, contracts, and programme office.

References:

Public:

Anti-corruption policy:

‘In addition to core anti-corruption training, the Businesses are encouraged to conduct additional function-specific anti-corruption training (e.g. Finance, Supply Chain, Contracts) as appropriate’.


‘We also continue to leverage our innovative education programs, such as our FCPAware program, which is directly communicated to employees engaged in global business activities to help ensure they are knowledgeable and vigilant about risk in this area.’

(p.9): ‘In 2013, we also produced our third edition of a series of video vignettes focusing on compliance with our anti-corruption policy and related laws, including the Foreign Corrupt Practices Act. This edition, which we call FCPAware 3, was delivered to and completed by a target audience of more than 10,000 employees. This video series helps to emphasize the importance of following company due diligence processes when engaging international business representatives and appropriately recording all accounting entries in our books and records.’


‘Each Raytheon Business is responsible for ensuring that periodic core anti-corruption


training is completed by all applicable employees both inside and outside the United States. In addition to core anti-corruption training, the Businesses are encouraged to conduct additional function-specific anti-corruption training (e.g., Finance, Supply Chain, Contracts) as appropriate.’

IFBEC Best Practices Training presentation (16 October 2013), p.5:

‘•Function-specific online modules

– BD, Program Offices, Contracts, SCM, HR, Finance’.

(p.6): ‘Anti-Corruption Education Enhancements

• Development and deployment of function-specific FCPA training for Contracts, Finance, HR, International, Program Office, RII/BD and Supply Chain (July 2010 – April 2011)

• FCPA Aware Ethics training launched in Q4 2010 with required completion by employees in designated functions

• FCPA eCommunicator launched on OGC website (October 2010)

• Live training provided by OGC and Ethics

• Enhanced finance-specific anti-corruption training, including UK Bribery Act (required of all finance employees worldwide since 2010)

• International Travel Approval and Tracking Systems (ITATS) tool modified to require FCPA/Anticorruption training prior to short and long term travel.’


A31:

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

Score:

2

Comments:

Based on public information, there is evidence that the company has a clear and formal process by which employees declare conflicts of interest. Employees must disclose conflicts of interest to the Ethics Office or the Office of the General Counsel.

References:

Public:

Anti-corruption policy 124-RP:


‘It is Raytheon’s policy is to ensure a companywide, consistent approach with respect to the identification, disclosure, and resolution of conflicts of interest. Raytheon is committed to conducting its business with propriety, and our directors, employees, consultants and representatives must act fairly, impartially, and never place personal interests over their obligations to Raytheon. Directors, employees, consultants and representatives engaged by the company are responsible for recognizing and avoiding activities, investments or relationships which involve or could result in a conflict of interest or the appearance of a conflict of interest. Potential and actual conflict of interest disclosure requirements are imposed to enable the company to independently evaluate and determine whether a conflict of Interest may be properly managed or may disqualify the individual from engaging in specific duties or responsibilities, and to ensure that company standards of ethical conduct are maintained by its directors, employees, consultants, and representatives. Raytheon’s Conflict of Interest policy requires company directors, employees, consultants, and representatives to avoid conflicts of interest, or the appearance of such, between their obligations to the company and their personal affairs and to disclose certain matters identified in the policy should they arise’.


‘Avoid Conflicts of Interest, Disclose Potential Conflicts




Directors, officers, employees, suppliers, consultants, representatives, and agents are required to avoid conflicts of interest between their obligations to the Company and their personal affairs, or other business interest or relationships. Any relationship or activity which may influence, or appear to influence, performance of one’s duties to the Company must be disclosed to the Ethics Office or the Office of the General Counsel for review and resolution. A competing personal interest could interfere with the Company’s interest, for example, where an individual has a direct and personal interest in a transaction or situation that could affect his or her judgment and divide loyalty to the Company with loyalty to one’s own interest. Examples of such conflicts include: dual or prior employment by a customer, competitor, or supplier; placement of business where the employee or family member has a financial stake; acting independently as a consultant to a customer or supplier of Raytheon; or accepting anything of value not approved pursuant to policy from a supplier or potential supplier. Appearances are important, and avoiding the appearance of a conflict of interest should be our guide in this area.

Directors, officers, and employees are prohibited from personally taking opportunities for themselves discovered through the use of Company information, position, or property without the consent of the Board of Directors. No Company information, position, or property may be used for improper personal gain, and no director, officer, or employee may compete with the Company directly or indirectly. Actual or potential conflicts of interest must be disclosed and resolved in accordance with Company policy in consultation with the Ethics Office, the Office of the General Counsel, or, in certain cases, with the Board of Directors.

Q: I want to take a part-time job, but a co-worker said I need to have that reviewed and approved by the Company. This is my business, why does the Company need to know?

A: The Company needs to be sure your part-time work does not interfere with your Raytheon work or with any Raytheon business interest. We need to conduct a conflict of interest review to be sure your part-time work doesn’t involve a competitor, supplier or customer, or otherwise create issues of concern. Finally, the Company may want to remind you that no Company time or resources may be used for secondary employment. If there are no issues, or if any concerns can be effectively addressed, your proposed part-time job with another organization would likely be approved.

Q: I have a relative who works for a supplier to the Company. Is that a problem?

A: Not necessarily. If you have no involvement in making procurement decisions concerning this supplier, there probably is no issue. However, you are required to disclose this situation to management and the Ethics Office, so that the Company can ensure that placing or continuing business with the supplier is not influenced in any way by your family relationship and your position at the Company.

Q: I have a family member who works for Raytheon; do I need to disclose that relationship?

A: Yes. This allows the Company to ensure that no conflict of interest, such as supervising a family member, exists.’


A32:

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

Score:

1

Comments:

Based on public information, there is evidence that the company may apply disciplinary procedures to those found to have engaged in corrupt activities. As the company’s anti-corruption policies apply to Board members, TI assumes that disciplinary procedures also apply. The company therefore scores 1. To score higher the company would need to provide evidence of an explicit commitment to apply disciplinary procedures, to those found to have engaged in corrupt activities.

References:

Public:


‘Compliance with this policy is mandatory. Violations of this policy may result in disciplinary action up to and including termination of Company employees, or termination of business relationship(s) with third parties. Violation of anticorruption laws may also subject individuals to civil or criminal penalties. No employee will suffer adverse consequences for refusing to pay bribes or for complying with this policy even if it were to result in the Company losing business’.


A33:

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?

Score:

1

Comments:

Based on public information, there is evidence that the company has multiple, well-publicised, secure channels, for employees to report concerns or instances of suspected corrupt activity. These channels include the Ethics Office, the Audit Committee and the Office of Business Ethics and Compliance. In particular, employees may report to the Ethics Office anonymously. The company therefore scores 1. To score higher the company would need to provide evidence that employees are able to report using an independent channel.

References:

Public:

Company website: http://www.raytheon.com/contact/

‘In conducting its affairs, Raytheon adheres to the highest ethical standards. Raytheon’s Ethics Office has a toll-free EthicsLine at 800-423-0210, available for those wishing to raise a concern, to report alleged misconduct or violation of Company policy, government law or regulation, or to seek advice. You may also contact the Ethics Office electronically or by writing to:

Ethics Office Raytheon Company 235 Wyman Street Waltham, MA 02451-1219

If you provide us with contact information, you will receive a written acknowledgement of your communication. You can communicate anonymously or confidentially if you wish. Reports will be tracked and investigated in the ordinary course by the Company’s Ethics Office, and if substantiated, resolved through appropriate corrective action. Retaliation for reporting a complaint or concern in good faith relating to ethics issues or any other matter is

http://www.raytheon.com/contact/

mailto:[email protected]



a violation of Company policy’.

Code of Conduct (2014), p.35:

‘You may contact Raytheon’s Corporate Ethics Office by:

EthicsLine: 800.423.0210

E-mail: [email protected]

Mail: Raytheon Company

Ethics Office

235 Wyman Street

Waltham, MA 02451

For additional Ethics information, resources, and education visit our external website: http://www.raytheon.com/responsibility/stewardship/ethics/index.html

Employees have an obligation to raise issues of concern. All reports, including anonymous reports, will be investigated, and if substantiated, resolved through appropriate corrective action. Those found to have violated the Code will be subject to disciplinary action, including in certain cases, termination of employment. If you choose to identify yourself when making a report, you will be provided feedback when the Ethics Office has completed its review. Although the feedback provided may not fully disclose all details of the disposition of the Ethics Office review. All reports are taken seriously and investigated. For those who wish to report a concern or alleged violation in confidence, confidentiality will be maintained to the extent possible, although limited disclosure may be necessary in some cases to conduct an effective investigation or where compelled by regulation or law. Employees are expected to cooperate in internal investigations. Retaliation against an employee for filing an ethics complaint is a violation of Company policy.’

(p.36): ‘Contact Information: Questions or Concerns Specific to Particular Functions

For Code-related questions or concerns specific to Finance, Human Resources, Information Technology or Supply Chain Management, you may use the following email addresses to submit your queries:

Finance: [email protected]

Human Resources: [email protected]

Information Technology: [email protected]

Supply Chain Management: [email protected]

To contact the Raytheon Audit Committee and Lead Director

Complaints or concerns regarding Raytheon’s accounting, internal accounting controls, or auditing matters are referred to the Audit Committee of the Board of Directors. You may write to the Audit Committee at:

Raytheon Audit Committee

Raytheon Company

870 Winter Street

Waltham, MA 02451


You may also submit a concern to the Audit Committee, or communicate with the Lead Director electronically, by visiting the Raytheon Corporate Governance website at www.raytheon.com/ourcompany/communicate.’

(p.37): ‘Contact the Office of Business Ethics and Compliance with questions or concerns about business practices, policies, or standards of conduct.

Raytheon Company

Office of Business Ethics and Compliance


Toll free fax: 800.706.0882


Company website: www.raytheon.com’.

http://www.raytheon.com/ourcompany/communicate


A33(a):

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

Score:

2

Comments:

Based on public information, there is evidence that across geographies, all employees have access to the Ethics Office and the Office of Business Ethics and Compliance.

References:

Public:

Company website: http://www.raytheon.com/contact/

‘In conducting its affairs, Raytheon adheres to the highest ethical standards. Raytheon’s Ethics Office has a toll-free EthicsLine at 800-423-0210, available for those wishing to raise a concern, to report alleged misconduct or violation of Company policy, government law or regulation, or to seek advice. You may also contact the Ethics Office electronically or by writing to:

Ethics Office Raytheon Company 235 Wyman Street Waltham, MA 02451-1219






Ethics Office

235 Wyman Street

Waltham, MA 02451

For additional Ethics information, resources, and education visit our external website:

http://www.raytheon.com/contact/




http://www.raytheon.com/responsibility/stewardship/ethics/index.html

Employees have an obligation to raise issues of concern. All reports, including anonymous reports, will be investigated, and if substantiated, resolved through appropriate corrective action. Those found to have violated the Code will be subject to disciplinary action, including in certain cases, termination of employment. If you choose to identify yourself when making a report, you will be provided feedback when the Ethics Office has completed its review. Although the feedback provided may not fully disclose all details of the disposition of the Ethics Office review. All reports are taken seriously and investigated. For those who wish to report a concern or alleged violation in confidence, confidentiality will be maintained to the extent possible, although limited disclosure may be necessary in some cases to conduct an effective investigation or where compelled by regulation or law. Employees are expected to cooperate in internal investigations. Retaliation against an employee for filing an ethics complaint is a violation of Company policy.’


Raytheon Company







A33(b):

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

Score:

2

Comments:

Based on public information, there is evidence that the company has formal and comprehensive mechanisms, to ensure that whistleblowing is not deterred and that whistleblowers are treated supportively. The company monitors whistleblowing channel usage statistics, with 280 investigations taking place in 2013. The General Counsel also maintains a log of all complaints, their investigations and their resolutions, with a periodic summary report issued to the Audit Committee.

References:

Public:

Code of Conduct:

‘Employees have an obligation to raise issues of concern. All reports, including anonymous reports, will be investigated, and if substantiated, resolved through appropriate corrective action. Those found to have violated the Code will be subject to disciplinary action, including in certain cases, termination of employment. If you choose to identify yourself when making a report, you will be provided feedback when the Ethics Office has completed its review. Although the feedback provided may not fully disclose all details of the disposition of the Ethics Office review. All reports are taken seriously and investigated. For those who wish to report a concern or alleged violation in confidence, confidentiality will be maintained to the extent possible, although limited disclosure may be necessary in some cases to conduct an effective investigation or where compelled by regulation or law’.


‘The Ethics Office also conducts investigations of alleged violations of our Code of Conduct and works with leadership to hold employees accountable if violations are substantiated. The Ethics Office conducted more than 280 investigations in 2013. Resolution of investigations substantiating Code of Conduct violations range from termination of employment to instituting improved internal controls.’



‘The General Counsel will maintain a log of all complaints, tracking their receipt, investigation and resolution and shall prepare a periodic summary report thereof for the Committee. Copies of complaints and such log will be maintained in accordance with the Company's document retention policy.’

http://investor.raytheon.com/phoenix.zhtml?c=84193&p=irol-govAuditProc

Company website: Programme Overview

‘Out of a total of nearly 3,400 contacts with our ethics office in 2010, more than 80% were employees seeking advice. The ethics office investigated approximately 450 misconduct allegations, and, where misconduct was substantiated, discipline up to and including termination was imposed. In the 2010 Employee Opinion Survey, questions concerning ethical behavior in our workplace received a 77% favorability rating, up 2 points from the prior year.’



‘Our Ethics Office conducts investigations of alleged misconduct and violations of the Raytheon Code of Conduct. Our Ethics Office partners with other Raytheon functions, as appropriate, including Human Resources and Internal Audit, to conduct investigations and address inquiries. In 2012, it received more than 6,000 contacts and conducted nearly 350 investigations. More than 90% of the contacts were from employees seeking advice or guidance.’

Sustaining an Effective Anti-Corruption Program public presentation – Tim Schultz (7 May 2014):

‘Ethics Hotline, quarterly certifications, investigations, and reporting to senior leadership and the Board of Directors.’




A34:

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

Score:

2

Comments:

Based on public information, there is evidence that employees have access to well-publicised resources, where help and advice can be sought on corruption-related issues. These resources include the Ethics Office and the Office of Business Ethics and Compliance.

References:

Public:






Ethics Office

235 Wyman Street

Waltham, MA 02451

For additional Ethics information, resources, and education visit our external website: http://www.raytheon.com/responsibility/stewardship/ethics/index.html

Employees have an obligation to raise issues of concern. All reports, including anonymous reports, will be investigated, and if substantiated, resolved through appropriate corrective action. Those found to have violated the Code will be subject to disciplinary action, including in certain cases, termination of employment. If you choose to identify yourself when making a report, you will be provided feedback when the Ethics Office has completed its review. Although the feedback provided may not fully disclose all details of the disposition of the Ethics Office review. All reports are taken seriously and investigated. For those who wish to report a concern or alleged violation in confidence, confidentiality will be maintained to the extent possible, although limited disclosure may be necessary in some cases to conduct an effective investigation or where compelled by regulation or law. Employees are expected to cooperate in internal investigations. Retaliation against an employee for filing an ethics


complaint is a violation of Company policy.’

(p.36): ‘Contact Information: Questions or Concerns Specific to Particular Functions

For Code-related questions or concerns specific to Finance, Human Resources, Information Technology or Supply Chain Management, you may use the following email addresses to submit your queries:

Finance: [email protected]

Human Resources: [email protected]

Information Technology: [email protected]

Supply Chain Management: [email protected]

To contact the Raytheon Audit Committee and Lead Director

Complaints or concerns regarding Raytheon’s accounting, internal accounting controls, or auditing matters are referred to the Audit Committee of the Board of Directors. You may write to the Audit Committee at:

Raytheon Audit Committee

Raytheon Company

870 Winter Street

Waltham, MA 02451

You may also submit a concern to the Audit Committee, or communicate with the Lead Director electronically, by visiting the Raytheon Corporate Governance website at www.raytheon.com/ourcompany/communicate.’


Raytheon Company







http://www.raytheon.com/ourcompany/communicate


A35:

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

Score:

1

Comments:

Based on public information, there is evidence that the company has a commitment to non-retaliation, for bona fide reporting of corruption. The company therefore scores 1. To score higher the company would need to make a specific statement that disciplinary measures are applied to those breaching the non-retaliation policy.

References:

Public:

Code of conduct:

‘Retaliation against an employee for filing an ethics complaint is a violation of Company policy’.


‘The Company will not discharge, demote, suspend, threaten, harass or in any manner discriminate against any employee based upon any lawful actions of such employee with respect to good faith reporting of ethical/integrity concerns (including concerns related to accounting matters) or helping to resolve any such concerns.’




Information Sources:

Company website:

www.raytheon.com



Anti-Corruption Policy:


Corporate Responsibility Report (2013):


Sustainability Report (2012):




Public Affairs Committee Charter:


http://www.raytheon.com/












FINAL ASSESSMENT RAYTHEON COMPANY · RAYTHEON COMPANY The following pages contain the detailed...

Documents

Transcript of FINAL ASSESSMENT RAYTHEON COMPANY · RAYTHEON COMPANY The following pages contain the detailed...