Every day, our actions influence our reputation. We work diligently to maintain a strong, global ethical culture that transcends cultural norms, regional variations in regulation, and challenges presented by changes to our business and markets.
For example, our continued expansion introduces new employees who are unfamiliar with our ethics and compliance culture. Accelerating growth in emerging markets means we increasingly operate in countries where regulations and cultural norms may be less stringent than our policies and standards. We use the Corruption Perceptions Index produced by Transparency International, in conjunction with internal data, to identify high-risk countries and raise awareness of ethical issues and perceptions in each market.
Our Standards of Business Conduct (SBC) serves as our ethical compass, and sets non-negotiable expectations for all our decisions and actions.
The SBC provides guidance in difficult situations, such as avoiding conflicts of interest and rejecting bribery and corruption. Clear and engaging, the SBC is available in more than 20 languages and has also been adapted for contingent workers. We also have a code specific to doing business with the U.S. public sector . Our Supplier Code of Conduct describes the social and environmental standards we expect from suppliers, while our Partner Code of Conduct sets requirements for fair sales and marketing practices for parties selling HP products and services.
Governance structure and responsibilities
Our ethics and compliance office sits within HP's Legal and Government Affairs organization, with groups focused on specific tasks and oversight from the Board of Directors.
Ethics and compliance organization structure
The Board of Directors has four primary ethics and compliance responsibilities:
- Oversee ethics and compliance at HP.
- Set and enforce the "tone at the top."
- Encourage a culture of ethics and compliance.
- Establish procedures and a forum for reviewing significant ethics complaints.
The board has 13 members. Raymond J. Lane, the former president and chief operating officer of Oracle Corporation, joined HP's board in November 2010 as non-executive chairman and became executive chairman of the board in September 2011. Meg Whitman, who became president and chief executive officer in September 2011, has also served as a member of HP's board since January 2011. All members except Ms. Whitman, Mr. Lane, and Ann Livermore (who joined HP's board in June 2011) are independent directors, as defined by the New York Stock Exchange and HP's Corporate Governance Guidelines.
The board's Audit Committee guides HP's ethics and compliance program and supports the company's chief ethics and compliance officer. G. Kennedy Thompson chairs the Audit Committee, having succeeded Robert L. Ryan in that role in February 2011. Mr. Ryan also served as lead independent director until November 2010, when Mr. Lane was named non-executive chairman, at which time HP ceased having a lead independent director. Mr. Thompson is also the independent director responsible for providing specific oversight of the company's compliance with legal and ethical requirements related to the conduct of investigations and reporting to the board.
Ethics and Compliance Office
Our ethics and compliance office is responsible for overseeing and implementing our ethics and compliance program. It is led by the chief ethics and compliance officer, who reports directly to the general counsel and the independent director responsible for providing specific oversight of the company's compliance with legal and ethical requirements related to the conduct of investigations and reporting to the board.
The ethics and compliance committee meets quarterly to give guidance on relevant issues. It consists of senior executives, including the general counsel, chief financial officer, and head of human resources.
Our compliance council includes members such as the chief privacy officer and senior leaders from HP's businesses, legal and compliance functions—including the head of internal audit. This council oversees related compliance council boards including those for compliance-related IT projects, market knowledge, environment, privacy, and personal data protection.
The global ethics team is a network including our ethics office, corporate SBC compliance team, and an ethics and compliance liaison group that reinforces collaboration across organizations. Senior employees in each business group, function, and region serve as ethics and compliance champions. They engage with senior regional and business management teams and compliance functions to ensure local issues are identified and addressed. The corporate SBC compliance team, a partnership between the ethics office and legal investigations team, handles all significant internal ethics and compliance investigations worldwide. (See Ethics questions and concerns.)
In 2010, the ethics and compliance office became responsible for HP's Social and Environmental Sustainability and Compliance (SESC) program, which sets standards for suppliers, monitors their performance, and helps them enhance their capabilities in this area. This expands accountability for different compliance functions within the Ethics and Compliance Office and reflects the strategic importance of the SESC program.
Also in 2010, the ethics and compliance officer became the executive director for the HP Foundation, a separate legal entity. The role enhances the department's support of global citizenship.
We develop and enforce policies, standards, and processes to help ensure HP identifies and addresses relevant legal and regulatory risks. The compliance office oversees the activities of compliance functions across the company, such as the privacy and global trade offices, and works closely with other risk functions, such as internal audit and enterprise risk management, to:
- Identify, assess, and prioritize risks.
- Engage with the personnel and functions responsible for addressing specific risks.
- Develop and implement mitigation plans.
- Determine where the company should invest resources to most effectively mitigate risk.
In 2010, the compliance office reassessed the least mature compliance functions, that were first identified through a rigorous assessment process started in 2009. The least mature compliance functions all moved to medium or high maturity. Some of the improvements they made include:
- Increased collaboration and alignment with dependent functions
- Established ownership and accountability for the risks within their domain
- Clarified roles, responsibilities, and requirements
In addition, the compliance office extended its assessment to include the business units and regions, and is tracking completion of mitigation plans, which includes improvements to the compliance risk management infrastructure.
Corrupt behavior undermines the very foundation upon which HP was built. We do not tolerate bribery of any kind, and comply with all relevant laws that affect our business, including those aimed at combating corruption. We will never trade our integrity for a business opportunity. We do not offer or provide bribes or kickbacks to win business or to influence a business decision. We have a due diligence process to choose agents and distributors and other controls to ensure that our commissions or fee arrangements will not be used as bribes on our behalf.
General training on anti-corruption concepts is part of our mandatory ethics and compliance annual refresher course (see below). We have detailed anti-corruption training for employees specifically engaged in public sector business. This is summarized in HP’s Anti-Corruption Compliance Program Overview. We also raise employee awareness in leader communications and videos. For example, our chief ethics and compliance officer makes our expectations clear in a video for partners and suppliers.
Our employees, partners, and suppliers have a responsibility to report any observed or known corrupt activity, and to familiarize themselves with and follow our anti-corruption policies—ignorance is not an excuse for failing to comply. HP promptly investigates and responds to any alleged violations of our policies or laws. To prevent potential violations, we encourage employees, partners, and suppliers to contact the ethics and compliance office through various channels to determine whether an action might constitute payment of a bribe. See Ethics questions and concerns for more information.
Communication and training
Every person at HP is accountable for their actions—regardless of their role. We continue to strengthen our training and awareness program to keep ethics and compliance top of mind. Examples include:
- Mandatory ethics and compliance annual refresher course This 90-minute online session covers the SBC and select other topics, highlighting key policies, procedures, pervasive, and high-risk issues for HP. Between March 1 and June 30, 2010, 99% of employees (excluding new hires, those on leave of absence, and people leaving HP) completed the course. A more comprehensive course for new employees is required as part of their on-boarding process.
- Integrity Minutes videos These short, serialized videos depict ethics and compliance issues that might happen in the workplace and conclude with a senior leader speaking about how the lessons apply to HP employees. In 2010, the topics included anti-corruption, conflicts of interest, misuse of company assets and time, competitive information, and ethical relationships.
- Leaders on Ethics videos In this ongoing series, HP senior leaders provide guidance on company policies and workplace behavior. In 2010, the videos covered giving and receiving gifts, confidential competitive information, insider trading, sales compliance, marketing responsibly, slush funds, and intellectual capital.
- Our Ethics Bulletin Each bulletin is available to all employees, presents real-life case studies with personal details removed, and explains how they were resolved and the lessons learned.
Additional activities in 2010 included:
- Refreshing the Standards of Business Conduct.
- Boosting external communications on www.hp.com and our supplier and business partner websites to publicize the various ways to report ethics concerns and ask ethics and compliance questions.
- Training our public sector sales force globally, with a particularly extensive program in the United States. We require all public sector sales employees to complete annual training and periodic certifications.
- Enhancing our online reference library to provide an overview, example, recommended action, and contact information for each significant compliance risk.
- Conducting more than 40 meetings between senior members of the ethics and compliance office and leaders, employees, and legal staff at major sites in 12 countries.