FINAL ASSESSMENT HONEYWELL INTERNATIONAL INC.

Transcription

1 FINAL ASSESSMENT HONEYWELL INTERNATIONAL INC. 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 40% Risk Management 5 0% Company Policy and Codes % Training 5 30% Personnel and Helplines % Total 39 50% TI has found no evidence that the company is involved in offsets and has therefore removed the two relevant questions (A13a and A13b).

2 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? 0 Based on public information, there is insufficient evidence that the company publishes a statement from the Chief Executive Officer supporting the ethics and anti-corruption agenda of the company. TI notes a statement emphasising ethics and integrity is published in the introduction to the Code of Conduct. However, this statement was last published in 2011 and does not directly relate to anti-corruption. TI notes: Code of Business Conduct (2011), p.1: Letter from CEO As Honeywell continues to grow, we must stay focused on our expectations and commitment to integrity and Honeywell s Twelve Behaviors. Our Code of Business Conduct is a roadmap to help you navigate the operating environments in our four businesses, which include some of the most dynamic sectors of the global economy. We have great positions in good industries, and we have a responsibility to conduct ourselves with the highest levels of integrity in every aspect of everything we do. Our integrity helps ensure that we continue to sustain the credibility of our brand, maintain our strong reputation, and build on our track record of growth and performance. I m counting on you to uphold our continued commitment to integrity at Honeywell.

3 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? 2 Based on public information, there is evidence that the company s Chief Executive Officer demonstrates a strong personal, external facing commitment to the ethics and anticorruption agenda of the company. The CEO is on the Steering Committee of the DII. TI understands that the Steering Committee meets on a regular basis. DII website: Steering Committee Members Michael Madsen President, Defense and Space Honeywell International Inc.

4 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? 0 Based on public information, there is no readily available evidence that the company s Chief Executive Officer demonstrates a strong personal, internal-facing commitment to the ethics and anti-corruption agenda of the company. TI notes that the company provided internal information for the CI 2012, which was openly published in the survey report with the company s permission. However, the public assessment score remains 0 as this part of the survey is seeking to understand company transparency. NA

5 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? 1 Based on public information, there is evidence that the company publishes a statement of values representing high standards of business conduct, including integrity and honesty. The company provides some explanation of these values, referencing transparency, trust and openness. The company therefore scores 1. To score higher the company would need to explain in greater detail why these values matter to the organisation and how they are translated into company policies. Code of Business Conduct (2011), p.1: As Honeywell continues to grow, we must stay focused on our expectations and commitment to integrity and Honeywell s Twelve Behaviors. Our Code of Business Conduct is a roadmap to help you navigate the operating environments in our four businesses, which include some of the most dynamic sectors of the global economy. We have great positions in good industries, and we have a responsibility to conduct ourselves with the highest levels of integrity in every aspect of everything we do. Our integrity helps ensure that we continue to sustain the credibility of our brand, maintain our strong reputation, and build on our track record of growth and performance.

6 (p.7): The Honeywell Code of Business Conduct (our Code ) is designed to provide guidance to each of us regarding Honeywell s standards of integrity and compliance in all our business dealings. Our Code is an integral element of the Honeywell Behaviors. It describes the basic rules of conduct that we, as one Honeywell, are expected to follow. In addition, it provides helpful resources in the event we have a question or concern about proper conduct. p.26: Building mutually beneficial relationships with our customers is important to our success as a Company. Maintaining such relationships requires that we provide safe, quality products and uphold the law in all our interactions with both commercial and government clients. (p.27): Seeking Business Openly and Honestly Our actions in the marketplace define who we are as a Company. By competing on the quality of our goods and services, we uphold Honeywell s reputation. We will never seek to limit the competitive opportunities of our rivals in deceitful or fraudulent ways. In addition, we never take advantage of anyone through unfair dealing practices. This means that we are careful not to misrepresent the quality, features or availability of our products or services. In addition, we do not disparage or make untrue statements about our competitors products or services. We seek to win business based on the quality of our products and our people, not through any improper means. (p.33): We must always conduct ourselves with honesty and integrity when attempting to win government work. (p.36): At Honeywell, we strive every day to build value for the shareholders who have placed their trust in our Company and in each of us. To achieve this goal and create growth opportunities for our shareholders, we must do business with transparency and integrity. Company Website: Corporate Governance Code of Conduct We Live Our Values As representatives of the Company to the outside world, and regardless of the pressures inherent in conducting business, we will act responsibly and in a manner that will reflect favorably on us and the Company. We will carry out our assignments guided by the principles set forth in our vision and values and in compliance with this Code of Business Conduct and our corporate policies.

7 The Company will provide training and educational materials, including this Code and various legal and other compliance materials, so that we are informed of Honeywell's integrity standards and our requirement to comply with all laws, Company policies and this Code. The Company will provide the organizational structure and communication channels through which employees can report suspected violations of this Code or other Company policy. Additional information related to reporting violations can be found under the section of this Code titled "Our Integrity and Compliance Program. To the extent possible, the Company will maintain the confidentiality of communications about suspected violations that are made in good faith, except where law or policy may require disclosure.

8 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? 2 Based on public information, there is evidence that the company belongs to the DII and the company s CEO is on the steering committee. DII website: Steering committee Michael Madsen President, Defense and Space Honeywell International Inc. DII website: Signatories Honeywell Honeywell Ethics Program Information Date Ethics Program Created: Tuesday, July 16,

9 A6: Has the company appointed a Board committee or individual Board member with overall corporate responsibility for its ethics and anti-corruption agenda? 1 Based on public information, there is some evidence that the company has appointed the Corporate Governance and Responsibility Committee with overall corporate responsibility for its ethics and anti-corruption agenda. Specifically, the Committee is responsible for the Code of Conduct. However, there is no readily available evidence that it has responsibility for the rest of the company s ethics and anti-corruption agenda. The company therefore scores 1. Corporate Governance and Responsibility Committee Charter, p.1: I. Composition The Committee shall be composed of three or more members of the Board of Directors who meet the independence requirements under applicable law and listing standards. II. Meetings The Committee shall meet at least three times each fiscal year III. Purpose The Committee shall (5) review the Company s policies and programs relating to compliance with its Code of Business Conduct, health, safety and environmental matters, equal employment opportunity and such other matters as may be brought to the attention of the Committee regarding the Company s role as a responsible corporate citizen. IV. Responsibilities The Corporate Governance & Responsibility Committee shall: 5. Review and reassess the adequacy of the Corporate Governance Guidelines of the Company and recommend any proposed changes to the Board for approval. 6. Review and report to the Board on the Company's policies and programs relating to health, safety and environmental matters, equal employment opportunity and such other matters, including the Company s Code of Business Conduct, as may be brought to the

10 attention of the Committee regarding the Company s role as a responsible corporate citizen.

11 A7: Has the company appointed a person at a senior level within the company to have responsibility for implementing the company s ethics and anticorruption agenda, and who has a direct reporting line to the Board? 1 Based on public information, there is some evidence that the company has appointed the Vice President, Global Compliance, with responsibility for implementing the company s ethics and anti-corruption agenda. This individual is identified as Douglas Perry. However, there is limited information provided about the scope of this individual s responsibilities regarding the company s ethics and anti-corruption agenda. The company therefore scores 1. DII website: working group Douglas Perry Vice President, Global Compliance Honeywell douglas.perry2@honeywell.com.

12 A8: Is there regular Board level monitoring and review of the performance of the company s ethics and anti-corruption agenda? 1 Based on public information, there is evidence that the company s Corporate Governance and Responsibility Committee reviews the ethics agenda. This Committee is supported in a structured manner by the Corporate Integrity and Compliance Council & the Business Unit Integrity and Compliance Leadership Function to conduct regular monitoring & reviews. However, these reviews do not appear to be major reviews of the complete anti-corruption agenda. The company therefore scores 1. Corporate Governance and Responsibility Committee Charter, p.1: I. Composition The Committee shall be composed of three or more members of the Board of Directors who meet the independence requirements under applicable law and listing standards. II. Meetings The Committee shall meet at least three times each fiscal year III. Purpose The Committee shall (5) review the Company s policies and programs relating to compliance with its Code of Business Conduct, health, safety and environmental matters, equal employment opportunity and such other matters as may be brought to the attention of the Committee regarding the Company s role as a responsible corporate citizen. IV. Responsibilities The Corporate Governance & Responsibility Committee shall: 5. Review and reassess the adequacy of the Corporate Governance Guidelines of the Company and recommend any proposed changes to the Board for approval. 6. Review and report to the Board on the Company's policies and programs relating to health, safety and environmental matters, equal employment opportunity and such other matters, including the Company s Code of Business Conduct, as may be brought to the attention of the Committee regarding the Company s role as a responsible corporate citizen.

13 Company Website: Code of Conduct The Corporate Integrity and Compliance Council The Corporate Integrity and Compliance Council shall provide policy leadership for the Company's Integrity and Compliance Program and report to the Corporate Responsibility Committee of the Board of Directors. Members of the Corporate Integrity and Compliance Council shall include an Integrity and Compliance Officer from each strategic business unit and key functional areas. The Chairperson of the Council shall be the corporate Vice President, Global Compliance. Responsibilities of the Council include: developing and approving Integrity and Compliance policies, standards, practices and procedures; reviewing and approving Integrity and Compliance training; monitoring compliance with Company policies and with laws and regulations; evaluating trends arising from Integrity and Compliance investigations; and reporting to the Corporate Responsibility Committee of the Board of Directors. The Business Unit Integrity and Compliance Leadership Function Each business unit shall appoint Integrity and Compliance Officer who shall determine the appropriate organizational oversight structure to assure effective implementation of Integrity and Compliance responsibilities within the business unit. Responsibilities of the business unit leadership function include: ensuring business unit compliance with Company policies, laws and regulations by overseeing selfgovernance activities; assessing compliance risks for the business unit; tracking and reviewing trends in data relating to the business unit's Integrity and Compliance investigations and taking steps to address those trends; developing, delivering and tracking Integrity and Compliance training; reporting periodically to the Corporate Council on the goals and results of Integrity and Compliance activities of the business unit; for violations of Company rules or standards of business conduct.

14 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? 0 Based on public information, there is little evidence that there is 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, or evidence of improvement plans being implemented when issues are identified. TI notes that the company s Corporate Governance and Responsibility Committee reviews the ethics agenda against a defined timetable and an overall structure. TI notes: Corporate Governance and Responsibility Committee Charter, p.1: I. Composition The Committee shall be composed of three or more members of the Board of Directors who meet the independence requirements under applicable law and listing standards. II. Meetings The Committee shall meet at least three times each fiscal year III. Purpose The Committee shall (5) review the Company s policies and programs relating to compliance with its Code of Business Conduct, health, safety and environmental matters, equal employment opportunity and such other matters as may be brought to the attention of the Committee regarding the Company s role as a responsible corporate citizen. IV. Responsibilities The Corporate Governance & Responsibility Committee shall: 5. Review and reassess the adequacy of the Corporate Governance Guidelines of the Company and recommend any proposed changes to the Board for approval. 6. Review and report to the Board on the Company's policies and programs relating to health, safety and environmental matters, equal employment opportunity and such other

15 matters, including the Company s Code of Business Conduct, as may be brought to the attention of the Committee regarding the Company s role as a responsible corporate citizen.

16 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? 0 Based on public information, there is no readily available evidence that the company has a formal process for review and where appropriate updates its policies and practices in response to actual or alleged instances of corruption. TI notes: Company Website: Corporate Governance - Code of Conduct The Corporate Integrity and Compliance Council The Corporate Integrity and Compliance Council shall provide policy leadership for the Company's Integrity and Compliance Program and report to the Corporate Responsibility Committee of the Board of Directors ( ) Responsibilities of the Council include: developing and approving Integrity and Compliance policies, standards, practices and procedures; reviewing and approving Integrity and Compliance training; ( ); evaluating trends arising from Integrity and Compliance investigations; The Business Unit Integrity and Compliance Leadership Function Each business unit shall appoint Integrity and Compliance Officer who shall determine the appropriate organizational oversight structure to assure effective implementation of Integrity and Compliance responsibilities within the business unit. Responsibilities of the business unit leadership function include: ( ); tracking and reviewing trends in data relating to the business unit's Integrity and Compliance investigations and taking steps to address those trends; developing, delivering and tracking Integrity and Compliance training;

17 A9(a): Does the company have a formal anti-corruption risk assessment procedure implemented enterprise-wide? 0 Based on public information, there is no readily available evidence that the company have a formal anti-corruption risk assessment procedure implemented enterprise-wide NA

18 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? 0 Based on public information, there is limited evidence that the company has a formal anticorruption risk assessment procedure for assessing proposed business decisions. TI notes that compliance functions do have a responsibility for ensuring compliance with company policies, but it is unclear if this addresses business decisions. TI notes: Company website: Corporate Governance - Code of Conduct The Business Unit Integrity and Compliance Leadership Function Each business unit shall appoint Integrity and Compliance Officer who shall determine the appropriate organizational oversight structure to assure effective implementation of Integrity and Compliance responsibilities within the business unit. Responsibilities of the business unit leadership function include: ensuring business unit compliance with Company policies, laws and regulations by overseeing selfgovernance activities; assessing compliance risks for the business unit; tracking and reviewing trends in data relating to the business unit's Integrity and Compliance investigations and taking steps to address those trends; developing, delivering and tracking Integrity and Compliance training; reporting periodically to the Corporate Council on the goals and results of Integrity and Compliance activities of the business unit; ( ) for violations of Company rules or standards of business conduct.

19 A11: Does the company conduct due diligence that minimises corruption risk when selecting or reappointing its agents? 0 Based on public information, there is no evidence that the company conduct due diligence that minimises corruption risk when selecting or reappointing its agents. TI notes a statement placing the onus of selecting reputable agents on employees, but it does not suggest a structured process of due diligence. TI notes: Code of Business Conduct (2011), p.33 We must ensure we only use reputable consultants, sales agents or other professional service independent contractors for legitimate legal purposes.

20 A12: Does the company have contractual rights and processes for the behaviour, monitoring, control, and audit of agents with respect to countering corruption? 0 Based on public information, there is no evidence that the company has contractual rights and processes for the behaviour, monitoring, control, and audit of agents with respect to countering corruption. NA

21 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? 0 Based on public information, there is limited evidence that the company makes 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. The Code of Business Conduct only mentions entering into contracts with supplier who have a record of and commitment to integrity. However, details on how this process is ensured are not available. TI notes that there is a supplier portal which, according to an overview, includes ethics expectations, but this is password protected. TI notes: Code of Business Conduct (2011), p.36: We use only legitimate, business-related criteria when choosing suppliers. Our Company will enter into representation or supplier agreements only with companies believed to have demonstrated a record of and commitment to integrity. In addition, we never take unfair advantage of our suppliers through abuse of confidential information, misrepresentation of material facts or any other unfair dealing practice. (p.8): Where appropriate, business partners working on our Company s behalf should also familiarize themselves with and follow our Code. Company website: Supplier portal Welcome to the Honeywell Supplier Portal, this site will allow Honeywell's internal Integrated Supply Chain professionals to share information, interact/collaborate, and ultimately form closer relationships with Honeywell's external supply base. Existing at the portal-level will be the features/functions that can be leveraged across multiple Honeywell business units (e.g., architectural components, corporate applications, corporate-wide

22 content, utilities/tools, etc.) as well as links to Honeywell business unit unique items (e.g., specific business unit web sites/applications/data/information). Company website: Supplier portal overview Objective - Provide suppliers with: overview of what is available on the Honeywell Supplier Portal explanation for some of the acronyms used by Honeywell Aerospace how to get access to the portal who to contact for assistance. =D01BD0A52-0E D416-82B

23 A13(a): Does the company explicitly address the corruption risks associated with offset contracting? NA Based on public information, there is no readily available evidence that the company engages in offset contracting. NA

24 A13(b): Does the company conduct due diligence that minimises corruption risk when selecting its offset partners and offset brokers? NA Based on public information, there is no readily available evidence that the company engages in offset contracting. NA

25 A15: Does the company have an anti-corruption policy that prohibits corruption in its various forms? 2 Based on public information, there is evidence that the company has an anti-corruption policy that prohibits corruption in its various forms. Code of Business Conduct (2011), p.28: In addition to avoiding commercial bribery and unlawful kickbacks, we comply with all applicable anticorruption laws regarding improper payments to government officials. Improper payments include both direct and indirect payments or an offer, promise or authorization of a payment or anything of value to a government official for purposes of improperly influencing government acts or decisions in order to obtain or retain business or otherwise secure a business advantage. Note that improper payments can take the form of cash, gifts or lavish entertainment. (p.17): As part of our duty to uphold our Company s reputation, we must avoid improper conflicts of interest. A conflict of interest occurs when our personal interests interfere with, or appear to interfere with, our ability to perform our jobs without bias. We may not engage in any interest, investment or association in which a conflict of interest might arise. If you have a potential or actual conflict of interest, you must disclose it by speaking with your supervisor or by contacting the Law Department or the Honeywell Integrity and Compliance Office. Conflicts of interest are often easily avoided if disclosed in advance. Developing strong working relationships with our customers, suppliers and other business partners is important to our growth. Business gifts and entertainment are sometimes used to strengthen these bonds. However, we must exercise particular caution when offering or accepting business courtesies. Exchanging gifts and entertainment can result in conflicts of interests. If not handled properly, they may also lead to the appearance of improper payments, kickbacks or corruption. You may not accept or provide any gift, favor or entertainment if it is made for an improper purpose, or if you know it would violate our

26 policies, the law or the gift policy of the recipient s company.

27 A16: Is the anti-corruption policy explicitly one of zero tolerance? 0 Based on public information, there is no readily available evidence that the company s anticorruption policy is explicitly one of zero tolerance. TI notes: Code of Business Conduct (2011), p.28: In addition to avoiding commercial bribery and unlawful kickbacks, we comply with all applicable anticorruption laws regarding improper payments to government officials. Improper payments include both direct and indirect payments or an offer, promise or authorization of a payment or anything of value to a government official for purposes of improperly influencing government acts or decisions in order to obtain or retain business or otherwise secure a business advantage. Note that improper payments can take the form of cash, gifts or lavish entertainment. " (p.17): As part of our duty to uphold our Company s reputation, we must avoid improper conflicts of interest. A conflict of interest occurs when our personal interests interfere with, or appear to interfere with, our ability to perform our jobs without bias. We may not engage in any interest, investment or association in which a conflict of interest might arise. If you have a potential or actual conflict of interest, you must disclose it by speaking with your supervisor or by contacting the Law Department or the Honeywell Integrity and Compliance Office. Conflicts of interest are often easily avoided if disclosed in advance. Developing strong working relationships with our customers, suppliers and other business partners is important to our growth. Business gifts and entertainment are sometimes used to strengthen these bonds. However, we must exercise particular caution when offering or accepting business courtesies. Exchanging gifts and entertainment can result in conflicts of interests. If not handled properly, they may also lead to the appearance of improper payments, kickbacks or corruption. You may not accept or provide any gift, favor or entertainment if it is made for an improper purpose, or if you know it would violate our

28 policies, the law or the gift policy of the recipient s company. (p.10): If you become aware of a situation that may involve a violation of this Code, Company policy or any applicable law or regulation, you have a responsibility to report it. Please note that failure to comply with our Code and Company policies can have serious consequences. Consequences may include disciplinary action, up to and including termination, as well as possible civil or criminal penalties.

29 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? 2 Based on public information, there is evidence that the company s anti-corruption policy, contained in its Code of Business Conduct, is easily accessible to Board members, employees, contracted staff and any other organisations acting with or on behalf of the company. The Code is available to download from the company website in 22 languages. Company website: About us Code of Business Conduct. We're committed to improving the quality of life of everyone from our colleagues, to our customers, to the communities where we live and work. From the shop floor to the boardroom, all Honeywell employees and representatives are held to the highest standard and we cultivate a culture of not just meeting, but exceeding all laws and regulations in the countries where we do business. Every member of the Honeywell team is trained in our Standards of Integrity, including: Formal company-wide procedures to train every employee in health, safety, environmental responsibility, non-discrimination, anti-corruption, trade controls, and the highest standards of excellence in all our business interactions. Thorough reviews of transactions to ensure we meet every legal standard. Real, meaningful resources devoted to ensuring we comply with every law at every level of our business. Providing practical, useful technological tools to help ensure that orders are only accepted from, and shipments made to, countries or persons not under sanctions. Enhanced forensic audit capabilities that specifically address corruption risks, so that we can act immediately to eliminate them. Thorough, frequent internal reviews and audits of government contract sites. Mandatory training for all employees on Honeywell s Code of Business Conduct.

30 Robust integration processes to ensure that newly acquired companies understand and comply with Honeywell policies and procedures. Download Code of Business Conduct. Select Language.

31 A17(a): Is the company s anti-corruption policy easily understandable and clear to Board members, employees and third parties? 2 Based on public information, there is evidence that the company has a clear anti-corruption policy that is easily understandable and clear to Board members, employees and third parties. It is written in clear language that educates employees on corruption in its various forms. Code of Business Conduct (2011), p.10: Asking for Advice and Voicing Concerns While working on behalf of Honeywell, you may face difficult situations. Many times your common sense, good judgment, our Code, and Company policies and procedures will be enough to guide you. However, there may be times in which you need additional help to make the right choice. In these cases, you have several resources available to you. (p.17): Integrity in Action Q: Barry has received an invitation to a holiday party hosted by one of our suppliers. He works closely with this supplier and would love to attend, since the party is sure to include fine wine and gourmet dishes. May Barry accept the invitation? A: Barry should consult with his supervisor or the Law Department to determine whether it is appropriate to attend. Factors to consider include the cost of the meal, whether the supplier is actively bidding on Honeywell work, whether Barry is involved in the Honeywell procurement decision-making process and whether there are other business related reasons to go to the dinner.

32 A18: Does the anti-corruption policy explicitly apply to all employees and members of the Board? 2 Based on public information, there is evidence that the company s anti-corruption policy explicitly applies to all employees and members of the Board. Code of Business Conduct (2011), p.8: Our Code applies to all employees, officers and directors of Honeywell.

33 A20: Does the company have a policy on potential conflicts of interest, and does it apply to both employees and board members? 2 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. It contains a definition and numerous examples of potential conflicts of interest. Code of Business Conduct (2011), p.17: As part of our duty to uphold our Company s reputation, we must avoid improper conflicts of interest. A conflict of interest occurs when our personal interests interfere with, or appear to interfere with, our ability to perform our jobs without bias. We may not engage in any interest, investment or association in which a conflict of interest might arise. If you have a potential or actual conflict of interest, you must disclose it by speaking with your supervisor or by contacting the Law Department or the Honeywell Integrity and Compliance Office. Conflicts of interest are often easily avoided if disclosed in advance. The policy further details instances and situations where such scenarios may occur and gives guidance for the same.

34 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? 1 Based on public information, there is evidence that the company has a policy for the giving and receipt of gifts, to ensure that such transactions are bona fide and not a subterfuge for bribery. However, the policy has no clear process for the approval required for accepting and giving gifts, and leaves this up to the persons involved. Therefore the company scores 1. Code of Business Conduct (2011), p.17: Gifts and Business Entertainment Developing strong working relationships with our customers, suppliers and other business partners is important to our growth. Business gifts and entertainment are sometimes used to strengthen these bonds. However, we must exercise particular caution when offering or accepting business courtesies. Exchanging gifts and entertainment can result in conflicts of interests. If not handled properly, they may also lead to the appearance of improper payments, kickbacks or corruption. You may not accept or provide any gift, favor or entertainment if it is made for an improper purpose, or if you know it would violate our policies, the law or the gift policy of the recipient s company. Gifts should not be accepted from suppliers or potential suppliers (or other business partners or potential business partners) during or in connection with contract negotiations with the supplier. In addition, we should avoid soliciting gifts from suppliers or other business partners for Honeywell functions or employee awards. If you are unsure whether you should offer or accept a business gift or entertainment, you should seek guidance. Customer entertainment and gifts must be discussed in advance with your supervisor. Stricter laws govern gifts offered or made to government officials. These laws apply not only to government officials, but also to employees of state-owned or state-controlled companies. You must comply strictly with these laws and regulations. Never offer or accept a business courtesy if doing so violates a law or regulation, will cause embarrassment for Honeywell, or will reflect negatively on the Company s reputation.

35 (p.28): Government Customers: Note that improper payments can take the form of cash, gifts or lavish entertainment. (p.35): Supplier Relationships: We will not be influenced by gifts or favors of any kind from our suppliers or potential suppliers.

36 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? 1 Based on public information, there is evidence that the company has a policy for the giving and receipt of hospitality, to ensure that such transactions are bona fide and not a subterfuge for bribery. However, the policy has no clear process for the approval required for accepting and giving hospitality, and leaves this up to the persons involved. The company therefore scores 1. Code of Business Conduct (2011), p.17: Gifts and Business Entertainment Developing strong working relationships with our customers, suppliers and other business partners is important to our growth. Business gifts and entertainment are sometimes used to strengthen these bonds. However, we must exercise particular caution when offering or accepting business courtesies. Exchanging gifts and entertainment can result in conflicts of interests. If not handled properly, they may also lead to the appearance of improper payments, kickbacks or corruption. You may not accept or provide any gift, favor or entertainment if it is made for an improper purpose, or if you know it would violate our policies, the law or the gift policy of the recipient s company. Gifts should not be accepted from suppliers or potential suppliers (or other business partners or potential business partners) during or in connection with contract negotiations with the supplier. In addition, we should avoid soliciting gifts from suppliers or other business partners for Honeywell functions or employee awards. If you are unsure whether you should offer or accept a business gift or entertainment, you should seek guidance. Customer entertainment and gifts must be discussed in advance with your supervisor. Stricter laws govern gifts offered or made to government officials. These laws apply not only to government officials, but also to employees of state-owned or state-controlled companies. You must comply strictly with these laws and regulations. Never offer or accept a business courtesy if doing so violates a law or regulation, will cause embarrassment for

37 Honeywell, or will reflect negatively on the Company s reputation. (p.28): Government Customers: Note that improper payments can take the form of cash, gifts or lavish entertainment. (p.35): Supplier Relationships: We will not be influenced by gifts or favors of any kind from our suppliers or potential suppliers. An occasional meal or entertainment in the normal course of business relations may be permissible, as long as: The representative of the supplier is in attendance Such hospitality is not excessive or unusual in nature The hospitality complies with applicable laws and is not otherwise prohibited by this Code In addition, when practical, hospitality should be reciprocated.

38 A23: Does the company have a policy that explicitly prohibits facilitation payments? 0 Based on public information, there is no evidence that the company has a policy that explicitly prohibits facilitation payments. NA

39 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? 2 Based on public information, there is evidence that the company has a policy on political contributions and regulates such contributions in order to prevent undue influence or other corrupt intent. The company s US operations are bound by the country law governing declaration of political activity and contributions. Code of Business Conduct (2011), p.42: Making Political and Charitable Contributions Our Company understands the many ways in which the political process enriches our communities. ( ) However, when we participate in such activities, we should do so on our own time, at our own expense and ensure that our activities do not conflict with the Code. We should not use Honeywell property for personal political activities. In addition, we should never engage in any political activities on Honeywell s behalf, unless authorized by the Government Relations function. Never coerce a co-worker, especially those with whom you have a reporting relationship, to support your particular causes. As interested citizens, Honeywell employees are free to make individual personal contributions to candidates of their choice. Employees who are U.S. citizens or who are U.S.- based permanent residents are eligible to participate in the Honeywell International Political Action Committee (HIPAC) provided they meet certain legal requirements. To determine if you are eligible to participate in the HIPAC, contact the Honeywell Government Relations Department or the general counsel of your business unit. Company Website: Investors Relations - Political Contributions Political Contributions. As of March 31, 2014, we have not made any political contributions using corporate funds since at least 2009 and have no intention of making such political contributions in the near future. Even before 2009, any such contributions were extremely

40 rare and for de minimis amounts of less than $5,000. TI notes that the company website also contains extremely detailed information and rationale on the company s policies of Political contributions and how they are regulated.

41 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? 2 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, and discloses the issues on which it lobbies. Code of Business Conduct (2011), p.42: Lobbying activities are highly regulated. Therefore, we may not make any contacts with government officials in an attempt to influence legislation, regulation, policy or other governmental actions on Honeywell s behalf without authorization from the Government Relations function. Company Website: Company Website: Investors Relations - Political Contributions Management and Board Oversight of Lobbying Activities. The law department oversees our lobbying activities. The Senior Vice President, Global Government Relations reports to the General Counsel and also works closely with the Vice President, Global Compliance whose organization ensures compliance with our political spending policy. The General Counsel, Senior Vice President, Global Government Relations and Vice President, Global Compliance meet regularly with the Chairman and Chief Executive Officer and his leadership team about legislative, regulatory and political developments. With respect to Board of Directors oversight, our public policy efforts, including all lobbying activities, political contributions and payments to trade associations and other tax-exempt organizations, is the responsibility of the Corporate Governance and Responsibility Committee (CGRC), which consists entirely of independent, non-employee directors. Each year the CGRC receives an annual report on the Company's policies and practices regarding political contributions. The CGRC's oversight of our political activities ensures compliance

42 with applicable law and alignment with our policies and our Code of Business Conduct. In addition, each year the Senior Vice President, Global Government Relations reports to the full Board of Directors on our global lobbying and government relations program. In December 2012, as disclosed in our publicly available filings required under the Lobbying Disclosure Act, we contributed $1 million to the Fix the Debt Coalition, a non-partisan 501(c)(4) organization which seeks to educate and mobilize Americans on the need for a comprehensive plan to fix the United States' long-term debt and deficits but have made no further contributions. TI notes that the company website additionally contains extremely detailed information and rationale on the company s policies of lobbying and how they are regulated

43 A25(a): Does the company prohibit charitable contributions, or regulate such contributions in order to prevent undue influence or other corrupt intent? 1 Based on public information, there is evidence that the company has a clear policy to regulate charitable contributions. However, it is not clear that the company publicly declares such contributions. The company therefore scores 1. Code of Business Conduct (2011), p.42: 'Making Political and Charitable Contributions Our Company understands the many ways in which the political process enriches our communities. ( ) However, when we participate in such activities, we should do so on our own time, at our own expense and ensure that our activities do not conflict with the Code. We should not use Honeywell property for personal political activities. In addition, we should never engage in any political activities on Honeywell s behalf, unless authorized by the Government Relations function. Never coerce a coworker, especially those with whom you have a reporting relationship, to support your particular causes. As interested citizens, Honeywell employees are free to make individual personal contributions to candidates of their choice. Employees who are U.S. citizens or who are U.S.- based permanent residents are eligible to participate in the Honeywell International Political Action Committee (HIPAC) provided they meet certain legal requirements. To determine if you are eligible to participate in the HIPAC, contact the Honeywell Government Relations Department or the general counsel of your business unit. Company Website: Investors Relations Political Contribution With respect to tax-exempt organizations, such as 501(c)(4)s, where funds may be used for political purposes, we have made only one contribution since TI notes that the company website also contains extremely detailed information and rationale on the company s policies on charitable contributions and how they are regulated.

44 A26: Does the company provide written guidance to help Board members and employees understand and implement the firm s ethics and anti-corruption agenda? 2 Based on public information, there is evidence that the company provides written guidance to help Board members and employees understand and implement the firm s ethics and anti-corruption agenda. The Code of Conduct contains example cases to explain particular situations and ensure employees better understand the company s policies towards anticorruption. Code of Business Conduct (2011), p.16: Integrity in Action Q: Barry has received an invitation to a holiday party hosted by one of our suppliers. He works closely with this supplier and would love to attend, since the party is sure to include fine wine and gourmet dishes. May Barry accept the invitation? A: Barry should consult with his supervisor or the Law Department to determine whether it is appropriate to attend. Factors to consider include the cost of the meal, whether the supplier is actively bidding on Honeywell work, whether Barry is involved in the Honeywell procurement decision-making process and whether there are other business related reasons to go to the dinner p.18): Integrity in Action Q: At an offsite meeting, a vendor who has been providing services to Honeywell for several months invites Denisha to lunch. She accepts, allowing the vendor to pay for the meal. Are her actions acceptable? A: Occasional meals and nominal gifts are ordinarily acceptable, so long as they don t raise a question about Denisha s objectivity. Customer entertainment and gifts should be discussed in advance with your supervisor. The supervisor should evaluate the business purpose for the meal, the setting and the cost of the meal, and the frequency of the vendor s invitations.

45 A27: Does the company have a training programme that explicitly covers anticorruption? 1 Based on public information, there is evidence that the company has a training programme on its Code of Business Conduct, which contains an anti-corruption policy. The company therefore scores 1. To score higher the company would need to provide evidence of an explicit anti-corruption module. Company Website: Corporate Governance - Code of Conduct The Corporate Integrity and Compliance Council The Corporate Integrity and Compliance Council shall provide policy leadership for the Company's Integrity and Compliance Program and report to the Corporate Responsibility Committee of the Board of Directors. Responsibilities of the Council include: ( ) reviewing and approving Integrity and Compliance training The Business Unit Integrity and Compliance Leadership Function Each business unit shall appoint Integrity and Compliance Officer who shall determine the appropriate organizational oversight structure to assure effective implementation of Integrity and Compliance responsibilities within the business unit. Responsibilities of the business unit leadership function include: ( ) developing, delivering and tracking Integrity and Compliance training; providing advice and counsel to employees regarding Code of Business Conduct and other ethical inquiries raised by an employee. Company website: New Employee Orientation Our Commitment to Integrity At Honeywell, we are committed to integrity and compliance in everything we do. Our Code of Business Conduct sets uniform standards and consistent expectations across the