This document and further information are available on the Group intranet CODE OF MANAGEMENT Technical perfection, automotive passion 2, rue Hennape. 92000 Nanterre. France Tel : +33 (0)1 72 36 70 00 Fax : +33 (0)1 72 36 70 07 www.faurecia.com
Introduction Faurecia s values drive the behavior of its managers towards all stakeholders: employees, customers, suppliers and local communities. These behaviors are described and illustrated in the Code of Management which serves as a day-to-day behavioral guide. The Code of Management illustrates how managers should be exemplary in acting in accordance with our values through examples of behaviors in different daily situations. The Code of Management should enable managers to understand the general principles of what is expected of them and enable them to become role models. A manager should behave in accordance with the Code of Management, and should lead by example. The behaviors in the Code of Management cover the four main areas of: Business planning Business execution Performance management & people development Business ethics The Code of Management contains the red lines of behaviors that are never tolerated, many of which are derived from the Group s Code of Ethics. Red line behaviors are contradictory to our values. Any reported breach of a red line will be taken seriously and investigated. Appropriate management decisions will be taken for an employee who has crossed a red line. The Code of Management is regularly updated as new situations are proposed or identified. Regular training sessions are provided for managers on the management code and annual appraisals are used to give feedback to individuals. The Code of Management is available and regularly updated on the Group s intranet Developing and reinforcing these behaviors throughout the organization will allow managers to act with an entrepreneurial mindset and to be accountable for their performance. They will enable Faurecia to act within a system of auto-control. The behaviors are underpinned by the notions of respect and transparency.
BUSINESS PLANNING During business planning we need to balance both short term and long term objectives. Managers should develop business and implement plans with an entrepreneurial mindset. That means being responsible for the use of the company s resources and taking initiatives for business development and value creation to become the industry benchmark. DO prepare business plans, budgets and medium term plans with realistic assumptions. DO develop ambitious action plans with your teams to optimize performance and meet targets. Challenge assumptions and your teams. DO challenge what you perceive as unrealistic objectives and propose an alternative. DO benchmark internally and externally in order to define the target performance and the objectives. This will allow a better planning process and assessment of intermediate objectives and calibration of targets. DO integrate an evaluation of the safety, environmental and social impacts in all business development decisions. DO make time-to-market a key criterion in making business development tradeoffs. DO prioritize the idea that has the most significant commercial potential all else being equal. DO make intellectual property a point on the agenda of early R&D meetings, so as to identify the need for IP protection as early as possible. As a general principle, make IP protection a top priority. DO prepare a business case for every project/product demonstrating its merits. The business case should include at the very least the projected financials, an assessment of major risks and ways to mitigate them. DO develop customer intimacy through meetings to discuss issues beyond a current business issue. Discuss future business needs and technology developments with customers. Maintain customer intimacy even if there is no short term business development. DO select suppliers based on rational, explicit criteria which favor long term business development. DON T hide any information or data. Full transparency should apply to all information and supporting arguments. Make sure all reporting reflects the full reality of Faurecia s operations or projects. DON T privilege the interests of one part of the organization over those of the Group as a whole. Think and act Faurecia first. 4 5
Business Execution Managers need to act with autonomy and accountability when managing their business and committing resources of the company. This means being empowered to act within a scope of responsibility whilst respecting the rules. To be accountable managers must take ownership for the performance. Behaving with transparency is critical. DO make sure that there is agreement about the resources and action plans necessary to achieve objectives and targets. DO ensure full transparency on quality and delivery issues. Always be honest with the customer and react promptly. Communicate any significant (potential) issues to the management. DO collect files/feedback at the start of a project from similar projects in the past, including from other Business Groups. Share this feedback with the team. DO promptly prepare a full report of the project upon project completion, including financials (actuals vs. budget), major milestones (actuals vs. planned) and lessons learned. DO communicate regularly with the customer and keep him informed. Share with him any potential risks. Say no if something is really not possible. DO follow up in writing on any agreement made in discussion with a customer. DO treat customers with respect and insist that the customer treats you with respect. If this is not the case escalate the issue. DO promote competition within the supplier panel. DO treat suppliers fairly and with respect. Apply Faurecia Terms and Conditions with suppliers. DO initiate and maintain transparent communication with local populations at each production location, particularly in terms of managing industrial risks. DO implement actions to help the local community such as making donations to charities or local associations. DON T attempt to hide information when something goes wrong or a situation is deteriorating and don t seek to place blame. Instead, report the situation immediately to your hierarchy, be transparent and ask for support. In case of a sudden, unexpected event, report promptly to your hierarchy. DON T commit the resources of the company without formal approval from the appropriate people as per the levels of delegation. DON T delay putting in place the resources need to successfully launch a project. In case of critical resources missing escalate the situation. DON T accept decisions that put a launch or program at risk. Escalate the issue internally. In many cases the OEM management team will support you. DON T hide problems from the customer. Be transparent and work to find solutions. DON T select suppliers outside the best interests of Faurecia. Take into account quality, need, performance and cost and compliance with the Code of Ethics. 6 7
PERFORMANCE Management & PEOPLE DEVELOPMENT Our culture is one in which we treat people fairly and with respect and develop them according to their performance and to their full potential. DO be fair and objective in the evaluation process when assessing performance against objectives, management behaviors and competencies. DO promote the employees who foster long-term value creation for Faurecia, all else being equal (though not at the expense of short-term results). DO develop your teams, implement training plans, identify potential and prepare succession plans. DO maintain contact with employees who left in good standing, so as to foster a sense of community and long-term partnership with them. DO spend time to make the induction process as smooth as possible when an employee starts on your team. Initial steps will have to include, at the very least, an introduction to the employee s main contacts both within and outside Faurecia. Make yourself available for questions. DO encourage your teams to express opinions freely. Organize regular brainstormings to improve performance. Implement improvement ideas. DO schedule one-on-one routine phone calls for those team members that you do not see often in person (e.g. because they are based elsewhere) to discuss overall satisfaction and to identify any potential conflicts. DO ensure that no participant needs to be connected to global meetings/ webconferences before 7:00 am or after 10:00 pm. Make sure that meetings have an agenda and that they do not overrun their time. DO identify and escalate any burn-out situations as early as possible. Actively seek solutions to relieve the employee. DO investigate reasons for employee departure in a systematic way and inform HR of any useful findings. Work to improve retention when needed. DO discuss first with HR and the employee s manager before talking to an employee from another management entity about a position in your team. Give employees a second chance, but DON T give them more than a second chance, if he/she shows significant underperformance or lack of competence. DON T hide information about an employee s performance in situations of internal mobility. Don t try to transfer people in a low performer situation. DON T block career development. Talent is a resource for the whole group. DON T react with anger when receiving bad news. Don t shoot the messenger and don t seek to apportion blame. Analyze the situation and look for solutions. 8 9
BUSINESS ETHICS These red line behaviors are derived from our Code of Ethics. This covers the areas of: Confidentiality Discrimination Harassment Conflict of interest Employee safety DON T divulge externally any information that has not already been publicly communicated. This applies both to information about Faurecia but also about customers and suppliers. Do not ask employees who join us for any confidential information they may have from their previous job. Don t communicate internal Faurecia information to customers and suppliers that is not relevant to the business. DON T tolerate any form of discrimination (age, gender, nationality, religion, health or disability, sexual orientation, political) at the workplace. This principle applies to all hiring, performance appraisals, compensation, benefits, promotions and terminations. Any issues should be discussed with your manager or Human Resources or use the whistle- blowing procedure as defined in the Code of Ethics. DON T treat employees differently in situations of fault or misbehavior because of their status (executive, manager or worker), their rank or their performance. The same sanctions should be applied to all employees. DON T ever let a case of suspected or proven harassment in, or outside, your teams go uninvestigated. Immediately notify the Human Resources management or use the whistle-blowing procedure as defined in the Code of Ethics. DON T get involved in situations in which a conflict of interest or the appearance of a conflict of interest could occur. Such situations are described in the Code of Ethics. DON T accept gifts/entertainment or give gifts/entertainment to customers or suppliers valued at or more than the equivalent of one hundred euros. Do not provide entertainment/gifts to customers without the presence of a Faurecia sales employee and the approval of the customer manager. DON T talk about competitors except using publicly available facts and data. Don t spread rumors or attack competitors. DON T breach the intellectual property rights of any third party. Don t use software without the appropriate license. DON T ever jeopardize employee safety for any reason. 10 11