Responsible business conduct

• All line leaders and functional directors are required to submit to the Chief Executive the level of implementation of core policies in their areas of responsibility through the twice yearly Operational Assurance Statement. In cases where a policy is judged not to be fully implemented a plan is required setting out the milestones to full compliance. The objective agreed for 2010 is that by December all of the milestones have been met and any future milestones are on track to be met.

In late 2009, a representative sample (approximately 10%) of employees worldwide were invited to participate in a survey on the Company’s approach to responsible business conduct. The survey covered the six questions related to responsible business conduct included in our biennial full employee opinion survey, which will next be held in 2010.

Overall, 41% of the sample responded. Results confirm that almost all respondents were aware of ethical standards expected of them with 75% of respondents believing that the Company demonstrates clear ethical standards.

Whilst these results are very positive, there are still areas for us to focus on and improve, particularly around employees feeling confident to speak up and challenge the way things are done.

Employees made 870 enquiries to our Ethics Helpline in 2009 to request information and advice or raise concerns confidentially about business conduct. Procedures are in place to ensure ethical concerns are investigated and the findings are reported to the Ethics Review Committee or for BAE Systems Inc. to the Ethics Executive Oversight Committee.

The Company’s target was to brief and train 100% of employees⁷ in position before 31 October on the Code during 2009.The Executive Committee considers its target to have been substantively met and actively continues to ensure that the remaining employees complete the Code of Conduct programme.

View the KPI’S in our
Annual Report 2009

The increase in the number of enquiries reflects the Company’s continued focus on awareness and training relating to business conduct following the roll out of the Code of Conduct in 2009.

The increase in dismissals reflects both the application of our responsible business conduct standards and the increase in employee dismissals data integrated into our HR systems following business acquisitions.