Corporate responsibility

Smiths has six fundamental strengths. Corporate responsibility for Smiths is enshrined in the sixth strength: 'doing business the right way'. Smiths defines 'the right way' in the Code of Corporate Responsibility and Business Ethics ('the Code'), which is based on 12 principles:

1. compliance with national laws and regulations;
2. fair and vigorous competition in the marketplace;
3. integrity and ethical conduct as the standard of individual and corporate business behaviour;
4. fair and honest treatment of suppliers and customers;
5. proper and respectful treatment of employees;
6. high standards for health and safety in the workplace;
7. respect for the environment;
8. contributions to the communities in which we live and work;
9. straightforward public information and activities;
10. respect for human rights;
11. prudent and transparent public accounting and reporting; and
12. a culture of compliance throughout the entire Smiths organisation – from the Chief Executive to the newest employee.

Translated into 13 languages, the Code applies to all Smiths businesses and employees worldwide and provides the framework for policies, programmes and procedures for a range of corporate responsibility issues. It is endorsed and fully supported by the Board.

Code compliance support to Smiths businesses worldwide is provided through a number of channels (including via the legal, human resources and internal audit functions) which provide advice, export control policies, education, training, guidance materials and risk assessment tools.

Managing corporate responsibility

The Code is set by the Board and monitored by the Code Compliance Council, chaired by the General Counsel, which reports at least twice a year to the Audit Committee of the Board. Responsibility for managing specific issues, however, lies at different levels within the Group, depending on the nature of the issue and how it can most effectively be managed:

• health, safety and environment issues are managed through a Group-wide steering committee and organisation;
• employee issues are managed through the human resources function and by line management;
• supplier and customer programmes are managed by each business; and
• community programmes are principally managed locally, although there is also some Group-level activity.

Environment

Smiths is committed to ensuring that, as far as is reasonably practicable, any detrimental effects of its activities, products and services upon the environment are minimised. In practice, this means using performance-based environmental management systems to drive improvement throughout the business.

Performance against targets

*Note that the 2004 baseline data includes Smiths Aerospace whereas 2007 does not. Whilst normalisation against sales makes the figures directly comparable, the changed mix of manufacturing processes can exaggerate to some extent an already positive level of achievement.

Health and Safety

Smiths is committed to conducting all its activities in a manner which achieves the highest practicable standards of health and safety. This year, attention has been focused on the underperforming sites and improving cross-divisional sharing of good practice.

Performance against targets

New targets

We are pleased that the three-year targets set in 2004 have been achieved and new targets have been developed to drive improvement still further.

Environment

The major current public environmental issue worldwide is greenhouse gas emissions and their impact on climate change. Smiths most significant emissions source is from the generation of electrical energy purchased by and consumed in our facilities. We have in recent publications converted our energy consumption to carbon dioxide equivalent values and for the next three-year period it is appropriate to target our overall greenhouse gas emissions. This will include emissions from energy usage and VOC emissions and thus replace these former targets.

Formal international greenhouse regulatory systems do not consider normalisation. Instead, they target based on a fixed cap. It is appropriate that Smiths follows this trend and establishes a target of the same level of emissions or better in FY 2009 to 2010 as FY 2006 to 2007 for each individual facility.

Additionally, total waste (net of recycled waste) and water consumption will continue to be targeted with an overall 9% improvement normalised against sales.

Health and safety

Building on the successful drive to reduce lost time incidents it has been decided to target ‘recordable incidents’. This measure includes incidents that do not necessarily lead to lost time and thus is more challenging. Good practice is acknowledged as a recordable incident rate of better than 1.5 per 100 employees per year and this target has been set as the goal for the Group. Many parts of Smiths are already performing at this level but we will focus on those that do not whilst striving to maintain progress at all sites.

The implementation of the ISO14001 Environmental Management System plays a significant part in ensuring that our businesses have robust systems in place for managing environmental performance. Thus it has been decided to target implementation of the comparable OHSAS18001 Health and Safety Management System. At this stage the target has been set for external certification at two-thirds of our manufacturing sites with 50 or more employees within the next three years.

Employees

The Group's policy is to provide equal opportunities for employment. Smiths recruits, selects and promotes employees on the basis of their qualifications, skills, aptitude and attitude. In employment-related decisions, Smiths complies with anti-discrimination requirements in the relevant jurisdictions concerning matters of race, colour, national origin, gender, marital status, sexual orientation, religious belief, age, or physical or mental disability. Disabled people are given full consideration for employment and subsequent training, career development and promotion on the basis of their aptitudes and abilities.

All Smiths employees are treated with respect and dignity. Accordingly, any harassment or bullying is unacceptable. Smiths respects the right of each employee to join or not to join a trade union or other bona fide employee representative organisation. Smiths believes in good communications with employees and in promoting consultation, co-operation and teamwork on matters of mutual concern.

Smiths offers all employees in the US and UK share schemes that enable employees to acquire an interest in the Company's shares and to align their interests more closely with those of shareholders.

Reaching Full Potential

Smiths invests in employees' skills and capabilities to help them reach their own Full Potential, which in turn helps the Company and its businesses to do likewise. Current priorities for Smiths to achieve full potential across the Group are talent development, succession planning and employee engagement.

Talent development

Smiths Group and the individual businesses continue to invest in identifying and developing the talents of our people. Smiths provides employees with challenging work that stretches their capabilities, backing that up with training and development activities tailored to individual needs. In 2006, Smiths introduced a new process for the most senior people, integrating the performance review with the overall 'Full Potential' goals of the business.

Smiths continues to be actively involved in all aspects of training and developing young people, including initiatives designed to ease the transition from school to work. Horizons is a two-year programme for new and recently appointed graduates. It provides an understanding of the Group and the business world in general, and develops personal and teamworking skills.

Succession planning

Smiths has a systematic succession management process for senior leadership roles. The Group identifies leadership talent and development needs, and follows this up with individual development plans that are monitored by senior management.

Employee engagement

Smiths provides information to and communicates with employees as an important part of doing business. Employees are regularly provided with a wide range of information concerning the performance and prospects of the business in which they are involved by means of employee councils, information and consultation forums, and other consultative bodies that allow their views to be taken into account.

Communities

Smiths is committed to contributing to the communities in which we operate. In addition to providing employment opportunities, we focus on community involvement through charitable giving, regeneration and education initiatives. 

Smiths supports national and international charitable organisations from a central budget administered by the Charity and Donations Committee. This year’s beneficiaries include the Royal Academy of Engineering, which helped to set up a new collaborative education initiative with Smiths in the UK – the Smiths Technology Education Programme (STEP) – which aims to provide able young people with the information and financial support they need to explore a career in technology. Individual businesses also support charity projects in a number of areas. For example, Smiths Medical supports medical research via the Smiths Medical Chair of Anaesthesia and Critical Care at University College London.

In addition to corporate donations, Smiths businesses devote a time to local community projects around the world. For example, Smiths Medical recently participated in St Mungo’s Putting Down Roots scheme, a gardening project for London’s homeless.

For further information, please see the Corporate Responsibility Report 2007 at www.smiths.com/responsibility.

Smiths Group divisions:
Smiths Detection, Smiths Medical, Smiths Specialty Engineering

Smiths Group plc:
Registered office 765 Finchley Road, London NW11 8DS
Incorporated in England No. 137013
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