Corporate responsibility
Smiths Code of Business Ethics ('the Code') is based on 12 principles:
1 Compliance with all applicable 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, business partners and customers
5 Proper and respectful treatment of employees
6 High standards for health, safety and security in the workplace
7 Respect for the environment
8 Contributing to the communities in which we live and work
9 Engaging appropriately with government departments and agencies
10 Respect for human rights
11 Prudent and transparent public accounting and reporting
12 A culture of compliance throughout the entire Smiths organisation embracing all employees
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.
Compliance support to Smiths businesses is provided through legal counsel serving the businesses and other experts who provide advice, export control policies, education, training, guidance materials and risk assessment tools.
During the financial year ended 31 July 2008, Smiths retained the consultancy URS to benchmark the Code against those of peer companies and a gap analysis was completed. This work found that there were no major omissions to the Code but a revised version has been produced to more fully reflect the current challenges facing a global company. The revised Code, although expanded, retains the 12 core principles that were central to its predecessor's structure and has the simplified title 'Code of Business Ethics'. It has been produced in all of the main Smiths operating languages, and is being made available to each employee in both hard copy format and on the Smiths intranet.
Managing corporate responsibility
The Code is monitored by the Business Ethics Compliance Council, which reports to the Audit Committee of the Board and has representation from each of the divisions. Responsibility for managing specific areas of activity depends on the nature of the issue and how it can most effectively be managed:
- environment, health and safety issues are managed through a Group-wide steering committee, a technical implementation committee and local co-ordinators;
- security is managed in each business by line management;
- employee issues are managed by line management and through the human resources function;
- supplier and customer programmes are managed by each business; and
- community programmes are principally managed locally, although there is also some Group-level activity.
Health and safety
Smiths is committed to conducting all its activities in a manner which achieves the highest practicable standards of health and safety.
In 2007 Smiths made the commitment to achieve certification to the occupational health and safety management system standard OHSAS18001 by July 2010 at all of its facilities with more than 50 employees. This financial year has seen pilot programmes, the development of standard materials and training workshops to support this programme. The success of OHSAS18001, together with other targeted initiatives is measured against the recordable incident rate performance where a rate of better than 1.5 recordable incidents per 100 employees is expected.
Performance against targets |
|
|
Target(August 2007 - July 2010) |
2008 result |
|
Recordable incident rate Better than 1.5 per 100 employees |
1.27 |
|
Lost time incident rate No target set |
0.57 |
|
OHSAS18001 certification Certification at all sites with more than 50 employees by July 2010 |
17 out of 83 certified |
Last year we reported on three incidents that resulted in extended hospital stays for the injured parties. We are pleased to report that we have had no incidents of the same severity this year.
Following a concerted effort, driven from the highest levels of the organisation, our safety performance, as measured through recordable incident and lost time incident rates, continues to improve. The improvements are supported by enhanced incident investigation and return to work programmes. The financial year that we have just completed has been the safest on record for Smiths.
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.
The environmental management system ISO14001 has been implemented at all Smiths manufacturing sites with more than 50 employees. New acquisitions, or businesses that grow above the 50 employee threshold, are required to seek certification. ISO14001 ensures that a culture of continual improvement is embedded throughout the organisation.
Three-year targets were set in August 2007 to be achieved by July 2010 for greenhouse gas emissions, waste disposal and water consumption. Progress is reported below.
Performance against targets |
|
|
Target(August 2007 - July 2010) |
2008 result |
ISO14001 certification for all sites with more than 50 employees |
All targeted sites have been certified. |
|
Greenhouse gas emissions No absolute increase over the 2007 baseline |
3% reduction |
|
Total non-recycled waste 9% reduction over three years normalised against turnover |
25% reduction |
|
Water consumption 9% reduction over three years normalised against turnover |
12% reduction |
Each of our key indicators shows improvement during the year and we will report on further progress and initiatives to ensure that this progress is maintained.
Employees
It is the Company's policy 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 all applicable anti-discrimination requirements in the relevant jurisdictions including 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 employees in the US and the UK opportunities to participate in share plans that enable employees to benefit from increases to the company’s share price and to align their interests more closely with those of shareholders.
Reaching full potential
Smiths invests in employees' skills and capabilities, which in turn helps the Company and its businesses to succeed. Current priorities for Smiths are talent development, succession planning and employee engagement.
Developing talent
Smiths has a number of development programmes designed to evaluate and enhance core leadership competencies. These development programmes are designed and tailored to address a wide range of learning styles, incorporating workshops, experiential learning, mentoring, team working and project experience.
Smiths continues to be actively involved in training and developing young people, including initiatives designed to ease the transition from school or study to work. For example, Horizons is a two-year programme for newly and recently appointed graduates and those early in their career. It provides an understanding of the Group and the business world in general, and develops personal and team working skills.
Succession management
Smiths operates a systematic succession management process for leadership roles. Our businesses identify leadership talent and development needs using common tools and a consistent language. Development plans are monitored by senior management to optimise effective succession opportunities.
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 contributes positively to the communities in which we operate. In addition to providing employment opportunities and playing a beneficial role in local economies, we support community involvement through charitable giving and education initiatives.
This activity is primarily managed at a divisional level. However, Smiths does offer some support to community and charitable organisations from a central budget. Consideration is given to charities and organisations that demonstrate how a donation will enhance the wellbeing of people through improved education, health and welfare or environment. Projects local to our operational facilities or connected to the industries in which we operate are the primary focus of Smiths support.
Education is a major recipient of our support. For example together with the Royal Academy of Engineering in the UK, the Smiths Technology Education Programme is now in its second year. Through the programme, school students are offered the opportunity to participate in summer school courses in engineering and technology. Those students who then go on to take an engineering or technology degree course at university are eligible to receive Smiths bursaries. Smiths also supports the Centre for the Study of Terrorism and Political Violence at St Andrews University by funding a research assistant.
Smiths divisions also deliver significant support. The Smiths Medical Chair of Anaesthesia and Critical Care at University College London is an important example of long-term funding that has enhanced medical care.
In addition to donations, Smiths people devote time to local community projects around the world. For further information, please see the 2008 Corporate Responsibility Report at www.smiths.com/responsibility.
Controls on defence sales
All sales of defence equipment are undertaken in accordance with government export and approval procedures and regulations, such as the International Traffic in Arms Regulation and the Export Administration Regulations in the USA. These laws prohibit export of certain items to specific countries. Smiths adheres to all relevant government guidelines designed to ensure that products are not incorporated into weapons or other equipment used for the purposes of terrorism or abuse of human rights, with internal controls to ensure compliance with these guidelines.
FTSE4Good
In 2008, Smiths was awarded membership of the FTSE4Good Index which recognises companies that meet globally recognised corporate responsibility standards. Whilst we are not complacent about the ongoing work required, we were pleased to receive this external recognition of our corporate responsibility initiatives and business ethics programme.
Smiths Medical is increasing its R&D investment to boost the number of new product launches and drive sales. It is currently developing a revolutionary breathing circuit which was tested on Mount Everest as part of a ground breaking medical study that Smiths Medical supported in collaboration with Great Ormond Street Hospital and University College London. The system is undergoing clinical trials and regulatory assessments. If approved, it will for the first time enable patients with chronic breathing difficulties to stay active whilst receiving treatment, greatly improving their chances of recovery.