Ethical Business Conduct and Anti-Bribery and Corruption Policy

PURPOSE

Meggitt PLC and all subsidiary companies are committed to the highest standards of ethical business conduct.  Meggitt will conduct business fairly, impartially, and in compliance with all applicable laws and regulations, and be guided by:

  • the Common Industry Standards adopted by the Aerospace and Defence Industries Association of Europe (ASD); and
  • the Global Principles adopted by the International Forum on Business Ethical Conduct (IFBEC).

Meggitt’s Ethical Business Conduct and Anti-Bribery and Corruption Policy, along with Meggitt’s Code of Conduct and other related policies, are available on our public website at www.meggitt.com

POLICY

Meggitt’s Ethical Business Conduct and Anti-Bribery and Corruption Policy covers the following issues:

  • Ethical Business Conduct
  • Compliance with laws
  • Conflicts of interest
  • Bribery and corruption
  • Gifts and entertainment
  • Competition and antitrust
  • Commercial Intermediaries
  • Know your Counterparties
  • Political contributions and lobbying activities
  • Breaches of this Policy and reporting obligations

Ethical Business Conduct

Meggitt is firmly committed to integrity, honesty, and respect for others in all its business relationships; including those with customers, suppliers, communities where we conduct business, and amongst its employees.  The highest standards of ethical behaviour are expected from Meggitt employees, directors and from those who act on the Company’s behalf in the performance of their professional responsibilities and in their own personal conduct.

A Code of Conduct has been adopted by the Board along with related policies to guide the conduct of our businesses; the people who work at Meggitt; those who work on our behalf; and others with whom we work.

Meggitt has an ethics and compliance programme which includes:

  1. Annual all-employee training and awareness presentations;
  2. Contact information for people who can help employees;
  3. An independently operated Speak Up Line for raising questions or concerns;
  4. Other policies and procedures to be adopted from time to time to assist in the implementation of this Policy. Such policies include but are not limited to:
    • Code of Conduct;
    • Financial Crime Policy;
    • Corporate Responsibility Policy;
    • Commercial Intermediary policies; and
    • Standards of Business Conduct for US Government Contracting.
  5. Regular monitoring of the programme and of compliance with the Code of Conduct.; and
  6. Linkages with internal audit programme and risk assurance reviews.

Compliance with laws

Our continued success depends on competing aggressively, but fairly, and in compliance with the laws and regulations in those countries where we are located or do business.  This Policy applies to all business units worldwide. Local customs and practices will not provide any excuse for breaches of this Policy.

Conflicts of Interest

Definition: A personal “conflict of interest” occurs when an employee’s personal, social, financial or political activities interfere or have the potential to interfere with the employee’s loyalty and objectivity towards Meggitt.  Actual conflicts of interest must be avoided but even the appearance of a conflict of interest can be harmful.

Conflicts of interest can include, but is not limited to:

  • having a second job;
  • performing services;
  • serving as a director or consultant;
  • membership of a political; organisation;
  • close relation or personal connection within Meggitt;
  • US government special organisational conflict of interest;
  • holding a financial interest in a customer, contractor, supplier, competitor or similar entity.

The activities of close relatives and friends can sometimes create conflicts of interest. A “close relative” means a spouse, partner, parent, step-parent, child, step-child, sibling, step-sibling, cousin, nephew, niece, aunt, uncle, grandparent, grandchild, or an in-law, or other person, where a legal or common law relationship exists.

In general, a relative should not have any business dealings with you, with anyone working in the same Division or function that you work, or any area under your influence or control, or with anyone who reports to you in a direct supervision capacity.  In addition, you should never be in a situation where you have the ability to hire, supervise, affect terms and conditions of employment, or influence the management of any close relative, regardless of whether that person is a Meggitt employee or employed by a Meggitt customer, contractor, supplier, or similar entity.

Conflicts of interest or potential conflicts of interest should be disclosed to your line manager.  Under appropriate circumstances, conflicts may be waived, or safeguards may be put in place to ensure they are properly managed.

“Special organisational conflict of interest” rules apply to Meggitt as a company where government contracts are involved. See Meggitt’s Standards of Business Conduct for the US Government Marketplace and consult Meggitt Legal Counsel before progressing with any requests.

Bribery and Corruption

Definition:  “Bribery” is giving or receiving any gift, loan, fee, reward or other thing of value to influence the behaviour of someone, including those in government or business, in order to obtain or retain commercial or personal advantage; to transact business on more favourable terms; or to engage in any form of improper conduct. Bribery includes the misuse of public or commercial office for private gain. Bribery is a crime.

Generally, there are two aspects to this kind of corruption:

  1. The first is a bribe paid to obtain something that the bribe recipient is not obliged to give. Examples include awarding a contract outside the normal bid and proposal process; payments to induce someone to award a contract (possibly at a higher value or on more favourable terms); or, to break the law; or make kickbacks.  At Meggitt, offering, soliciting, providing, or accepting such payments are NEVER permitted.
  2. The second is a facilitation or “grease” payment which involves making a payment to officials as a way of ensuring that they perform, either more promptly or at all, the tasks that they should in any event be undertaking. Examples could include payments to ensure mail delivery; the connection of utilities (such as telephone lines or electricity supplies); or, payments for releasing goods held in customs. In most countries this kind of payment is also a criminal offence.  Meggitt policy is that such payments should NOT be made.

Bribes may take many forms, and it can often be difficult to distinguish inappropriate behaviour from legitimate business activity.  Risks arise particularly where you may be working with agents or with individuals in countries whose conduct you do not directly oversee.

Whenever you are asked to approve or make a payment you should ensure that you understand fully the reason for the payment.  Unless it is being made for a specific purpose (other than for ensuring business advantage), you should consider carefully whether the payment is legitimate, and if in doubt, do not make or agree to make the payment.  You should raise the matter with one or more of the people referred to at the end of this Policy and follow it through to appropriate resolution.

Gifts and Entertainment

Definition:  A “gift” is anything of value given or received as a result of a business relationship, where the recipient does not pay fair market value.  A business gift can be in any form – for example, dinner in a restaurant or club; tickets to the theatre or a sporting event; travel; a discount not available to the general public; consumer goods; or use of an individual’s or company’s time, materials, equipment or facilities.  A gift offered or given to a relative of an individual with whom Meggitt has or seeks to do business is considered a gift directly to that individual.  Likewise, any gift offered to or received by a relative of a Meggitt employee because of that employee’s position with Meggitt shall be considered a gift to that employee.

Gifts in the business context are not personal but are a reflection of the relationship between Meggitt and the other entity.  The sale of Meggitt products and services should always be free from even the perception that favourable treatment was sought, received, or given in exchange for the gifts. As such, gifts may only be accepted by Meggitt employees if they are not extravagant or frequent, are intended to encourage normal business relations, and could not be construed reasonably as an attempt to influence a decision to award a contract, work or favourable treatment.  So, for example, promotional items of nominal value are permissible.  Gifts of money are never acceptable. If in doubt you should not accept the gift, or declare it to your immediate supervisor as soon as possible and seek guidance as to whether you can keep it.

Employees whose duties include negotiation of contracts or concessions, or who are involved in the evaluation of products or services for potential use or purchase by Meggitt must be especially careful to avoid any appearance of favouritism or unfair dealing.  Gifts should not be accepted from vendors and suppliers before a contract is awarded, during bidding, evaluations or negotiations.

Gift giving by a Meggitt employee, or to a counterparty, should be disclosed to the employee’s supervisor and approved in advance. In all cases gifts or hospitality should be kept to a scale that could not be considered as extravagant, particularly in the context of the recipient’s position and likely salary.  Always consider whether the counterparty is allowed to accept such gifts under their policies.  Another test is whether a Meggitt employee or director could accept such a gift.

Gift giving by a Meggitt employee to another Meggitt employee using company funds (i.e. a retirement gift) should be disclosed to the employee’s supervisor and approved in advance.   If the gift is for an employee’s manager, managerial approval from one level higher should be sought. In all cases gifts or hospitality should be kept to a scale that could not be considered as extravagant, particularly in the context of the recipient’s position and likely salary.  Always consider whether the person receiving the gift is allowed to accept such gifts and whether it would be appropriate.

Meggitt has implemented and maintains an on-line gift registry and all gifts and hospitality of more than nominal value, given or received, must be entered in the registry by the individual involved.  The frequency of such gifts and hospitality must also be recorded.  The registry is audited regularly.

NOTE: Clearance from Meggitt Legal Counsel or Group Director, Ethics and Corporate Responsibility should always be sought before making payments to public officials, because in some countries there is a presumption that such gifts are corrupt.  It is not always obvious if someone is a public official. Special rules apply to government contracts and government officials.  Meggitt prohibits gifts to employees or representatives of the United States Government. See Meggitt’s Standards of Business Conduct for the US Government Marketplace and consult Meggitt Legal Counsel.

Competition and Antitrust

Definition:  Meggitt strictly adheres to what are called “competition” laws in many countries and “antitrust” laws in others.  Such laws are designed to protect and promote free and fair competition around the world.  Competition laws prohibit anti-competitive behaviour, such as price-fixing, collusion and conspiracies. They also prohibit unlawfully obtaining information about competitors.

Many countries have laws prohibiting anti-competitive behaviour, so, depending on the Meggitt business location, the laws that apply may vary.  Some competition laws, such as those in the USA and the European Union, can apply even when the conduct occurs outside the country’s borders.

In the EU, fines for anti-competitive behaviour can be 10% of group global turnover.  In the USA and the UK, violations may be crimes and individuals who are convicted can receive prison sentences and substantial fines.

Commercial Intermediaries

Distributors and Integrators

Definition:  A “Distributor” is an individual or an established legal entity which buys Meggitt’s products, takes ownership of them, and resells them in their own name.

Definition:  An “Integrator” is an entity or an individual appointed by Meggitt who solicits new business promotes Meggitt’s products and resells Meggitt’s products installed as a component of a larger systems.  An Integrator conducts ancillary assembly of the Meggitt products, at the request of End Users of the system.

Distributors and Integrators are sometimes called “resellers” but they mean the same thing.  Meggitt provides its Distributors and Integrators with an appropriate opportunity to generate revenue, generally in the form of a discount from list or market prices.  Distributors and Integrators are independent contractors and, as such, are not to use the Meggitt name on business cards, for stationery, or in any other manner that implies that they are Meggitt employees.

A Distributor or an Integrator may be appointed when the Meggitt business considers it appropriate, on the basis of sound business judgment, to supplement the Company’s own sales force, taking into consideration applicable law, regulations and business conditions.

Meggitt expects the same level of integrity and business conduct from any Third Parties with which Meggitt works.  These standards are explained in our Meggitt Third Party Code of Conduct.   Distributors and Integrators must scrupulously avoid any practices which are unlawful, improper or unethical; and they must conduct themselves at all times with business associates and potential Meggitt customers, in a manner that will avoid even the appearance of impropriety and will not cause embarrassment to Meggitt, to its customers, or to the Distributor or Integrator in the event of public disclosure.  Distributors and Integrators must act in accordance with Meggitt Third Party Code of Conduct, a copy of which will be delivered to the Distributor or Integrator at the outset of the relationship.

Conduct that would be improper or illegal if committed by a Meggitt employee may not be committed by a third party, such as a Distributor, on Meggitt’s behalf.  That would be improper or illegal as well.

NOTE: See Meggitt’s Distributor Policy and Meggitt’s Systems Integrator Policy. Those policies incorporate elements of this Policy and should be consulted, along with Group General Counsel & Director, Corporate Affairs at all stages of the relationship with a Distributor or Integrator and Group Director, Ethics & Corporate Responsibility in relation to due diligence.

Sales Representatives

Definition:  A “sales representative” is an individual or an established legal entity performing services in good faith for the purpose of securing business for Meggitt. For such services Meggitt provides appropriate remuneration, generally in the form of a percentage of sales, but occasionally as a fee for services. Sales representatives are independent contractors and, as such, are not to use the Meggitt name on business cards, for stationery, or in any other manner that implies that they are Meggitt employees.

Any arrangement obligating Meggitt to pay a finder’s fee if Meggitt receives a contract shall be considered a sales representative agreement and is subject to this Policy and the Sales Representative Policy. Such an arrangement could be considered a “contingent fee” arrangement which is generally prohibited in relation to US Government contracts. Employees should consult Meggitt’s Standards of Business Conduct for the US Government Marketplace and Meggitt Legal Counsel before entering into such a sales representative agreement where the ultimate customer would be the US Government.

Meggitt has decided not to appoint any new sales representatives nor to renew existing agreements other than in exceptional circumstances.

Sales representatives must scrupulously avoid any practices which are unlawful, improper or unethical; and they must conduct themselves at all times with business associates and potential Meggitt customers, in a manner that will avoid even the appearance of impropriety and will not cause embarrassment to Meggitt, to its customers, or to the representative in the event of public disclosure. Sales representatives must act in accordance with the Meggitt Third Party Code of Conduct and this Policy, copies of which are available on line at: www.meggitt.com. This Policy and the Meggitt Third Party Code of Conduct should also be provided to the sales representative by the Meggitt site which engages the sales representative, at the outset of the relationship.

Conduct that would be improper or illegal if committed by a Meggitt employee may not be committed by a third party, such as a sales representative or consultant, on Meggitt’s behalf. That would be improper or illegal as well.

NOTE: See Meggitt’s Sales Representative Policy. That policy incorporates elements of this Anti-Corruption and Business Ethics Policy and should be consulted, along with the Group General Counsel & Director, Corporate Affairs, at all stages of the relationship with a sales representative and Group Director, Ethics & Corporate Responsibility in relation to due diligence.

Know Your Counterparties

All Counterparties (including customers and suppliers) and Commercial Intermediaries that work with Meggitt are expected to be mindful of their ethical responsibilities and legal compliance obligations.

All counterparties can carry civil or criminal liability and business risk to Meggitt.   It is important that Meggitt understands the business structure, the directors and management, the business model, the business areas and territories of each Counterparty with which Meggitt works, also source of funds and understanding trade compliance obligations.

Meggitt takes a number of steps to evaluate counterparties at the time of appointment and during the term of any contractual relationship.

Political Contributions and Lobbying Activities

It is the policy of the Company not to participate directly in any party political activity and not to make political contributions whether in cash or in kind, anywhere in the world.  It is understood that Company activities, such as being members of or involved with organisations concerned with matters of public policy, law reform and representation of the business community, and communicating with the Government and political parties at local, national and European level, could be construed as direct political activity but is not generally prohibited (see Lobbying and Advocacy below).

Meggitt recognises employees’ rights to participate as individuals in the political process, in ways that are appropriate to each country.  However, employees should be careful to make it clear that they do not represent the Company as they participate in the political process.  Therefore:

  1. do not use Company time, property or equipment to carry out or support your personal political activities. In short, engage in the political process on your own time and with your own resources (we may allow you time off work for these purposes, including in particular where we are obliged by law to do so);
  2. always make clear that your views and actions are your own and not Meggitt’s;
  3. if you plan to seek or accept a public office, you should seek the approval of your manager in advance. Approval may not be given if the manager considers that there will be an adverse impact on the performance of your job or the Company.

Lobbying and Advocacy

Although Meggitt will not directly participate in party politics, we will continue to engage in policy debate on subjects of legitimate concern to the Group and all its stakeholders including shareholders, its people and the communities in which we operate, by processes such as lobbying.

Lobbying activity on behalf of Meggitt is highly regulated by law.  Our Legal Counsel are responsible for overseeing this activity.  Consult your line manager before any non-routine contact is made with government officials or employees.

Non-routine is defined as:

  • other than as required by normal government processes and monitoring contracts; and
  • relating to government policy or legal/regulatory changes.

Breaches of this Policy, Consequences and Reporting Obligations

Violations or breaches of this Policy are punishable by disciplinary action up to and including termination of employment.  Violations may also result in criminal prosecution of the individuals involved.  This Policy will be enforced through regular monitoring and auditing.

Any director or employee who suspects or becomes aware of any breach or violation of this Policy, including any suspected irregular payment, or any anti-corruption statute or regulation must report, without the delay, the suspicion or violation to one of his or her supervisor; to the Group Company Secretary; or to the Group General Counsel & Director, Corporate Affairs, or to the Group Director Ethics & Corporate Responsibility, or to Meggitt Legal Counsel.  Anyone making such a report will be protected from punishment or retaliation in accordance with Meggitt’s Code of Conduct.  Anyone receiving such a report is responsible for escalating the report to the next higher level or to another appropriate senior employee, and for following up until it is resolved.  Employees must ensure the people that they manage or supervise understand their responsibilities.

Contact information for people who can help, are contained in the Code of Conduct, on Speak Up posters provided throughout your facility and on MC2.

Meggitt also provides an independently operated Speak Up Line, available 24 hours a day, seven days a week, which may be used to raise questions or concerns.  Each Meggitt facility contains posters listing the toll free phone number to be used to place such calls.

An internet application is also available for these purposes at www.meggitt.ethicspoint.com.

The Board delegates responsibility for oversight of this Policy to the Corporate Responsibility Committee.  The Chief Executive, the Chief Financial Officer, the Group Company Secretary and the Group General Counsel and Director, Corporate Affairs will have executive responsibility and will report at least twice a year on these matters to the Corporate Responsibility Committee and at least once a year to the full Board.  The Group Director Ethics & Corporate Responsibility will have day to day oversight of this policy and the implementation within business processes.  Division Presidents, Product Group and the senior on-site executives are responsible for the local implementation of this Policy in their businesses and at their sites.

Approved by the Board on 17 December 2021.