Governance & Ethics
Being A Responsible Business
Creating Value with the Right Values
ITT wants to be a company with a great workplace environment and great results. The two goals aren't mutually exclusive. In a culture built on respect, responsibility and integrity, employees feel more empowered, are more productive and produce better results.
It's not always an easy balance to maintain. All companies face internal and external pressure to "make the numbers." But we want employees to make the right decisions and use their values as a guide in pursuit of increased shareholder value. As we reach for top-tier financial results, we are committed to a company culture where ethics and compliance are at the forefront of everything we do.
Our Commitment:
To live our values of respect, responsibility and integrity, and to create and maintain a corporate culture that is aligned with the personal values of ITT employees.
Progress to Date:
The night vision export compliance issue that was resolved in 2007 brought renewed focus to our ethics and compliance effort, and was a catalyst for analysis of ITT's corporate culture. In 2007-08, ITT redefined the company vision and values and executed a company-wide initiative to raise awareness among employees. The company has placed "Living Our Values" on the top of the corporate agenda and has invested significant resources to create a sustainable values-based culture.
Goals for 2008/2009:
To move from awareness to understanding of the new ITT vision and values among all employees. To embed the ITT values in all company policies and procedures, including business reviews and the strategic planning process. To launch a learning curriculum to educate employees on what it means to be "Living Our Values."
Workplace Culture
Building an Ethical and Compliant Culture
In 2007, ITT conducted surveys to measure employee perceptions about company culture and about the company's current ethics and compliance programs, tools and practices. The key findings include:
- ITT employees share a strong moral compass.
- ITT needs to do a better job of creating an environment where employees feel confident in standing up for what's right and don't feel pressured to compromise their values or standards in order to achieve business objectives.
- ITT has a comprehensive ethics program, but needs to enhance its processes for reporting concerns and for accessing available advice line resources.
- ITT must reinforce a single set of standards for everyone at all levels of the company.
ITT is using the survey results to pinpoint areas for improvement and shape a stronger ethics and compliance program.
In 2007, ITT redrafted our vision and values to align closely with our employees' personal values and our desired company culture.
ITT is also investing in our company-wide ethics and compliance program. For 2007-2008, we completed training of nearly every employee worldwide on our Corporate Code of Conduct. We also provided focused training on key issues such as export controls, accuracy of records, conflicts of interest, anti-bribery and security — and communicated extensively to our employees about the many ethics and compliance tools available to them. These include our ombudspersons program and EthicsPoint helpline. We are also developing new "Living Our Values" training, which will open a dialogue with employees about company culture and help us align our behaviors with ITT's new vision and values.
In addition, ITT has strengthened its Ethics and Compliance organization, appointing dedicated ethics and compliance directors at the corporate level and at our three main businesses, and a chief ethics and compliance officer who reports directly to the CEO.
In April 2008, ITT rolled out our new vision and values to employees across the company through interactive meetings like this one at our plant in Nogales, Mexico.
ITT is seeing an increase in the number of compliance-related questions being raised, which indicates that we are building an environment of trust where employees feel confident in coming forward with issues.
Holding Ourselves Accountable
A healthy company culture is one where employees are confident that they can freely report legal or ethical concerns, that their concerns will be investigated thoroughly, and that appropriate actions will be taken without fear or favor.
ITT has a robust reporting process in place. We have a global network of more than 30 ombudspersons operating at ITT headquarters and at each of our three main businesses to provide coverage in all of the primary languages spoken by ITT employees. We continue to expand this internal ombudsperson network and to promote our external resource — EthicsPoint — as another way for employees to raise questions and concerns. Employees can contact these sources confidentially.
In 2007, the number of potential ethics and compliance violations reported by employees to our ombudspersons or EthicsPoint rose significantly compared to past years. This increase can be traced directly to our new ethics and compliance training and indicates that employees are holding each other accountable — and feeling more confident that their company will support them when they come forward with concerns.
All reports were investigated by ethics and compliance review boards at the business or headquarters level. Of the cases investigated in 2007, most were simple misunderstandings. However, 25 of the investigations did require action, ranging from written warnings to termination of employment. In addition to these cases, the export compliance violation in our Night Vision business led directly to a number of disciplinary actions, including terminations, demotions and financial penalties.
Shaping Public Policy: Congressional Lobbying
ITT is a global company, but we are based in the United States and our government relations and political lobbying activities are limited almost exclusively to the U.S. In addition to employing several full-time Washington representatives, ITT operates a relatively small political action committee (ITTPAC). Through this tool, we collect voluntary donations from company employees and direct the money to politicians' personal reelection committees. These "hard money" contributions comply with U.S. law.
ITTPAC does not favor a particular political party. In selecting legislators to support, our sole criterion is their stance on key issues that affect our company and our stakeholders. We steer ITTPAC funds to senators and representatives who can help shape the federal budget so that it includes programs that utilize our defense products and services, and also supports politicians who share our points of view on policy issues-such as global trade, tort reform, pension and benefits issues and asbestos liability — that affect our business.
During the 2007-2008 election cycle, the now combined ITT-EDO political action committee has contributed $272,000 to 66 members of the U.S. Congress. To see current and past ITTPAC contributions to federal candidates, visit www.bipac.net.
ITT VIsion and Values
Moving in the Right Direction
In 2007-2008, ITT introduced a new vision and streamlined set of company values. The ITT vision and values are our company's compass. As we pursue product breakthroughs and financial growth, they guide our actions and remind us that we must always pursue market leadership in the right way — with respect, responsibility and integrity.
Code of Conduct
ITT is committed to doing the right thing always. Sometimes this means making difficult choices, even when no one else will know. ITT places a priority on its ethics and compliance program. The Code is specifically designed to promote accountability, integrity, and respect while deterring wrongdoing.
