BAE : Corporate Governance seminar

November 03, 2020 at 09:45 pm IST

BAE Systems Governance Seminar - 2 November 2020

All statements other than statements of historical fact included in this document, including, without limitation, those regarding the financial condition, results, operations and businesses of BAE Systems and its strategy, plans and objectives and the markets and economies in which it operates, are forward-looking statements. Such forward-looking statements which reflect management's assumptions made on the basis of information available to it at this time, involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of BAE Systems or the markets and economies in which BAE Systems operates to be materially different from future results, performance orachievements expressedor impliedby such forward-looking statements. BAE Systems undertakes no obligation to update any forward - looking statements whether as a result of new information, future events or otherwise.

Agenda

Welcome and Overview - Sir Roger Carr
Board Governance, Culture and Purpose, COVID response - Sir Roger Carr
Audit Committee Overview - Stephen Pearce
Corporate Responsibility Committee - Ian Tyler
Remuneration Committee - Paula Rosput Reynolds
Break
Q&A - panel session
Summary and Wrap Up - Sir Roger Carr

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	2

Welcome and Overview

Sir Roger Carr

Chairman

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	3

Board Governance, Culture and Purpose

Sir Roger Carr

Chairman

Purpose and Culture

We Serve, supply and protect those who serve and protect us in a corporate culture that is performance driven, but values led

Spirit of Governance

We are proud of what we do - we serve and equip those that serve and protect us
We aim to inspire and excel in what we do - the technology we develop, the talent we build - from apprentice to boardroom
We place safety above profit - people above process - ethics above outcomes - in a workplace culture that rewards merit and values diversity and cares for the environment
We work with our customers in the spirit of partnership - we combine self-interest with nations' interests - we seek win win solutions - and avoid win lose conflicts
We strive to go the extra mile - in the products that we make - the quality we deliver - and the service we offer
We recognise we are entitled to nothing and must earn everything
We reward stakeholders and deliver for our customers by honing our competitive edge, selling globally - innovating constantly - striving to execute flawlessly
We are clear it is not simply how much money we make - but how we make money that counts
We trade responsibly - account conservatively - act with integrity and govern scrupulously

We are performance driven and values led

Company Purpose

At BAE Systems we equip and support our defence, security and aerospace customers so they can protect people, national security, critical infrastructure and vital information.

We have an important role in society because we:

help our customers to provide security and safety
contribute to the economic prosperity of the places where our people live and work
support high value jobs in our business and in our supply chains
value our people and their diversity so they can fulfil their potential in an inclusive and supportive working environment
inspire and excel in the work we do - the technologies we develop and the talent we build
develop cutting edge technologies to sustain the competitive strength of the Company in global markets
care for and support our local communities whilst seeking to reduce the environmental impacts our businesses have around the globe

Through careful long-term sustainable management and governance of our business we will continue to create value for all our stakeholders.

Governance

Companies Act S172
- Board Leadership
- Strategy, Investment, Risks, Behaviours
- Stakeholder Engagement
Board Governance
- Board Committees
- Code of Conduct
- Responsible Trading Principles
- Internal Controls
- Risk Framework
- Workplace and Operational Environment
- Delegated authorities
Core Business Processes
- Operational Framework and policies - 5 year Integrated Business Plan
- Operational Assurance Statement
- Life Cycle Management process (incorporates product trading considerations)

Robust governance is at the core of our business

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	8

Corporate Governance - Overview

	Board	•	Independent reviews
	•	Management dinners*
-	8 UK, 4 US, 1 Australia	•	HiPo breakfasts
-	31% Female	•	Site visits*

Stakeholders

Shareholder Contact

Government Contact

Customers / Military leaders

Pension

Employees

Chairman
CEO / Executive
Remco
Informal Board Dinners*
Regular dialogue with Senior ministers and Political Officials in the UK, US, Australia, KSA and Qatar
Regular dialogue with Senior Military leaders in all customer countries
Board dinners
Close working relationship with pension funds through CFO
Formal and informal communication networks

Committees

RemCo

Paula Rosput Reynolds(1)

Audit

Stephen Pearce

Corporate Responsibility

Ian Tyler(2)

NomCo

Sir Roger Carr

Notes

To recommence post COVID-19

To be replaced 1st Jan 2020 by Ian Tyler
To be replaced 1st Jan 2020 by Jane Griffiths

	•	USA - Special Security Agreement
Inc. Board
•	Oversight on behalf of USA government

Our Response to COVID

Play Video Content

Audit Committee Overview

Stephen Pearce

Chair of the Audit Committee

Audit Committee - Overview

The Audit Committee monitors the Company's risk management and internal control systems and reviews their effectiveness. The monitoring and review covers all material controls, including financial, operational and compliance controls
Review the policies and procedures for the identification, assessment, management and reporting of risk
- Key risks the committee focuses on are;
- - Revenue/ profit recognition/ provisioning
  - Pensions
  - Taxation
  - M&A/Goodwill
  - Net Debt
  - Operations
  - Information management
- Risk management and internal control systems are underpinned by;
- - Operational Framework and Code of Conduct
  - Operational Assurance Statements
  - Life Cycle Management
Monitoring the integrity of the Company's financial statements - "fair, balanced and understandable"
Monitoring the independence and effectiveness of internal and external audit and management responses to findings and recommendations. Audit quality both internal and external always a priority

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	12

Audit Committee - External Audit

Refresh of Risk management process since 2018
Deloitte have now completed 2nd full annual audit cycle
Deepening maturity of Deloitte audit work through the year ending 31 December 2019 and into 2020 includes:
- Business as usual programme of audit work, with structures reviews of Life Cycle Management, IT controls, accounting practices
- Supporting the transition to a new Group Finance Director and Director, Financial Control
- Embedding relationship with Internal Audit to optimise audit efficiency and risk coverage
- Debt, M & A, Pensions
- Trends in Audit - Brydon Report, accounting standards
- Risk culture - prudence, revenue recognition, goodwill, programme assurance
- Audit Quality Review
- Taking into account COVID-19

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	13

Audit Committee - Relationship With Internal Audit

The Role of Internal Audit

Internal Audit plays an integral role in the Company's risk management and assurance Framework and provides regular reports to the Audit Committee. Operates in alignment with IIA Code of Practice.
The independent assurance that Internal Audit provides is a key element of the Company's governance framework.
Taken with management operations and reporting, functional oversight and external audit assurance, Internal Audit provides a service that gives confidence to the Board and amongst the Company's stakeholders.
Regular sessions held with the Audit Director without attendance from Senior Management.

Links with the Audit / CR Committee

Engagement with senior members of the Audit team outside normal regular meetings
The annual Internal Audit programme is agreed jointly by the Audit and Corporate Responsibility committees to ensure that the overarching programme covers financial and operational risks and includes the assessment of ethical and reputational risk management and the Company's values .
Increasing focus on Information management, IT and supply chain integrity
Cyber risk assessment and monitoring

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	14

Corporate Responsibility Overview

Ian Tyler

Chair of the Corporate Responsibility Committee

Focus of the Corporate Responsibility Committee

BAE Systems CR Agenda is based on:

Robust & responsible management of the impacts and risks associated with our operations
Identifying and responding to emerging and future risks/opportunities to support sustainable performance
Ensuring the safety, security & wellbeing of our people
Protecting and enhancing our reputation as a responsible business

Governance & regulatory requirements

Responsible Trading
Compliance with export controls
Anti bribery and corruption

Societal	Environment
• Work place safety & wellbeing	•	Operational impacts
•	People and community	•	Use of renewables
•	Culture & engagement	•	Low carbon innovation
•	Diversity & inclusion	•	Carbon reduction

Responsible Procurement

Priorities embedded in business operations

CR Committee - Progress & Direction

	2010
Responsible Trading	How we trade
	(Woolf Report)

Workplace Safety	Process
	Compliance

Employment Proposition

Environment

Data Assurance

2014	2018	2020
What we trade
Who we trade with
	Supplier Assurance
Risk Reduction		50% reduction
	in recordable
Safety Culture
	incidents

		Health & Wellbeing
		2010-2020
	D&I Strategy	COVID-19
	Focused
	D&I initiatives
	objectives to

	progress
Employee Voice	diversity

Divisional

Initiatives

2021

Inclusion Workplace Culture

Corporate Carbon Objectives

Social Agenda

Corporate Responsibility Committee - how it works

The Committee provides review and oversight of the Company's CR Agenda, through -

Established annual rolling agenda focused on responsible trading policy, anti-bribery & corruption, safety
- wellbeing, environment, diversity & inclusion
Assurance of compliance with corporate policy & process through
- Direct engagement with line management, employees and employee groups
- Review of performance metrics
- Review of Internal Audit programme and findings
- Site visits (see below)
- Other indicators (e.g. Employee Opinion Surveys, external benchmarking surveys)
Setting CR objectives for the CEO and providing recommendation to RemCo on performance rating
Annual site visits to confirm effective implementation of corporate approach at business level (visits to date: US Shipyards, UK Munitions, UK Submarines, UK Air, India, MBDA (UK), US Electronic Systems, US Ordnance)
Direct employee engagement during site visits & meetings with High Potential employees. Attendance at Trade Union and other employee events (e.g. Graduate Conference)
Approving external reporting (through Annual Report) and external assurance report

Sustainability Agenda fundamental to the success of our business

CR Committee - 2020 Progress and Direction

2020 Update:

Specific objectives to be introduced focused on:
- Progressing clear carbon objectives
- Driving inclusion & workplace culture in the workplace
- Employee engagement & wellbeing
- Third party & supply chain supply chain
- Social value and contribution to UN SDGs
Safety improvements and progress on gender diversity to become 'qualifiers' for executive award
2020 additionally has seen a focus on:
- Covid safe operations
- Employee engagement and well-being
- Diversity and Inclusion - Black Lives Matter

Looking ahead:

On-goingCovid related priorities
Action on climate change - including meeting TCFD reporting requirements
Societal impacts - prosperity agenda
Well being and engagement

Continued Commitment to Robust Governance, Standards and Assurance

Corporate Responsibility Committee

Play Video Content

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	20

Remuneration Committee Overview

Paula Rosput Reynolds

Chair of the Remuneration Committee

The Remuneration Committee Philosophy and Remit

Our remit has expanded over the last several years, partly in response to government policy and stakeholder input. But the Committee has deepened its approach because we believe that well- designed remuneration can be a tool of culture change and progressive improvement in company performance.
We establish and administer detailed goals which form the basis for remuneration of the Executive Directors and the members of the Executive Committee. We also ensure that the incentives we set for short and long-term incentives cascade appropriately throughout the wider workforce.
We seek to assure that the remuneration for the wider workforce is consistent with market trends, with regulation, and is non-discriminatory with respect to gender, ethnicity and other personal attributes not related to performance.
We meet periodically, as do all board members, with the wider workforce and with high-potential employees to engage in candid dialogue.
The Remco chair actively seeks input from shareholders in advance of policy changes and major decisions on remuneration.

Issues on Our Agenda in 2020

Obtaining shareholder input on an ongoing basis, rather than merely seeking your votes
Discussing quantum and fairness of pay
Recasting the reward system to align with strategy in a meaningful way
Balancing of financial and non-financial incentives
How performance in safety and D&I should be recognized
Analysis of peer groups for TSR purposes
Equalising pension allowances
Calibrating reward given exigencies of Covid

Policy Revisions Approved in 2020

Safety and D&I measure within non-financial annual incentive will apply as a 'downward' underpin if performance is not achieved at high level expected
Changes to metrics applicable to award of Performance Shares (LTI):
- Addition of a cash-generation measure to recognize importance of a secure dividend to the investor proposition (25% of reward)
- Addition of a Strategic progress measure (25%); areas of progress discussed with shareholders
- TSR component reduced (50% to 25%)
- Recommitment to EPS growth metric (3/5/7%)
Pension contribution of 8% into a defined contribution scheme for new hires in line with the wider UK workforce; CEO pension allowance fixed in monetary terms and to be reviewed on an ongoing basis
Introduction of five year time period for achieving Minimum Shareholding Requirement and confirmation of consequences of not meeting it
Establishment of a formal post-cessationshareholding policy for top executives

Balance of Incentives

Annual Incentive	LTI
- Financial based on PLC targets and also include relevant	3 strategic metrics:
sector targets for Executive Committee members	- Advancing technology

- Non financial includes the underpinning elements of	- Improve operational effectiveness
Diversity and Inclusion and Safety	- Improve efficiency and competitiveness

		Earnings Growth	Cash
Financial	Non Financial	TSR	Strategic

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	25

RemCo Response to COVID-19

Affirmed policy that rewards will be paid only if performance meets targets

No extraordinary support from governments; dividends continue to be paid. So rewards programs continue to operate and pay out only if performance targets are achieved over one and three year periods
No adjustment to previously-adopted performance conditions for annual bonuses or in-flight LTIP awards have been undertaken.
Committee will review executive pay in the Q1 2021, when complete information on the Group's operational and financial performance for 2020 is available.
Continued encouragement to all plan participants to "keep eyes on the ball."

LTI Grants Were Priced in a Volatile Market with discretion invoked

2020 March LTI grants were delayed by several weeks for Remco to understand Covid-related market volatility, prevailing grant values and regulatory environment regarding rewards
Committee included provision in grant language regarding its future discretion in the event that there is a misalignment between pay and performance at time of vesting
Communications with shareholders providing data on pattern of grant prices over time; strike prices were within the range of previous years' grants

RemCo Looking Ahead

Finalizing details of strategic progress for 2021:
- Project adherence
- Capital Efficiency
- Digitization
ESG Metrics - What will be appropriate and meaningful in the business? How do we build on what we have already?
Program for retaining and advancing high potential employees into roles of increasing responsibility
Wider workforce considerations in the "new normal"
Delivering value in the reward function: People spend and workforce analytics; personalization and governance

Break

Panel Session Q&A

On the panel from BAE Systems

Our speakers
- Sir Roger Carr - Chairman
- Stephen Pearce - Non Executive Director and Chair of Audit Committee
- Ian Tyler - Non Executive Director and Chair of the Corporate Responsibility Committee
- Paula Rosput Reynolds - Non Executive Director and Chair of the Remuneration Committee
Additionally on the Q&A panel and in attendance
- Chris Grigg - Senior Independent Director
- Jane Griffiths - Non Executive Director and Chair of the CR Committee from Jan 1 2020
- Dame Elizabeth Corley - Non Executive Director
- Nicole Piasecki - Non Executive Director
- Charles Woodburn - CEO
- Martin Cooper - Director, Investor Relations

Summary and Wrap Up

Sir Roger Carr

Chairman

Supplementary Information

Overview of 2020 remuneration policy

UK Executive Directors


		Performance shares
Performance		Vests in year 5 subject to
	three-year EPS, TSR, cash
shares
	generation and strategic

		progress metrics and two-
		year holding period

			Compulsory bonus
			deferral into DBP
Annual		One-third deferred in
incentive		shares for 3 yrs

			Cash based element
			Two-third paid in cash

Base salary			immediately


	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5

Annual incentive subject to one-third compulsory deferral.
LTI delivered entirely in Performance Shares.
Performance shares vest subject to 3 year performance conditions (25% on each of EPS growth, relative TSR, cash generation and strategic objectives). Further 2 year holding period before release.
Application of reasonable discretion on vesting outcomes.
MSR of 300% for CEO; 200% for GFD to be achieved within 5 years.
Post-cessationshareholding requirement of 100% MSR for 2 years.

			US Executive Directors

				Performance shares

				Vests in years 3,4 and 5
				subject to three-year EPS,
Performance			TSR, cash generation and
shares			strategic progress
				metrics; vested shares
				released in one-thirds

Restricted			Restricted shares
		Vests subject to three year
shares
		service condition with

				additional two-year

				clawback period
				deferral into DBP
Annual
		One-third deferred in
incentive
		shares for 3 yrs


				Cash based element
				Two-thirds paid in cash
Base salary				immediately

	Year 0			Year 1	Year 2	Year 3	Year 4	Year 5

Annual incentive subject to one-third compulsory deferral.
LTI delivered in Performance Shares (298% of salary) and Restricted Shares (150% of salary).
Performance shares vest subject to 3 year performance conditions (25% on each of EPS growth, relative TSR, cash generation and strategic objectives). Vested shares released in three equal tranches at end of years 3,4 and 5.
Restricted shares vests end of year 3 + additional 2 year clawback period.
Application of reasonable discretion on vesting outcomes.
MSR of 425% to be achieved within 5 years.
Post-cessationshareholding requirement of 300% salary for 1 year.

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	33

Sustainability Agenda

Our Sustainability Agenda is fundamental to the success of our business. Sustainability is embedded into our Operational Framework & Policies and overseen by a robust Board Governance structure and implemented through our Code of Conduct, Responsible Trading Principles, Internal Controls, Risk Framework, and Delegated Authorities.
We recognise that we can make a valuable contribution towards the UN Sustainable Development Goals (SDGs) that we can influence. Our current agenda supports 8 of the goals.

Our Priorities & Contribution to the SDGs

https://www.baesystems.com/en/our-company/sustainability

Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.	34

Our Approach to Environment & Climate Change

We are committed to high standards of environmental management and undertake activities with the aim of reducing the environmental impact of our operations, products and supply chain.
We monitor and report our emissions at Group-level, in compliance with the UK government's Carbon Reduction Commitment and the Australian National Greenhouse Energy Reporting System

https://www.baesystems.com/en/our-company/sustainability

Our Operations Our Products

Maintaining high

environmental management standards

Reducing

emissions &

enhancing disclosure

Investing in low

carbon

innovation

Our Actions & Progress

All major manufacturing sites certified to ISO 14001
Reduction in mains water (14%) and abstracted water(16%) in 2019
Recycling of waste increased by 18% in 2019
Our global carbon footprint in 2019: 1.103 million tonnes of CO2 equivalent (-5% vs 2018)
Moving towards 60% sourcing of renewable energy across the UK estate
More than 10,000 solar panels live in UK and Sweden
Investment in development of hybrid propulsion technologies
Apply lifecycle assessment to maximise potential for reuse and remanufacture of our products
Member of the International Aerospace Environment Group

Our Commitments

Committed to high standards of environmental management
Establish net zero timeline and report by 2022 in line with the recommendations of the Task Force on Climate- related Financial Disclosures (TCFD)
Formal review of environmental and climate related risks this year

Responsible & sustainable operations

Employee safety & wellbeing are our priority
Our productivity rate was 27% higher than UK national average in 2018 (1)
We engage with over 22,000 suppliers worldwide
We contributed £9.3 billion to the UK's GDP in 2018 and helped create over 120,000 FTE jobs (1)

Our Operations

A workplace culture

upholding high

standards of ethics, safety and inclusion

Positively contributing to social & community impact

Our Actions & Progress

Speak-uppolicy with >160 Ethics officers and a 24-hour
Ethics helpline
Detailed policies on bribery and anti-corruption and industry-leading standards
Executive sponsored Employee Resource Groups to support inclusion
c.700 apprentices and 500 graduates in UK in 2019; engaging children and young adults in STEM subjects
Community Investment Policy - contributed >£11m to local, national and international charities in 2019
Support through technology, materials, and facilities for Covid Response

Our Commitments

Year on year reduction in safety incidents (linked to Exec remuneration)
Roll out annual Business
Conduct scenario-based training to all employees
Increase representation of women and other minorities

Suppliers	supply chains & open	Human Rights impacts
	Responsible	• Supplier relations governed by our Responsible Supplier
	Principles & Product Trading Policy that specifically considers
Our	innovation	• Funded 50+ innovative SMEs to access and mature future
	capability for our business

(1) Source: Oxford Economics - The contribution of BAE Systems to the UK Economy - published September 2019

Extend supplier audit program to further embed Supplier Principles

Engagement with external agencies

We proactively engage with external rating agencies and other third parties as a means of benchmarking and identifying where we need to improve.
These groups include:
- MSCI
- Sustainalytics
- ISS - ESG
- Dow Jones Sustainability Index
- Transparency International
- Workforce Disclosure Initiative
- Individual investment funds

Employment Support & Advice

Code of Conduct

Code of Conduct applies globally to all employees, directors, and wholly owned subsidiaries. Controlled JV's are expected to uphold substantially equivalent standards
Embedded into the due diligence process for suppliers
Expressly prohibits bribery and other forms of corrupt conduct
Mandated Business Integrity training during induction with annual line manager lead face-to-face training thereafter
Reviewed every three years to ensure best practice

Ethics Helpline

Code of Conduct makes clear that the first point of call is a colleague, manager, HR or Legal
Alternatively there is an Ethics Helpline and network of Ethics Officers
160 Ethics Officers across the Company who receive regular training and provide day to advice and guidance on ethical matters
Ethics Helpline - lines are open 24/7, anonymity if required, externally independently run
Ethics reporting reviewed at a business level (in quarterly business reviews) and corporately at the Ethics Review Board and Corporate Responsibility Committee

Product Trading Policies

The policy applies to BAE Systems plc, its wholly owned subsidiaries and all other companies and entities controlled by BAE Systems plc have a substantially equivalent policy applicable.
Our Product Trading Policy helps our line leaders and employees apply the Responsible Trading Principles in practice. It requires them to assess business opportunities according to the level of risk associated with:
- The type of product and its intended use.
- The end user
- The country of sale
Product Trading Evaluation Criteria
- Does the Product fulfil its intended purpose and match the customer's stated requirement?
- Does the Product conform to BAE Systems Product Safety Policy?
- Is the Product able to distinguish planned from unintended targets? Is it proportionate to the role and necessary for its intended purpose?
- Can it reasonably be anticipated that the Product will be controlled or prohibited in the foreseeable future?
- Is the Product an entirely new class of weapon or capability?
- Is there a significant, specific, and foreseeable risk of the Product being diverted or transferred to an unapproved user or utilised for an unauthorised purpose?
- Does the Product create a significant lasting adverse environmental or health impact over and above that reasonably necessary in its manufacture, storage, deployment, use, or disposal?
- Can the Product's end use reasonably be expected to violate civil liberties or human rights?
- Can customers be reasonably expected to maintain and use the Product safely through life?
- Is there a reasonable or foreseeable risk that the customer or end user may be subject to regime change or that foreign policy changes such that the reputation of the Company might become damaged?
- Is the Company able to supply the Product?

Key Anti-Corruption Policies within the Operational Framework

Advisers Policy
Community Investment Policy

•	Conflicts of Interest Policy	Our policies are reviewed annually with
	changes approved at Board Level

•	Export Control Policy	Our policies include processes for risk-based due


•	Facilitation Payments Policy	diligence, internal and external approvals and on
•	Fraud Prevention Policy	going monitoring

• Gifts and Hospitality Policy
• Lobbying and Political Donations Policy
•	Offset Policy
•	Procurement Policy
•	Product Trading Policy
• Pursuit of Export Opportunities Policy
•	Risk Management Policy

https://www.baesystems.com/en/download-en/20200121113819/1434636829917.pdf

Advisers Policy

Covers appointment and management of third parties engaged to influence, promote or assist our sales and marketing efforts or the strategic development of the Company
Appointment managed by central Business Conduct Compliance/International Compliance team
All Advisers assessed to ensure no apparent risk of corrupt or unethical behaviour, a clear business case and compelling justification for proposed remuneration
Third party due diligence report and on-site interview by BCC team. All appointments reviewed and assessed by Business Development Adviser Compliance panel chaired by independent legal counsel
On going monitoring, reporting and due diligence review
Central oversight and approval of payments
Re-appointmentevery two years.

Facilitation Payments Policy

Facilitation payments prohibited for both employees or others on their behalf
Any request for a facilitation payment must be declined and reported to the Legal Department
Any request must be recorded in a facilitation payment register

Conflicts of Interest Policy

All employees to ensure their personal interests do not compromise their duties to the Company
Notification requirement if actual, perceived or potential conflict of interest arises
All conflicts reported to Business Chief Counsel, recorded in a conflicts of interest register and on the employee's personnel file
Remedial steps required to address conflicts of interest

Gifts and Hospitality Policy

G&H can only be occasional, appropriate, reasonable and in accordance with applicable laws
G&H must be for a legitimate business reason and never connected with obtaining of an inappropriate advantage
If involving Government customers it must comply with their rules
The policy sets out clear financial limits and approval levels
G&H at certain levels needs to be recorded in a gifts and hospitality register

Training

All employees receive Code of Conduct training on induction and annual face to face refreshers thereafter
Enhanced anti-corruption training is provided through biennial online Integrity In Business Dealings training depending on function and role
Those engaged with the appointment, monitoring or payment of Advisers are required to do face-to-face advanced training on risks, red flags and processes to address risk

Offset Policy

Offset must be undertaken in accordance with our Code of Conduct and with clear levels of ownership and executive oversight
Offset must be consistent with customers offset policies and proportionate to the value of related contracts
Risk both financial and non-financial are clearly assessed and mitigated
Offset proposals are subject to rigorous review and approvals process which includes risk based anti- corruption due diligence
Certain offset is subject to review by external panel chaired by independent legal counsel

Our approach to Trade Controls

Clear management commitment to trade controls compliance through Export Control Policy
A comprehensive set of Trade Controls procedures and internal controls designed to ensure compliance with all applicable export controls and sanctions (including financial sanctions and embargos)
Additional business policies and procedures to assess country risk before we pursue export opportunities
Supporting tools and guidance, including trade control screening software and guidance to support the business with risk assessments
Mandatory third party screening of all counterparties including suppliers, contractors, joint venture partners, customers and job applicants
Flow down of trade control requirements to supply chain through standard terms and conditions
Mandatory export control training on induction and at regular intervals depending on seniority or job role
Rolling self-assurance testing of our trade control compliance processes and annual programme of specific trade control audits

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Disclaimer

BAE Systems plc published this content on 02 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2020 16:14:07 UTC

Real-time Estimate Cboe Europe Other stock markets 06:18:00 17/05/2024 pm IST			5-day change	1st Jan Change
1,362 ^GBX	-0.13%		-2.43%	+22.48%

16/05	BAE Systems signs decoy contract with US Navy	CF
14/05	BAE Systems Wins $12 Million to Boost Effectiveness of Radio Frequency-Based Applications	CI

BAE Systems signs decoy contract with US Navy	16/05	CF
BAE Systems Wins $12 Million to Boost Effectiveness of Radio Frequency-Based Applications	14/05	CI
Bank of America Downgrades BAE Systems to Neutral from Buy, Lifts PT	13/05	MT
Stocks flat as IPO chat brightens up subdued day	13/05	AN
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BAE Systems Backs Guidance as Defense Spending Remains High -- Update	09/05	DJ
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BAE Systems plc

Equities

BA.

GB0002634946

Aerospace & Defense

BAE : Corporate Governance seminar

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Sector Other Aerospace & Defense