Code of Business Ethics - Marshall Group

THE MARSHALL GROUP OF COMPANIESCode of Business Ethics

A message from the ChairmanThese values are at the foundation of our Companyand guide our behaviour. The underlying philosophyof the Code is that there should be no gap betweenwhat we say and what we do.We must act according to the laws and regulationswherever we operate and live up to the high ethicalstandards we have set ourselves.As we continue the pursuit of our goal to be aninnovative, profitable and significant player in eachof our industries we have decided to review, update,and consolidate in one document, our ethics policiesand guidelines with the launch of the Code ofBusiness Ethics, applicable across all the companieswithin the Group.The Code encapsulates the existing ethics policies and:• Seeks to combine and consolidate the variouspolicies and guidelines into one document; and• Provides a framework and a decision tree to helpguide your actions.We have a responsibility to ensure that both ourfounder’s ethos of adventurism and the highestethical standards are maintained. Our goal is for ourcustomers, shareholders and the community to trustus to deliver excellence through the work of ouremployees, partners and suppliers. We will onlyachieve this goal and sustain this reputation in thelong term if we all base our actions on our corporatevalues of:• Integrity – maintaining high ethical standards;• Commitment to training;• Continuity of employment; and• The delivery of outstanding customer care.This Code is based on our long established values.They enshrine our commitment to integrity, selfreliance, flexibility, continual innovation and ourability to change.This Code of Business Ethics is a statement of ourcommitment to act in this way in all our businessdealings. Our success and our future as a businessdepend on it. The Code provides a summary of theprinciples to which we must all conform in order topreserve and enhance the reputation of Marshall. Itapplies to all of us.A crucially important element of this is thecommitment to an open culture where people feelconfident and secure in seeking advice and raisingconcerns. If you are unsure of what to do inparticular circumstances or concerned that the Codeis being broken, you have a responsibility to speakup. The Code explains the mechanisms to deal withthis, including the reporting process, and theprotections which will ensure that retaliation againstthose who do speak up will not be tolerated. TheCode also shows where support and furtherinformation may be obtained.Finally, there are four key steps which you cantake to help us maintain high ethical standards inour business;1. Be familiar with this Code;2. Apply it every day at work;3. Always try to do what is right; and4. If you are unsure what to do, don’t be afraid to ask!I am proud of our long history of responsiblebusiness conduct. Our values are embodied in thisCode and doing business in a way that is consistentwith these is vital to Marshall’s reputation and toour success.Sir Michael MarshallChairman and Chief Executive2

2.2 Fair and just opportunities and rewardsWe gain competitive advantage by attracting, retaining anddeveloping the best talent from the broadest range of people.We are committed to the promotion of diversity and equalityand to creating an environment free from unfairdiscrimination. Unfair discriminatory behaviours andpractices undermine people’s skills and potential and areunacceptable to us.We invest in training, education and development to improvethe capability of the business and the skills of our employees.We seek to reward our employees fairly and take account ofindividual contributions to the performance of the businessesin which they work.We take great pride in the number of employees who haveattained significant periods of long service with the Group.We have many wonderful people in the Company and wewant to make maximum use of their skills, knowledge,concerns and suggestions.Q: A female member of myteam has children and I feelthat her responsibilities as amother must compromise herjob performance. I amconsidering candidates for amore senior position; can I takethis into account?A: All employment-relateddecisions should be basedentirely on merit and theindividual circumstances of thejob. Decisions made in themanner described willconstitute discrimination.Q: I am worried that my medicalcondition could affect myprospects at work, if it becameknown. What should I do?A: Talk in confidence to yourManager, HR Manager, or oneof the other sources of advicedescribed on page 20.Employers must not unlawfullydiscriminate against peoplewith disabilities or treat themless favourably, and it is ourpolicy to make reasonableadjustments to workingconditions to overcomedifficulties encountered.8

3. Conducting businessOur reputation depends not only on the high quality, technical excellence and timely availability of ourproducts and services but also on our customers’ confidence in our professional integrity. Our success isalso increasingly tied to the performance and reputation of our suppliers. We seek constantly to strengthenour relationships in the supply chain by conducting our business in a way that is mutually beneficial, openand competitive.3.1 Honesty and integrity in all our business dealingsWe are committed to fair competition and honest,straightforward business dealings. We abide by antitrustand competition laws, for example those that prohibitprice fixing and boycotting of suppliers or customers, thefixing of market share, misrepresenting a competitor, orstealing trade secrets.We respect the confidentiality of information to which wehave access from our customers, suppliers or otherbusiness partners.We will not offer or accept bribes. In addition, we willavoid any situation that makes it appear that we haveaccepted a favour from outside Marshall in the context ofour work. We must not offer or receive a gift of money, inany circumstances. It is a criminal offence in the UK tobribe an overseas or UK government official even if thepayment takes place overseas.We observe import and export laws and regulations andobtain proper authorisation for the import and export ofproducts and technology.We appoint and use advisers to represent our interests onlywhen we believe their professionalism, integrity andethical standards meet the requirements of this Code. Wemanage them strictly in accordance with Company policy.Q: A colleague has proposedthat we give a non-cash, in-kindbenefit to a government official.I am told that this is commonpractice in the countryconcerned. Is this permissible?A: No. It is illegal under UKlaw to do this even to anoverseas government official.These benefits are viewed in thesame way as cash payments.Local custom provides noprotection or legitimacy andsuch a practice may well beillegal. Report the request toyour Manager and seek adviceon what action should be taken.Q: I have been told I can hire aconsultant to help get all thenecessary permits which weneed from a foreigngovernment. The consultantrequested a large retainer andsaid that he would use themoney to "help move theprocess along". I am unsurewhere the money is really going;do I have to worry about it?A: Absolutely. You must alwaysensure that payments toconsultants are on an armslength basis and representreasonable compensation forreasonable service. Moreover,employees are required to usedue care in selectingconsultants, agents and anyoneelse employed to win businesson our behalf.9

We will offer or accept hospitality only when it can beregarded as a normal business courtesy. We will avoidhospitality that is inappropriate or when it might be reasonablyregarded as influencing a business decision, or when it cannotbe reciprocated.We will decline to accept gifts of significant value and willaccept modest gifts only on the special occasions when it iscustomary to exchange items of low value. As a guide,provided that an employee uses good judgement andmoderation and that the employee’s objectivity is notinfluenced, gifts of a nominal value or modest and reasonableentertainment to further a business relationship are generallyacceptable. Provided that gifts make the recipient neither feelobligated nor could be construed as a means to make theemployee feel obligated, an employee may accept a gift ofwhich individually, or in aggregate taken over a 12 monthperiod, does not exceed £100.Where gifts, rewards and "perks" in excess of £100 are offeredby third parties these must be fully disclosed to your lineManager and require approval from a Senior Director.Q: If I order a certain numberof items from a manufacturer, Ihave been offered a freeholiday for myself and family.Do I need to seek approvalbefore I accept the holiday?A: For any gift or reward inexcess of £100 you must letyour line Manager know andreceive approval from yourSenior Director. In addition,you may have a personal taxliability arising from theacceptance of a gift or rewardand it is your responsibility todeclare this to the InlandRevenue. If in doubt, alwaysask your Manager and, ifnecessary, one of the sources ofadvice listed on page 20.Q: If I hit my sales target thismonth, the manufacturer willgive me £200 of high streetvouchers. Do I need to seekapproval before I accept these?A: As above10

3.2 Dealing fairly with our customersWe apply our expertise in technical innovation to ourproducts and services for the benefit of our customers, inorder to bring them new market opportunities, good valueand consistent quality, reliability and safety.We communicate honestly and openly with ourcustomers, seeking a full understanding of theirrequirements, working transparently with them andstriving to achieve our commitments to them.Q: I have a concern that amaintenance procedure Iundertake could have safetyimplications for the customer.What should I do?A: Safety is an overridingconsideration for Marshall. Theanalysis of technical risk is aspecialist subject and you shouldraise it with your Supervisor whowill, with others, decide on thecorrect course of action.11

3.3 Dealing fairly with our suppliersWe value all our supplier relationships and we treat all oursuppliers with fairness and integrity, regardless of the value ofour transaction or the longevity of our relationship.We expect our suppliers, their employees and subcontractorsto operate to the highest standards of business integrity in theirrelationship with Marshall.Our terms of business with suppliers will be clear. We respectthese terms and always aim to operate in accordance withthem. We aim to communicate honestly and openly with oursuppliers, seeking a full understanding of their problems, andworking with them to find solutions that satisfy both parties.Q: One of our suppliers ispaying its employees below thelocal legal minimum pay rates.What is our position on this?A: We are committed toensuring that our contractualarrangements do not exploitthird party employees, so youshould raise the matter with theManager responsible for thiscontract.We will decline to accept gifts of significant value and willaccept modest gifts only on the special occasions when it iscustomary to exchange items of low value.12

3.4 Health & SafetyMarshall will not compromise health or safety in theworkplace for production or profit. We will work safely in amanner that protects and promotes the health and well beingof the environment and individual.We make proper provision for the health, safety andwelfare of our employees, customers, visitors, contractorsand others who may be affected by our activities at work.Health and Safety is primarily a managementresponsibility, but we all have a responsibility to follow thehealth and safety policies and should report any accident,hazardous situation or fire safety violation to thedepartment Manager or health & safety department.The MA, MSV, MMH and MTK Health & Safety policiesprovide a wide range of procedures, and these must befollowed. Compliance with the law is our minimumstandard and our ongoing aim is to have zero accidents andenvironmental incidents whilst seeking continuousimprovement.We practice our responsibilities with regard to promotingcompetence in the workplace by offering a wide range oftraining courses focussed on risk assessment andassociated safe systems of work.Where possible, we aim to prevent alcohol, drug andsolvent abuse amongst employees and to detect at an earlystage employees with problems. Wherever possible wewill offer assistance to affected employees.We promote and safeguard the health and comfort of allemployees and visitors by operating a policy of nosmoking in all our buildings.Q: Despite what the Companysays about giving health, safetyand the environment equalpriority with other businessissues, my supervisor demandsthat we meet output targets thatcan only be met by breakingsafety procedures. I am worriedthat I shall be seen as letting theteam down if I object. Whatshould I do?A: Safety procedures mustnever be compromised. If youfeel unable to speak to yoursupervisor about this, speak tothe next level of management oryour company’s Health & SafetyAdvisor. As a Company, we willnot tolerate the victimisation ofemployees who raise genuineconcerns.Q: I am very overstretched atwork and not coping. Wherecan I get help?A: You can talk to theOccupational Health Nurse, orHR as a confidentialcounselling service is availablefor stress conditions.13

4. Running the companyOur shareholders and other investors trust us to use all our assets – human, financial, physical andintellectual – to make our business grow and increase the value of their investment in Marshall.4.1 Good governanceWe are committed to strict compliance with all the lawsand regulations that apply to our business activitiesaround the world.Our Board of Directors is committed to high standardsof corporate governance in setting the company’s valuesand standards and ensuring that its obligations to ourstakeholders are understood and met.Our Board seeks to maintain a sound system offinancial, operational and compliance controls and arobust system of risk management.We are committed to the prevention and detection offraud and will report any suspicion of fraudulentactivity. Fraudulent activity is a criminal offence andwill not be tolerated.We have approved delegated authorities in place toensure that all orders signed for, bids submitted tocustomers and the authorising of payments is done so inaccordance with appropriate levels of seniority withinthe organisation.Q: The delegated limit ofauthority for my position is£25,000 and I have beenasked to authorise a paymentof £26,000. Can I authorisetwo payments, one for£25,000 and one for £1,000?A: No. Cheque or individualpayment splitting to circumventthe delegations of authority isconsidered to be a disciplinaryoffence and authorisation forthe full amount should besought from the next levelof authority.Q: What will happen to me ifI have deliberately orinadvertently breached a lawin the course of doingbusiness for Marshall?A: If you have any concernsor are uncertain about youraction, you should seekadvice; relevant contacts arelisted on page 20. Criminalpenalties may apply, whichmay be more severe if you failto report unlawful activity.Q: I suspect that an employeemay be colluding with asupplier to defraud theCompany. What should I do?A: You must report the matter,preferably to your Manager.However, if you judge that tobe difficult or inappropriate,reports may be made directlyto the Chairman, CompanySecretary or the GroupFinance Director. Youranonymity will be respected.14

4.2 Avoiding conflicts of interestWe avoid any relationship, influence or activity that mightimpair, or even appear to impair, our ability to make objectiveand fair decisions when performing our jobs. As employees,we will not:• Provide services (as an employee, consultant, or otherwise)to a competitor or potential competitor, while employed byMarshall, without prior approval.• Place business with a firm owned or controlled by anemployee of Marshall or his or her family, unless writtenapproval has been received beforehand.• Own, or have a substantial interest in, a company which isa competitor or a supplier to Marshall, except with thewritten permission of your responsible Director.If such a situation arises, we will report it promptly to theresponsible Manager and seek advice.You are able to hold shares in a quoted public listed companywithout needing to declare it.We comply with the laws and regulations and best practice thatapply to the actual or potential employment or engagement offormer military and civilian government personnel.Q: My partner works for acompany that supplies Marshallwith equipment. Sometimes Iam responsible for purchasingsupplies from them. Whatshould I do?A: Explain this to yourManager, who will provideguidance or seek advice.Q: I have often dealt withmilitary customers in the courseof supplying equipment toMarshall. One of them hasasked me about the possibilityof employment by theCompany after he leaves themilitary. How should Irespond?A: There are conflict of interestregulations that must be fully andcarefully observed. Share thefacts of the situation with yourManager, the HR Department orone of the other sources ofadvice listed on page 20.15

4.3 Safeguarding our AssetsTechnology, information and designs are important toMarshall, the means by which we remain competitive andserve the interests of our shareholders. We keep suchcompany information in the strictest confidence and donot disclose it without proper authorisation.Our customers include governments and defencecompanies and our projects may therefore becommercially sensitive and raise issues of nationalsecurity. We will not seek unnecessary or unauthorisedaccess to material and, where we have authorisation, wewill comply with the relevant security regulations.We are each responsible for the proper use of Marshallcustomer property, including electronic communicationsystems, materials, facilities and equipment. We use andmaintain these assets with care and respect, guardingagainst waste and abuse. We will use them only forcompany purposes unless we have proper authorisationfor other use.We will not tolerate the deliberate downloading orcirculation of illegal, offensive, obscene orinappropriate materials.Q: I have invented something inthe course of my work withMarshall which I think is noveland could benefit the company.What should I do about it?A: You should discuss it with theCompany Secretary, who willadvise whether a patent shouldbe applied for. Remember thatprior disclosure of the inventionto the outside world could resultin failure to obtain a patent.Q: I am a school Governor andwould like to offer some practicalhelp to encourage the study ofengineering. Does this Codeprohibit this?A: No, it is Marshall policy tosupport such activity providingthat it is first authorised byyour Manager.16

4.4 Sustaining our reputationOur reputation is one of our most valuable assets and we mustbehave at all times in a manner that reflects well on theCompany. We will enhance our reputation by being seen bythe world at large as living up to these values and abiding byall the provisions of this Code.We will deal straightforwardly with the media and ensure thatnothing is said that is intentionally inaccurate or misleading.We are proud of the Marshall brand and we must ensure thatit is not devalued by association with unauthorised activities.Q: What should I do if I get aphone call from a journalistasking questions about my jobor the business?A: Unless you have beenspecifically cleared to discuss aparticular subject, you shouldpolitely refer the journalist toyour company’s relevant mediaenquiries contact listed onpage 20.Q: What should I do if one ofmy customers or supplierswants to use the Marshall logo?A: There are specific brandguidelines and all suchrequests should be addressedto your company’s relevantmedia enquiries contact listedon page 20.17

5. Protecting the environmentWe care for the environment through our commitment to the good practice described in the MarshallEnvironment Policy Statement and encourage our employees to respect the environment in all activitieswhen they are on Marshall’s business.We have developed an Environmental Policy to provide theMarshall Group of Companies management andemployees with guidance to assist in the control ofenvironmental management in all of our businesses.Through the implementation of this policy the Group ofCompanies will be able to identify, address and controlspecific environmental issues, particularly those with asignificant environmental impact, and achieve improvedenvironmental performance.We are committed to improving the environmentalperformance of our products. Their environmental impactis being reduced by our design work and our sustainedinvestment in technology.We seek continual improvement by implementing thepolicy and related standards. We pursue targets in suchareas as energy and waste reduction, and recycling in ouroperations. All new activities are assessed forenvironmental impact and appropriate health and safetyprovision. An independent body assesses our targets andachievements and we report annually on ourenvironmental performance.Q: What do I do if I discoverthat the business in which I amworking is in breach ofenvironmental legislation?A: As a Company we arecommitted to obeying the law.You should raise the matter withyour Manager or your companiesHealth and Safety Advisor.Q: I am sometimes asked whatMarshall is doing to reduce thepollution caused by industry.How do I answer?A: If it is a question from afriend or family member, youmay refer to the continuousimprovement achieved throughour technology and designprogrammes, or seek guidancefrom the local health, safety &environment representatives.However, if it is a formalenquiry from the media, youshould refer it to yourcompany’s media enquiriescontact listed on page 20.18

6. Working with the communityWe have a firm and long-standing commitment to the communities in which we live and work. Our dutyof care to our neighbours is linked to our operational business objectives and is an integral part of ourapproach to corporate responsibility.Charitable donations are an integral part of our communityinvolvement. We direct this support primarily to causeswith educational, engineering and scientific objectives, aswell as to social objectives connected with our businessand place in the wider community.We actively encourage our businesses and individualemployees to support the local community, particularly ineducation, the arts, the environment, sports, health careand in charitable activities.We listen carefully to any community complaints and weseek to develop relationships with local representatives andorganisations in order to understand their concerns. Wemake continual efforts to seek to address and removethese concerns.We encourage our employees to take part in externalactivities providing that it does not interfere with the properperformance of their duties.Q: Will the Company supportme in working for voluntaryorganisations such as schoolcommittees or communitygroups?A: Yes. However, Company timeor resources must only be usedafter permission has beengranted.Q: As a Marshall employee, mayI take part in political activities?A: Yes, providing you are notusing the Marshall name, time orresources, or attributing yourviews to the Company.Q: If a member of thecommunity approaches me witha complaint, what should I do?A: Always treat it politely andseriously and promise that it willbe dealt with. Report thecomplaint to your Manager, whowill take the required action orseek further guidance.19

7. Applying this code7.1 Seeking helpNever hesitate to seek guidance on matters of ethics and business conduct. First, talk to yourSupervisor or Manager, if you can. If you don’t feel comfortable with this, then there are otherpeople in the Company who have knowledge and experience of ethical matters and who can helpyou, for example:Group MA MMH MLSHR & Employment Bill Dastur Keith Hussey Carole Burman David RidgwayMatters Group Finance Director Head of HR HR Director HR Manager01223 373422 01223 373322 01223 377329Occupational Health Bill Dastur Linda Higham Carole Burman Linda HighamIssues Group Finance Director Occupational HR Director Occupational01223 373422 Health Nurse 01223 377329 Health Nurse01223 373444 01223 373444Legal Issues Jonathan Barker Jonathan Barker Shaun Harvey Jonathan BarkerCompany Secretary Company Secretary General Counsel Company Secretary01223 373446 01223 373446 01603 881243 01223 373446Financial Issues Bill Dastur Glen Clark Francis Laud Alison PettittGroup Finance Director Finance Director Finance Director Financial Controller01223 373422 01223 373389 01223 377238 01223 373920Health, Safety & Terry Holloway Richard Martin Malcolm Fryer MLS - Peter CallaghanEnvironmental Issues Group Support Health & Safety Health Safety & MSV - Ray CuttingExecutive Advisor Environmental Advisor MVE - Peter Hardisty01223 373227 01223 373754 01223 377158 MSDG - John HarrisSuspected criminal Jonathan Barker Martin Broadhurst Daksh Gupta Peter Callaghanbehaviour & Company Secretary Chief Executive Chief Executive Chief Executivefraudulent activity 01223 373446 01223 3732270 01223 377259 01223 373484Export Control Issues n/a Tony Neary n/a Jon BorthwickExport & OffsetHead of CommercialControl Manager 01223 39917401223 399497Media enquiries Terry Holloway Jonathan Conder Christopher Walkinshaw Peter CallaghanGroup Support Business Manager Business Development Chief ExecutiveExecutive 01223 373295 Director 01223 37348401223 373227 01223 377905In the event of the person named above having left or retired, please refer to their successor.20

7.2 Dealing with violations or breaches of this CodeWe must all work to ensure prompt and consistent action against violations of this Code. If you think youhave seen or experienced unethical behaviour, or, if something is troubling you which you think we shouldknow or investigate, we encourage you to report your suspicion.In the first instance, we hope you can raise your concern with your line Manager. This may be done orallyor in writing. He or she is responsible for taking action to correct anything that may be wrong. However,if for any reason you feel unable to raise the matter with your Manager for whatever reason you shouldconsult one of the other sources of advice listed above. Finally, if you feel the matter is so serious that youcannot discuss it with any of the above, you may contact the Chairman, the Group Internal Auditor or theSenior Non-Executive Director:• The Chairman, Sir Michael Marshall – 01223 373825, mjm@marcamb.co.uk; or• The Group Internal Audit Manager, Gary Moynehan – 01223 399476, gjm@marcamb.co.uk; or• The Deputy ChairmanOnce you have told us of your concern, we will investigate it to assess initially what action should betaken. This may involve an internal enquiry led by the Group Internal Auditor or a more formalinvestigation undertaken by a solicitor who is independent of the business structure and who will deal withissues impartially and in strict confidence. We will tell you who is handling the matter, how you cancontact them and whether your further assistance may be needed. If you request it, we will write to yousummarising your concern and setting out how we propose to handle it.If you raise a genuine concern under this policy, you will not be at risk of losing your job or suffering anyform of retribution as a result. Providing you are acting in good faith, it does not matter if you are mistaken.Of course, we do not extend this assurance to someone who maliciously raises a matter which they knowis untrue.We will not tolerate the harassment or victimisation of anyone raising a genuine concern. However, werecognise that you may nonetheless want to raise a concern in confidence under this policy. If you ask usto protect your identity by keeping your confidence, we will not disclose it without your consent. If thesituation arises where we are not able to resolve the concern without revealing your identity (for instance,because your evidence is needed in court), we will discuss with you whether and how to proceed.Disclosure outside the Company without following internal procedures may lead to disciplinary action.As you can see, our Chairman has written the foreword to this Code. All Company Directors within theMarshall Group of Companies are fully behind the commitments made about protecting your position andmaintaining the integrity of the reporting process.21