Emerson works hard to maintain a culture of ethical conduct and legal compliance. Our Business Ethics Program is a set of policies and practices honed over the past two decades that define ethical conduct for every Emerson employee in interactions with each other, customers, communities and other stakeholders.
Our leadership team is required to communicate and reinforce our commitment to compliance with applicable laws, rules and regulations, proper handling of proprietary data and information and accurate financial reporting. Employees are urged to communicate questions or concerns about compliance in whatever way they feel comfortable, including our global whistleblowing system operated by an independent third party.
The Emerson Board of Directors, in conjunction with a senior management committee, oversees the program and bears final responsibility for its success. Senior management and the Board of Directors regularly review and update the program to consider if updates are necessary or appropriate. Policies and documents that support Emerson's Business Ethics Program include:
CEO and Senior Financial Officer Code of Ethics
The Emerson Chief Executive and Senior Financial Officers Code of Ethics conveys the roles, responsibilities and expectations for top corporate officers in exhibiting and promoting integrity and in providing accurate and timely financial reporting.
Ethics Program Handbook for All Employees
Emerson's Business Ethics Program Handbook sets forth the detailed elements of our ethics program. The handbook along with our annual all-employee ethics and compliance training cover many topics including:
Annual Ethics Training
We reinforce our Ethics and Compliance Program with annual all-employee training to ensure that every employee is aware of and following the requirements of the program. This commitment to training also helps to ensure that every employee is aware of the latest important updates for our governance principles and practices.
These annual training sessions are generally done face-to-face with various levels of management conducting the training, which encourages dialogue that helps Emerson leaders to identify and address emerging questions or issues. Most importantly, we use the interaction to ensure that every employee understands how to report any ethical concern without apprehension or fear of retaliation. We conduct surveys to measure employees’ understanding of the program. These surveys show a high level of understanding of our Ethics and Compliance Program by our employees throughout the world.
Ethics Hotline and Communication
To facilitate the communication of ethical concerns or questions, we provide email and phone access to an Ethics and Compliance Hotline for our employees globally. Reports to the hotline may be filed anonymously, and we tolerate no form of reprisal against employees for reporting concerns.
Ethics Hotline emails or calls are received by an independent company, which reports the information to a limited number of experienced and specialized Emerson management personnel for investigation and response. The program is audited by internal and external auditors each year and is revised regularly to improve the program. The Audit Committee of the Board of Directors directly receives hotline reports from the independent hotline provider, reviews ethics and compliance allegations, and receives a report on the resolution of any such allegations from management when the allegations relate to accounting, internal accounting controls and auditing.
Conflict of Interest Evaluation and Reporting
Emerson conducts an annual reporting process to determine whether any potential conflicts of interest exist between the company and any of its Directors, officers or employees. Each year, a questionnaire is administered to all exempt/salaried employees and any other employee deemed to be in a position to influence and/or receive personal gain at the company’s expense. The questionnaires are available in 21 languages. Any variant responses received are investigated and resolved. All newly reported variant responses for the campaign year are reported to the Ethics Committee. The Corporate Governance and Nominating Committee provides oversight for Emerson’s conflict of interest policies and receives a report annually on the results of the Conflict of Interest Evaluation process.
Emerson articulates its anti-corruption internal control requirements in an Internal Control Questionnaire (“ICQ”). All business units are required to complete the ICQ and to certify on a quarterly basis that their ICQ is accurate and that the business unit has implemented the required internal controls. Emerson audits approximately 50 locations per year to ensure appropriate anti-corruption internal controls are in place. Emerson utilizes a risk assessment model to identify audit targets and all locations that operate in high-risk countries and industries are audited at least once every three years. Emerson also operates an anonymous hotline that employees can use to escalate potential corruption issues, and all hotline allegations are thoroughly investigated.
Emerson includes anti-corruption information in its annual ethics training, which is received by all employees worldwide. The training is modified each year in response to risks identified during the previous year’s audits. Emerson also requires all employees with contact with customers, government officials, third party intermediaries and suppliers to complete an online anti-corruption training program once every three years. Additional face-to-face and webcast training also is available.
Emerson participates in the political process through our federal and Missouri political action committees and direct company contributions. Emerson and the Emerson political action committees (PAC) are non-partisan. Contributions are made to political candidates and causes to support pro-manufacturing, pro-business and pro-economic growth policies. Both the company and the PAC boards base their contribution decisions on what they believe to be sound public policy and in the best interests of the company.
The Board of Directors’ Corporate Governance and Nominating Committee oversees policies and practices related to the company’s political spending. The committee approves an annual contribution limit on expenditures to support state and local political candidates, as well as those for campaigns, ballot issues and bonds. The annual contribution limit is $1,000,000.
U.S. law prohibits companies from contributing to candidates for federal office, but many states allow corporate contributions to state and local candidates, political organizations and ballot issues. For fiscal 2015, Emerson contributed a total of $49,100 to state and local political candidates, and federal, state and local campaigns and ballot issues and bonds. The recipients and amounts of those contributions are detailed in our Political Contributions Report.
Emerson has established two PACs: a federal PAC called the Emerson PAC and a state PAC called the Emerson Missouri Responsible Government Fund. The state and federal PACs are separate and nonpartisan. The federal PAC is a voluntary fund supported by contributions from Emerson employees and retirees who elect to participate in the political process by pooling their resources to support candidates who share the values and goals of the company. This fund supports federal candidates and other candidates where permitted by law. The Missouri fund is supported by company contributions to support candidates in Missouri. Both of these PACs may make contributions to party organizations where permitted in accordance with law and their bylaws.
Details of contributions to and disbursements from the federal PAC fund are available at the U.S. Federal Election Commission’s website (www.fec.gov), by searching for Emerson PAC (or its prior name, Emerson Responsible Government Fund) at the site’s Campaign Finance Disclosure Portal Link.
In fiscal 2015, Emerson contributed $39,100 to the Emerson Missouri Responsible Government Fund. A list of contributions by this fund is available on the Missouri Ethics Commission website at www.mec.mo.gov.
Further information about Emerson’s policies and procedures for political spending can be found on the Political Contributions page of the Emerson website.
Trade Associations and Lobbying
As a large and diverse global company, Emerson is a member of many trade associations and coalitions where we work with our industry partners on a range of issues and activities that represent the Company's interests. These organizations operate independently. For many organizations and coalitions, we pay dues or make contributions which are not necessarily related to lobbying efforts or political goals. In some cases, however, these organizations do engage in advocacy at the federal, state and/or local levels. While we may generally agree with positions taken by these associations, Emerson's membership in any particular trade association does not indicate its agreement with all of the association's views.
Emerson does engage with public officials at all levels of government directly through our employees and through third party advocacy organizations. These engagements educate officials on our company's operations, emerging technologies and markets, as well as on our views concerning public policy matters. Emerson lobbying activity is reported in our Lobbying Disclosure Act filings, which are publicly available at http://disclosures.house.gov and are also posted to the Trade Associations and Lobbying page of the Emerson website.