The cornerstone of Xylem’s ethics policy is our Code of Conduct. Our Code of Conduct requires all of our Directors, officers and employees to act ethically and honestly.
We expect every interaction, every transaction and every business opportunity to be handled in a manner consistent with our Code of Conduct, our policies and all applicable laws. We ensure compliance with multiple layers of accountability and make it easy for employees to speak up when they see something wrong.
In 2017, we made several enhancements to our ethics program, including the global launch of our new Xylem Integrity Line (XIL), which encompasses a reporting hotline and web-based interface to replace the legacy reporting system. The XIL facilitates easier issue reporting by users, and it enhances our issue response and investigation management capabilities. In tandem with our launch of the XIL, we embarked on a global “speaking up” campaign to remind our colleagues about the importance of raising issues of concern and asking questions when they see conduct that may potentially be inconsistent with our company values. Included in our campaign were new “speaking up” posters promoting the importance of colleagues saying something if they see something.
In addition, we expanded Xylem’s ombuds-person program, increasing the number of local ombudspersons around the company’s global operations by 25 percent in 2017, thus increasing the number of direct touchpoints employees have with our ethics and compliance program throughout the organization.
Our Code of Conduct went into effect for Pure Technologies, EmNet and Valor Water Analytics employees on day one following our acquisition of those businesses, and we are continuing to fully roll out all ethics policies across our expanded organization. The Code of Conduct is posted publicly in 26 languages and is available to employees on our company intranet and to third parties on our public website. In addition, our Supplier Code of Conduct is posted publicly in 18 languages and is incorporated into our standard contracts.
Every other year, we conduct global Code of Conduct training for all employees, and we provide training to all new employees and at targeted locations throughout Xylem on a continuous basis. Through Code of Conduct training, Xylem employees gain a deep understanding of our core values of respect, responsibility, integrity and creativity and the types of behaviors, actions and decisions that will enable them to support these values. Additional topics covered in the Code of Conduct training are carefully selected by reviewing current ethics and compliance trends within the company and analysis of our hotline reporting and other data.
Training is conducted through a combination of on-line and in-person video delivery to ensure all employees are aware of Xylem’s commitment. After training, Xylem employees certify that they understand how the Code applies to their jobs and how to comply with its provisions. Companywide Code of Conduct training was conducted in 2016 with 96 percent completion, and we will update the training for all employees in 2018. In all, Xylem conducted more than 4,300 person-hours of live ethics and compliance training during 2017, up 18 percent versus 2016.
Xylem endeavors to create a corporate culture where employees are expected to report misconduct, where they have many ways to report concerns and where retaliation for reporting is not tolerated. Our reporting concerns policy encourages employees to report misconduct through:
- The Xylem Integrity Line, a toll-free, 24-hour-a-day confidential reporting helpline available to employees, suppliers or customers with language support in over 180 languages.
- Local ombudspersons who receive and impartially address employee Code of Conduct questions or ethical concerns and are required to take all reasonable and legally permissible steps to protect the identity of all those who report possible violations in good faith.
- Consultation with management, Human Resources or our team of ethics and compliance professionals, including our Chief Ethics and Compliance Officer.
We build awareness about our policy and reporting mechanisms through robust employee engagement, which includes ethics and compliance newsletters, “speaking up” posters translated into 21 languages at our locations, live training and an employee intranet portal dedicated to Xylem’s ethics and compliance program.
At Xylem headquarters and in each of our regions, we have established Ethics and Compliance Review Boards. These boards, staffed by senior managers and compliance leaders, meet at least quarterly to oversee local compliance with our Code of Conduct and compliance policies, manage compliance trainings, drive employee engagement, and monitor any ethics and compliance investigations. The boards ensure that every concern that is raised receives appropriate management attention and is resolved in a fair and expeditious manner. They also facilitate learnings from across the organization.
The number of ethics concerns raised in 2017 was generally in line with benchmarking for a company of Xylem’s size and industry. Our total number of questions and concerns raised decreased 10 percent from 2016 to 2017.
Xylem trains employees on applicable anti-corruption laws and regulations, primarily through our Anti-Corruption Policy, Gifts, Hospitality & Travel Policy and Anti-Corruption Manual, and our Code of Conduct.
In addition, designated employees around the world in Finance, Legal, Compliance, and Sales and Marketing are provided with additional, in-depth anti-corruption training either in person or online. Xylem conducts an annual risk assessment of all its Growth Centers and regional Commercial Teams, which includes risks related to bribery and corruption. This risk assessment is monitored and updated regularly. Xylem’s internal audit department also conducts regular audits of select sites to determine compliance with the U.S. Foreign Corrupt Practices Act and Xylem’s internal policies, and to assess the effectiveness of our anti-corruption program.
Operating as a global company, corruption and bribery also present risks to Xylem in areas where we leverage third parties rather than having a Xylem-owned office. We mitigate this risk by conducting robust due diligence of select third parties. As part of the approval process, third parties certify that they will comply with all applicable anti-corruption and anti-bribery laws. We renew our due diligence on a periodic basis and offer training for third parties to help them understand how to remain compliant.