Conducting Business Ethically
Cobham competes on the basis of its products, technology, quality, service, price and similar competitive factors. Cobham does not seek to gain any improper advantage through the use of any unfair dealings or practices.
Cobham is committed to complying with all competition and anti-trust laws applicable in the countries where it operates.
The Cobham Corporate Framework sets out the Company's governance structure, including the roles of the Board and its committees, as well as the responsibilities of the Group Executive and of all Cobham employees. It also sets out the key requirements of Cobham's policies, processes and procedures, which have been developed to help employees understand their responsibilities. These requirements cover many areas of Cobham's business activities, are regularly reviewed to ensure they are kept current, are easily accessible on the Company extratnet, are reviewed on a regular basis, and approved by the Governance Committee.
Working with Third Parties including Intermediaries
Cobham endeavours to develop trusted interpersonal and customer relationships. We understand our customers' needs, deliver on customer commitments and strive to exceed them every day by staying committed to remaining customer focussed.
Cobham expects its suppliers, contractors, and all other third parties to maintain the highest standards of integrity, and to comply with the laws and regulations that govern their business and the business they do on Cobham's behalf. Cobham requires all third parties to comply with Cobham's Supplier’s Code of Business Conduct.
Intermediary Engagement Process
Cobham's representatives, including agents, advisors, consultants, dealers, resellers, government lobbyists, bid partners, distributors or joint venture partners (collectively ‘Intermediaries’),are chosen and continually monitored carefully. All such Intermediaries are required to comply with applicable laws and regulations, as well as relevant Cobham policies and Cobham's Code of Business Conduct or equivalent. Under Cobham’s Intermediary policy, all intermediaries must first be approved appropriately by following the Intermediary Engagement Process.
The Intermediary Engagement Process is applicable to all intermediaries used by Cobham businesses. Cobham has established a robust risk assessment and due diligence process to carry out checks on any intermediary that represents or promotes the interest of Cobham. An intermediary must be registered in Cobham's central database and is then risk assessed and categorised accordingly. The risk-assessment criteria comprise a range of factors, including territory of operation. Review of risk-weighted on-boarding due diligence is conducted. This includes verifying ownership and conducting checks on key personnel. The extent of due diligence is proportionate to the potential risks posed by a prospective intermediary engagement. It is also Cobham policy that the remuneration of an intermediary should be proportionate to the work done and there are limits on the amounts of commissions. ,
Any intermediary engagement must receive the appropriate prior approval after consideration of the due diligence, business case and all other relevant factors. Approval levels are risk weighted. Some intermediary engagements require the approval of the Intermediary Review Board (IRB). This sits independently of the business units. The IRB is chaired the by the Vice President, Legal & Compliance, and with other Senior Vice Presidents Commercial and Contracts for each Sector in attendance as necessary.
Once approved, agreements with intermediaries have a fixed term, depending upon the risk level. Agreements contain various contractual provisions relating to anti-bribery and anti-corruption, including audit rights and immediate termination by Cobham for violations of any applicable anti-bribery/anti-corruption laws or regulations.
Ongoing checks continue during the term of the agreement, again on a risk-weighted basis. These include checks, including by way of on-site audit visits to confirm that the services are being provided appropriately, that any approval conditions have been met, and that there have been no changes within the due diligence information previously provided that may increase bribery risks, including current ownership verification and a check that annual ABAC training has been completed where required.
When the agreement is close to expiry, if Cobham wishes to continue the relationship with the intermediary, the Intermediary Renewal Process must be followed. This process includes a review of current due diligence checking, for any changes in circumstances or any red flags raised which changes or increases the bribery risks. Such review must be approved by the approving body, prior to a new agreement being executed for the term permitted.
Cobham is focused on delivering its corporate responsibility and sustainability objectives in ways that offer real long term benefits to our customers, shareholders, suppliers and employees. Cobham has a Responsible Supply Chain policy in place which sets out the corporate position reflecting the standards required by our suppliers. This policy requires a supplier to demonstrate to Cobham that it has policies in place that cover a range of areas, including human trafficking and bribery and corruption. The policy requires new suppliers to be assessed before being awarded work, with active suppliers being assessed thereafter.
Where the use of sub-contractors or other third party organisations has been permitted by Cobham, we expect the supplier to implement the same requirements through their own supply chain and their own sub-contractors.
The Cobham standard terms of purchase require each supplier to comply with various contractual obligations relating to anti-bribery and anti-corruption. These includethe Anti-bribery/Anti-corruption policy, in that they do not, directly or indirectly, offer, promise or give any gift, payment or other benefit to any person for the purposes of inducing or rewarding improper conduct or influencing any decision by a public official to the advantage of themselves or Cobham.
Cobham has an Offset policy to manage various risks that can arise in connection with offset, including bribery and corruption. The policy, among other things, requires specific review and approval of the assumption of any offset obligations and associated due diligence, as well as ongoing monitoring of the performance of any existing offset obligation policy, to ensure compliance with all laws and regulations, including the risk that an offer to fulfil offset obligations could be used in a corrupt or otherwise inappropriate manner. Any third parties associated with offset, (including bid or JV partners), are required to undergo the due diligence (including ownership), and prior approval process contained in the Intermediary policy before engagement. A dedicated Offset Manager has oversight over the Group’s offset obligations and activities to monitor for relevant risks.
Human Rights, Anti-slavery/Anti-human Trafficking
Cobham supports the principles contained in the Universal Declaration of Human Rights and seeks to reflect these in the context of its business activities wherever possible.
Cobham respects the human rights of its employees as set down in the International Labour Organisation Declaration on Fundamental Principles and Rights at Work. These include the right to an injury-free workplace, a statutory minimum wage, freedom of association, the elimination of slavery and human trafficking (including forced, compulsory, bonded or child labour), and the elimination of all forms of discrimination in the workplace.
Cobham expects its suppliers to adopt the same principles as Cobham itself, and has therefore implemented a supplier due diligence process to ensure that no Cobham suppliers are involved in slave labour or human trafficking. Training on human trafficking and forced labour is provided to all employees, as well as to new Cobham employees, to raise awareness of these issues.
The diversified nature of our business means that Cobham sells its leading-edge technologies world-wide. We operate in a number of markets, with a significant presence in the defence industry. We specialise in supplying components and subsystems for the military equipment that our customers manufacture. This means we are often a second or third-tier supplier to the end user. We do also deal directly with governments and military organisations, both supplying products and providing services.
Cobham operates in a highly regulated industry, designed to protect the national security and foreign policy objectives of the countries in which we operate. We comply with the laws and regulations of these countries (including export controls,) which limit the sale of our products/services outside a list of approved countries.
National governments are some of the largest end users of our products and services, and we engage with them regularly to ensure we understand their needs and priorities. We aim to ensure governments recognise our skills and capabilities, and how our products and services can support their objectives.
We are transparent in all our dealings with governments, and comply with all applicable laws. All employees and agencies who engage with governments must do so in line with our Code of Business Conduct.
Our internal government relations teams carry out most of our work in this area. The largest such team is based in Washington, D.C., as the United States Government is one of our most important customers. We also communicate regularly with the governments of the UK, Australia and India (among others).
We employ several professional government relations agencies in the United States, and engage on specific issues through industry bodies such as Aerospace, Defence and Security (ADS) in the UK and the Aerospace Industries Association (AIA) in the United States.
Governments in some parts of the world have more stringent requirements with regard to gifts, entertainment and hospitality offered to officials. Employees dealing with government officials are required to make sure they understand any rules and regulations that apply in the country they are dealing with. Any employees who are in any doubt about their obligations should seek advice from group Legal & Compliance. This includes dealing with government delegations, where it is generally acceptable to demonstrate and explain Cobham's products and to make delegates feel welcome, but completely unacceptable to attempt to obtain an improper advantage by doing so.
US Government Officials
Our priority is to ensure we continue to have access to governmental contracts. In this context we engage directly with the United States Government to ensure fair treatment for foreign-based companies such as Cobham.
Communicating with US Government officials at the Federal, State and local level must be done in an appropriate way to educate on the legitimate interests of the Cobham Group and its employees. These communications must be conducted and reported in compliance with all applicable laws and regulations. Direction is provided via the US Government Relations and Lobbying policy.
Cobham is aware that recruiting and hiring former government employees may pose certain risks. In the US there are particular risks, and Cobham has a policy setting out requirements that must be followed when recruiting and hiring current and former U.S. Government employees and officials, including military personnel, in order to comply with specific federal laws and regulations.
There is an additional United States Government Gratuities policy which must be complied with, in addition to the Gifts and Hospitality policy if dealing with US Government officials.
Political Contributions Cobham does not make any corporate contributions to political parties. In the United States, our employees can make voluntary contributions through our Political Action Committee (PAC), which operates in line with the requirements of the Federal Election Campaign Act. The PAC is permitted to make bipartisan contributions to politicians who are broadly supportive of business and of our industry in particular.