Thales Sa · EURONEXT:HO
Thales Sa — ESG Presentation (December 2010)
92 slides from Thales Sa's sustainability presentation, Dec 2, 2010
Slide 1: Corporate Responsibility Investor Day
http://sustainability.thalesgroup.com 2 December 2010 - Neuilly Corporate Responsibility Investor Day
Slide 2: Keynote address
2 / http://sustainability.thalesgroup.com Keynote address Luc Vigneron Chairman and CEO
Slide 3: Introduction and programme
3 / http://sustainability.thalesgroup.com Introduction and programme Bernard Rétat Chairman of the Ethics and CR Committee
Slide 4: Corporate Responsibility: a dedicated organisation
4 / Corporate Responsibility: a dedicated organisation Defines Thales’s policy Ethics & Corporate Responsibility Committee Implements the policy Ethics Corporate & CR Ethics & CR Corporate Responsibility Officers Department Deploys the policy Corporate Responsibility Investor Day – 2 December 2010
Slide 5: Corporate Responsibility: a robust organisation
5 / Corporate Responsibility: a robust organisation Thales’s Board Chairman & CEO of Thales Ethics & CR Committee SVP, Audit & Internal Control VP, Ethics & CR Ethics Officer – USA 1 within each Ethics Officer – UK Thales Country + 1 by major Ethics Officer - Germany entities Functional link . Hiera
Slide 6: Agenda
6 / http://sustainability.thalesgroup.com Agenda A proactive environmental approach Thales social responsibility Governance Business ethics – Preventing corruption Export control Risk management Wrap-up
Slide 7: A proactive environmental approach
7 / http://sustainability.thalesgroup.com A proactive environmental approach Sandrine Bouttier-Stref Group Environment Director
Slide 8: A proactive environmental approach: contents
8 / Défense et Sécurité A proactive environmental approach contents http://sustainability.thalesgroup.com Founding principles Dedicated means An integrated approach Deployment 2009 results and 2010 objectives Corporate Responsibility Investor Day – 2 December 2010
Slide 9: Founding principles
9 / Founding principles Preventing and managing environmental impacts and risks: Comply with requirements: statutory, customers… Reduce Thales’s environmental footprint Assess exposure in terms of environmental risks and healthy risks due to environment Involve all stakeholders to protecting environ
Slide 10: Dedicated means
10 / Dedicated means A Corporate structure and an international network: ORGANISATION Managers per area or country Managers per entity Environment processes Group policy and targets, continuous improvement GROUP approach REFERENTIAL Integrated in Thales’s Reference System (Chorus II) Environmental d
Slide 11: An integrated approach
11 / An integrated approach Performance Analysis Performance assessment Action plan implementation Risk mapping programme Environmental management Risk mapping programme Common strategy for Survey to identify and certification ISO 9000 / assess corrective and ISO 14000 / OHSAS 18000 preventive actio
Slide 12: Deployment
12 / Deployment General purchases Products THALES ENTITIES Real estate COTS SUPPLIERS Process activities CUSTOMERS Technical Programmes specifications Use of Thales’s competencies as a systems integrator Corporate Responsibility Investor Day – 2 December 2010
Slide 13: 2009 Results (vs 2007)
13 / 2009 Results (vs 2007) ENERGIES ISO 14 000 108 entities Total consumption: - 7% (90% of staff) 2010 target: - 10% CO2 from ENERGIES OHSAS 18 000 Total emissions: - 12% 72 entities (48% of staff) 2010 target: - 10% CO2 from TRAVEL Total emissions: - 8% 2010 target: - 10% OTHERS Water consumption
Slide 14: Thales social responsibility
14 / http://sustainability.thalesgroup.com Thales social responsibility Loïc Mahé SVP, Human Resources & Communication Anne de Ravaran VP, Legal and Human Resources Ethics
Slide 15: Thales social responsibility: contents
15 / Défense et Sécurité Thales social responsibility contents http://sustainability.thalesgroup.com Individual development of each employee Cooperation with employees and their representatives Equality of treatment Desire to provide a safe and healthy working environment for each individual Corpora
Slide 16: A worldwide presence
16 / A worldwide presence 3,400 1,370 55,610 of which France 390 34,300 240 730 660 340 3,600 68,000 employees in 50 countries • 68,000 employees of whom 50% outside France • Highly skilled (e.g. 60% of workforce are engineers or managers) Corporate Responsibility Investor Day – 2 December 2010
Slide 17: Thales social responsibility
17 / Thales social responsibility Thales’s commitments: Comply with all national and international legislations Signatory of the UN Global Compact and promotor of the pact’s ten universal principles (far beyond the International Labour Organization basic principles) Thales deploys its social respons
Slide 18: Thales social responsibility
18 / Défense et Sécurité Thales social responsibility http://sustainability.thalesgroup.com Individual development of each employee Cooperation with employees and their representatives Equality of treatment Desire to provide a safe and healthy working environment for each individual Corporate Respon
Slide 19: Thales's individual development policy
19 / Thales’s individual development policy Valuing social dialogue and professional development of employees Employees’ professional development is one of the key objectives Development and management of people and their talents as a priority Continuous improvement process of the global human resou
Slide 20: Thales's individual development policy
20 / Thales’s individual development policy Anticipation approach: the French Group Agreement (2006): Better anticipation of jobs evolutions Better professional development for employees by: Gathering information regarding job families, jobs within the group and quantitative and qualitative foreseen
Slide 21: Thales's individual development policy
21 / Thales’s individual development policy Anticipation approach: IDEA, the European Agreement (2009): Anticipating medium term evolutions by job family By sharing with employee representatives, each year at National and European levels, the analysis of the impact on key job families By giving each
Slide 22: Thales's individual development policy
22 / Thales’s individual development policy Job families management: Professional and career development within and across job families In the medium-term: taking into account external factors (economic context, technologies and markets), helps to clarify qualitative and quantitative developments in
Slide 23: Thales's individual development policy
23 / Thales’s individual development policy TALK, the 2nd European Agreement (2010): Sets out key principles for conducting Annual activity discussion Mutual respect during discussions Transparency during interviews and with regards to results Balance dialogue between the line manager and the employ
Slide 24: Thales social responsibility
24 / Défense et Sécurité Thales social responsibility http://sustainability.thalesgroup.com Individual development of each employee Cooperation with employees and their representatives Equality of treatment Desire to provide a safe and healthy working environment for each individual Corporate Respon
Slide 25: Thales's principle of equality of treatment
25 / Thales’s principle of equality of treatment As a high-tech company which has traditionally been more attractive to men than women Gender equality: Thales is fully committed to gender equality and making female employees an integral part of its future development Thales is committed to taking pr
Slide 26: Thales's principle of equality of treatment
26 / Thales’s principle of equality of treatment The French Group Agreement (2004): Defines principles of professional equality Sets out the methodology to implement three-year action plans in each company in France: Creation of gender equality committees: prepares the annual report on gender equali
Slide 27: Thales's principle of equality of treatment
27 / Thales’s principle of equality of treatment The IDEA european agreement also includes a package of measures to support gender equality: Countries covered by the agreement are required to produce an annual report assessing gender equality against a number of key indicators and to propose an asso
Slide 28: Thales's principle of equality of treatment
28 / Thales’s principle of equality of treatment Thales signed a French Group agreement in 2009 to consolidate the role of the “over-fifties” within the company and promote their professional development Regarding senior employees, this agreement aims at: Stamping out all forms of age discrimination
Slide 29: Thales's principle of equality of treatment
29 / Thales’s principle of equality of treatment The signing of a Group-level agreement on the employment of people with disabilities (last one 2008): The main action plans are based on Supporting and developing employment of people with disabilities in accordance with a long-term recruitment plan P
Slide 30: Thales social responsibility
30 / Défense et Sécurité Thales social responsibility http://sustainability.thalesgroup.com Individual development of each employee Cooperation with employees and their representatives Equality of treatment Desire to provide a safe and healthy working environment for each individual Corporate Respon
Slide 31: A safe and healthy working environment
31 / A safe and healthy working environment Provide a safe and healthy working environment for each individual: At Group level The definition of a Thales policy regarding the safe and healthy environment area is defined in accordance with the local legislation The establishment of the alert process
Slide 32: The social report: an expression of Thales social responsibility
32 / The social report: an expression of Thales social responsibility The social report: The social report presented each year to the board is written on the basis of selected indicators taking into account the indicators proposed by the GRI (Global Reporting Initiative) in labour practice, decent w
Slide 33: Governance
33 / http://sustainability.thalesgroup.com Governance Eric Thomas SVP, Legal & Contracts Group General Counsel
Slide 34: Governance: contents
34 / Défense et Sécurité Governance contents http://sustainability.thalesgroup.com Shareholding structure Contractual framework Statutory and regulatory framework Composition and functioning of the BoD Corporate Responsibility Investor Day – 2 December 2010
Slide 35: Governance
35 / Défense et Sécurité Governance http://sustainability.thalesgroup.com Shareholding structure Contractual framework Statutory and regulatory framework Composition and functioning of the BoD Corporate Responsibility Investor Day – 2 December 2010
Slide 36: Shareholding structure
36 / Shareholding structure 199 million shares 253 million voting rights % Share capital % Voting rights French State (1) French State (2) 27.0% 42.1 % Float Float 47.1% 37.7 % Dassault-Aviation Dassault-Aviation 25.9% 20.2% Of which employees Of which employees 3.0% 4.59 % Thales: a controlled comp
Slide 37: Governance
37 / Défense et Sécurité Governance http://sustainability.thalesgroup.com Shareholding structure Contractual framework Statutory and regulatory framework Composition and functioning of the BoD Corporate Responsibility Investor Day – 2 December 2010
Slide 38: Contractual framework: general
38 / Contractual framework: general 2 shareholders acting in concert The French State The "Industrial Partner": Dassault Aviation 2 agreements Shareholders Agreement Governing the relationship between the French State and Dassault Aviation Specific Agreement Protecting "national strategic interests"
Slide 39: Contractual framework: Shareholders Agreement
39 / Contractual framework: Shareholders Agreement Background Effective since January 2007, upon acquisition of transportation and space assets from Alcatel-Lucent Replaced the former cooperation agreement with Alcatel and GIMD of November 1999 signed upon privatisation of Thales Adhered to unchange
Slide 40: Contractual framework: Specific Agreement
40 / Contractual framework: Specific Agreement Restriction on transfer of "strategic assets" Encompasses both companies and unincorporated assets State approval required if transfer > 33.33% Commitments from Dassault Aviation Dassault HQ and management to remain in France Strict control on access to
Slide 41: Governance
41 / Défense et Sécurité Governance http://sustainability.thalesgroup.com Shareholding structure Contractual framework Statutory and regulatory framework Composition and functioning of the BoD Corporate Responsibility Investor Day – 2 December 2010
Slide 42: Statutory and regulatory framework
42 / Statutory and regulatory framework Incorporated under French law A société anonyme with a conseil d'administration Combined role of CEO and Chairman of the board Some specificities Privatisation law French State holding > 20% Employees represented on the board of directors Golden share Veto rig
Slide 43: Governance
43 / Défense et Sécurité Governance http://sustainability.thalesgroup.com Shareholding structure Contractual framework Statutory and regulatory framework Composition and functioning of the BoD Corporate Responsibility Investor Day – 2 December 2010
Slide 44: BoD: general
44 / BoD: general 16 directors 14 appointed by the General Meeting 5 members proposed by the French State 4 members proposed by Dassault Aviation 4 outside individuals, selected jointly by the French State and Dassault Aviation 1 representative of employee-shareholders 2 elected by French employees
Slide 45: BoD: independence of directors
45 / BoD: independence of directors Directors appointed on proposal of the French State or Dassault Aviation or representing employees are not considered as independent Rules of conduct with respect to corporate bank directors 3 independent directors (19%) Yannick d'Escatha, Chairman of CNES (French
Slide 46: BoD: activity
46 / BoD: activity 9 meetings in 2009, with an average attendance of 92% Board's internal rules Clearly defined and communicated to directors Include corporate governance best practices Exceptions to AFEP-MEDEF code have no adverse effect on the efficient functioning of the Board 3 committees of the
Slide 47: BoD: Audit and accounts committee
47 / BoD: Audit and accounts committee 6 meetings in 2009, with an average attendance of 83% Members: Roger Freeman (Chair) Stève Gentili (independent) Olivier Bourges Loïk Segalen Dominique Floch Key roles: Monitors the process for preparing financial information, the efficiency of internal control
Slide 48: BoD: Strategic Committee
48 / BoD: Strategic Committee 4 meetings in 2009, with an average attendance of 100% Members: Luc Vigneron (Chair) Charles Edelstenne Olivier Bourges Philippe Lépinay Marie-Paule Delpierre Pierre Mutz (independent) Key roles: Examines Thales's strategic directions in its main businesses Analyses the
Slide 49: BoD: Appointments & Remuneration Committee
49 / BoD: Appointments & Remuneration Committee 10 meetings in 2009, with 90% attendance on average Members: Yannick d’Escatha (Chair / independent) Olivier Bourges Eric Trappier Key roles: Remuneration policy for the company's senior executives Remuneration of the Chairman & CEO Share subscription
Slide 50: Business ethics and Preventing corruption
50 / http://sustainability.thalesgroup.com Business ethics and Preventing corruption Dominique Lamoureux VP, Ethics and Corporate Responsibility
Slide 51: Business ethics and preventing corruption: contents
51 / Défense et Sécurité Business ethics and preventing corruption contents http://sustainability.thalesgroup.com Thales’s anti-bribery procedures Thales’s supply chain A need to go further Collective and sectorial initiative Corporate Responsibility Investor Day – 2 December 2010
Slide 52: Business ethics and preventing corruption
52 / Défense et Sécurité Business ethics and preventing corruption http://sustainability.thalesgroup.com Thales’s anti-bribery procedures Thales’s supply chain A need to go further Collective and sectorial initiative Corporate Responsibility Investor Day – 2 December 2010
Slide 53: What is at stake?
53 / What is at stake? Corruption is one of Thales's most critical risks: The Group is a major international player… … involved in large government contracts Thales took an early stance because it was aware of: The reputational damage for any misconduct, or even simple allegations The cost of crimin
Slide 54: A continuous improvement process
54 / A continuous improvement process 2000: Code of Ethics A clear statement from the Top Management to stop foreign bribery A very important training and awareness program Publication of reference guides and relevant website 2000: Good Practices Handbook First processes abiding by new international
Slide 55: Cutting-edge policies
55 / Cutting-edge policies Comprehensive anti-bribery policies: A strong and visible commitment from senior management Compliant processes to prevent and detect bribery: from third-parties management to gifts and hospitalities Empowered officers and dedicated structures to manage third- parties, wit
Slide 56: Tone from the middle management is a must
56 / Tone from the middle management is a must Components for employee buy-in Awareness: • A Corporate Code of Ethics • Behaviour guides • 'E-learning' program with worldwide distribution Information: • Accurate Intranet Website • Reference guides • Company baseline or reference systems Training: •
Slide 57: Business ethics and preventing corruption
57 / Défense et Sécurité Business ethics and preventing corruption http://sustainability.thalesgroup.com Thales’s anti-bribery procedures Thales’s supply chain A need to go further Collective and sectorial initiative Corporate Responsibility Investor Day – 2 December 2010
Slide 58: Thales's supply chain
58 / Thales’s supply chain Deployment plan Since December 2009, Thales deploys its Purchasing and CR Charter + Assessment Questionnaire in line with our UN Global Compact and OECD Guidelines commitments Thales also requires suppliers to evaluate themselves their CR performance regarding: • Labour st
Slide 59: Thales's supply chain
59 / Thales’s supply chain First results 2010 – Q3: 336 suppliers have signed the Charter and completed the Questionnaire Deployment rate: 21% regarding the Group's purchasing volume - 3 countries are notable: • US: 33% (overperform) • France: 29% (overperform) • UK: 21% (in line with objectives) Gl
Slide 60: Business ethics and preventing corruption
60 / Défense et Sécurité Business ethics and preventing corruption http://sustainability.thalesgroup.com Thales’s anti-bribery procedures Thales’s supply chain A need to go further Collective and sectorial initiative Corporate Responsibility Investor Day – 2 December 2010
Slide 61: "It takes two to tango"
61 / “It takes two to tango” Integrity programs have their limits! Corruption practices need two players: • An 'active' corruptor and a 'passive' corrupted! To date, preventing corruption is only enforced by supplying companies Companies continue to face extortion: the pressure from the 'demand side
Slide 62: New business models
62 / New business models From an 'export' model to a 'domestic' approach, … by reinforcing Thales's domestic footprint. Reinforce 'Thales Countries' companies, who are now responsible for the Group sales & marketing strategy as well as their P&L Increase sustainable partnerships with local industria
Slide 63: Rigorous standards
63 / Rigorous standards Two instructions on Business Advisers and Key Industrial Partners (end of 2010) extensive external due diligence processes red flags through 'show stoppers' and 'risk factors‘ choice of companies with internationally recognized skills and expertise request to abide by all int
Slide 64: Business ethics and preventing corruption
64 / Défense et Sécurité Business ethics and preventing corruption http://sustainability.thalesgroup.com Thales’s anti-bribery procedures Thales’s supply chain A need to go further Collective and sectorial initiative Corporate Responsibility Investor Day – 2 December 2010
Slide 65: Strategic Intelligence issue
65 / Strategic Intelligence issue Preventing corruption calls for innovative approaches Early warnings on future laws and norms Close and regular coordination with International Organisations, as UN (Global Compact), OECD and National Governments Cooperation with Non-Governmental Organisations, such
Slide 66: The sectorial approach objectives
66 / The sectorial approach objectives European Companies must comply with a very strict regulatory environment: Strict compliance and integrity programs are key to any Risk Management Policy… …but must not hamper Company competitiveness These constraints can become a competitive advantage: Improve
Slide 67: The sectorial approach achievements
67 / The sectorial approach achievements First step: European Common Industry Standards Summary • Elaboration of the Common Industry Standards (CIS) by an ASD's Task Force created in June 2007 • CIS conceived as a 'standard' for setting up an integrity program (guidelines + 'tool-kit') focused on pr
Slide 68: The sectorial approach achievements
68 / The sectorial approach achievements Second step: EU-US Global Principles Objective (Farnborough EU-US CEO dialogue of July 2008). • Demonstrate that international companies operate with the highest ethical standards and develop a ‘level playing field’ • Lobby democratic governments not to buy f
Slide 69: The sectorial approach achievements
69 / The sectorial approach achievements Third step: International Forum on Business Ethics Conduct First Forum • organised on January 13, 2010 in Berlin gathering 60 participants from US and E.U. companies (delegates also came from Japan, Israel and Australia) • High level representatives from NATO
Slide 70: Export control
70 / http://sustainability.thalesgroup.com Export control Paul Moffatt VP, Legal, Compliance Matters
Slide 71: Export control: contents
71 / Défense et Sécurité Export control contents http://sustainability.thalesgroup.com What is at stake? A proactive answer A dedicated organisation Specific tools and trainings deployed 2009 - 2010 results Corporate Responsibility Investor Day – 2 December 2010
Slide 72: What is at stake?
72 / What is at stake? Thales export control risk exposure Major exporter High technology portfolio Leveraging technologies between civil and defence activities Large element of bought in components in our product offering Political and legal compliance risks The consequences of breaching export con
Slide 73: A proactive answer
73 / A proactive answer Compliance programme Based on ten areas of best practices Global and mandatory application Top management support ‘US compliant’ approach adapted to fit European multi-national group Transparency towards authorities Corporate Responsibility Investor Day – 2 December 2010
Slide 74: A dedicated organisation
74 / A dedicated organisation Compliance organisation Corporate team In house specialist US controls expertise Quarterly Group Export Compliance Committee Groupwide Network of Export Control Officers Corporate Responsibility Investor Day – 2 December 2010
Slide 75: Specific tools and trainings deployed
75 / Specific tools and trainings deployed Tools Instructions and Guidelines Risk profiling questionnaire Gap analysis questionnaire Template documents Dedicated intranet site Multi level training Multi language Introductory brochure Board level briefing slides Classroom training Practitioner worksh
Slide 76: 2009 - 2010 results
76 / 2009 - 2010 Some results: Excellent level of compliance with local national regulations Enhanced and growing awareness of risks associated with bought in goods (especially of US origin) Annual compliance self-assessments provide improved visibility of the maturity of control measures deployed M
Slide 77: Risk management
77 / http://sustainability.thalesgroup.com Risk management Marc Darmon SVP, Audit and Internal Control
Slide 78: Objectives
78 / Objectives For the last four years, Thales has developed a mature and comprehensive Risk Management, Compliance and Internal Control Program The Group rolled out a dedicated program and a specific organization: To reduce the risk of compliance breach of Laws and regulations Accounting principle
Slide 79: Thales Risks Management Scheme
79 / Thales Risks Management Scheme Key principles Accountability and Commitment of Group companies Managing Directors Internal Control deals with compliance with: Applicable laws and regulations Internal processes and rules Reliability of financial reporting Prevention of Enterprise risks A yearly
Slide 80: A comprehensive approach
80 / A comprehensive approach For Thales, Ethics and Corporate Responsibility are: Serious matters and not a window dressing approach Strategic assets to preserve Part of the founding principles of a controlled risk management policy They are translated into operationnal processes integrated at the
Slide 81: Compliance Program for 2010
81 / Compliance Program for 2010 Thales Compliance Program aims at covering both compliance with external constraints with internal constraints. As of today, Thales Compliance Program addresses the following topics, considered as the most critical: Ethics & Values Legal compliance Company law Enviro
Slide 82: Compliance Program for 2010
82 / Compliance Program for 2010 At legal unit level: The CEO is the prime person responsible (both legally and from a management perspective) for compliance with internal and external constraints The CEO oversees the implementation of local compliance programs and ensure their effectiveness A Compl
Slide 83: Internal Audit organisation
83 / Internal Audit organisation Comprehensive Audit Universe: Finance + Compliance + Operations Skilled and stronger team (40 people) Audit plan to cover the Group risks Internal Audit support risk Management: Audit of the ICQ self assessments Audit of the key Group risks management, including: Bid
Slide 84: Wrap-up
84 / http://sustainability.thalesgroup.com Wrap-up Marc Darmon SVP, Audit and Internal Control
Slide 85: Wrap-up
85 / Wrap-up Corporate Responsibility: an instrument of performance improvement and risk management A comprehensive, coherent system Code of Ethics and dedicated ethics organisation Robust ethics policies supported by strict internal control measures Innovative approaches to employee training, aware
Slide 86: Many thanks for your attention
86 / http://sustainability.thalesgroup.com Many thanks for your attention
Slide 87: Appendix
87 / http://sustainability.thalesgroup.com Appendix
Slide 88: Current composition of the BoD
88 / Current composition of the BoD Representatives elected by Employees Public Sector Marie-Paule Delpierre Luc Vigneron, Chairman and CEO Dominique Floch Olivier Bourges Didier Lombard Bruno Parent TSA, represented by Bernard Rétat Other attendees with no voting power Industrial Partner Charles Ed
Slide 89: Ethics and Corporate Responsibility Committee
89 / Ethics and Corporate Responsibility Committee Coherence between the different corporate functions and countries is provided by the ECRE’ stakeholders organisation: Board / Corp. governance B. Rétat Shareholders J.C. Climeau Finances Customers S. Lucot I.O. zone A D. Brugère France O. Conrozier
Slide 90: Ethics and Corporate Responsibility Committee
90 / Ethics and Corporate Responsibility Committee Missions: Define and implement Group policy on ethics and corporate responsibility Suggest developments in ethical standards with respect to commercial matters, the environment, labour relations and society at large, and propose related action; Ensu
Slide 91: Ethics and Corporate Responsibility Department
91 / Ethics and Corporate Responsibility Department Missions Keep the Code of Ethics up to date, help to define and deploy best practices, and set standards for business ethics (prevention of corruption, export control, etc.); Prevent infringements of the Code of Ethics and, where necessary, provide
Slide 92: Ethics and Corporate Responsibility Officers
92 / Ethics and Corporate Responsibility Officers Missions disseminate the Code of Ethics along with recommendations on the Group’s Ethics Policy and its application at Division / Country level, then monitor its application; ensure that employees receive the training and information they need; for C