Executive Summary

Business Ethics And The Medtronic Mission

Arthur D. Collins, Jr.,
Chief Operating Officer of Medtronic, Inc.

February 1995

Nearly 35 years ago, Earl Bakken, Medtronic's founder, drafted a mission statement that still serves as our ethical foundation and reminds us of the Company's principal purpose for being: to "contribute to human welfare" so that people can live fuller, healthier lives.

Our mission also clearly states how we expect to fulfill our corporate purpose: by directing our growth in the areas of biomedical engineering where we display maximum strength and ability; by striving without reserve for the greatest possible reliability and quality in our products; by recognizing the personal worth of employees; and by maintaining good citizenship as a company.

We recognize that to successfully achieve our goals, the Company must continue to grow and remain healthy. As a result, we expect to earn a "fair profit" on our operations. Profit, however, is not our primary goal. We believe that if we act responsibly and focus on meeting our customers' needs, strong financial performance will follow.

Medtronic employees embrace the mission statement. It has been translated into multiple languages and distributed to every employee throughout the world. It is displayed prominently in all our facilities. It is also quoted widely and referred to in many of our internal and external publications.

Employees have another visible reminder of Medtronic's mission--a two and one-half inch bronze medallion. One side of the medallion shows a recumbent figure rising from a sickbed and walking away with the overarching words "Toward Full Life." Engraved on the other side is the first principle in our mission statement: "To contribute to human welfare by the development of biomedical devices that restore health, relieve pain, and extend life." All new employees receive this medallion personally from Earl Bakken during meetings where he reinforces the importance of our mission. These meetings, and the medallions that symbolize the event, are powerful reminders of the values that have contributed to Medtronic's success and growth.

We know that even though the global business environment is changing and becoming more interconnected, business ethics and social values still vary by country and geographic region. What is taboo in business dealings in one area may be perfectly acceptable in another. For Medtronic, however, the mission statement serves as a great equalizer, raising our thinking and actions to a higher level.

With the mission as our foundation, significant effort has been expended to ensure that clear statements of appropriate business practice exist and are communicated frequently to employees in all worldwide locations. To support this effort, extensive training programs have been developed and translated into local languages. Clear communication channels have been established to answer employee questions and to provide guidance in questionable situations. In addition, peri-odic monitoring takes place to ensure employee understanding and compliance.

Management commitment at all levels in the organization has been a critical ingredient for success. Management needs to lead by example. We must be prepared to deal openly with difficult situations and be willing to walk away from business that does not conform to established ethical standards, even when it means sacrificing immediate financial gain. Incidentally, it has been our experience that this approach has enhanced Medtronic's reputation and actually has improved both the near- and longer-term financial position of the company.

While management commitment is important, ultimately we trust the judgement and actions of each and every employee. As a result, we take great care in selecting and integrating employees into the Medtronic culture. As hard as we try, we certainly are not perfect. From time to time that trust has been broken and our ethical standards have been breached. In those instances, and they have been infrequent, swift and decisive corrective action was needed and was taken. In all cases, consistency and fairness have guided and will continue to guide our decisions.

Our ultimate success depends to a great degree on how well we gain and keep the trust of our shareholders, fellow employees, suppliers, health care providers and the patients we all serve. This trust needs to be renewed each day, and can only be earned by conducting business according to the highest standard of ethical behavior. Our mission statement has been and continues to be that standard for Medtronic.

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