Executive Summary

Ethics As A Valued Business Strategy

Michael R. Bonsignore
Chairman & CEO of Honeywell Inc.

May 1996

By conducting business in accordance with the highest ethical standards, Honeywell reinforces the confidence our customers, employees, partners, suppliers, shareholders and communities have in us. They all want to know that Honeywell, and each employee who represents the company, can be counted on to do business ethically.

In essence, ethics is an important business strategy for us. Throughout its 110-year history, Honeywell has come to be know as a company that can be trusted. Frankly, that reputation is a vital asset to be safeguarded.

In fact, ethics is so important to us that employees throughout the company have named integrity as the first of our core values, which serve as the framework for decision-making by employees worldwide:

• Integrity and the highest ethical standards.

• Mutual respect and trust in our working relationships.

• Communication that is open, consistent and two-way.

• Diversity of people, cultures and ideas.

• Innovation and encouragement to challenge the status quo.

• Continuous improvement, development and learning in all we do.

• Teamwork and meeting our commitments to one another.

• Performance with recognition for results.

To maintain our integrity, each employee is held accountable for understanding and practicing our Code of Ethics and Business Conduct, which helps us make decisions about: doing business with customers, suppliers, and the government; competitors; employee responsibilities; international issues; media relationships; environmental, health, safety and quality issues; and taking action on ethical concerns. We translated our Code into six languages and distributed it worldwide last year, so that wherever we work in the world of Honeywell, one common set of business principles is understood and practiced by all.

Every employee is expected to read the Code, as well as discuss, understand and apply it. Every leader is expected to help his or her team understand and follow the code. He or she also must provide ethical leadership by personal example and set the standard for ethical performance, helping employees when they have ethical questions on the job. If an employee for some reason cannot get help from management, our Ethics Officer is available for counsel to anyone, anywhere at Honeywell.

We also have a Honeywell Ethics Hotline that employees can call anonymously with questions or concerns about ethics policies, or to report suspected violations of the Code without fear of retribution.

Sometimes employees call in if they are worried about what they see happening around them or it they aren't quite sure of the facts. Our Ethics Officer helps by confidentially investigating both the facts and the perspective surrounding such situations, and seeing them through to resolution.

Interestingly, the majority of people who have called the hotline have identified themselves, even though the program gives the option to remain anonymous. The percentage of callers who do maintain anonymity has dropped over the past two years. In my opinion, that reduction speaks to the confidential and professional way in which ethical matters are handled at Honeywell.

In doing business globally, Honeywell employees are required to comply with all applicable U.S. and foreign laws and regulations. Compliance with such laws, as well as company standards, is required even if they seem inconsistent with local practice in foreign countries, or would place the company at a competitive disadvantage. We cannot have a set of business practices for each of the 95 countries where we do business. Only one will do -- ethical behavior -- all the time. The benefit for Honeywell comes in the added business we receive because of our reputation for doing the right thing.

We will be successful in our business if we remain committed to practices which are ethical and lawful. Integrity is a fundamental tool that we will use to achieve our vision of delighted customers, leadership in control, and profitable growth.

Center for Ethical Business Cultures

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