Our Demonstrated Commitment to the Highest Level of Ethical Conduct
Supported by unwavering management commitment and engaged Board oversight, we operate our business with a demonstrated commitment to the highest level of ethical conduct, everywhere in the company every day. This commitment is reinforced by strong policies and practices related to fair, ethical and honest business dealings, robust governance, and compliance with applicable laws, while demonstrating respect for human rights at ITW and throughout our supply chain.
Board and Management Oversight of CSR
Our single-tier Board is led by our Chairman & CEO and a strong independent Lead Director. All our directors other than our CEO are independent directors as defined by NYSE listing standards. Our directors are highly qualified, with a diversity of skills, backgrounds and perspectives. Our Board is composed of 10 directors, including two females and two African American men, resulting in 40 percent overall diversity (20 percent gender diversity and 20 percent ethnic diversity). A director may not stand for re-election after his or her 75th birthday to allow for diverse experiences and ideas from new directors. The Board believes that its structure and composition of highly experienced, engaged and diverse independent directors provide effective oversight of the company’s management.
The Board has an active role in the company’s overall strategies. The Board also conducts an annual review of the company’s corporate governance practices and periodically reviews the company’s CSR strategy. Furthermore, the Board is responsible for overall risk oversight of the company, which includes certain environmental, social, supply chain, cyber security and other governance matters. To this end, ITW’s Board receives periodic updates regarding the company’s CSR-related initiatives and progress, including an annual review of those related to climate change and cyber security risks. In addition, the Audit Committee of the Board oversees and reviews, at least annually, legal affairs and environmental, safety and health matters that may have a material impact on the company’s financial statements or the company’s compliance policies, as well as the company’s overall risk policies and practices, and reviews steps taken by management to monitor and control certain exposures, including with respect to cyber security.
ITW’s management team, subject to oversight by our Board, structures, monitors and adjusts ITW’s CSR efforts in a manner that is consistent with our core values, and in a manner that best serves the interests of the company and all ITW’s stakeholders. Each year, senior management reviews the long-range plans of our segments and divisions. These plans consider, as appropriate, long-term CSR implications and the ability to meet customer needs related to sustainability and climate change risk management.
In addition, ITW’s Director of Environmental Health, Safety & Sustainability has day-to-day environmental-related responsibilities, including overseeing the execution of ongoing environmental, safety and regulatory compliance initiatives. Within our decentralized culture, each ITW division utilizes ITW’s CSR framework to develop and execute a fit-for-purpose environmental management methodology and safety program appropriate for its business.
Read more about our Board composition and oversight role as well as our strong governance profile in our 2021 Proxy Statement.
Rooted in our values of Integrity, Respect and Trust, we set high ethical standards for our company and partners that help us deliver best-in-class performance. With a focus on continuous improvement, we regularly review and update, as appropriate, our policies governing ethical conduct and responsible behavior.
- Corporate Governance Guidelines ensure the company is governed in a manner that serves the interests of our shareholders, colleagues and other stakeholders.
- Statement of Principles of Conduct describes the expected standard of behavior governing all ITW colleagues, businesses and subsidiaries around the world. It also outlines our commitment to compliance with human rights laws, including those against slavery, human trafficking and child labor. These standards are also applied to our suppliers through our Supplier Code of Conduct and in our standard purchase order terms and conditions.
- Code of Ethics outlines ITW’s principles regarding fair, ethical and honest business dealings, full and fair disclosure, and compliance with applicable laws for our CEO, Vice Chairman, CFO and all key financial personnel.
- Safety Policy stipulates that we strive every day to foster a proactive safety culture through the execution of our Enterprise Safety Strategy, which is based on a philosophy that every accident is preventable and with a shared goal of zero accidents.
- Environmental & Sustainability Policy reinforces ITW’s commitment to global environmental sustainability reflected in the following priorities: improving our environmental performance on an ongoing basis; working with suppliers who operate with similar dedication to global environmental sustainability; and partnering with our customers in innovating solutions that address their needs for environmentally responsible products.
- Global Anti-Corruption Policy emphasizes the importance of complying with anti-corruption laws of all countries in which ITW and our divisions, subsidiaries, agents, consultants and affiliates operate.
- Human Rights Policy reinforces our commitment to demonstrating respect for human rights at ITW and throughout our supply chain, and it applies to all ITW colleagues and locations worldwide and to others who may act on ITW’s behalf.
- Conflict Minerals Policy seeks to assure that our products are conflict free.
- Modern Slavery and Human Trafficking Statement describes the steps we take to mitigate slavery and human trafficking in our supply chain.
- Supplier Code of Conduct requires our suppliers, vendors and contractors to operate to our high ethical standards. This Code applies all relevant aspects of ITW’s Statement of Principles of Conduct to our suppliers. Among other requirements, our suppliers are required to adhere to applicable laws, including those concerning human rights, child or forced labor, wage and working hours, discrimination, environmental, health and safety, and fair dealing. Furthermore, our suppliers are required not to engage in corruption, and they commit to fully comply with all applicable anti-corruption laws and regulations of the countries in which they operate.
- Supplier Expectations inform our suppliers that they are expected to operate in compliance with rigorous performance standards and improve their own environmental and social performance.
- Government Affairs statement describes our prohibition against use of company assets or funds for political purposes.
- Hedging/Anti-Pledging Policy for executive officers and directors prohibits hedging the risk of ownership in ITW stock and prohibits pledging of ITW stock to secure payment obligations.
- Clawback Policy provides for the recovery of incentive compensation payments from our senior officers in the event of an accounting restatement (whether or not based on misconduct) due to material noncompliance with financial reporting requirements.