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Our Governance & Ethics

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Our Demonstrated Commitment to the Highest Level of Ethical Conduct

Supported by unwavering management commitment and engaged Board oversight, we operate our business with 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 Oversight of Sustainability

ITW’s Board of Directors is responsible for providing oversight and strategic guidance to management to support the long-term interests of our stakeholders. Our Board is led by ITW’s chairman & CEO, E. Scott Santi, and an independent lead director, Richard Lenny. All directors other than our CEO are independent directors as defined by New York Stock Exchange (NYSE) listing standards.

The Board plays an active role in the oversight of ITW’s sustainability strategy, supported by additional oversight and responsibilities carried out by Board committees, company leadership and colleagues.

Overall Sustainability: The Board conducts an annual review of the company’s environmental, social and governance (ESG) strategy. Throughout the year, the Board receives periodic updates from management regarding the progress on ESG strategy and performance, which may include, for example, discussions relating to ESG initiatives, risks and reporting. Additionally, the committees of the Board may also review components of the ESG strategy that fall within their purview.

Enterprise Risk Management: The Board is responsible for the overall risk oversight of the company and focuses on the most significant risks facing the company. The Board executes on its risk oversight responsibilities through the full Board and Committees, building upon management’s annual enterprise risk assessment. In 2021, the annual risk assessment process identified the following key enterprise risks: legal/compliance/reputation, controllership/tax, key leader continuity/succession, supply chain integrity/continuity, cybersecurity, plastics in consumer packaging and significant external event risks. The Board has a formal process to review each of these risks annually or more frequently, as appropriate.

Cybersecurity: The Board annually reviews and evaluates the company’s cybersecurity policies and practices with respect to risk management as well as steps taken by management to monitor and control such exposures. In addition, the Audit Committee receives quarterly cybersecurity reports from management.

ITW has built a fit-for-purpose framework that is based on the National Institute of Standards and Technology (NIST) framework and is required to be followed by all ITW locations. All ITW locations have advanced endpoint protection software, awareness training, phish testing and vulnerability scanning (includes identification and prioritization of cyber risks), backup and recovery mechanisms, and periodic tabletop testing.

Human Capital: The Board oversees the development of executive talent and planning for the effective succession of the company’s CEO and executive leadership team. It also regularly consults with the CEO on the company’s organizational needs, its talent pipeline and diversity and inclusion strategies, and the succession plans for critical leadership positions. On an annual basis, the Board also conducts a detailed review of the company’s overall needs for human capital, including executive succession plans, compensation and benefits to attract a workforce with skills and capabilities needed to execute our strategy, addressing the company’s talent management initiatives, and discussing individuals who are considered potential future senior executives of the company.

Read more about our Board composition and oversight role as well as our strong governance profile in our 2022 Proxy Statement.

 

Our Policies Reinforce Our Commitment to Ethical Conduct

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. We regularly review and update, as appropriate, our policies governing ethical conduct and responsible behavior.

Key policies include:

  • Corporate Governance Guidelines ensure the company is governed in a manner that serves the interests of our shareholders, colleagues and other stakeholders.
  • ITW Code of Conduct, reinforces ITW’s commitment to the highest level of ethical conduct and describes the standards of behavior governing all ITW colleagues, directors, businesses and subsidiaries around the globe. ITW’s core values of Integrity, Respect and Trust are the foundation of the Code, which also applies to ITW’s suppliers through our Supplier Code of Conduct and in our standard purchase order terms and conditions. The Code also outlines our commitment to compliance with human rights, anti-corruption and data protection and privacy laws, as well as fair and honest competition and all applicable trade laws and restrictions.
  • 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.
  • 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.
  • 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.
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