Integrity, as a Core Strategic Imperative!

The technological expertise that the company has been cultivating for more than a century is crucial to the security of people, goods, and information. Thales is therefore in a unique position and has a particular responsibility to its stakeholders and to society at large.

A corporate responsibility policy is a basic necessity for any company that has made a commitment to sustainable growth and recognizes the true role of its stakeholders. For Thales, the primary objective of a corporate responsibility (CR) policy is to ensure compliance not only with a vast array of legal and regulatory
requirements, but also with a growing number of standards, best practice guidelines, and recommendations issued by international organizations and civil society. It is important to meet expectations of the public at large on a range of environmental and social issues and those of the society. By embracing these new responsibilities, companies such as Thales clearly benefit in terms of image and reputation. By incorporating practical prevention policies into their risk-management processes, fraudulent practices are also less likely to occur and legal sanctions can be avoided. Companies with strict CR policies therefore deliver better overall performance.

As an international company, Thales conducts its business in a strategic space of global dimensions and growing complexity. Thus, the Group has put in place a proactive integrity policy and attaches the utmost importance to ethical business practices with respect to customers, suppliers, employees, shareholders,
financial markets, the environment, and society at large.

Thales considers CR to be a strategic imperative for the Group, in that it opens up opportunities for innovation, creates competitive advantages, and contributes directly to the future success of the company. This approach is supported by a Group-wide Code of Ethics and a dedicated organization in charge of ensuring compliance with the principles it sets forth.

A comprehensive training and awareness policy is in place across the Group to promote participation by all Thales employees and foster a shared sense of belonging that is anchored in the concepts of ethics and responsibility. Focusing on excellence and long-term sustainability, this approach builds collective intelligence on the basis of mutual trust and respect. It forms a common vision of the issues Thales faces by sharing meaningful information with others in order to understand the risks involved and to find innovative, proactive responses that stakeholders expect.

Driven by a common vision of the Group’s business and its role in society – and empowered by irreproachable ethical conduct – each employee contributes actively and collectively to the long-term sustainability and performance of Thales.

Corruption represents a major risk for multinational corporations, particularly for those that bid on public contracts. The practices of solicitation, extortion, and passive corruption are still very frequent in countries with weak governance. This type of practice can expose a company and its officers to civil and criminal penalties and, in addition, be extremely damaging in terms of reputation.

At the end of the 1990s, in order to mitigate these risks, Thales established a policy to prevent corruption that has since been incorporated into a process for continuous improvement.

The Group’s compliance and integrity program is regularly evaluated and adjusted on the basis of changes in internal and external risks and the Group’s commercial strategy.

This global compliance and integrity program is based on:

• international organization and dedicated resources that are responsible for ensuring the implementation of systems and procedures to prevent corruption;

• the integration of procedures to prevent the risk of corruption within the company’s operational processes, particularly during commercial transactions involving third parties;

• internal alert channels available to the employees;

• a robust internal control and audit process;

• programs to increase awareness and to inform and train Group employees – programs that are primarily intended for those with the greatest potential exposure (marketing, sales, projects, and purchasing).

The policy of “zero tolerance” for any act of corruption is fully supported by the Group corporate management and Board of Directors.

The participation of the Group within professional, intergovernmental, and nongovernmental organizations is also one of the key factors of its policy to prevent corruption and to share and disseminate best practices. Thales has contributed to the establishment of directives and common standards for all business sectors, such as the “Best Practice Guidance on Internal Controls, Ethics, and Compliance” of the OECD and – more specifically for the aerospace and defense sector – the Common Industry Standards in Europe, and the Global
Principles of Business Ethics, published by the International Forum on Business Ethical Conduct (www.ifbec.info), which is a joint structure of the AeroSpace and Defence Industries Association of Europe
and the Aerospace Industries Association of America and of which Thales is a founding member.

In 2012, Thales was ranked as one of the top 10 companies in the defense sector by Transparency International, an NGO working to fight corruption worldwide. Transparency International’s Defence Companies Anti-Corruption Index 2012 report presents an analysis of the corruption prevention programs of the world’s 129 biggest companies in the defense sector.