2.1 Is the design and implementation of the anti-bribery and corruption program tailored to the company based on an assessment of the corruption and bribery risks it faces?
We are committed to ensuring that our entire Compliance Program, including those elements related to bribery and corruption, is based on a proper assessment of risks. Since Chad Boudreaux was appointed Chief Compliance Officer in 2013, he has led a team of compliance professionals and outside experts in the development of a comprehensive, broad-based Compliance Program. HII’s Compliance Program is fundamentally dynamic in nature. It was designed to evolve to confront a dynamic risk environment. On an annual basis, we conduct an anti-corruption risk assessment, using the framework of “Rationalization,” “Opportunity,” and “Pressure,” to assess the likelihood of a corruption issue and identify at-risk areas.
The annual risk assessment also identifies risk mitigation factors and establishes risk mitigation action items, assigned to specific individuals with specific deadlines. The risk assessment and mitigation steps also serve as the basis for the annual Anti-Corruption Core Element Work Plan. Performance against the objectives of the Core Element Work Plans are evaluated each year by the Accountable Vice President and Law Department to ensure that responsible employees are carrying out mitigation steps and reaching other stated goals.
On an annual basis, the Chief Compliance Officer presents the results of the risk assessments to the Board of Directors.
Important related documents and links:
2.2 Is the company’s anti-bribery and corruption program subject to regular internal or external audit, and are policies and procedures updated according to audit recommendations?
We subject our Compliance Program to regular internal and external testing and inspection. On an annual basis, we perform a review and evaluation of each of the Core Elements of our Compliance Program, including our Anti-Corruption Core Element. This evaluation, which is performed by the Accountable Vice President in tandem with a member of the Law Department, reviews HII’s performance against stated objectives in the Anti-Corruption Core Element Work Plan. Following this evaluation, the Accountable Vice President and Law Department member may propose revisions to the Anti-Corruption Work Plan for the following year or, if necessary, revisions to the anti-corruption compliance program more generally.
Internal Audit also plays a key role in monitoring the performance of the anti-corruption program. Each year, Internal Audit performs a comprehensive review and evaluation of the Compliance Program. The 2019 Compliance Program review will be based on the April 2019 Guidance Document from the US Department of Justice, titled Evaluation of Corporate Compliance Programs.
Although all Company policies, procedures, systems, and processes are subject to review, Internal Audit activities are primarily based on assessments of enterprise risk. The annual planning process starts with the Company’s identification and evaluation of enterprise risks (including emerging risks). Generally, from this evaluation, a majority of high and medium rated risks are selected to make up the Annual Audit Plan. This risk based model enables periodic review of compliance, financial and operational areas throughout the Company. Within some of the reviews, elements of the Company’s anti-bribery and corruption program (as well as other compliance areas) are assessed and all corrective actions are monitored to final remediation. As a result and based on our risk-based model, the Anti-Corruption Core Element Work Plan is subject to (eligible for) review, along with other elements related to the anti-corruption program including lobbying, gifts and gratuities, and conflicts of interest.
Finally, each year we work with outside experts to perform “Compliance Reviews” of various aspects of our Compliance Program. These Compliance Reviews involve a comprehensive assessment of our existing controls in the relevant area, many of which involve aspects of our anti-corruption program. Following these Compliance Reviews, we make any necessary adjustments to policies, procedures, and controls.
Important related documents and links:
2.3 Does the company have a system for tracking, investigating and responding to bribery and corruption allegations or incidents, including those reported through whistleblowing channels?
HII has a system and process, fine-tuned through years of experience, for responding to allegations of misconduct of all kinds, including bribery and corruption. All investigations are handled promptly, professionally, and independently. Under HII policy, all allegations of corruption and bribery, regardless of who receives them, must be referred to the Law Department for management and investigation. All investigations regarding corruption or bribery are addressed by our Investigations Unit, a group within the Law Department, or by qualified outside counsel. Any allegations of material corruption are referred to qualified outside counsel for investigation.
Investigations of misconduct are tracked in an investigations database and typically documented in written reports and forms. The status and results of investigations are reported to Senior Management, including Division Presidents and Division Counsel. These reports include determinations of root causes and recommended remedial actions. Results are also tracked and compiled on a company-wide basis.
We strongly encourage employees to report bribery and corruption concerns and have policies in place to protect whistleblowers. Our OpenLine system, managed through a third-party provider, helps us track and manage whistleblower reports and protect the identity of anonymous whistleblowers. It is our policy and practice to keep whistleblowers apprised of the results of investigations to the extent possible.
Important related documents and links:
2.4 Does the company have appropriate arrangements in place to ensure the quality of investigations?
We understand that a critical element of our Compliance Program, our ability to detect and respond to misconduct, would be undermined if we could not perform professional high-quality internal investigations. Among other things, this could lead to a loss of employee confidence and an unwillingness to report potential misconduct through appropriate channels.
As noted above, all investigations into allegations of bribery and corruption, whether from whistleblowers or other sources, are addressed by our experienced Investigations Unit or qualified outside counsel. Our Investigations Unit is comprised of highly qualified and experienced investigators, led by former U.S. Department of Justice personnel and others with extensive experience investigating misconduct.
We take various steps to ensure the quality of our investigations. Internal Audit annually audits the investigations process to ensure that investigations are addressed professionally and efficiently and that appropriate remedial action is taken. On an annual basis, the Audit Committee of the Board of Directors receives a briefing from the Law Department on the company’s responses to allegations of misconduct, including the numbers and types of reported allegations of misconduct and the number, types, and dispositions of misconduct investigations. Finally, if an investigation results in a material finding of bribery and corruption, a committee that includes the Chief Compliance Officer and Director of Compliance will review the investigative process and the results of the investigation to make a determination as to whether the findings should be disclosed to relevant authorities.
2.5 Does the company’s investigative procedure include a commitment to report material findings of bribery and corruption to the board and any criminal conduct to the relevant authorities?
Material findings of corruption and other criminal conduct are reported to the Board of Directors through the Chief Compliance Officer, Chief Legal Officer, or CEO.
As a responsible government contractor, HII works closely with multiple government agencies, and takes an aggressive approach to disclosing potential misconduct. We are committed to working with relevant authorities in aid of investigations and to making any disclosures required by law or otherwise necessary under the circumstances. Evaluating whether disclosure to relevant authorities is warranted is a key element of HII’s investigative procedures. The Chief Compliance Officer and Chief Legal Officer work with relevant authorities to the extent disclosure is warranted.
2.6 Does the company publish high-level results from incident investigations and disciplinary actions against its employees?
We believe that sharing information and data about whistleblower reports and corresponding investigations and disciplinary action can encourage employees and others to report misconduct. As such, on a regular basis, we aggregate whistleblower data and statistics on employee discipline and include such information in our Ethically Speaking newsletter, which is circulated internally. The data includes the number of reports received through whistleblower channels, the category of the report (Inquires, HR Issues, Allegations), and additional information regarding the subjects of the reports and disciplinary action taken.
We have few bribery and corruption-related whistleblower reports and even fewer investigations. As such, we do not typically segregate this data. Over the past 12 months, we have not had any reports or investigations related to allegations of corruption or bribery.