Conducting Our Business Ethically
At Hormel Foods, maintaining the highest ethical standards is our top priority. We are committed to our employees at all levels—from those working in our plants to senior management—to apply the highest standard of ethics to all decisions and actions within the company. And we work to provide everyone with the knowledge and the structure to do so.
Code of Ethical Business Conduct
In an effort to create a business environment where ethics is of utmost importance, we train all U.S. based employees on our Code of Ethical Business Conduct. We provide the policy and third party compliance reporting to all employees globally. Our Code of Ethical Business Conduct serves as a guide for our employees, officers and directors in making business decisions. The code covers many of the topics discussed in this report, including fair employment practices, harassment, safety, diversity, environmental responsibility and product integrity. Additionally, our code of conduct outlines our policies on conflicts of interest, gifts, illegal payments, illegal political contributions and disciplinary action.
All company policies at Hormel Foods follow local and national laws in the United States and other locations in which we operate.
- One-hundred percent of our board members, subsidiaries, joint ventures and company locations are covered under our code of conduct, which includes attesting to compliance with the Foreign Corrupt Practices Act. When considering a company for merger or acquisition, we conduct due diligence and examine the suppliers of the prospective party and expect them to comply with our code.
- To ensure adherence to our code of conduct, in 2002 we established a compliance program that upholds accountability through reporting, tracking and investigation of possible violations of the code.
- The Audit Committee of the Board of Directors oversees the program, which includes a cross-functional Compliance Committee, training of new employees and a hotline for employees to report incidents that may violate our code.
The Compliance Committee is comprised of members of the company’s Executive Management Committee and employees from human resources, legal and internal audit. This committee frequently receives updated information about potential code-of-conduct violations. When a potential violation is reported, the committee promptly initiates an investigation that is deemed as the appropriate course of investigative action. If it appears that an infraction of the law has occurred, the committee refers the investigation to the general counsel and promptly provides a written report to management. This report outlines the information that was received and the investigative action that is being taken.
At the conclusion of the investigation, a final report is provided to management. If serious violations have been noted, the committee prepares a report to share with the Audit Committee to explain the course-of-action taken. Certain courses of disciplinary action will be taken depending on the type and severity of the violation. Hormel Foods also takes steps to respond appropriately to these violations to proactively prevent subsequent violations of the law, including modifying the compliance program as necessary.
More information about committees on our Board of Directors can be found in the 2011 Proxy Statement.
Communicating Our Way
To make sure the value system at Hormel Foods is understood across the company, we communicate Our Way to our employees in their native languages. In the United States, for example, we provide this information in Spanish as well as English.
If our employees observe anything that does not comply with our code and the values outlined in Our Way, we provide a hotline number to facilitate anonymous employee feedback and address concerns – 1-800-750-4972. This hotline can be used to report a range of issues, including corruption and discrimination. To ensure accountability, this hotline is operated by an independent third-party organization.
Performance-Based Executive Compensation
To advance our principle of perpetuating financial sustainability, Hormel Foods maintains a compensation committee within our Board of Directors that is exclusively comprised of non-employee, independent directors. The committee establishes and administers the compensation and benefit programs and upholds two primary goals:
- Attract and retain highly qualified executive officers; and
- Incent the behavior of executive officers to create stockholder value.
In order to accomplish these goals and remain competitive within the industry, we also benchmark compensation compared to peer companies. Our incentive-based system factors in individual performance, competitive market data and overall performance of the company. To help attract and maintain top talent and propel the company’s success into the future, Hormel Foods also provides executives with the opportunity to receive short- and long-term incentives. More information about compensation can be found in the 2011 Proxy Statement.