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Transparency & Ethics

Transparency & Ethics

Ethical Business Practices

We believe that ethical behavior is critical to the Lexmark's vision, Customers for Life. All Lexmark employees are expected to adhere to the policies set forth in the Lexmark Code of Business Conduct. The Code covers the following topics: personal conduct, conflicts of interest, accounting records, internal controls and audits, complying with laws and regulations, supplier relationships, customer relationships, information concerning others and corporate social responsibility.

In 2016, all regular, worldwide employees and managers acknowledged their understanding of the 2016 Code of Business Conduct confirming that they conduct themselves and Lexmark business in accordance with the Code’s requirements. Internal Audit, Human Resources and Legal review the Code of Business Conduct on an annual basis.

Lexmark requires targeted anti-corruption and anti-bribery training courses that educate select employee groups about risks of corruption specific to their job functions.

Any officer, director, employee or agent acting on behalf of Lexmark who violates the Lexmark Code of Business Conduct can be subject to Lexmark disciplinary action, as well as substantial government fines and/or imprisonment.

Preventing Corruption

Both Lexmark business operations are regularly analyzed for risks related to corruption. All locations and operations are included when considering fraud risks. Significant entities and processes are specifically identified during the review process. Corruption risk factors are considered in the formation of the Lexmark internal audit plan, which is reviewed by the Director of Internal Audit, the Senior Vice President and Chief Information and Compliance Officer and the Chief Financial Officer on an annual basis. The company has designed and adopted employee and supplier codes of business conduct that help to mitigate these risks.

The annual audit planning process takes into consideration high-risk fraud areas. The planning phase for each audit includes a discussion and consideration of fraud risk. Based on the risk assessment for fraud, internal Audit evaluates controls in each area audited through test steps designed to address fraud risks. Specific audits are also planned to primarily focus on fraud risks. Key risks are revenue recognition, inventory, receivables, fixed assets, liabilities/disbursements and employee payables.

Lexmark has a zero-tolerance policy towards bribery and corruption among Lexmark employees and business partners. Lexmark terminates business relationships with business partners that operate in an unethical manner. Lexmark recently terminated its relationship with an electronic component manufacturer after discovering that the company violated an environmental regulation and refused to take the required corrective actions. Incidents of corruption involving Lexmark employees are reported to Human Resources and Legal. No legal cases regarding corrupt practices were brought against Lexmark or our employees during 2016.

All allegations of employee corruption and/or fraud are thoroughly investigated by the appropriate business unit in collaboration with Human Resources, Internal Audit, and the Lexmark Legal Department. Results of such investigations determine disciplinary action and whether the incident requires investigation by outside agencies and formal charges. While incidents of corruption are infrequent, they do occur. In accordance with the Lexmark zero-tolerance policy toward bribery and corruption, Lexmark decided to dismiss certain employees during the reporting period based on nonsystemic, personal-level incidents of fraud or dishonesty.

Preventing Anticompetitive Behavior

Lexmark supports efforts to preserve and foster fair and honest competition in a competitive market system. We take care to ensure that our business practices do not violate competition laws (also known as antitrust, monopoly, fair trade or cartel laws) that prohibit business practices that unreasonably restrict the functioning of the competitive system. Lexmark was a defendant in one pending anticompetitive behavior lawsuit during the reporting period. In U.S. federal court litigation, Static Control Components, Inc. has alleged that Lexmark engaged in anticompetitive behavior in violation of federal and state laws. The courts have not rendered any decision on the merits of these claims. Lexmark denies the allegations and is actively defending itself in court.

Monetary Fines

Because of our commitment to ethical business practices, Lexmark has not been subject to any significant fines or nonmonetary sanctions for noncompliance of laws and regulations related to accounting fraud, human rights, workplace discrimination, health and safety or corruption during this reporting period.

Gift and Gratuity Policy

The Lexmark Gift and Gratuity Policy states that no Lexmark employee or member of his or her family may accept a gift or gratuity from a supplier or prospective supplier unless it is of nominal value (no more than $25). Cash gifts of any kind are prohibited.

Vision and Values

Our employees have defined our vision and values. We live these concepts every day. More than mere words, these statements are truly a framework for how we operate. To learn more about our vision and values, see our Vision and Values page.

Ethics Hotline

The Lexmark Ethics Line (1-866-477-2029) is a 24-hour, international toll-free telephone number established to assist Lexmark employees with questions about the Code of Business Conduct or concerns that something improper has occurred or might be occurring. A third-party provider operates the Ethics Line. The third-party provider of the telephone lines is prohibited from providing a caller’s identity to Lexmark without the caller’s permission. Calls are reported to Lexmark for investigation and reviewed by Lexmark senior management.

Marketing Communications

As stated in our Code of Business Conduct, “It is Lexmark’s policy to avoid any misstatement of fact or misleading impression in any of its advertising, literature, exhibits or other public statements.”

It is the joint responsibility of the public relations, marketing or content development representative preparing the message, and of the technical product experts, to verify that all statements are true and correctly supported. The accuracy of claims is also reviewed by our Legal Department and validated by the Product and Process Quality Assurance Team. We review our compliance with regulations and voluntary codes concerning marketing communications annually. Lexmark had no incidents of noncompliance with regulations or voluntary codes concerning marketing communications in 2016.