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Ethics Committee Report

INTRODUCTION BY KEN HANNA, ETHICS COMMITTEE CHAIRMAN

I am pleased to introduce the report from the Ethics Committee for 2013.

During the year the Committee has continued to concentrate on anti-bribery and corruption issues, through improved monitoring, processes and training.

RESPONSIBILITIES AND ROLE OF THE ETHICS COMMITTEE

The main responsibilities of the Committee are:

  • to advise the Board on the development of strategy and policy on ethical matters; 
  • to advise the Board on steps to be taken to establish a culture of integrity and honesty in all of the Company's business dealings;
  • overseeing the Company's policies and procedures for the identification, assessment, management and reporting of ethical risk; 
  • overseeing the Company's policies and procedures to prevent persons associated with the Company from engaging in bribery; and 
  • monitoring and reviewing the operation of the Company's policies and procedures. 

The full Terms of Reference of the Committee are available on our website at http://ir.aggreko.com/committee-terms-of-reference.

MEMBERSHIP OF THE COMMITTEE

The members of the Committee throughout the year were as follows:

Ken Hanna Chairman
David Hamill  
Diana Layfield
 		  

All members of the Committee are therefore independent Non-executive Directors.

David Hamill will be stepping down as a Director following our 2014 Annual General Meeting and Ian Marchant will then be joining the Committee. Peter Kennerley is Secretary to the Committee and during 2013 Rupert Soames attended by invitation. As each regional business covers countries with heightened ethical risk, each regional Director is also invited to attend the Committee at least once each year.

The Committee met three times in 2013.

MAIN ACTIVITIES OF THE COMMITTEE DURING THE YEAR

The Committee receives regular reports on the development of Aggreko's anti-corruption and bribery strategy, including the communication of our procedures, together with associated training, legislative developments, reports of incidents and actions taken and the activities of our sales consultants.

Some of the particular matters addressed by the Committee during 2013 were:

Revised ethics policies

This year we approved a revised Gifts, Hospitality and Entertainment Policy, Charitable Donations Policy and a new Sponsorship Policy. These policies were last comprehensively reviewed in 2011, following the implementation of the UK Bribery Act 2010. Although we believe that the policies have worked well in ensuring that our employees comply with the high ethical standards we have set ourselves at Aggreko we undertook a further review this year to see how the policies have worked in practice, identify improvements and also to reflect the new regional structure of Aggreko.

Online training

We introduced a new compliance initiative, our online ethics compliance training programme in 2013. The programme is an online interactive web-based training package and was developed in-house by our compliance and training teams to ensure that it had maximum relevance for our business. It is available at two levels – the first, on which all employees will be trained and assessed, and then a second level for those categories of employees who need a greater awareness and understanding of our processes, for example senior employees in sales or finance. By the end of Q1 2014 the training will be available in nine languages. The secondary level includes a competition law module.

Monitoring

We continue to monitor the effectiveness of our processes and policies.

The most significant ethical risk we run is the behaviour of third party sales consultants (see the section entitled Principal Risks and Uncertainties – Failure to conduct business dealings with integrity and honesty). In that section we summarise the steps we take to mitigate that risk through our approach to appointing, training, rewarding, controlling and monitoring our sales consultants. As in previous years, the Committee received a report from Group Internal Audit on the operation of our policy for sales consultants, and we were satisfied that it continues to work effectively.

This year we also asked Internal Audit to undertake a comprehensive review of our Anti-Bribery and Corruption Framework. The review indicated that the framework is working broadly in line with expectations and in accordance with the guidance published by the Ministry of Justice. It did, however, identify a number of areas where our processes can be improved, and we have instigated a plan to address the points raised. We have asked for a follow up review later in the year.

Presentations from the Regional Businesses

This year the Committee received briefings from each of the three Regional Directors, covering their approach to the Ethics policy and monitoring and compliance in the region, particularly in relation to the communication of the new policies. Each addressed the training and monitoring of sales consultants.

Governance

On an annual basis the Board reviews the Committee's effectiveness as part of the Board's evaluation process. The results of this year's evaluation found that the Committee works well and no particular actions or improvements were identified specific to this Committee. A detailed explanation of the Board evaluation process, findings and areas identified for improvement can be found in the Corporate Governance Report.

Ken Hanna

Chairman of the Ethics Committee
6 March 2014