Managing our responsibilities

It is Balfour Beatty’s policy to operate to clear and unequivocal standards of ethical behaviour. The Group has set out five core principles, which are at the heart of all the Group’s activities. These are set out on our website, and in summary are:

• to comply with the law wherever we operate;
• to conduct all our business and make all our decisions within a clear ethical framework;
• to maintain safe and healthy workplaces and ensure the safety of the public;
• to contribute positively to the physical and social environments in which we operate; and
• to engage positively with all our stakeholders.

Balfour Beatty first defined and communicated a coherent set of ethical principles in 1986. Since then, these principles have been regularly reviewed and updated, most recently in 2006.

Two companion codes have also been developed to ensure adherence to these principles. The first, “Business Conduct Guidelines,” explains to every employee what is expected of them, in terms of behaviour, procedures and attitudes. In 2008, an online training programme to embed these principles was initiated.

By the end of the year, over 55% of UK employees had successfully completed the programme. This will continue to be rolled-out across the Group in 2009, and further, more detailed programmes will be developed.

The second, “Stakeholder Code of Practice,” sets the key operating principles and minimum standards for the Group’s operating companies when engaging with employees, customers, suppliers and the wider community.

During 2008, the Group began a process to refine its ethical principles further, with an exercise to define its core values. These will be widely communicated during 2009.

Together, these documents constitute a comprehensive system of ethical governance which will continue to be reviewed periodically.

Balfour Beatty has clearly-stated policies and principles for a range of important issues such as risk management, safety, health, environment, human rights, equal opportunities, whistleblowing and competitive behaviour. Within this framework, operating companies are required to develop specific policies and practices, relevant to their particular businesses.

The Group-wide risk management framework provides a common system for identifying and controlling risks of all types. The principal risks and risk management are set out in the Directors’ report and accounts 2008. Each operating company, division and project is subject to rigorous risk analysis, evaluation and management. Major risks and opportunities are reviewed regularly at senior management levels including by the Audit Committee and Board.

Balfour Beatty Group and operating company review processes are also in place for key non-financial issues.

Safety and health issues are reviewed by the Board and its Executive Committee, with each main segment of the business having its own equivalent body. Balfour Beatty requires all its operating companies to have formal safety management systems, which are subject to external audit.

Strategic environmental issues are reviewed by the sustainability working group, chaired by a Group managing director. An environmental managers’ forum reviews key topics and shares best practice between the operating companies. Environmental performance is audited regularly and Group-wide statistics are collated in respect of the Group’s major environmental impacts.