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SECTION
34
GLOBAL ETHICS & COMPLIANCE PROGRAM
A.
SUMMARY
B.
APPLICABILITY
C.
DEFINITIONS
D.
POLICY
E.
RESPONSIBILITIES
F.
REFERENCES
Code of Ethics
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A. SUMMARY
1. United Technologies Corporation is committed to the highest standards of ethics and compliance.
This commitment is reflected in our Code of Ethics, which goes beyond what is required by the law
and reflects our core values. The Code is the foundation for everything we do, driving us to act in a
manner consistent with the highest standards of business ethics. In so doing, we promote both our
products and values everywhere we do business, giving us a competitive advantage in the market
place.
2. UTC expects full compliance with our Code and all applicable laws and regulations, in all places, all of
the time. Our commitment is manifest by this Policy, the Corporate Policy Manual, and our Financial
Manual, which set forth our rules for governance in certain key compliance areas. We will proactively
identify our legal and regulatory risks and requirements, create programs to comply with such
requirements, develop systems and controls to better ensure compliance, use technology to manage
and promote our programs, and educate people to ensure they know and understand what is
expected of them, and how to behave in a manner consistent with all laws and our Code. Then, in a
systematic manner, we will self-assess, audit, and verify compliance, while also driving continuous
improvement.
B. APPLICABILITY
United Technologies Corporation, its Business Units, subsidiaries, divisions, and other controlled
business entities and operations (“Operating Units”), and all directors, officers, and employees thereof,
worldwide (collectively “UTC”). This Policy replaces CPM 36 and 55.
C. DEFINITIONS
“Corporate” means the UTC corporate office and “Business Unit” or “BU” means Otis Elevator
Company, Pratt & Whitney, UTC Aerospace Systems, UTC Climate, Controls & Security, and United
Technologies Research Center. “CPM” means Corporate Policy Manual. “FM” means the Financial
Manual. Other Bold terms are defined in Exhibit 1.
D. POLICY
1. UTC will comply with all laws and regulations applicable to its businesses worldwide.
2. UTC will comply with and effectively maintain its Code of Ethics (“Code”), which serves as the
foundation for UTC’s ethical culture and compliance program. The Code shall be reviewed
periodically as part of a process of continuous improvement.
3. UTC will adopt and implement policies and procedures that outline and assign compliance
responsibilities, internal controls, audit practices, and other applicable rules. These policies and
procedures shall be designed, in part, to prevent and detect violations of applicable laws, company
policy, and the Code.
4. UTC will implement and maintain an effective risk assessment process for identifying significant
enterprise compliance risks as well as site-specific risks. This process shall not only identify risks, but
also include development and implementation of effective risk mitigation plans.
5. UTC will deploy an ethics and compliance training program for all directors, officers, employees,
onsite contractors and, where appropriate, third-parties, and will establish a training and
communications strategy. Training shall be developed specifically for target audiences, addressing
subjects based on identified risks and local needs. Training and communication shall be made
available in as many languages as practicable.
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6. UTC will enforce its Code, policies, and procedures fairly and effectively. It will establish clear and
fair disciplinary procedures, which shall be executed reliably, promptly and consistently across the
enterprise. UTC will establish procedures for recognizing and rewarding ethical behavior, to include
making ethics and compliance part of the hiring, performance evaluation, and promotion process.
UTC will not provide substantial authority to any individual who has engaged in illegal activities or
other conduct inconsistent with UTC’s high standard of ethics and compliance.
7. UTC will maintain an effective Ombudsman program to facilitate the anonymous (if the user so
chooses) and confidential reporting of suspected violations of law, regulation, or company policy.
8. UTC will monitor and audit its business activity to detect violations of applicable laws, company policy
and the Code, and will periodically assess the effectiveness of its ethics and compliance program.
9. UTC will maintain an effective anti-retaliation program, intended to promote open and honest
communications, encourage reporting of wrongdoing, and to prevent even the appearance of
retaliation against both those who report in good faith their ethics and compliance concerns, and
those who cooperate with or participate in the investigation of such matters.
10. UTC will implement a risk-based third-party compliance program designed to detect and prevent
collusion, Corrupt Payments (as defined in CPM 48), and other illegal or unethical conduct. This
program will include pre-retention screening and post-retention training and monitoring of prospective
and existing third-parties identified as presenting appreciable compliance risk. UTC will also
effectively apply due diligence processes in advance of any merger, acquisition or other significant
corporate investment or transaction and develop and implement robust integration plans. UTC will
extend the Code and its policies and procedures to all newly acquired controlled entities, and in-part
or in-whole to non-controlled acquired entities and other third-parties, where and when appropriate.
D. RESPONSIBILITIES
1.
The UTC Board of Directors (“Board”) shall adopt and approve the Code and all revisions thereto.
Senior management and the Board shall promote a culture of ethics and compliance consistent with
the Code that flows down through the entire organization and governs how UTC does business.
2.
Oversight and implementation of UTC’s ethics and compliance program shall be vested in the UTC
Corporate Vice President, Global Ethics and Compliance (“CVP GEC”). The CVP GEC shall report to
the UTC Executive Vice President and General Counsel (“EVP GC”), and have an independent,
dotted-line reporting relationship to the Audit Committee (“Audit Committee”) of the Board. UTC
senior management shall ensure that the CVP GEC is provided adequate staffing and resources to
develop and implement an effective ethics and compliance program.
3.
The chief executive of each BU and Operating Unit will establish and maintain an internal control
program and resources sufficient to ensure compliance with all applicable laws and regulations as
well as the Code and all UTC policies and requirements.
4.
In addition to financial and operational audits conducted by UTC Internal Audit Division (IAD), the
Corporate Vice President, IAD (“CVP IAD”) will perform or provide for, under the direction and
supervision of CVP GEC/designee, periodic audits (“Compliance Audits”) of compliance programs
and high-risk transactions at Operating Units sufficient to detect violations of policy and to provide
UTC management reasonable assurance that internal control programs are adequate.
5.
Corporate and Operating Unit personnel shall follow the procedures set forth in Exhibit 1 in
implementing this Policy. CVP GEC is authorized to prescribe and amend Exhibit 1 as deemed
necessary to foster and assure a robust ethics and compliance program.
6.
CVP GEC shall review this Policy biennially.
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E. REFERENCES1
FM and constitute policies of CPM including, without limitation, CPM1: Mergers, Acquisitions, Divestitures, Joint Ventures, Securities Purchases, and
Sale of Assets or Intangibles; CPM 3: Antitrust Compliance; CPM 4: Business Ethics and Conduct in Contracting with the United States Government;
CPM 5: Government Relations; CPM 7: Conflict of Interests; CPM 11: Philanthropic Donations; CPM 16: Enterprise Risk Management; CPM 17: Service
Vendors; CPM 18: Government Disclosures; CPM 18A: Federal Acquisition Regulation Disclosure Guidelines; CPM 20: Compliance With Export
Controls & Economic Sanctions; CPM 20A: Compliance with Import and Customs Laws; CPM 44: Industrial Cooperation & Economic Offset; CPM 48:
Anti-Corruption; CPM 48A: Giving Business Gifts; CPM 48B: Sponsoring Third Party Travel; CPM 48C: Hiring and Retaining Current and Former
Government Officials and Their Relatives; CPM 48D: Lobbyists; CPM 48E: Distributors and Non-Employee Sales Representatives.
1
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
E X H I B I T
1
EXHIBIT 1
IMPLEMENTING PROCEDURES
A. UTC Enterprise Oversight
1. Enterprise Goal
We relentlessly pursue a world-class ethics and compliance program whereby our employees and our business
partners conduct themselves at all times in a manner consistent with the high values and standards established
in our Code. We aspire to create a culture that promotes strict compliance with all laws, regulations, and UTC
requirements, no matter the consequences. We will not compromise our ethics, and we will forego business
opportunities that require us to do so.
2. Enterprise Strategy
UTC’s size, global scale and complexity make achieving and sustaining best-in-class ethics and compliance a
continual challenge. To meet our best-in-class program objectives, our enterprise strategy is to:
a.
Promote transparency and accountability in all that we do, including the personal responsibility of
each employee to comply with applicable laws, the Code, and UTC policies;
b.
Improve and integrate UTC’s existing systems and controls aimed at preventing ethics and
compliance escapes and allowing for more effective audit and review, using technology to
mistake-proof these controls whenever practicable;
c.
Deploy standard work and tools across the enterprise that add efficiency to ethics and compliance
processes, capture best practices, provide greater transparency, and ensure we meet our ethics
and compliance obligations;
d.
Implement effective training to promote a heightened sense of ethical awareness in all employees
and reinforce the importance of ethical conduct throughout their careers;
e.
Foster and enhance our ethics and compliance personnel by rewarding such positions, providing
ongoing training and education, increasing rotational opportunities, and improving career paths for
those persons committed to ethics and compliance careers;
f.
Establish, where useful and appropriate, cross-functional steering committees and teams to
promote strategic leadership and enterprise-wide accountability, as well as to drive ethics and
compliance activity into our day-to-day operations;
g.
Improve our systems and tools to allow for data analysis to better identify potential violations and
improve our ability to measure risk;
h.
Ensure that no employee is subject to retaliation for raising questions or concerns or reporting in
good faith suspected violations through any channel of communication, or cooperating or
participating in an audit or investigation; and
Extend our policies and requirements to third-parties wherever appropriate, to mitigate compliance
risks and ensure we do business with those committed to ethical standards consistent with our
own.
i.
3. Organization and Structure
The Board and its Chairman and UTC’s President and Chief Executive Officer are ultimately responsible for
UTC’s Ethics and Compliance program. The underlying principles and requirements for this program shall be
set forth in the Code, CPM, and FM (which shall be reviewed periodically to ensure continuous improvement)
as well as in the effective mitigation of risks identified through UTC’s ongoing Enterprise Risk Management
(ERM) program (see CPM 16: Enterprise Risk Management).
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EVP GC is the senior official responsible for implementing the requirements of this Policy. CVP GEC has
functional responsibility for ethics and compliance across the enterprise and shall report to EVP GC and to the
Audit Committee. CVP GEC shall be responsible for periodically reviewing and updating the Code.
CVP GEC leads UTC’s Global Ethics and Compliance Organization (“GECO”). CVP GEC also chairs the UTC
Risk and Compliance Council (“RCC”), and appoints the chairs and oversees the work of the Compliance
Leadership Group (“CLG”), the Ethics Leadership Group (“ELG”), and the Government Contracts Leadership
Group (“GCLG”) (all of which are described below).
UTC’s Ethics and Compliance Program shall, in part, be directed and implemented by the following offices and
entities:
a.
UTC Risk and Compliance Council (RCC)
The RCC comprises the UTC President and Chief Executive Officer, UTC Executive Vice
President and Chief Financial Officer (“EVP CFO”), UTC Executive Vice President, Human
Resources and Organizations (“EVP HR”), EVP GC, CVP GEC (who will serve as chair), UTC
Senior Vice President, Operations, UTC Vice President, International Trade Compliance, and
CVP IAD. Other executives, including representatives from the Operating Units, may be
appointed to or attend the RCC from time-to-time, at the discretion of the permanent members.
RCC’s mission is to promote the development of a coordinated, cross-functional approach to
ethics and compliance that enhances our ethical culture, improves compliance controls, and
increases business process efficiency by seeking to integrate compliance processes with existing
or improved business processes. RCC’s responsibilities shall include:
(1) developing ethics and compliance requirements for officers and employees;
(2) developing performance metrics for Operating Units to measure progress towards
fulfillment of key ethics and compliance initiatives and objectives;
(3) overseeing UTC’s ERM program, ensuring that risks are identified promptly, measured
accurately, and robust mitigation plans are deployed proactively and effectively; and
(4) reviewing significant compliance matters and other relevant ethics and compliance issues
and, where appropriate, ensuring effective remedial measures, including resource
deployment, systems enhancement, and enhanced internal controls, policies, and
procedures are implemented across the enterprise to prevent, detect and deter
misconduct.
RCC shall meet at least quarterly, and its decisions, projects, and initiatives shall be reported to
the Audit Committee.
b.
Global Ethics and Compliance Organization (GECO)
GECO’s mission is to develop, deploy, and support Operating Unit implementation of UTC’s
ethics and compliance program. GECO’s ethics and compliance responsibilities shall include:
(1) Developing, implementing, and maintaining:
a.
initiatives and programs to promote our core values and ethical conduct and to
ensure universal awareness of and compliance with the Code and UTC policies,
including: (i) training platforms (i.e., enterprise-wide IT systems), requirements, and
materials; (ii) communication requirements and materials; (iii) requirements for
management and employees; (iv) recognition of organizations with comprehensive
and effective initiatives/programs, ethics and compliance personnel with outstanding
performance, and employees with exemplary behavior; and (v) uniform standards
and guidance for disciplinary and corrective action;
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b.
initiatives and programs to promote good faith reporting of suspected violations,
including trained resources, operating independently from management, and
enterprise-wide communications systems to facilitate the anonymous (if the user so
chooses) and confidential reporting by employees and third parties of suspected
violations of law, regulation, or UTC policies as well as impartial responses to
questions, issues, or concerns raised through such communication systems;
c.
initiatives and programs to eliminate instances of retaliation against employees who
raise questions or concerns, report in good faith suspected violations through any
channel of communication, or cooperate or participate in an audit or investigation;
d.
enterprise-wide case matter management systems to record, monitor, and disposition
allegations of suspected violations of law, regulation, or Company policy;
e.
periodic employee surveys to assess the effectiveness of our ethics and compliance
programs;
(2) supporting RCC and Corporate, BU, and Operating Unit management to implement
UTC’s ERM program;
(3) providing guidance and training on the Code, UTC policies, existing and new legal and
regulatory requirements, and in conducting effective investigations;
(4) reviewing and dispositioning approval requests (including waivers, when necessary and
appropriate) made pursuant to Code or UTC policy requirements;
(5) conducting benchmarking and providing forums to share best-practices to further
enhance UTC’s ethics and compliance programs;
(6) conducting Program Reviews to assess site-specific ethics and compliance programs;
(7) providing general programmatic support to BU and Operating Unit ethics and
compliance personnel;
(8) directing and supporting
assessments/evaluations;
Compliance
Audits
and
other
internal
self-
(9) interfacing with and maintaining strong working relationships with regulatory and
enforcement agencies as well as local and national law enforcement;
(10) overseeing and supporting an effective program for compliance with U.S.
procurement laws (see CPM 18: Government Disclosures);
government
(11) responding to government and other third party inquiries and investigations involving
compliance matters;
(12) overseeing and supporting UTC and significant BU and Operating Unit compliance
investigations;
(13) conducting compliance investigations
when appropriate;
independent
of
operating
unit
oversight,
(14) providing regular case descriptions of ethics and compliance matters to the UTC
Financial Exposure Committee (FINEX) (see Section D4);
(15) briefing the Audit Committee on ethics and compliance matters (see Section D4, infra.)
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Compliance Leadership Group (CLG)
CLG comprises the UTC Vice Presidents and Associate General Counsels, Global Ethics and
Compliance (one of whom will serve as chair), UTC Compliance Counsels, UTC Ethics and
Compliance Officer (“ECO”), CVP IAD, UTC Vice President, Employment Law and HR
Compliance, representatives from UTC Communications, BU Ethics and Compliance Counsels,
and others who are from time-to-time invited to attend. CLG’s mission is to aid in the
development and implementation of UTC’s global ethics and compliance strategies, to serve as a
forum for sharing best-in-class practices, discussing relevant legal and regulatory developments,
and designing and deploying tools that can be used across UTC to enhance ethics and
compliance processes. CLG’s responsibilities shall include:
(1) developing and implementing (in coordination with RCC, ELG, GCLG, and AWG) ethics
and compliance requirements for officers and employees;
(2) developing and implementing (in coordination with RCC, ELG, and GCLG) Operating
Unit performance metrics to measure progress towards fulfillment of key ethics and
compliance initiatives and objectives;
(3) developing Program Reviews (to be performed by GECO), and cross-functional reviews
(to be performed by Operating Units), and other self-assessment/evaluation activities;
(4) identifying and mitigating (in coordination with Corporate functional departments and BU
ethics and compliance personnel) key compliance risks pursuant to UTC’s ERM program;
(5) developing, updating, and releasing policies, procedures, and guidance to address and
mitigate key ethics and compliance risks; and
(6) sharing among the Corporate functional departments and Operating Units best
practices/standard work for addressing existing and emerging compliance risks.
d.
Ethics Leadership Group (ELG)
ELG comprises the UTC ECO (who will serve as chair) and the BU lead ECOs (Global ECOs).
ELG’s mission is to create strategic plans and objectives in support of GECO’s mission to build a
strong ethical culture and robust programs to promote UTC’s core values and principles
everywhere we do business. The ELG’s responsibilities shall include:
(1) developing (in coordination with CLG) ethics and compliance training requirements and
materials for UTC employees and contractors as well as key third-parties;
(2) developing (in coordination with CLG and UTC Communications) Corporate and
Operating Unit annual plans and materials for communicating topics relating to ethics
and compliance;
(3) developing (in coordination with Human Resources) Corporate and Operating Unit
annual plans and materials for conducting ethics and compliance-related surveys;
(4) providing interpretive guidance on the Code and (in coordination with UTC Human
Resources) disciplinary action;
(5) supporting ECOs including selection, on-boarding, training, career development
(monitoring and promoting), and off-boarding;
(6) developing, implementing, and maintaining effective IT platforms for training and case
management;
(7) sharing among the Corporate functional departments and Operating Units best
practices/standard work for promoting a strong ethical culture and UTC’s core values and
principles; and
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(8) developing and implementing (in coordination with CLG) Operating Unit performance
metrics to measure progress towards fulfillment of key ethics and compliance initiatives
and objectives.
e.
Government Contracts Leadership Group (GCLG)
GCLG comprises the UTC Vice President and Associate General Counsel, U.S. Government
Contracts (who serves as chair), at least one designated lawyer from each aerospace BU charged
with government contract responsibilities, UTC Vice President and Assistant Controller for
Government Accounting, and other persons who are from time-to-time designated as members.
GCLG’s mission is to ensure UTC’s compliance with U.S. procurement law and the Federal
Acquisition Regulation (“FAR”) as well as other implementing procurement laws and regulations,
and to coordinate best practices across Operating Units. GCLG shall convene at least quarterly
and its responsibilities shall include:
(1) reviewing current legal and regulatory developments and, whenever necessary, the
impact on and changes necessitated to UTC and Operating Unit policies and procedures
as a result of new or revised laws, regulations, or case law;
(2) developing and implementing a program to ensure that the relevant personnel at both
aerospace and commercial BUs receive sufficient and regular training on government
contracts compliance matters;
(3) documenting its determinations and recommendations and provide the same to GECO
and Operating Unit U.S. Government contract legal and contracts staffs and/or to other
affected organizations as necessary to ensure prompt and complete compliance;
(4) in the case of proposed new laws or regulations, providing UTC-consolidated comments
to UTC’s industry associations, outside contacts, lobbyists, or otherwise to ensure UTC’s
comments are identified and communicated as appropriate; and
(5) developing and implementing (in coordination with CLG) Operating Unit performance
metrics to measure progress towards fulfillment of key ethics and compliance initiatives
and objectives.
f.
Antitrust Working Group (AWG)
AWG comprises UTC’s antitrust group, including the Associate General Counsel for Antitrust &
Competition Law (who shall serve as the chair), as well as members of GECO, and at least one
lawyer from each BU charged with responsibility for antitrust compliance matters. The mission of
AWG is to aid in the development and implementation of UTC’s antitrust compliance strategy, to
serve as a forum for sharing best practices, and design and deploy training and tools that can be
used across UTC to enhance antitrust compliance processes. The AWG shall convene at least
quarterly and its responsibilities shall include:
(1) reviewing current legal and regulatory developments and, whenever necessary, the
impact on and changes necessitated to UTC and Operating Unit policies and procedures
as a result of new or revised laws, regulations, or case law;
(2) determining whether and to what extent UTC and its Operating Units may be affected by
such matters;
(3) establishing clear and actionable guidance for implementation via new or revised policies,
procedures, and training;
(4) documenting its determinations and recommendations and provide the same to GECO
and/or other affected organizations, as necessary, to ensure prompt and complete
compliance;
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(5) in the case of proposed new laws or regulations, providing UTC-consolidated comments
to UTC’s industry associations, outside contacts, lobbyists, or otherwise to ensure UTC’s
comments are identified and communicated as appropriate; and
(6) developing and implementing (in coordination with CLG) Operating Unit performance
metrics to measure progress towards fulfillment of key ethics and compliance initiatives
and objectives.
B. Business and Operating Unit Ethics and Compliance Programs
1.
General Requirements
Each BU shall establish and maintain an effective ethics and compliance program, which shall extend to, and
its effectiveness shall be assessed with respect to, each Operating Unit. Each BU’s ethics and compliance
program shall, at minimum, satisfy the requirements of this Policy, as well as policy directives issued by CVP
GEC. These programs will establish controls, foster lawful and ethical behavior by all employees and third
party representatives (e.g., distributors, non-employee sales representatives, suppliers), and joint venture
partners and effectively prevent and detect improper conduct in existing and prospective operations (e.g.,
potential acquisitions and joint ventures). Each BU shall ensure that the requirements of the Code, Corporate
Policy Manual, and Financial Manual are cascaded and implemented throughout the entire BU.
.
2.
Compliance Councils
Each BU shall establish a Compliance Council(s) or equivalent group to ensure effective implementation of
UTC’s ethics and compliance program, the requirements of this Policy and Procedure, and the risk
assessment process. The BUs shall determine the specific composition, schedule, and objectives for these
Councils.
3.
Personnel
The President and General Counsel of each BU shall be responsible for appointing persons to the following
positions:
a)
BU Ethics and Compliance Counsels: BU Ethics and Compliance Counsel shall be
responsible for overseeing and managing implementation of BU ethics and compliance programs,
and shall serve as the functional lead for Global ECOs and BU Compliance Counsels. BU
Ethics and Compliance Counsel shall report to the BU General Counsel, with dotted-line
reporting to CVP GEC. BU Ethics and Compliance Counsel are standing members of CLG;
b)
Global Ethics and Compliance Officers (Global ECOs): Global ECOs shall be responsible for
overseeing and managing implementation of BU ethics programs, and shall serve as the
functional lead for BU ECOs. Global ECOs shall report to BU Ethics and Compliance Counsel,
with dotted-line reporting to UTC ECO. Global ECOs are standing members of ELG;
c)
BU Compliance Counsels: BUs shall appoint a sufficient number of legal counsel with specific
expertise (e.g., anti-corruption, anti-trust, U.S. government contracts, investigations) to support an
effective compliance program, ensure compliance with UTC policy and applicable laws, and lead
or assist investigation of Significant, LE/IA, and similar matters;
d)
Ethics and Compliance Officers (ECOs): BUs shall appoint a sufficient number of full and parttime ECOs, including regional (RECOs) and local (LECOs), to support an effective ethics
program, ensure compliance with UTC policy, and lead or assist investigation of non-Significant
matters. BUs shall periodically assess ECO resources to ensure adequate coverage.
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The concurrence of CVP GEC shall be required for appointments of BU Ethics and Compliance
Counsels, Global ECOs, and for all other executive (≥ E1) and manager (L4) level BU ethics and
compliance positions. Appointments of non-executive and non-manager level BU Compliance Counsels
and ECOs in regions where UTC Ethics and Compliance Counsels are present shall be made in
consultation with UTC Ethics and Compliance Counsel.
C. Government Inquiries and Communications
As a complex international corporation, UTC often is in contact with various law enforcement / intelligence agencies
(LE/IA) both inside and outside the United States (including inquiries from agencies with civil enforcement
authority). These contacts are made at all levels within UTC and, at times, simultaneously at different Operating
Units. UTC’s general approach to such inquiries is to cooperate fully with LE/IA. However, care must be taken to
ensure that we understand all relevant information before responding, in order to ensure that our communications
to LE/IA are fully accurate. There also might be legal constraints that limit our ability to provide certain types of
information. Accordingly, the following steps must be taken whenever LE/IA contacts are made within UTC and its
Operating Units, with the exception of routine contacts with LE/IA in the ordinary course of UTC’s business:
1. Employee Notification to Operating Unit Legal Department
Any employee or onsite contractor contacted by LE/IA in regard to a matter within the scope of their
employment with, or contract with, UTC or any Operating Unit shall promptly notify their Operating Unit
legal department of the contact. (This requirement does not encompass communications protected by law,
such as “Whistleblower” communications, or contacts with UTC security personnel that are within the
normal course of their responsibilities.)
2. Responding to LE/IA
Whereas it is the employee or contractor’s decision whether to respond to an LE/IA inquiry directed to the
employee or contractor in their personal capacity , where an LE/IA inquiry is directed to UTC or to the
employee or contractor in regard to a matter within the scope of their employment with, or contract with,
UTC, the employee/contractor shall not respond on behalf of UTC or provide company or third-party
proprietary information, without express authorization from the Operating Unit’s legal department (unless
such provision of information is protected by law). Likewise, the employee/contractor shall not act on
behalf of LE/IA while performing company-related functions or while on company business travel, without
express authorization from the Operating Unit’s legal department and CVP GEC/designee. Additionally,
before any information is provided to LE/IA, consideration must be given to whether such provision of
information may violate US and non-US law (including state secrets and data privacy protection laws),
contractual obligations, or any other applicable legal requirement.
3. Operating Unit Notification to GECO
Operating Unit legal departments shall promptly notify CVP GEC regarding all communications and
inquiries from LE/IA relating to UTC business.
4. Preservation of Records
Upon receipt of any inquiries from LE/IA, measures shall be implemented to ensure that all potentially
relevant documents and other records, including those stored electronically, are adequately safeguarded
and preserved. No potentially relevant document or record shall be altered, hidden, or destroyed.
D. Internal Investigations
1.
Report and Track Suspected Violations
Unless prohibited by local law, employees are required to report actual or suspected violations of law,
regulation, or UTC policy. When appropriate, contractors and third-parties should be encouraged to do so,
and required by contract to do so, whenever possible. Reporting can be made to management, the legal
department, an ECO, or to an Ombudsman (via telephone or DIALOG). Upon receipt, reports of actual or
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suspected violations of law, regulation, or UTC policy shall be promptly entered into UTC’s case
management system.
“Significant” matters are actual or suspected violations of law, regulation, or UTC policy: (a) categorized
as “Anti-Competitive Conduct” or “Corrupt Payments -- Giving”; or (b) designated as “Significant” by the
CVP GEC/designee (see BPO Handbook). Significant matters must be promptly entered into UTC’s case
management system, marked as “Significant”, and reported to CVP GEC.
“Sarbanes Oxley Reportable” matters are actual or suspected instances of fraud perpetrated by a
member of management (L5-E5) or by an employee with a significant role in the corporation's internal
controls over financial reporting. Sarbanes Oxley Reportable matters must be promptly entered into UTC’s
case management system, marked as “Sarbanes Oxley Reportable”, and reported to the EVP CFO.
“Executive” matters are actual or suspected violations of law, regulation, or UTC policy allegedly
perpetrated by UTC executives (E1-E5). Executive matters must be promptly entered into UTC’s case
management system, marked as “Executive”, and reported to EVP HR.
Significant, Sarbanes Oxley Reportable, and Executive matters shall be investigated, internally
reported, externally disclosed, and dispositioned in accordance with the ECO Handbook, and Sections D25, and E4, as applicable.
2.
Investigation of Suspected Violations
Operating Unit procedures for investigating and addressing potential compliance violations shall observe
the following principles:
(a)
each alleged violation will be reported promptly to the ECO and entered within three business
days in the UTC case management system maintained by GECO. For the purposes of this Policy,
without strict regard to the form in which the reporting person raises his/her concerns, the
information provided should be treated as an allegation if it raises a reasonable suspicion that
such laws, regulations, or policy may have been violated;
(b)
BU Ethics and Compliance Counsel and/or Global ECO are responsible for ensuring that the
matter is investigated and reported promptly through UTC’s case management system, and that
the investigation is concluded in a thorough, timely and proper manner;
(c)
the investigation will be conducted confidentially, and access to information regarding its existence
(including access to information in the matter management system referenced above) will be
strictly limited to those having a need-to-know;
(d)
in any case in which there is a question whether: (i) an alleged legal violation involved intentional
wrongdoing; or (ii) wrongdoing occurred during the course of the investigation (e.g., the making of
a false statement, obstructive conduct), the Operating Unit’s investigation must be conducted
with extreme care to collect, safeguard, and assess all relevant documentary and testimonial
evidence (including electronic discovery). When such a situation arises, the Operating Unit’s
General Counsel and the CVP GEC shall be advised at once;
(e)
the Operating Unit investigation shall not be conducted by persons: (i) who were involved, or
alleged to be involved, with the questioned activity; (ii) who are directly subordinate to a person
whom the allegation specifically identifies as committing, condoning, or acquiescing in the
questioned activity; or (iii) might otherwise be reasonably considered to have a perceived conflict
of interest. If participation of such persons is necessary to ensure a complete and timely
investigation, the BU Ethics and Compliance Counsel and/or Global ECO shall consult with
GECO to determine whether additional measures must be taken by the Operating Unit to ensure
the integrity of the investigation, to include oversight of the investigation by GECO.
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(f)
remedial actions - the Operating Unit shall take the steps necessary to assure that all remedial
and corrective actions identified as a result of its investigation are supported by adequate plans,
resources, and accountability for timely execution, and that they are tracked to completion and
documented as closed. If a violation is confirmed and continuing, it shall be stopped immediately.
No known violation of law shall be allowed to continue.
(g)
Where appropriate, the CVP GEC shall designate the lead investigator for an investigation and/or
oversee an investigation.
Cooperation with Internal Investigations
All employees must cooperate fully with all internal investigations, except where applicable law or legal
requirements limit such mandatory cooperation. Cooperation shall include but not be limited to:
participating in interviews when requested, providing relevant evidence, and, if such evidence is stored on
personal devices or private places, making such evidence available to the company, when not precluded
by law. No employee shall obstruct an investigation, provide false or misleading information, or withhold
information, or alter, fabricate, destroy, or remove any evidence (e.g. documents, materials, or files) related
to an investigation.
4.
Internal Reporting
To ensure that actual or suspected violations of law, regulation, or UTC policy which may adversely impact
internal controls or the accuracy of UTC’s financial statements are timely reported to senior UTC
management, GECO will provide to FINEX on a quarterly basis status reports of matters: (a) categorized
as “Accounting Irregularities”, “Misappropriation of Company Money”, and “Misappropriation of Company
Property”; (b) with estimated financial exposure greater than $100,000; and (c) marked Sarbanes Oxley
Reportable. Cognizant Operating Unit finance and legal personnel and Global ECO will provide FINEX
with detailed briefings on any of the foregoing matters that FINEX requires additional information.
CVP GEC will provide to the Audit Committee at its regular meetings status reports on: (x) verified
Sarbanes Oxley Reportable matters; and (y) matters marked “Audit Committee Requested” or with case
type “Board Contact” (see BPO Handbook). CVP GEC will also provide the Audit Committee as necessary
with updates on noteworthy ethics and compliance issues and matters.
5.
External Disclosures
Disclosures of certain matters are required by law or regulation (see CPM 18: Government Disclosures).
Accordingly, the Operating Unit’s legal department and CVP GEC/designee shall be consulted with
respect to any actual or suspected noncompliance with law or regulation that might trigger a required
disclosure, or other matter giving rise to a mandatory or voluntary disclosure.
(a)
Mandatory disclosures shall be made to the appropriate government authorities and affected
stakeholders, as required by law or regulation, and in accordance with the procedures set forth in
CPM 18.
(b)
When not specifically mandated by law or regulation, an actual or potential noncompliance may be
disclosed to the appropriate authorities or affected stakeholders. Such decisions will be made
case-by-case, after consultation with the BU General Counsel and CVP GEC. This consultation
requirement does not apply to routine disclosures, such as reports to the FAA regarding failure to
perform a drug test on time, or failure to fill out an airworthiness certificate.
(c)
Determinations regarding certain disclosures may be controlled by other governing UTC policy
(e.g.¸ CPM 18, 20, 20A), and in these instances the specialized policies shall control.
E. Human Resources and Disciplinary Review
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1. CVP GEC will coordinate with UTC’s EVP HR/designee to develop programs that promote and reward
ethical conduct by UTC’s employees and ensure that ethics and compliance are part of the employee
hiring, development, and promotion evaluation processes.
2. CVP GEC will consult and coordinate with EVP HR to establish clear and fair disciplinary procedures,
which shall be executed reliably and promptly. CVP GEC shall make available to Human Resources a
case management system that will allow for centralized tracking of allegations, investigations, and
corrective actions in regard to those matters supported by Human Resources.
3. Discipline must be applied fairly, based on the facts and circumstances of the violation. It is appropriate to
take into account past misconduct, self-reporting, and acceptance of responsibility, when present, in
determining the appropriate discipline. Discipline of an individual who is not directly involved in improper or
unlawful conduct may be appropriate when circumstances indicate that the individual, in the exercise of his
or her job responsibilities as a supervisor, manager, executive, or professional with fiduciary
responsibilities, knew or should have known of such conduct and failed to take appropriate action to
prevent, detect or report such conduct, or otherwise failed to properly supervise the wrongdoer(s). See
ECO Handbook for guidance regarding disciplinary action.
4. BUs shall report recommended disciplinary action on Significant and Executive matters in writing to the
UTC Disciplinary Review Committee (comprising EVP CFO, EVP GC, EVP HR, and CVP GEC) not less
than seven calendar days prior to the imposition or communication of the planned action or inaction. The
Operating Unit shall not impose or communicate the recommended action or inaction until all members of
the UTC Disciplinary Review Committee have responded, or expiration of the seven-day period without
response. BUs shall notify implemented disciplinary action on Sarbanes-Oxley matters (not otherwise
deemed Significant or Executive) in writing to the EVP CFO/designee not more than seven calendar days
after the imposition or communication of the action or inaction.
F.
Finance
CVP GEC shall consult and coordinate with EVP CFO to establish procedures, tools, and controls that
continually improve and enhance UTC’s ability to gather information and data needed for the detection of
wrongdoing and the prompt identification of transactional risk, and to prevent such escapes from occurring.
EVP CFO shall be responsible for maintaining and continually improving UTC’s Finance Manual and common
controls matrices, to ensure that proper controls and systems are implemented to prevent and detect violations
of compliance laws and regulations.
G. Internal Audit
CVP IAD, at the direction of CVP GEC/designee, shall plan, schedule, and conduct periodic Compliance
Audits.
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