Texas Instruments

Ethics in Texas Instruments

Ethics Organization at TI

The TI Ethics Director is commissioned to ensure that all of the company guidelines remain aligned with ethical standards. His reporting chain is through an oversight group, the TI Ethics Committee, which reports to the Audit Committee of the Board of Directors. The TI Ethics Director is also responsible for updating the TI Ethics Committee, the Audit Committee of the Board of Directors, and the president and CEO on a regular basis.

The TI Ethics Committee was established in 1987 concurrently with the TI Ethics Office and consists of eight high-level TI managers. This committee is chartered to oversee the activities of the TI Ethics Office, review and approve ethics-related policies, procedures, and primary publications, monitor compliance to laws and regulations as well as ethical practices, review any major ethical issues that may arise from time to time and approve appropriate corrective actions.

Employee/Employer Partnership

At TI, each individual employee is considered to be a valuable asset, to be respected and to be nurtured, both as an empowered individual and as a team member. TI has remained focused on the individual and is committed to providing a safe workplace that is free from harassment and discrimination where each employee is encouraged to set high goals.

This business philosophy of employee/employer partnership is evidenced by:

an "open door" that gives every employee access to higher levels of management;
a work environment prohibiting retaliation and retribution, discrimination, and harassment;
required sexual harassment training;
40-hour annual training requirement;
external educational assistance available to all employees;
a job opportunity system whereby employees are allowed to move from job to job within the company;
multiple, company supported diversity networks, with a major goal of career development; and
strong TI support for community involvement.

The TI program focuses primarily on supporting and nurturing the ethics of the workplace, not on identifying and punishing wrong-doing, according to Carl Skooglund, vice president and director of ethics, Texas Instruments. "Compliance is absolutely vital and mechanisms are in place, including strong discipline for dealing with violations of laws, regulations and ethical principles. But the overarching principle on which all TI ethics activities are based is one of trust. We recognize that trust is the basis for all solid business relationships and those relationships depend upon a reputation and track record of integrity. And, at TI, we view our reputations as an asset as vital as the technologies that we develop and bring to the marketplace," Skooglund said.

"We discovered some time ago that many new and entry-level employees believed they had little to do with TI’s ethical reputation because they were not in a position to make significant decisions," Skooglund explained. "All employees, however, make decisions daily -- such as how to charge time or how to use company assets -- and can create ethical problems with poor decisions. For that reason, an effective ethics communications program must address the entire spectrum of employees in an intrusive, continuous manner, starting immediately after hiring.

From the very beginning of an employee’s tenure at TI, the importance of ethical business practices is stressed as well as how employees can receive help in making decisions -- through the TI Ethics Office, from their manager, the legal department, human resources, or from other managers. In addition to the continuous communications program, training courses are designed to communicate TI’s ethical business practices to work groups.

"All these efforts underscore TI’s commitment to maintain the highest ethical standards worldwide," Skooglund said. "However, its not easy to set one standard that applies everywhere. We are facing a variety of issues that we really never had to think about before and a large part of the company’s continued success in the global market depends on how we come to grips with these issues."

Ethics in the Global Market

"Ethical questions face business people every day, especially when a company is involved with worldwide markets," said Carl Skooglund, vice president and director of ethics, Texas Instruments. "Finding the right answer isn’t often easy -- one has to balance local customs and laws with U.S. laws."

As an international company with more than 44,500 employees operating in more than 25 countries, TI is global in scope and culture with a time-honored tradition of conducting business in an ethical and legal manner. But, that is an increasingly difficult challenge fueled by the changing times, relationships and situations facing companies today.

TI’s global vision is World Leadership in Digital Solutions for the Networked Society. The company is competing to win at a global level -- entering into strategic partnerships, alliances and joint ventures in every corner of the globe. The success of these relationships depends greatly upon the company’s representatives understanding the ethical standards and expectations of others. Consider these examples of cultural differences from the Ethics Office files:

In the U.S., telephone helplines or "hotlines," as some companies refer to them, are considered a normal part of business. In some parts of the world, however, hotlines may be greatly mistrusted or even viewed as personally offensive and dangerous.
U.S. companies and U.S. citizens are subject to certain U.S. laws wherever they are. Other countries also have a global reach.
Workers in some parts of the world consider the concept of ethics to be very personal and they may not fully understand that it is also a global or company-wide issue to be discussed or even questioned. In many places, the contract negotiation process can be very long and drawn out -- and somewhat informal. That’s very frustrating for most U.S. companies unless they have a good understanding of what’s going on. There may be very good intentions on all parts, but unless everyone clearly understands the process, it may seem that something unethical is happening.

"These types of situations are trying in the best of times. But today, many organizations and people are under enormous pressure to succeed in a very competitive and challenging global economy. Companies are reducing or eliminating layers of management that made decisions that they are now expecting those on the firing line to make. We are in a world where the ability to communicate rapidly has exploded. It has created enormous opportunities as well as risks. Legal complexities have increased to the point that people simply don’t know. In fact, they can’t know," said Skooglund

"Our relationships with other companies are changing through alliances, partnerships and joint ventures to the point that at different times we may be dealing with other companies as customers, suppliers or competitors. Yet, we still expect employees to recognize and respect those differences and the legal risks they present."

The challenge in this dynamic environment, with its close calls and uncertainties, according to Skooglund, "is to provide tools to our employees so that they can make the tough, quick decisions on the fly, on the firing line. And, make them correctly. There are two elements to making decisions and taking action on behalf of an organization: 1) a clear understanding of the organization’s values, principles and ethical expectations and 2) sound personal judgment and appropriate choices."

To meet these challenges, TI has adopted a three-level approach to ethical integrity on a global level. The first level simply asks: Are we complying with all legal requirements on a local level?

The next level asks: Are there business practices or requirements at the local level which impact how we interact with co-workers in other parts of the world? A growing number of local regulations -- rigid environmental regulations in some parts of Europe, for example -- have a significant effect on products that we ship to and from those countries.

The third level is: Do some of our practices need to be adapted based on the local laws and customers of a specific locale? What we think is perfectly proper in one country may not migrate well to another. On what basis do we define our universal standards that apply to TI employees everywhere?

"For example," Skooglund explained, "TI generally follows conservative rules covering the giving and receiving of gifts. However, what we consider to be an excessive gift in the U.S. may differ from what local customs dictate in other parts of the world. We used to define gift limits in terms of U.S. dollars, but this is impractical when dealing internationally. Instead, we emphasize following the directive that gift-giving should not be used in a way that exerts undue pressure to win business or implies a quid-pro-quo.

"In today’s environment, there is no way that a rule book or a library of policies are going to guide those actions. They must be guided by a shared understanding of basic values and principles of integrity. And they must be supported by resources that will help people to recognize when the caution lights should come on and to know where they can seek expert advice quickly. TI’s reputation is completely in our hands, to be enhanced or damaged by the nature of our actions," he concluded.

The TI Ethics Quick Test

Is the action legal?
Does it comply with our values?
If you do it, will you feel bad?
How will it look in the newspaper?
If you know its wrong, don’t do it!
If you’re not sure, ask.
Keep asking until you get an answer.

This information is provided to TI employees on a business-card size mini-pamphlet to carry with them. For copies of the card or further information, contact the TI Ethics Office at 1-800-33-ETHIC.