CODE OF ETHICS: Ingersoll Rand India

Reviewing Code of Ethics of

Ingersoll Rand India By Bansuri Das MBA Business Sustainability TERI University

SUMMARY

Ingersoll-Rand (India) Limited is a part of the Ingersoll Rand Company, a global

innovation and solutions provider with powerful brands and leading positions within its

markets. Ingersoll-Rand (India) Limited has its presence in India since 1921.

Ingersoll Rand code of conduct describes its commitment to lawful and ethical conduct

wherever they do business. The code of conduct framed by the company covers

exhaustively the situation under which legal or ethical issues may arise, under which

how an employee must act.

The spirit of the code of conduct lies in the genesis of the company’s core values of

Integrity Respect, Teamwork, Innovation and Courage. The code of conduct is the

minimum standard of conduct which is to be scrutinized by a number of stakeholders.

And all employees are expected to act with the highest business ethics in all Ingersoll

Rand transactions.

This paper outlines the policy framework under which Ingersoll Rand formulated their

code of conduct.

“Good ethics and governance are not just "moral" or "compliance" issues. In the long

term, they are essential behavioral traits for the organization that strengthen the brand

equity and help ensure stable growth.”

- Former Executive Director, Ingersoll-Rand (India) Ltd,

Bangalore

CODE OF ETHICS: Ingersoll Rand India

Introduction

Company Profile

Ingersoll-Rand (India) Limited is a part of the

Ingersoll Rand Company, a global innovation and

solutions provider with powerful brands and leading

positions within its markets. Ingersoll-Rand (India) Limited has its presence in India

since 1921. The company established its first manufacturing plant in India in 1965 and

became a public limited company in 1977.Today Ingersoll-Rand has manufacturing

facilities in Ahmadabad that is ISO 9001:2008 certified and in Sahibabad that is ISO

9001:2000, ISO 14001:2004 & OHSAS 18001:2007 Certified. Ingersoll Rand products

are widely appreciated in the market for their superior quality and reliability. With a

strong sales presence in over 15 locations across the country and a strong national

distributor network, Ingersoll-Rand (India) Limited is a dominant player in its business of

providing solutions for the Infrastructure development, Industrial Solutions and Climate

Control markets. It is amongst the country's largest exporters of engineered goods.

Ingersoll Rand believes that their success lie in when all its employees work towards a

common purpose and common values. A culture which is consistent act in the best

interest of their customers, shareholders, communities and themselves.

Their culture is based upon a set of core value:

Integrity We act in the highest legal and ethical standards in everything we do Respect We communicate and act in ways that respect and value the worth of all people, cultures, viewpoints and backgrounds Teamwork We work together and share resources to provide greater value to our customers, employees, business partners and shareholders Innovation We use our diverse skills, talents and ideas to develop innovative, imaginative and creative solutions to challenges Courage We speak up for what is right and take measured risks so our company can thrive

Scope of the paper

CODE OF ETHICS: Ingersoll Rand India

This paper reviews the code of conduct norms laid down by Ingersoll Rand India with

the following objectives:

1. To establish the scope of corporate ethics documented by Ingersoll Rand India.

2. To identify existing rules and regulations that aided Ingersoll Rand India in preparing

its code of conduct.

3. To enumerate international regulations (voluntary and involuntary) followed by

Ingersoll Rand India while preparing their “Code of Conduct”.

4. Recommendations based on the analysis of the code of ethics for further

improvement.

Ingersoll Rand India Code of conduct:

Overview:

Ingersoll Rand India code of conduct is based on Ingersoll Rand Global code of

conduct, it describes their commitment to lawful and ethical conduct wherever they do

business. The code of conduct reflects Universalist ethics like honesty, integrity and

responsible conduct which are accepted and recognized by business with diverse

culture.

The code of conduct are made available on Ingersoll Rand Global corporate website in

many international languages like Arabic, Chinese , Czech, Dutch , English , French,

German, Hungarian, Indonesian , Italian, Japanese, Korean, Malay, Polish, Portuguese,

Russian, Spanish, Thai, Turkish.

Code of Conduct Approach:

Ingersoll Rand India approach towards formulating the code of conduct:

Established an Ethics and Governance Policy for the company, through discussions with the senior management team; benchmarking it with the policies of best-practice companies. Writing it out in a plain, easy to understand language.

Publishing the Policy, along with a Code of Conduct for the employees. Illustrating the code with typical examples of what the employee should do, when faced with day-to-day ethical dilemmas. In other words, demystify corporate jargon, and make the policy user-friendly.

CODE OF ETHICS: Ingersoll Rand India

Communicating the policy widely and repeatedly. Starting with all meetings with a slide on it; holding refresher training programmes; get all employees to sign; and make it part of the new employee orientation.

Encouraging dialogue and challenging, in order to improve understanding and "ownership" of the policy at an individual level.

Coming down hard on the cynics.

Seting the example from the top; practice the policy consistently and visibly. This is critical, the ultimate fate of the policy depends on this.

Circulating the policy amongst customers and suppliers. To make it easier for the employees to follow the policy.

Establishing an Ethics Hotline which is secure, confidential and available to all employees. Someone senior should handle this hotline, with direct reporting to the CEO; alternatively, it could be the CEO's office itself.

Taking swift and fair action on reported violations, after due verification.

Reviewing the policy at regular intervals, to make sure it stays current with changing regulatory and market requirements.

Scope of the Code of conduct:

The code of ethics made by Ingersoll Rand Global is

applicable to all employees i.e officers, employees and

directors are collectively referred as employees but Ingersoll

Rand India has specially laid down a set of code of conducts

for its senior management structure, executive directors in

which officers and directors are referred to together as

employees and to all non-executive directors on the Board of

Directors of IR India.

The codes of conduct are broadly divided into eight main

heading.

1. Responsibility to each other:

This sections talks about individual commitments i.e. each employee is expected

to read and abide by the rules laid down by the company to maintain the highest

order of ethical standard additionally managers and supervisors are excepted to

CODE OF ETHICS: Ingersoll Rand India

perform additional duties of creating, monitoring, demonstrating a commitment

towards the code of conduct to set ample example to the other employees,

penalties for violations: Ingersoll rand has clearly laid down the circumstance of

violation of code of conduct under which an employee may be terminated on

account of misconduct, employee relations, environment: Since Ingersoll Rand is

a global company with diverse background, employees are expected to create an

environment in which ideas can be expressed freely with mutual respect, health

and safety: this section expects its employees operate business in an

environmentally conscious manner and also to abide by the EHS rules of the

company for their own safety and last but not the least substance abuse: It talks

about putting a stop towards using or selling of illegal intoxicating products in the

companies premises.

2. Responsibility to Ingersoll Rand:

Under this code employee should adhere to the following, Conflict of interest: All

employees are expected to conduct their activities with the best companies in

mind. Interest, relationship with customers, vendors and suppliers: , using

Ingersoll Rand name, assets, facilities and relationships: it requires efficient and

proper use of the company’s assets and resources, Duty to disclose and disclose

procedure: It is employees duty to disclose promptly and completely any

circumstance that might trigger a conflict or interest , Gifts, Entertainment and

favors: This section offers a set of complex and every situation evaluated under

which an employee must be careful not to create a situation which suggest

conflict of interest, Confidential information: This code suggest that employee

should take care and safeguard information from improper public disclosure,

Communication: Employees are prohibited from making any false or misleading

entries into the company’s books and records, Respecting companies resources:

Each employee is responsible to safeguarding company’s assets and to be

careful enough not to diminish their values or harm them and Copyrights,

intellectual property and software: Employees must respect Copyrights,

intellectual property laws and take careful observation of the terms and

conditions of any software license agreements to which company is a part etc

3. Responsibility to market:

Inside information and investment in securities: Because Ingersoll Rand shares

are publically traded, employees and their families are prohibited from trading or

recommending the trading of IR shares, options or warrants when employee

possess “material inside information” about the company, communications with

the press, investors and the public: This law compels employees for fair public

disclosure of information, competition laws: Fair competition is fundamental and

there shall be penalties for violation for both companies and individual, The other

codes under these sections are Marketing and related activities, Product and

CODE OF ETHICS: Ingersoll Rand India

service quality, customer service, Competitive Intelligence, International

business, Anti corruption and bribery, Global trade compliance, Anti Boycott

laws, Money laundering and exchange and Government Business

4. Information privacy and Data security:

Customers expect that the company safeguards the business and personal

information shared with them, thus at most care is needed not to dislose any

private information other than those with a legitimate business need to know and

have permission to do so.

5. Political activities and contributions:

Under this section of codes IR has the following codes Corporate political

activities: Under this section employees may not make any direct or indirect

political contribution on behalf of IR, Personal political activity: IR encourages it

employees in political activities in support of candidates or parties of their choice,

Lobbying: Lobbying activities require disclosure and permission of sector counsel

or the Government and public affairs office to determine the rules applied.

6. Legal Proceedings:

This section of code requires employees to notify of any investigation or legal

proceedings in which the company might get involved.

7. Violations by others:

Company shall not engage in business activities with a third party with which the

company has business activities that violates their standard of business conduct.

8. Waiver of the code of conduct:

The company will waive application of the policies set forth in this code only

where circumstances clearly warrant granting waivers.

International policies governing Ingersoll Rand code of conduct:

Global Human Rights Policy:

Ingersoll Rand believes in a fundamental standard that support their commitments to their employee, business partners, customers and communities. They have therefore adopted Global Human Rights Policy. Although this policy aligns with basic working condition and human rights concepts, it serves as a fundamental value set forth to serve as a global minimum business standards.

This policy has the following codes:

Non Discrimination and Harassment Ingersoll Rand has equal employment opportunity policy and they do not discriminate based on race, sex, color, nation origin, creed, religion, pregnancy, age, disability,

CODE OF ETHICS: Ingersoll Rand India

military/veteran status, sexual orientation, genetic information, marital status or any legally protected status. Freedom of Association, Work Environment and Compensation Ingersoll Rand respects their employee’s right to individually decide to join or to refrain from joining any lawful organization. The company is committed to complying with laws pertaining to freedom of association, consultation and collective bargaining and to promote a work environment that fosters communication, productivity and employee engagement. IR also provided compensation and benefits that are fair and equitable for the type of work performed. Protecting Employee Privacy Ingersoll Rand is committed to provide privacy protection to its employee data base maintained by the company, they have safeguards in place to ensure the personal data is protected from unauthorized access and disclosure. Prohibiting Forced Labor and Child Labor Ingersoll Rand, employment relationship is voluntary and the company prohibits employment of forced or child labor. Promoting Safety, Health and Environment Ingersoll Rand is committed to providing employees with a safe and healthy work environment. Expectations for our Suppliers Ingersoll Rand relationship with their business partners is defined by contracts which are based on lawful and ethical practices. Doing Business Globally As a global company Ingersoll Rand’s business transitions cross many borders and they are committed to engaging in reasonable due diligence and screening od customers and distribution to ensure compliance with laws and regulate international trade. Promoting Enforcement of the Policy Ingersoll Rand believes that the ability to enforce a policy is very critical and they shall inform employees of these policies and encourage them to believe in this policy.

Whistle Blower Policy

The company has adopted a whistle blower policy as a mechanism for employees to report to the management any concerns about unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct. This policy also affirms that all employees can report their concerns to the audit committee.

Ingersoll Rand has a 24/7 ethics helpline for employees who wish to seek guidance or to report concerns or discussing the issue with a manager, supervisor, HR

CODE OF ETHICS: Ingersoll Rand India

representative or a member of the ethics and compliance group. Employees have an option to telephone; email a confidential report, this helpline is also extended to other third party employees engaged in a business activity with Ingersoll Rand.

Ingersoll Rand has a set of separate ethics helpline numbers for countries in which they do business like Brazil, China, Czech Republic, France, Germany, India, Ireland, Italy, Mexico, Russia, Spain, Turkey, United Kingdom, United States.

National policies governing Ingersoll Rand Code of Conduct

SEBI: Companies Act, Code of Conduct (hereinafter referred to as "the Code") has been framed and adopted by Ingersoll Rand (hereinafter referred to as "the Company") in compliance with the provisions of Clause 49 of the Listing Agreements entered into by the Company with the Stock Exchanges.

SEBI: Prohibition of Insider Trading Regulation 1992, as amended, the company has adopted a code of conduct for prevention of insider trading with effect from August 1, 2002. This code of conduct is applicable to all directors and such employees of the company who are expected to have access to company’s unpublished price sensitive information.

SEBI: Disclosure practices for prevention of insider trading, as required by SEBI regulations, the company has adopted a policy for corporate disclosure practices for prevention of Insider trading with effect from August 1, 2002, This policy is applicable to all directors and employees of the company.

Secretarial Audit: As stipulated by SEBI regulations, the company secretary carries out the secretarial audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSl) and the total issued and listed capital. This audit is carried out every quarter and the report is submitted to the stock exchanges as well as placed before the Board of Directors. The audit confirms that the total listed and paid up capital is in agreement with the aggregate of the total number of shares in dematerialized form and total number of shares in physical form.

Recommendations:

Ingersoll Rand has a very clearly and exhaustively defined code of conduct. Based on the secondary data and personal interview taken from IR India representatives, the following recommendations can be made to Ingersoll Rand India.

CODE OF ETHICS: Ingersoll Rand India

Ingersoll Rand India has its branches in Mumbai, Kolkata, Delhi, Bangalore, Sahibabad, Chennai and Ahmadabad but the code of conduct listed on the website is in English and not in the national language Hindi or any other local language. Also on the corporate website the code of conduct is available in different languages but not in an Indian language. Since IR has its operations is India since 1921, it’s important that the code of conduct should be listed in Indian national language for all the stakeholders to believe and value.

CODE OF ETHICS: Ingersoll Rand India

Annexure 1

Q1. Global human rights policy has aided Ingersoll Rand to formulate its code of

conduct, are there any more international policies adopted by Ingersoll Rand?

Q2. Ingersoll Rand has a common Corporate Compliance Policy globally. The values,

ethics, models of governance and laws vary from country to country. How difficult is it to

implement the code of conduct in a dynamic environment? What are the specific

challenges you face in India?

Q3. Ingersoll Rand has a Helpline to address employee grievance regarding the code of

conduct. Is the Helpline also open to other stakeholders of the company?

Or

Does Ingersoll Rand have a consumer grievance cell to address issues related to code

of conduct of the

company?

Q4. How does the feedback mechanism employeed to monitor and address complaints

from stakeholder on issues related to Code of conduct work?

Q5. Does Ingersoll Rand India promote freedom of association for its employees?

Q6. The Code of Conduct establishes a frame work for senior level member of Ingersoll

Rand India. How does Ingersoll Rand India ensure that the knowledge of code of

conduct is passed down to the lower level members of the company?

Q7. Why isn’t the code of conduct posted in our native language on the website of

Ingersoll Rand India?

Q8. How does Ingersoll Rand Code of conduct address the needs/benefits all the

stakeholders of the company?

Q9. What are the internal control mechanisms employed by the company to avoid

leakage of confidential information?

CODE OF ETHICS: Ingersoll Rand India

Reference:

Ingersoll Rand India, 2009, Corporate information [Online] Available

at: http://www.ingersollrand-india.com/About-Us-001.asp [Accessed 18 Oct 2010].

Ingersoll Rand, 2010, Our Code of Conduct: A guide to legal and ethical standards for

all employees

Ingersoll Rand, 2010, Ingersoll Rand Global Human Rights Policy [Online] Available

at: http://company.ingersollrand.com/aboutus/corpgov/Documents/Ingersoll%20Rand%

20Global%20Human%20Rights%20Policy.pdf [Accessed 21Oct 2010].

Ingersoll Rand- India, 2010, 88th Annual Report

Raghavan, Anchal, 2006, Ethics and Governance — Next global frontier for India Inc

[Online] Available

at: http://www.thehindubusinessline.com/2006/07/15/stories/2006071501151200.htm

[Accessed 18 Oct 2010].