Ethics and Conduct
Conducting our Business Ethically
Maintaining the highest ethical standards is critically important at Hormel Foods. From employees working in our plants to members of the Board of Directors, we see it as our responsibility to apply the highest ethics to all decisions and actions.
Code of Ethical Business Conduct
At Hormel Foods, we require our employees to be trained on our company’s policies and procedures. Our Code of Ethical Business Conduct serves as a guide for our employees, officers and directors in making business decisions. The code covers many of the topics discussed in this report, including fair employment practices, harassment, safety, diversity, environmental responsibility and product integrity. Additionally, our code of conduct outlines our policies on conflicts of interest, gifts, illegal payments, illegal political contributions and disciplinary action.
At Hormel Foods, all of our policies follow local and national laws in the United States and elsewhere.
One-hundred percent of our board members, subsidiaries, joint ventures and company locations are covered under our code of conduct, which includes attesting to compliance with the Foreign Corrupt Practices Act. When considering a company for merger or acquisition, we conduct due diligence and examine the suppliers of the prospective party, to ensure it does not violate this code.
To ensure adherence to our code of conduct, we established a compliance program that upholds accountability through reporting, tracking and investigations of possible violations of the code.
The Audit Committee of the Board of Directors oversees the program, which includes a cross-functional Compliance Committee, training of new employees and a hotline for employees to report incidents.
The Compliance Committee includes members from the company’s Executive Management Committee and employees from human resources, legal and other departments. Regularly, this committee receives updates on potential violations of the code of conduct. When a violation is reported, the committee promptly initiates any investigation deemed appropriate by them. If it appears that a violation of law has occurred, the committee refers the investigation to the general counsel and promptly provides a written report to management outlining the information received and the investigative action being taken. At the conclusion of the investigation, a final report is provided to management. If serious violations are noted, the committee prepares a report to share with the Audit Committee and explains the actions taken. Depending on the violation, disciplinary actions are taken, and the company takes steps to respond appropriately to the violation to prevent similar violations, including modifying the compliance program as necessary.
More information about our board structure can be found in the 2010 Proxy.
Communicating Our Way
To ensure our employees understand the value system at Hormel Foods, we communicate Our Way in our employees’ native languages. In the United States, for example, we provide this information in Spanish, as well as English.
If our employees observe anything that does not comply with our code and the values outlined in Our Way, we provide a hotline number to facilitate anonymous employee feedback and address concerns –
1-800-750-4972. This hotline can be used to report a range of issues, including corruption or discrimination. To ensure accountability, this hotline is operated by an independent third-party organization.
Performance-Based Executive Compensation
As part of our principle of maintaining financial sustainability, Hormel Foods has a compensation committee within our Board of Directors that consists exclusively of nonemployee, independent directors. The committee establishes and administers the compensation and benefit programs, and upholds two primary goals:
- Attract and retain highly qualified executive officers; and
- Incent the behavior of executive officers to create stockholder value.
To accomplish these goals, we also benchmark compensation compared to industry peers. The incentive-based system factors in individual performance, competitive market data and overall performance of the company. Incentive compensation is also comprised of both short-term and long-term incentives to help assure the company’s success into the future. More information about compensation can be found in the 2010 Proxy.