Texas Instruments

Corporate governance

Overview

Leadership | Ethics and compliance | Results | Looking ahead

TI’s governance structure is designed to facilitate company decision-making and accountability, and its leaders are responsible for supporting and driving ethical business practices globally.

In 2013, our leaders addressed new regulatory requirements, expanded our board of directors, reinforced our values, and trained employees and suppliers on the Electronic Industry Citizenship Coalition’s (EICC) Code of Conduct, to which we now subscribe.

Leadership

The Governance and Stockholder Relations Committee within TI’s board of directors maintained its diligence in monitoring stakeholder sentiment in 2013. Committee members reviewed presentations on our governance practices, stockholder activity, key citizenship investments and outcomes, and TI’s political action committee expenditures.

We also welcomed two new members to our board of directors: Mark A. Blinn, president and chief executive officer of Flowserve Corp.; and Ronald Kirk, U.S. trade representative under President Barack Obama.

Ethics and compliance

TI began using the EICC Code of Conduct as a source of guidance in 2012, and will continue to align and adopt best practices and processes within the electronics industry. We also encourage our first-tier suppliers to do the same.

The EICC code was designed to ensure worker safety and fairness, environmental responsibility, and business efficiency – both within a company and across its supply chain. To evaluate how closely our own factories’ policies and protocols adhere to the code, we had all sites complete a self-assessment questionnaire designed by EICC members. These evaluations found some opportunities for improvement, but no significant compliance gaps.

We also trained TI managers and employees in Malaysia and Taiwan on the EICC code to increase their awareness and understanding of ethical behavior expectations, human rights protection and local labor laws. The EICC and TI auditors then audited these sites and helped them identify and correct issues. Improvements were quickly apparent in workplace safety, cafeteria cleanliness, sanitation and oversight of third-party waste vendors.

To help employees maintain compliance with both internal and external guidelines and laws, we continued providing extensive training globally. We offered specialized courses in:

  • The EICC Code of Conduct.
  • TI’s Code of Business Conduct.
  • TI’s Supplier Code of Conduct.
  • Environmental, safety and health.
  • Antitrust.
  • Fraud awareness.
  • Confidential information protection.
  • The Foreign Corrupt Practices Act.
  • Anticorruption compliance.
  • International trade compliance.
  • Preventing workplace harassment.

Results

In 2013, TI:

  • Experienced no material incidents and received no material fines on any legal matter, including matters relating to environmental, labor, human rights, bribery and corruption laws.
  • Trained more than 32,000 employees on TI’s Ethics and Compliance Awareness Program and Code of Business Conduct. We also trained more than 31,500 employees on preventing workplace harassment and confidential information protection.
  • Responded to 355 inquiries received through the Ethics Office and accounting audit hotline. Many did not relate specifically to ethics issues, but were instead questions related to (for example) employment or customer support. Inquiries that were ethics-related were resolved by the Ethics Office or forwarded to the appropriate operation for handling. None of the inquiries or contacts presented an accounting issue or appeared to pose a material financial risk.

TI continued to be recognized as a leader in responsible and ethical business practices by:

  • Corporate Responsibility Magazine, which named TI one of the “100 Best Corporate Citizens” for the 11th year.
  • Ethisphere Institute, which named TI one of its “World’s Most Ethical Companies” for the eighth consecutive year.
  • Fortune Magazine, which recognized TI among its “World’s Most Admired Companies” (No. 2 in semiconductors) for the 10th consecutive year.
  • New York Stock Exchange Euronext Vigeo, for being among the 50 most advanced U.S. companies for corporate responsibility.
  • Thomson Reuters, which included TI as a member component on its Corporate Responsibility Indices.

Looking ahead

In 2014, we intend to:

  • Change how we identify and audit high-risk suppliers to align with EICC protocols.
  • Build employee and management understanding of EICC evaluation tools and methods before conducting third-party validated audits at two TI sites.
  • Continue training:
    • Manufacturing, customer-facing and procurement employees on the EICC code, and vendors on the TI Supplier Code of Conduct.
    • All employees worldwide on ethical decision-making.
    • Salaried employees on export compliance.
    • U.S. employees on environmental, safety and health.
    • All supervisors of California-based employees on preventing sexual harassment.
    • Appropriate employees on the Foreign Corrupt Practices Act and how to protect personal information.
  • Update our Code of Business Conduct, which will be rolled out in early 2015 in e-book format to help educate internal and external stakeholders.

We foster a culture of ethical business practices and legal compliance.