Cadena de valor de la materia prima

Does the company record and publicly disclose all political contributions?

Score:

2

Comments:

Based on public information, there is evidence that the company regulates political contributions. The company engages in a number of political processes, including providing corporate political contributions to two national gubernatorial associations, and supporting public policy issues in-line with the company's objectives. These processes are transparent and accountable. The Policy Committee of the Board provides oversight of government relations strategy and activities. Management of participation in the political process is the responsibility of the Corporate Vice President of Government Relations who reports directly to the CEO. The company publishes annual spending reports for its political action committee, corporate contributions and trade association memberships on its website. Direct political contributions to candidates or their political action committees are prohibited.

References:

Public:

Global Principles of Business Ethics for the Aerospace and Defense Industry, October 2009 (IFBEC):

“Companies will not offer, promise, or provide any undue pecuniary or other advantage (e.g. payments, gifts, hospitality, as well as political contributions or charitable donations), to public officials, political parties or political candidates, or to any private party, in order to obtain or retain business or gain any other improper advantage in the conduct of their business (hereafter "Improper Advantage"). Companies shall duly account for payments, gifts, hospitality, political contributions or charitable donations in their books and records in compliance with applicable regulations and in a manner which permits reasonable traceability.

http://www.northropgrumman.com/CorporateResponsibility/Ethics/Documents/internatio nal/europe/Global_Ethics_Principles.pdf

NORTHROP GRUMMAN 09/09/14

HTTP://WWW.NORTHROPGRUMMAN.COM/PAGES/DEFAULT.ASPX Northrop Grumman website, Investor Relations, Political Contributions:

‘Northrop Grumman Corporation… is engaged in the democratic process to support leaders and participate in the political environment at the federal and state level. All of the company's activities are in keeping with our principles of good governance and the highest standard of ethics. The company engages in the following activities: educates elected officials on key public policy issues related to its business, administers a political action committee that enables our employees to support candidates for office, provides limited direct corporate political contributions to national-level gubernatorial associations and is a member of several trade associations which support its business objectives. The company engages on public policy issues in support of the company's objectives, including in the areas of national defense and aerospace, STEM (science, technology, engineering and mathematics), tax and international trade policy. The company's policy with respect to independent expenditures that advocate the election or defeat of federal candidates is provided below.

Governance and Reporting

The Policy Committee of the Northrop Grumman Board of Directors provides oversight of the company's government relations strategy and the manner in which the company conducts its government relations activities, including the governance and compliance of the political action committee, the company's policies and practices with respect to political contributions, and the company's lobbying activities. The Policy Committee receives regular reports on government relations activities. Management of the company's participation in the political process is the responsibility of the Corporate Vice President of Government Relations and this position reports directly to the CEO. Northrop Grumman publishes annual spending reports for its political action committee, corporate contributions and trade association memberships on its corporate website.

Employee Political Action Committee

Employees of Northrop Grumman Corporation meeting certain FEC eligibility requirements can voluntarily join the company's political action committee, Employees of Northrop Grumman Political Action Committee ("ENGPAC" or "the PAC"). In addition to supporting the federal election campaigns of congressional candidates, ENGPAC supports national political organizations and leadership Political Action Committees. Participation in ENGPAC offers our employees the opportunity to pool their resources to support candidates for office who are supportive of national security. ENGPAC contributions are made on a bi- cameral and bipartisan basis. PAC membership is both voluntary and disclosed inside the corporation only to those involved in PAC administration.

ENGPAC’s federal contributions to candidates and political organizations (PDF)

There are two levels of governance for the company's political action committee. The Steering Committee, comprised of Corporate Vice Presidents, reviews ENGPAC activity and votes to make changes to ENGPAC policies and procedures. The Advisory Committee, comprised of representatives from each sector, meets every other month to provide

NORTHROP GRUMMAN 09/09/14

HTTP://WWW.NORTHROPGRUMMAN.COM/PAGES/DEFAULT.ASPX

corporation's Government Relations department. All PAC expenditures and contributions are made following an internal review process in our corporate Government Relations office. To ensure compliance with all applicable election laws and regulations, robust internal controls are in place and an external firm acts as a final review before any contribution is made using ENGPAC funds.

Direct Political Contributions

At the state and local level, the Company has concluded that as a matter of policy, it will not make any direct contributions to candidates or their political action committees. The Company makes contributions to national-level gubernatorial associations to help ensure that its perspective is represented on matters of state and local policy. In 2013, Northrop Grumman contributed to two organizations that are classified under the Internal Revenue Code as section 527 organizations, giving $20,000 to the National Governors Association and $25,000 to the Democratic Governors Association.

Policy Regarding Independent Expenditures that Advocate the Election or Defeat of Federal Candidates

The U.S. Supreme Court determined in 2010 that corporations may make unlimited expenditures for independent communications to the general public that expressly advocate the election or defeat of a clearly identified federal candidate.

Northrop Grumman has no plans to spend corporate funds directly on such communications.

Should a future situation warrant Northrop Grumman's participation in independent expenditures that expressly advocate the election or defeat of a clearly identified federal candidate, the decision would require approval of the Policy Committee of the Northrop Grumman Board of Directors; would have to be consistent with the interests of Northrop Grumman’s shareowners; and would have to conform to applicable laws.

Northrop Grumman would be transparent with its disclosure of these expenditures, as it is with other political expenditures. This includes making all legally required filings, including with the Federal Election Commission, as well as disclosing various expenditures on our external website. Such independent expenditures would receive the same scrutiny as all of Northrop Grumman's other corporate political expenditures, which includes an annual update with the Policy Committee of the Board of Directors.’

http://www.northropgrumman.com/InvestorRelations/PoliticalContributions/Pages/default .aspx

NORTHROP GRUMMAN 09/09/14

HTTP://WWW.NORTHROPGRUMMAN.COM/PAGES/DEFAULT.ASPX

A25:

Does the company have a clear policy on engagement in lobbying activities,