Company SummaryCorporate Social Responsibility
Introduction
nCipher is committed to conducting business in an ethical and socially responsible manner. This relates to all aspects of our business: while we are accountable to our shareholders, we take into account the interests of all our stakeholders including our employees, our customers, our suppliers as well as the local community, and the environment in which we operate.
This corporate social responsibility statement sets out to describe the general principles under which nCipher operate, as well as pointing out where these are governed by laws or regulations. It also includes some examples of ways in which the Company is implementing these principles and how they have a practical affect on the Company's actions.
This statement is used by the Company's Corporate Social Responsibility Committee to measure progress towards the goals it sets. It is reviewed regularly to enable targets to be set and to put in place any necessary changes.
Corporate Governance and risk management
nCipher is committed to high standards of corporate governance. Details on the Board of Directors and our Corporate Governance statement are set out on pages 8 and 9 respectively.
Board of Directors
Our Board of Directors is responsible for the proper management of the Group. The non-executive Directors are independent of management.
Board sub-committees deal with the following:
- Audit: accounting, financial reporting and internal controls.
- Corporate social responsibility: environment, employment practices, health and safety, equal opportunities and diversity, community and social investment, ethical trading and human rights, and other aspects of ethical business practice.
- Nominations: nomination of new Directors and officers, continuing education and succession planning.
- Compensation: annual salaries, incentive arrangements, option grants, service agreements and other employment conditions for the executive Directors.
Financial reporting
All books and records are kept in accordance with applicable laws and according to proper accounting standards, fully reflecting all receipts and expenditures. This is in order to make sure the financial information we use within the business or for external publication is accurate and reliable.
We report half yearly in accordance with the requirements of the London Stock Exchange on which the Company is listed and accounts are presented in accordance with IFRS.
Corporate social responsibility
The Corporate Social Responsibility Committee reports to the Board on corporate social responsibility issues, including environment, employment practices, health and safety, equal opportunities and diversity, community and social investment, ethical trading and human rights, and other aspects of ethical business practice.
This committee, which includes Board members and members of the executive management team and employees, is responsible for setting out the standards which the Company aims to achieve, and for measuring progress towards goals stated in this document.
Legal compliance
We are committed to strict compliance with the laws and regulations which apply to our business activities around the world.
Risk management
The Company has a risk officer who is responsible for assessing risks and implementing risk-related policies. The risk officer is a member of the Corporate Social Responsibility Committee.
The Board is ultimately responsible for nCipher's system of internal control and for reviewing its effectiveness. The system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material mis-statement or loss.
Risk management procedures in place come under the following headings:
- Control environment: The Board is committed to the highest standards of business conduct and seeks to maintain these standards across all of its operations throughout the world.
- Risk identification: The Board is committed to the ongoing identification and assessment of the risks associated with a variety of internal and external sources including control breakdowns, disruption in information systems, competition, natural catastrophe and regulatory requirements.
- Information and communication: The Board undertakes periodic strategic reviews, which include consideration of long-term financial projections and the evaluation of business alternatives.
- Control procedures: The Company has control procedures designed to ensure complete and accurate accounting for financial transactions and to limit the potential exposure to loss of assets or fraud.
- Monitoring and corrective action: The Company has clear and consistent procedures in place for monitoring the system of internal controls.
Becoming a preferred employer
nCipher's employees are the Company's most important asset, and are responsible for generating the intellectual property which forms the raw materials of our products. As such, the Company is committed to becoming a preferred employer and providing a work environment in which employees can both feel valued and produce their best work.
The culture at nCipher encourages an open environment. We expect honesty, openness and courtesy from all employees in their business dealings. This means everyone must act in an ethical way and respect the dignity and human rights of other colleagues and the people we do business with.
Employees have clear employment contracts which set out terms of their employment, disciplinary and grievance processes, appraisal procedures and details of leave including annual, parenting and other leave.
We will not employ forced labour or children. Children may visit the Company only under circumstances that protect them and their rights to education and social development (for example, on educational work experience or work placements arranged via their place of education).
Valuing our employees
We depend on the skills and commitment of our people. Employees at every level are encouraged to make their fullest possible contribution to nCipher's success. We aim to manage people openly, honestly and fairly.
To attract and retain the best employees and support the Group's objectives nCipher is committed to paying competitive rates of pay for its employees. All employees are offered benefits competitive to the market place in their geographical region, which may include pensions, private healthcare, life cover, share option schemes and parental leave.
Equal opportunities
nCipher's selection, training, development and promotion policies encourage equal opportunities for all employees regardless of gender, sexual orientation, marital status, race, age, colour, ethnic origin or disability. All decisions are based on merit. Employees are encouraged to become involved in the financial performance of the Group through an employee share option scheme.
Maternity and paternity leave are provided at, or in excess of, the statutory minimum and we recognize the parental and family responsibilities of our employees, and the contribution that their families make to their work.
We expect our employees to work only reasonable hours.
Training and development
We recognise that our employees are our most important asset. We provide opportunities for all employees to develop their talents to the full, aiming to make nCipher an enjoyable and satisfactory place to work.
nCipher is committed to the education and development of its employees. We aim to create a culture of lifelong learning, driven by a training and development programme to help our people achieve their potential. nCipher has a policy of recruiting and retaining the best people to help the business grow for the future.
Pensions policy
We seek to give our employees the certainty and security for their retirement that they deserve, while trying to protect the Group and its shareholders from open-ended liabilities.
We recognise that pension investments are an area of concern for our employees. Where a pension is part of the employee's package, we have chosen a pension provider with a wide choice of pension funds for the Company pension scheme. This includes an ethical investment fund which itself has clear, stated policies on the types of company in which it will invest, enabling employees to invest their pension money according to clearly defined principles.
Workplace health, safety and welfare
A safe place of work goes beyond legal requirements: it is about providing a safe working environment for our employees. Good health and safety is good business.
The commitment to health and safety comes from the Board through our Health and Safety Policy, and they review the performance of the business on a regular basis. Achieving our goals depends upon all our people working together. Managing health and safety successfully demands investment in our people through training, support and setting standards.
Appropriate use of Company resources
We expect employees to use our resources in a responsible and ethical manner. While incidental or occasional personal use may be allowed with prior approval from a manager, misuse is an ethical violation. For example, we support and encourage the use of e-mail and Internet services for conducting company business, but have an Internet Usage policy which provides guidelines for acceptable use.
Inventions and intellectual property
Employees must disclose any inventions conceived while in our employment. These may arise from normal duties or from employment by us. Subject to applicable law, we will be entitled free of charge to the sole ownership and exclusive use of them.
nCipher encourages employees to be creative and therefore awards cash payments in respect of each patentable invention they create, irrespective of the number of patents which are applied for and/or granted in respect of that invention.
Confidentiality
We expect employees to keep all Company and Group information confidential. This might include plans to buy or sell businesses, product designs, manufacturing processes, advertising, marketing plans, research and development, suppliers, customers, financial information, personnel and employment matters, and other information which is not generally known to the public.
We will make sure that employees are aware of their obligations and also expect them to take steps to prevent unintentional disclosure. Breaches of confidentiality will be dealt with under the disciplinary policy which forms a part of all employees' contracts.
These obligations apply to all employees, including those who leave the Company.
Inside information
Confidential business information must not be shared with others outside nCipher or used for the personal gain of oneself or others. Employees, their family and close acquaintances should not buy or sell Company shares if they have material information that has not been made public and could affect our share price.
Conflicts of interest
Employees must not have outside commercial interests that conflict with the best interests of the Group. We expect all employees to act only for the benefit of the Group and not be influenced by a personal interest that may result from other individual or business interests (for example, shares in business partners, personal or family involvement in trading contracts with us, and so on).
Product integrity
We are committed to providing our customers with high-quality, safe products. We will not make unsubstantiated claims in our marketing materials. Wherever possible, we will ensure that our products are tested against authoritative standards prevalent in our industry.
Our development team and production and manufacturing teams are responsible for ensuring that our products meet relevant safety and electrical standards, both in the initial design phase and during production of the finished product.
Product built by our manufacturing subcontractors is tested in-house before it is shipped to customers. Our choice of subcontractors is based in part on their provision of well-documented quality and safety procedures.
Community and environment
We endeavour to protect and preserve the environment in which we operate. The greatest environmental impact of our business is likely to be during manufacturing. We aim to ensure that all our manufacturing subcontractors have a responsible attitude to the environment, minimize the harm caused by manufacturing our products, and have clear policies in place setting standards for the work they do, including the handling and disposal of dangerous materials.
Our primary manufacturing subcontractor has an environmental policy which endeavours to ensure its business activities meet legal requirements, national and industry guidelines and local environmental requirements and they are committed to continual improvement in the prevention of pollution. They hold the following approvals: ISO 9001:2000, BASEEFA, BABT 340 and UL listing.
We aim to make the communities in which we work better places to live and do business, being sensitive to the local communities' social and economic needs. In recognition of the importance of our role in the communities where we operate, we are committed to supporting community-based projects that bring practical benefit to local communities. nCipher and its employees regularly take part in charitable events in the regions local to nCipher offices. nCipher is also registered with Give As You Earn to enable employees to make regular, tax-effective donations to charitable or voluntary organisations.
We continually look at ways in which our actions can benefit the community. For example, the water provided for employees in our Cambridge office is supplied by AquAid. For every bottle of water delivered a donation is made to The AquAid Lifeline Fund which brings relief to drought-stricken areas and supports orphaned and abandoned children in Central Africa.
Transportation
Many nCipher offices are in congested urban areas. We aim to locate our offices in locations with good public transport links and employees are encouraged to use public transport wherever practical. For example, our Cambridge office is close to the railway station enabling many employees to travel to work by train.
We also support employees who cycle to work in Cambridge. We have provided facilities for cyclists including a shower and cycle tools and spares. We have encouraged our landlords to provide additional secure cycle parking facilities.
Recycling
We aim to minimise our impact on the environment by recycling office waste where practical. Current recycling programmes include office waste paper, printer cartridges and aluminium drinks cans.
WEEE (Waste from Electrical and Electronic Equipment)
The European Union (EU) Directive on WEEE (Waste from Electrical and Electronic Equipment) is intended to protect the quality of the environment and human health through the prudent use of natural resources and the adoption of waste management strategies that focus on recycling and reuse.
Following the WEEE directive nCipher, along with almost all electrical equipment producers, is responsible for their products at the end of their useful lives. All nCipher products are labelled with a crossed out wheelie bin logo as detailed in the directive, indicating it is to be suitably recycled. When the product has reached the end of its useful life customers are requested to contact nCipher to arrange for collection and WEEE compliant recycling of the unit.
nCipher has always recycled its redundant or discarded hardware security modules, by sending them to an ISO 14001 accredited recycling company which disposes of waste electronics in an environmentally acceptable manner. This is now being extended to comply with the WEEE directive.
External stakeholders: Customers
We seek to be honest and fair in our relationships with our customers, providing standards of service which have been agreed. The nature of our products means that we tend to have long-standing relationships with customers where we provide support and product enhancements under agreed contracts which specify levels of service.
All sales are carried out under standard terms and conditions which are communicated clearly to customers as part of their contract with us.
Data on customers is held in strict accordance with data protection policy and our data protection registration.
Competition
We are committed to free and open competition. We will compete vigorously but honestly, while complying with all competition and anti-trust laws wherever we carry out business.
External stakeholders: Suppliers and Subcontractors
We seek to be fair and honest in our relationships with suppliers and subcontractors and make payments in accordance with agreed terms.
We have a strict business conduct policy not to offer, pay or accept bribes or substantial favours. Any employee found to operate outside this policy will be subject to disciplinary proceedings.
We will carry out our business honestly, ethically and with respect for the rights and interests of the people with whom we do business. We expect relations with joint-venture partners, licensees, suppliers and trade customers to be mutually beneficial and will encourage our principles and standards to be upheld while the relationship continues.
The welfare and safety of the employees of our suppliers is important. We expect all nCipher suppliers to extend fair and honest dealings to their employees and to all with whom they do business.
It is our aim to act responsibly in our commercial and trading activities. We cannot claim to have all the answers to complex ethical or social issues. We aim to be good citizens, acting responsibly where ever we operate, and we will endeavour to meet our customers' expectations.
External suppliers: Shareholders and other suppliers of Finance
We will provide shareholders with financial reports that are accurate and timely, communicating our goals, significant risks and prospects honestly, to actual and potential shareholders.
We will use financial resources entrusted to us in ways that have been agreed with the providers.
Reporting
nCipher is committed to public reporting and will continue to provide accurate and timely reports and information. We report on a half-yearly basis and ensure that information is provided to the market in a timely fashion. We are committed to openness in all forms of reporting. The published reports and information we supply to regulatory agencies or other government organisations must be complete and not misleading.
We recognise the value of our website as an information resource and aim to ensure that it provides complete and up-to date information for stakeholders.
Our investor relations section of our website is specifically designed to give information to investors. Investors may register to receive corporate news by email which is delivered promptly when announcements are made.
Communications
We communicate openly, directly and accurately with the public. We will not give special treatment to any individual or institution. Material information about our performance and prospects is communicated to the entire financial community at the same time.
Matters relating to the Group must not be discussed with representatives of the media unless specifically authorised as part of an employee's role.
Corporate and shareholder communications
Our Group corporate communications department must co-ordinate any announcements, statements, or responses to questions from the media, which relate to price or commercially sensitive information.
Advertising and promotions
All advertising, promotions and other public communications will be conducted in line with the principles of honesty, integrity and openness. This will ensure that we communicate in an accurate and truthful way.
Management commitment
nCipher's management will do everything in its power to conform to the letter and spirit of this statement. Responsibility for this rests with the Company's Corporate Social Responsibility Committee which includes senior members of staff and reports to the Board.
Ensuring compliance
This statement sets out the general principles that govern our business conduct.
While we have businesses around the world which operate in line with local cultural and legal standards, this document sets out the minimum standards which should apply everywhere that we do business and all our businesses must meet.
The Group's human resources, together with local business units, will be responsible for making sure that:
This statement is provided to all managers, and other employees as appropriate, in the business and communicated in line with the Group's employee communications plan.
- Induction processes make sure new employees and newly-acquired businesses are made aware of, and keep to, the principles contained in this statement.
- Any local codes or similar statements are in line with these principles.
- At reasonable intervals, managers confirm to the Corporate Social Responsibility Committee that they and those under their direction are complying with this statement.
- In the event of any breaches, appropriate action is taken, such as reporting the incident to a local or Group representative.
April 2007