Operational Excellence

GE is committed to maintaining a culture of integrity, transparency, ethics and compliance. Operational excellence means managing social and environmental performance, applying the same performance culture, innovation and talent to these goals as we do to any other business goals.

GE has been working on a company-wide initiative known as Regulatory Excellence since 2007. The initiative emphasizes the responsibility of leaders in every business to ensure regulatory compliance, and it has established a common process for managing regulatory risk areas across the Company.

The GE Board of Directors oversees the implementation of policies in relation to employees, customers, investors and other stakeholders. GE invests in its employees, spending more than $1 billion on training each year. Our non-negotiable expectation of employee integrity is articulated in our policy, The Spirit & The Letter, which requires compliance with law and policy relating to vital issues, such as financial integrity and avoiding conflicts of interest. Available in 31 languages, these integrity policies are provided to all of our employees, holding each person accountable for compliance.

Our strong compliance culture reinforces these efforts by requiring employees to raise any compliance concerns and by prohibiting retribution for doing so. To facilitate open and candid communication, we have about 700 designated ombudspersons throughout the Company who act as independent resources for reporting integrity or compliance concerns. We hold our consultants, agents and independent contractors to the same integrity standards.

Global Risk Management and Business Processes

A disciplined approach to risk is important in a diversified organization in order to ensure that we are executing according to our strategic objectives and that we only accept risk for which we are adequately compensated. We evaluate risk at the individual transaction level and evaluate aggregate risk at the customer, industry, geographic and collateral-type levels, where appropriate.

In addition, our global risk management systems were further strengthened in August 2009 with the appointment of the GE Chief Risk Officer (CRO), Mark Krakowiak. The CRO develops and implements an enterprise risk management approach for GE to ensure that risk objectives are aligned with our overall company strategy. They work closely with the businesses to aggregate, monitor and mitigate risk through improved controls, policies and procedures, integrating these controls with existing governance and management processes.

The Company continues to work on productivity through process control, Six Sigma, Lean Manufacturing and the development and implementation of new technologies.

To read more about our global risk management framework and business processes, visit:  www.gecitizenship.com/our-commitment-areas/compliance-governance/global-risk-management

Responding to Engagement in Decision Making

At the corporate level, three key bodies are responsible for making decisions about citizenship and implementing learnings from the numerous stakeholder dialogues:

• The Public Responsibilities Committee of the GE Board of Directors is chaired by Director and former U.S. Senator Sam Nunn, and includes Jeff Immelt, Chairman and CEO; James I. Cash, Jr., director; Rochelle B. Lazarus, director; Ann M. Fudge, director; James J. Mulva, director; Susan Hockfield, director; and Roger S. Penske, director. This committee oversees GE’s positions on corporate social responsibilities and public issues of significance that affect investors and other key GE stakeholders. To learn more about the Public Responsibilities Committee, please visit www.ge.com/governance/committees.
• The Citizenship Executive Advisory Council (CEA) is comprised of five senior GE executives: Brackett Denniston, senior vice president and general counsel; Bob Corcoran, vice president of corporate citizenship; Gary Sheffer, vice president communications & public affairs; Ann Klee, vice president of environmental programs; and Mark Vachon, vice president of ecomagination. This group reviews stakeholder feedback and issues important to the Company’s citizenship efforts, helping ensure that the appropriate actions and resources are in place.
• The Corporate Executive Council (CEC) brings together 40 of GE’s top leaders, including business CEOs, to share progress on the Company’s strategy and performance, and to discuss best practices.
• Citizenship issues are linked into GE’s broader strategic planning through both hardwired and softwired connections. Societal issues are hardwired to strategy as part of our “Growth Playbook,” the business environment we consider in developing business strategy. Environmental, social and regulatory issues are incorporated into a number of cyclical processes, including individual employee assessments, business compliance and environment reviews, and health and safety assessments.

To be successful, these inputs must be factored into and considered part of strategy, planning and execution. Citizenship reporting provides an end-of-year overview of our key strategic issues, our responses to them and our performance against stakeholder concerns.

How Engagement Links Learning & Decision Making