Ethics and Compliance Program

Alcoa’s reputation is underpinned by a strong ethics and compliance program to ensure all employees around the world understand and are committed to complying with all applicable laws, living our values, and adhering to our policies and procedures.

Elements of our ethics and compliance program include:

• Publishing the Guide to Business Conduct and other directional documents;
• Deploying global business conduct training and communications to all employees;
• Managing the global Ethics and Compliance Line;
• Administering the annual Business Conduct and Conflict of Interest Survey Certification, which focuses on certification of compliance with laws and company policy, including business conduct, insider trading, and anti-corruption compliance policies, and confirmation of no conflicts of interest;
• Managing investigations of fraud and other significant non-compliances;
• Monitoring effectiveness metrics and non-compliance risk assessments;
• Administering a records retention program; and
• Serving as a resource to business and resource units in addressing ethics and compliance matters.

Alcoa investigates any alleged violations of law or policy or other wrongdoing contrary to our values and takes prompt and appropriate action when substantiated.

Ethics and Compliance History

Alcoa’s ethics and compliance approach is grounded in a strong company value system that began with the founding of The Pittsburgh Reduction Company in 1888 in Pittsburgh (USA).

Following our quality initiative in the 1980s, we formalized a process to reinforce and train all employees on our values and supporting principles. Alcoa’s Preventive Law Program was initiated in the early 1990s in the sales, administration, finance, procurement, and other functions to ensure that the decision making of our leaders would be grounded on our values and ethics.

We initiated an annual process to survey business conduct that requires decision makers to certify compliance with Alcoa’s business conduct, anti-corruption, and insider trading policies. The survey also requires individuals to report potential and actual conflicts of interest so that appropriate management controls can be designed and implemented.

Ethics and Compliance Mission

Alcoa’s Compliance Department and the Compliance Advisory Council were formed in 2001.

Under the leadership of the chief legal and compliance officer and the direct supervision of the director of global compliance, the department oversees the ethics and compliance program. It consists of our Ethics, Compliance, and Advisory Services (ECAS) and Global Trade Compliance groups. Environmental Compliance reports to Alcoa’s chief sustainability officer, who is a member of our Environmental Compliance Review Committee with the director of global compliance and others.

Our Compliance Advisory Council—made up of the chief executive officer, chief financial officer, chief legal and compliance officer, and general counsel—continues to meet with the director of global compliance and others on a regular basis to provide strategic direction for the program.

The mission of the ECAS group is to provide tools and guidance so that all Alcoa employees understand and comply with the letter and spirit of the laws and regulations that govern our businesses, as well as Alcoa’s business conduct policies and guidelines.

We believe that ethics in decision making goes beyond clear-cut legal/illegal choices and becomes most critical when one is choosing among several options, all of which may be legally acceptable. Prudent businesses integrate compliance into a working code of conduct that goes beyond compliance with laws and regulations to also encompass the company’s values and principles.

Ethics, compliance, and appropriate business behavior are reinforced through training, communications, reporting mechanisms, and the handling of investigations. Our program goal is the effective prevention, detection, and remediation of conduct in conflict with the law or our policies or values.

Guide to Business Conduct

Alcoa’s Guide to Business Conduct was developed and updated several times since the 1990s to accommodate new policies and changes in laws. Our Executive Council adopted the guide to clarify expectations regarding employee interactions with business partners and the communities in which we operate, consistent with our values and applicable laws.  

Available on alcoa.com in 18 languages, the guide defines our commitment to protect those who report ethics and compliance concerns, to discipline those who refuse to follow Alcoa’s ethics and compliance standards, and to do what’s right. 

The standards detailed in the guide and summarized in the Key Points sections apply to members of Alcoa’s board of directors and all company employees.

Stakeholder-Specific Guides

Two guides that supplement sections to our Guide to Business Conduct address issues most likely to arise in certain stakeholder relationships.

The Guide to Business Conduct in a Manufacturing Environment, translated into 21 languages and available to all Alcoa businesses, discusses business conduct issues most relevant to the roles and responsibilities of manufacturing employees. Topics include health and safety, respect and fair treatment, non-retaliation, responsible use of company assets, human rights, harassment, and employee privacy.

The Alcoa Supplier Standards clearly outline our expectations concerning supplier conduct. We set high standards for conducting business ethically that are consistent with our values and in accordance with the law. We expect our suppliers to meet these standards as they provide goods and services to us. Topics addressed in the standards include anti-corruption, fair competition, use of competitor information, human rights, and a commitment to sustainability and protection of the environment.

Leader’s Guide

Alcoa’s managers are expected to create a work environment that encourages a “speak-up” culture. Supervisors create a culture of respect and honesty in which employees feel free to dissent or raise business conduct and other issues without fear of reprisal.

We distribute to our leaders a reference guide entitled “Be a Role Model! How to be a Leader in Ethics.” The guide reinforces specific actions that can be taken by supervisors globally to create a culture of respect.

“Be a Role Model!” training supports the guide and is available in multiple languages on our internal Global Compliance training portal. This presentation examines the supervisory leader’s responsibility to be a role model and lead by example, and it reinforces appropriate actions to foster an ethical workplace culture.

Ethics and Compliance Training

“Do What’s Right!” Training

All newly hired Alcoa employees are required to participate in our “Do What’s Right!” training, which serves as an introduction to our corporate Ethics and Compliance Program and our values. As part of the on-boarding process, employees also receive information about our Ethics and Compliance Line and a copy of our Guide to Business Conduct.

Online Training

Alcoa employees who meet certain criteria (i.e., corporate officers, business unit leaders, employees who negotiate with customers and suppliers, employees who can contractually commit the company, employees who have access to confidential information, etc.) are required to participate in online ethics and compliance training.

The selected courses serve to remind the individual of our business conduct standards and their applicability to the individual’s work responsibilities. Those enrolled in the online training program complete approximately four courses per year.

In addition, we continue to use Ethics PinPoints and Moments to reinforce key messages with employees. Distributed via email, these short, multi-lingual reminders address our core values and standards. In 2012, we deployed five PinPoints and Moments on the following topics: intellectual property and use of third-party photos and materials; anti-retaliation; anti-bribery and dealing with public officials; social media; and e-mail security.

Shop Floor Training

Any Alcoa employee who does not participate in the online training program is required to complete annual shop floor training. The 2012 course was entitled “Standards of Business Conduct” and was designed to reinforce the key concepts of our Guide to Business Conduct. 

The course emphasized the importance of knowing and complying with laws, regulations, and company policies; asking questions in uncertain situations; and raising concerns when known or suspected violations occur. The course also stressed that Alcoa does not tolerate retaliation against employees who raise concerns in good faith.

We translated the course into multiple languages for global deployment, primarily through instructor-led group sessions facilitated by human resources. However, shop-floor employees with access to a computer were given the option to complete the course online.

Anti-Corruption/Anti-Bribery Training

Our Anti-Corruption Policy reflects our strong commitment to conducting all of our operations around the globe ethically and in compliance with all applicable laws. Our directors and management continue to believe that the way we achieve results is as important as the results themselves. 

Vigilance in complying with anti-corruption and anti-bribery laws, such as those based upon the OECD Convention and the U.S Foreign Corrupt Practices Act, is critical as we increase our global business activities.

Training is a key component in an anti-corruption program. We continue to provide refresher training to all employees enrolled in the online ethics and compliance training program. From January 2003 through December 2012, Alcoa employees and select contractors completed more than 30,000 anti-corruption and anti-bribery courses through the online ethics and compliance training program.  

In addition to online training, members of our legal department conduct numerous live anti-corruption training sessions worldwide. At the time of hire, all employees are also expected to complete “Do What’s Right!” training, which contains anti-corruption elements.

Ethics and Compliance Communications

Throughout the year, the Ethics and Compliance Department distributes various communication materials that deal with business ethics and appropriate business conduct to all locations in multiple languages. These materials help maintain an awareness of current issues, familiarize employees with business conduct expectations, and promote understanding of our business values and philosophy. 

Many of the subjects are based on actual issues encountered and investigated by Alcoa. A variety of communication mediums are used, including letters from the CEO and other leaders, articles, social media posts, and interactive games.

Ethics and Compliance Line 

Alcoa encourages employees to report concerns and issues to their local supervisors, work teams, or other professionals by using the usual communication channels and problem-solving processes.

Our global Ethics and Compliance Line provides employees and any other concerned parties another confidential channel for expressing concerns and raising issues about workplace activities and business practices. Employees are also encouraged to use the line, as permitted by local law, to get guidance on legal or regulatory requirements, seek clarification of Alcoa policies or procedures, or simply ask for advice on appropriate behavior.

Toll-free compliance line numbers are available worldwide and answered in the caller’s native language. We also offer an ethics and compliance e-mail address, fax number, and a postal mail address for submission of written inquiries. Web reporting is available in certain jurisdictions, providing another confidential mechanism for individuals to report concerns and ask questions.

An independent company confidentially handles intake of all calls and web reports, summarizing and reporting each to Alcoa’s Ethics and Compliance Department and appropriate regional liaisons for prompt and confidential follow-up. Every concern or request for advice is promptly reviewed by the regional liaison and assigned for investigation by the most appropriate location, business unit, or corporate personnel.

Concerns that suggest an immediate threat to the personal safety of employees, Alcoa property, or the community are referred to pre-determined emergency contacts, who begin an immediate investigation and institute any appropriate corrective action.

All matters are addressed and responded to without reprisal. We have a target response time of 18 calendar days from receipt of an issue, contingent upon the seriousness and complexity of the matter.

Once an issue is resolved, a written response to the caller is entered into the system managed by the Ethics and Compliance Line vendor. The caller, who is provided with a unique identification number when the report is initiated, can then call back on the line, or log onto the website if the report was submitted via the web, to obtain information on the results of the investigation.

Exit Interview

In the United States, employees who leave Alcoa employment, other than those terminated by the company, are contacted for an exit interview. The exit interview process, conducted by a third-party vendor, incorporates several ethics- and compliance-related questions. We feel that these interviews can be useful in gauging the ethical climate of Alcoa, as well as uncovering any specific code of conduct infractions not previously reported.

Business Conduct and Conflict of Interest Survey Certification

Every year, we ask selected employees to reaffirm their commitment to Alcoa’s values and ethics-related policies through the Business Conduct and Conflict of Interest Survey Certification (BCSC), which is another confidential reporting mechanism. Our chairman and CEO provides an introductory letter to the certification, communicating the importance of business conduct that is honest, compliant, and transparent.

In 2012, 17,700 employees identified by Alcoa corporate and business unit management completed BCSC surveys. This represents an increase of 5,900 participants, or 50%, compared to 2011. We expanded the eligibility criteria for both survey completion and online training in 2012 to capture a greater portion of our workforce.

Survey participants certify compliance with Alcoa’s business conduct, insider trading, anti-corruption, and conflict-of-interest policies. The Ethics and Compliance Department and legal counsel review and address any issues or requests for clarification raised by the respondents.

Following are some additional points of significance regarding the 2012 BCSC process:

• All surveys deployed have been tracked, or are being tracked, to completion;
• 97% of survey certifications were completed online using our automated web-based survey system;
• Employees in 34 countries were directed to their nation’s data privacy statements to enable them to grant informed consent prior to submitting their survey responses; and
• 100% of all affirmative responses are being followed up to establish management controls with the employees and their supervisors where it is deemed appropriate.

In 2012, the BCSC process again received a satisfactory audit result from Alcoa’s external auditors on the basis of internal controls and the sustainability of the process.

Major Internal Compliance Investigations

Our chief legal and compliance officer regularly updates executive management and our board of directors on significant allegations and the progress of investigations into those allegations.

Our ECAS group continues to manage and facilitate major internal investigations into allegations of misconduct in which our employees and business partners engage. The investigation strategy focuses on a team approach involving the ethics and compliance, legal, human resources, finance, and internal audit departments, as appropriate. 

In a continuing effort to drive improvement in our approach to investigations, we updated our Internal Investigations Guidelines in early 2012. In addition, investigations training conducted for our investigators by one of the leading specialists in the field is available online to all Alcoa employees who participate in conducting any type of internal investigation. 

Ongoing web-based and real-time training, communications, the annual survey, the Guide to Business Conduct, and an overall values-based culture are factors that help minimize situations of behavior inconsistent with the law and our policies and values.

Effectiveness Metrics

Effectiveness metrics provide an objective assessment of the impact of our ethics and compliance program. Historically, we have maintained activity metrics. These metrics measure the degree to which we have deployed our ethics and compliance tools and the extent to which they are utilized. What activity metrics do not measure, and what is even more important, is the change that is brought about within Alcoa as a result of the implementation of these processes.

The Ethics and Compliance Line illustrates the difference between the two types of measures. While we measure activity (i.e., call volumes, types of calls, regional activity, accuracy of the service provided, etc.), these metrics alone do not indicate the value the line is providing to Alcoa and its employees.

We continued to work closely with our Internal Audit Department in 2012 on a process that includes documenting all financial- and business-process-related findings resulting from our investigations. These findings and our remediation recommendations are recorded in Internal Audit’s self-assessment database. Locations are required to identify a responsible person and provide an action plan and date by which the location expects to remediate each gap identified. 

2012 Geographic Breakout of Ethics and Compliance Line Reports
Percent

100% of all Ethics and Compliance Line calls receive an individualized response.

We continue to monitor activity and effectiveness of our online ethics and compliance training program. Cumulative results through 2012 show that more than 268,000 courses have been completed by an average of 12,525 employees per year. At the end of 2012, active employees achieved a cumulative 99% completion rate for the courses deployed.

We collected more than 8,000 survey responses with respect to our 2012 PinPoint deployments. The survey’s results reflected a high level of satisfaction with this training methodology, with 89% of respondents rating the training as either excellent or good. 

2012 PinPoint Survey Results

Percent

Through a separate survey, we collected more than 8,000 responses relative to our online training. The results also reflected a high level of satisfaction with the training content, which was rated as either excellent or good by 93% of respondents.

2012 Online Training Survey Results

Percent

Records Retention Program

Our records management program addresses record retention requirements and retrieval of historical facts and data required for various purposes, including litigation. The program is supported by a corporate records retention policy, procedure, and retention schedule.  

Business Ethics and Sustainability

Ethics and compliance are key components of Alcoa’s sustainability as a company. Our ethics and compliance program provides substantial benefits for our company and our employees, customers, shareholders, and communities in which we operate. We believe that operating within the law and making decisions in light of ethical values and principles create a culture that leads to economic success, environmental excellence, and social responsibility. These are all fully aligned and essential for Alcoa’s long-term sustainability.

At Alcoa, business ethics is about the application of ethical values by employees when conducting business each day.

Companies should consider the impact they have on a global society that expects certain standards of behavior from them. As the public becomes more demanding, these standards could become an important factor in determining from whom consumers will purchase products or services. The Institute of Business Ethics has labeled society’s approval, which allows a company to continue doing business, a “license to operate.” In other words, society increasingly expects companies to treat their employees fairly, tell their customers the truth, and address their environmental impacts.

At Alcoa, the strong relationship between business ethics and corporate sustainability initiatives helps us define what we are responsible for, to whom we are responsible and why, and what initiatives and actions will be necessary to achieve our longer-term goals.

Awards and Recognition

Ethisphere Institute—Research-based Ethisphere Institute is a leading international think-tank dedicated to the creation, advancement, and sharing of best practices in business ethics, corporate social responsibility, anti-corruption, and sustainability. In 2012 and 2013, the institute selected Alcoa as one of the World’s Most Ethical Companies.