Rolls-Royce Bolsters Ethics Policy in Face of Corruption Probe
March 6, 2014 3:20 PM EST
Aerospace and defence company Rolls-Royce (RR.L), facing an investigation by Britain's anti-fraud watchdog, said it had cut the number of middlemen it uses as it steps up efforts to prevent bribery and corruption.
A 1952 Rolls-Royce "Silver Wright" car is on display in Riga Motor museum, Latvia.
The British company said in its annual report on Wednesday that as well as cutting down on the number of intermediaries it uses, it has relaunched a 24-hour ethics telephone line for staff and created a new role of head of risk training.
The world's second-largest maker of aircraft engines said in December the Serious Fraud Office (SFO) had launched a formal investigation into concerns of possible bribery and corruption in China and Indonesia.
A year earlier, it had passed information to the SFO relating to bribery and corruption involving intermediaries in overseas markets, and said it could face prosecution.
Rolls-Royce is also facing an investigation into state-run Hindustan Aeronautics Ltd's (HAL) orders from Rolls-Royce.
Investigations over overseas corruption and bribery are a perennial risk facing makers of military equipment, given the huge contracts and high secrecy in the defence sector.
Rolls-Royce tasked lawyer David Gold with leading a review of its compliance procedures after the allegations emerged. He published his interim report in July. A final version is expected in due course.
"The number of intermediaries used by our businesses has continued to fall dramatically during the year," Rolls said in its annual report, adding that it was working to simplify its anti-bribery policies in line with Gold's recommendations.
Rolls-Royce said last month that U.S. and European spending cuts would halt profit growth in 2014, bringing to an end the group's decade-long record of increasing annual profits.
A pay freeze for top management will accompany the group's gloomier outlook for this year.
"There will be no increase in basic pay for most of the senior leadership team in 2014," the company said.
Rolls's performance over the previous three years was, however, strong enough to trigger rewards under a long term incentive plan.
The group's chief executive John Rishton earned a total of 6.2 million poundsin 2013, 36 percent higher than the 4.6 million pounds he took home the year before on account of the payout.
Most Popular Slideshows
- Gennady Golovkin Next Fight Options: Canelo Alvarez, Miguel Cotto Or Julio Cesar Chavez Jr.
- NFL MNF: Pittsburgh Steelers 30, Houston Texans 23 [PHOTOS]
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Boy Stoned To Death For Alleged Rape, Victim Receives Dowry From Militants
- No Mercy: ISIS, Father Stones to Death Daughter for Alleged Adultery
- ASUS Releases A Teaser Indicating The Arrival of New Zenfone and ZenWatch On October 28
- Russia is Creating Underwater Combat Robots to Protect its Arctic Territories
- Three Dual SIM Samsung Galaxy Note 4 Duos Variants Comes To China
- iOS 8 Jailbreak Release Date is Doomed as Team Evad3rs Opts Out, Pangu Hits Snag – Report
- Google Nexus 6 vs. iPhone 5S: 4 Important Things to Consider Before Switching to Android Lollipop