Introduction to Procedures

Boeing Policy NB-AAG-200, "Ethical Business Conduct," and and related procedures constitute companywide standards of conduct.

This procedure provides an overview of the Boeing ethics and business conduct program and employees' responsibilities. It describes the offices, personnel, and procedures that are part of the program. It establishes the company's ethics and business conduct education requirements and gives information on how employees can resolve business ethics concerns. It also establishes the companyís framework for assuring an effective program to prevent and detect violations of law.

Structure

1. The Ethics and Business Conduct Committee (the "Committee") is appointed by the Board of Directors.
2. The director of Ethics and Business Conduct is appointed by the chairman and chief executive officer. The director manages the Office of Ethics and Business Conduct, including the Boeing Ethics Line. The director coordinates ethics advisor and compliance oversight activities.
3. The Boeing Ethics Line provides all Boeing employees and others with a means of communicating questions and concerns regarding matters that may be in violation of Boeing policy, procedures, laws, or regulations, such as improper, illegal, or unethical business practices and health, safety, and environmental issues.
4. Executive series ethics advisors are appointed by the senior executive of each major operating segment in consultation with the director of Ethics and Business Conduct.
5. Business ethics advisors, located at business unit operating locations ("ethics advisors"), are appointed by the senior executive of the business unit in consultation with the executive series ethics advisor or the director of Ethics and Business Conduct.

Employee Concerns

1. Employees are encouraged to address questions or concerns with management. The employee may also direct questions or concerns regarding company standards of conduct to ethics advisors or to the Boeing Ethics Line.
2. Retaliation against employees who raise genuine concerns to any company source will not be tolerated. Retaliation or retribution against any employee for proper use of reporting mechanisms is cause for appropriate discipline, up to and including dismissal.
3. Violations of the company standards of conduct are cause for appropriate corrective action including discipline.

General Requirements

1. Education Programs

1. The director of Ethics and Business Conduct will establish a companywide ethics and business conduct education program designed to ensure that all employees have an awareness of the Boeing values and the standards of conduct. All employees will participate in a formal session at least once a year. The operating segments will document, and maintain records of, participation in formal sessions.
2. Each operating segment will establish a compliance education program designed to ensure employees have an awareness of legal requirements that are relevant to their work at a level of detail appropriate to their job functions. The frequency, participants, mode of presentation, materials, program emphasis and other criteria of the program will be established with guidance from the Law Department and the Office of Ethics and Business Conduct. The operating segment will maintain appropriate records and periodically review its education program to ensure compliance with this procedure.
3. Managers and other employees in sensitive positions, such as sales, marketing, finance, contracts, and materiel, require more comprehensive education as well as periodic refresher courses. Contract labor, consultants, and others acting for the company must also be made aware of and are expected to adhere to Boeing standards of conduct.

2. Publicity and Communication

1. Ethics and business conduct booklets will be approved by the Committee and distributed within the company as the Committee directs. Booklets will be made available to customers and public organizations upon request. Suppliers, consultants, and contract labor will receive booklets and education as the Committee directs.
2. The telephone number of the Boeing Ethics Line will be publicized in each issue of Boeing News and, as appropriate, on work area posters. The telephone numbers of ethics advisors may also be listed.

Responsibilities

1. Company Employees

1. Responsibility for the company's commitment to integrity rests with each employee.
2. Each employee is responsible for complying with the companywide standards of conduct and for raising questions if the employee is concerned that the standards are not being met.
3. All managers are responsible for:

1. Being familiar with and promoting the Boeing values.
2. Supporting implementation of and monitoring compliance with Boeing Policy NB-AAG-200, "Ethical Business Conduct." Management responsibilities include:

• Being familiar with the companywide standards of conduct required of all employees and the resources available to assist them in resolving questions or concerns.
• Promoting compliance with the standards of conduct established by Boeing and applicable laws, and ensuring that employees are aware of these standards and the legal requirements relevant to their work.
• Maintaining a work environment that encourages open communication regarding ethics, business conduct and legal issues and concerns.
• Promptly forwarding to the appropriate functional organization or to ethics advisors or the Boeing Ethics Line any matters received pursuant to 3.A that the manager regards as potentially significant.

4. The senior executive of each operating segment has overall responsibility to oversee compliance, within the segment with the standards of conduct and applicable laws. The chair of the Committee has this responsibility for the Company Offices organizations. Responsibility to oversee compliance includes:

1. Supporting implementation of the ethics and business conduct program in the operating segment.
2. Appointing an executive series ethics advisor in consultation with the director of Ethics and Business Conduct for each major operating segment. Appointing an appropriate number of business ethics advisors for other operating segments.
3. Ensuring adequate compliance education programs (see 4.A.2).
4. Maintaining mechanisms for monitoring compliance with company policies and procedures and applicable laws.
5. Taking appropriate corrective action, including discipline.

2. Ethics and Business Conduct Committee

1. The Committee issues procedures, policy directives, guidelines, and communications to further the objectives of the company's ethics and business conduct program.
2. The Committee approves the company's ethics and business conduct booklets and determines distribution of such booklets within and outside the company.
3. The Committee oversees the company's ethics and business conduct program and related compliance activities.
4. The Committee receives an annual report from Internal Audit on the status of monitoring activities in the company to ensure compliance with company policies, procedures and legal obligations. (see 5.F.2)
5. The Committee reports periodically to the Audit Committee of the Board of Directors on the company's ethics and business conduct program and related compliance activities.

3. The Director of Ethics and Business Conduct

1. The director of Ethics and Business Conduct administers the company's ethics and business conduct program. The director establishes companywide processes to assist employees in obtaining guidance, resolving questions, expressing concerns and reporting suspected violations of the standards of conduct and the law.
2. The director works with the operating segments to continuously improve ongoing programs, to establish companywide criteria for ethics education and awareness programs and to coordinate compliance oversight activities. The director works with the ethics advisors to implement the procedures, policy directives, guidelines, and communications of the Committee.
3. The director directs the activities of the ethics advisors by:

1. Establishing guidelines and procedures for ethics advisors, including uniform requirements for collecting and reporting facts and data regarding ethics activities.
2. Providing functional leadership to ensure companywide consistency regarding ethics policy, issues, and ethics and business conduct education programs.

4. The director serves as the ethics advisor for the company offices.
5. The director serves as secretary of the Committee.
6. As to the Boeing Ethics Line, and ethics advisors who accept communications described in 2.C, the director ensures that:

1. Measures are taken to maintain confidentiality, protect anonymity, and eliminate fear of retribution.
2. Reported concerns are reviewed and investigated by Internal Audit, Human Resources, Security, the Law Department, operating segment ethics advisors, or executive-level management, or others as appropriate.
3. Appropriate management is advised of investigation findings and recommended corrective actions.
4. A follow-up system is maintained to ensure that appropriate corrective actions are taken.
5. If possible, investigation results and corrective actions are communicated to employees who reported concerns.

4. Executive Series Ethics Advisors

1. Executive series ethics advisors administer the ethics and business conduct program and related compliance activities within the operating segment and direct activities of the operating location ethics advisors.
2. Executive series ethics advisors report to the senior executive of the operating segment and to the director of Ethics and Business Conduct.
3. Executive series ethics advisors coordinate operating segment compliance activities with the director of Ethics and Business Conduct.

5. Business Ethics Advisors

1. Ethics advisors provide employees with decision-making guidance and answer questions or concerns regarding the standards of conduct.
2. Ethics advisors for major operating segments report to the senior executive of the business unit and the executive series ethics advisor.
3. For operating segments that do not have an executive series ethics advisor, business ethics advisors report to the senior executive of the segment and to the director of Ethics and Business Conduct and perform such additional activities as directed.

6. Internal Audit

1. The Vice President - General Auditor provides appropriate auditing and evaluation of systems and processes that monitor compliance with company policies and procedures and legal obligations. The Vice President - General Auditor consults with the Vice President and General Counsel concerning appropriate systems to be monitored for legal and regulatory compliance.
2. Internal Audit conducts assessments and reports annually to the Committee on (a) the status of monitoring activities in the company to ensure compliance with company procedures and legal obligations and (b) whether the company's ethics and business conduct program and related compliance activities meet the criteria established in the Federal Sentencing Guidelines for an effective program to prevent and detect violations of law.

7. Local Ethics Committees

1. Business unit operating locations may establish a local ethics committee, chaired by the ethics advisor, to assist in fulfilling the operating segment's responsibility to support the ethics and business conduct program.
2. The local ethics committee will operate in accordance with guidelines established by the director of Ethics and Business Conduct.
3. The senior executive for the operating location appoints members of the local ethics committee in consultation with the executive ethics advisor or the director of Ethics and Business Conduct.

Ethical Business Conduct - Questions and Answers

Does the company really expect employees to adhere to the ethical business conduct policy even if it means losing business or reducing profitability?

Yes. Maintaining high ethical standards is essential to staying in business and maintaining long-term profitability

I have heard that the Boeing ethics policy is a response to the Federal Government program against waste, fraud, and abuse and is not really applicable to the commercial portion of our business. Is this correct?

No. The ethics policy is applicable to both the commercial and government segments of our business. However, some of the procedures address issues unique to government.

Who are the business ethics advisors?

They are senior managers who have access to top management and who are well versed in Boeing standards of conduct. They are responsible for advising Boeing employees on how to interpret and apply the standards.

Will I get into trouble with my manager if I call the Boeing Ethics Line or my business ethics advisor about an ethics issue?

No. Boeing policy encourages employees to express concerns about ethical issues and to report any suspected violations. Boeing will make every effort to maintain the confidentiality of the caller. The company will not tolerate retaliation against employees who properly use company reporting mechanisms.

Do the Boeing ethics policies apply to consultants?

Yes. When consultants are hired by the company, they are expected to adhere to the same standards as Boeing employees. The policies also apply to subsidiary employees, contract labor, and others acting for the company.

I think some members of my work group may be charging time to an incorrect charge number. What should I do?

First, discuss your concern with your manager. Make sure that there is no misunderstanding about the work they are doing. If that doesn't resolve the problem, you should consider seeking advice from your next-level manager, your business ethics advisor, or the Boeing Ethics Line. Time must be charged correctly.

Something doesn't feel right to me but I don't feel comfortable approaching my manager. Can a business ethics advisor really help?

A business ethics advisor can listen to your concerns and suggest approaches to resolving the issues. You can also call the Boeing Ethics Line. Trust your sense of integrity; if it doesn't feel right, you should seek guidance.