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Ethics

At General Dynamics, we know each day our employees will make decisions that are critical to our success.  To help ensure that those decisions meet our company’s ethical standards, General Dynamics’ Board of Directors and management have devoted significant time and resources to maintaining an active and robust ethics program.  Since the inception of our formal ethics program in 1986, we have maintained a Standards of Business Ethics and Conduct handbook that applies to all employees.  The handbook, internally known as the “Blue Book,” has been updated as we have grown over the years and has been translated into several languages as we have expanded internationally.

The handbook states clearly our expectation that all employees will conduct General Dynamics business in accordance with the law, our policies, our values and our business- ethics principles.  It contains rules and guidance on how employees are to conduct business, whether dealing with customers, suppliers or each other.  It reminds employees to sustain General Dynamics’ ethical business reputation by adhering to our principles of integrity, honesty and respect.  An extremely important facet of the Blue Book is the prohibition against retaliation for any person who raises in good faith an ethics or compliance issue.  The Blue Book also states that we expect our suppliers, vendors, contractors and joint venture partners to develop ethics and compliance programs that are consistent with our values in all material respects.

We have adopted additional ethics codes specifically applicable to our financial professionals and the Board of Directors.  The Code of Ethics for Financial Professionals applies to the chief executive officer, chief financial officer, controller, and any person performing similar financial functions for General Dynamics.  It supplements the Blue Book. All personnel subject to the Finance Code are required to periodically recertify their compliance.   In addition, there is a Code of Conduct for members of the Board of Directors that embodies the board’s commitment to manage our business in accordance with the highest standards of ethical conduct. Copies of the Blue Book, Code of Ethics and Code of Conduct are available on our website at www.generaldynamics.com, under the “Investor Relations – Corporate Governance” captions.

The General Dynamics Ethics program provides many resources to help employees “do the right thing.”  Day-to-day oversight is provided at the corporate office by an ethics program manager. Overall leadership is provided by a chief ethics officer who reports directly to the chairman and CEO on all ethics program matters.  The ethics officer briefs the Audit Committee of the Board of Directors twice a year at regularly scheduled meetings.  In addition, the program is managed at each business unit by a business unit ethics officer, with support from local ethics officers.  The 13 business unit ethics officers and 120 local ethics officers implement the ethics program by:

• Distributing the Blue Book and conducting orientation for all new employees
• Developing policies, procedures and work rules that, in conjunction with the Blue Book, govern employee conduct at the business units
• Ensuring that all employees receive periodic refresher training regarding the ethics program and any specific topic areas that are critical to the performance of their jobs;
• Responding to questions about interpretation and application of rules and policies;
• Providing advice and guidance to help employees resolve ethical dilemmas and make decisions;
• Receiving reports of employee concerns regarding ethical matters; and
• Conducting and overseeing prompt, thorough and objective investigations of all reported allegations of suspected ethical misconduct and taking corrective action, if necessary.

In addition to communicating our standards in the Blue Book, the ethics program also helps sustain our reputation by detecting and addressing unethical conduct early. Our program includes a 24-hour-a-day, seven-day-a-week, confidential Business Ethics Hotline which our employees can call to communicate any business ethics-related concerns.  Callers may remain anonymous if they wish.  The hotline accepts calls in approximately 30 different languages.  All reports to the hotline are investigated promptly and appropriate action is taken to resolve each matter.

Examples of efforts at our business units to keep employees focused on the importance of conducting our business in accordance with our ethics principles include:              

An annual “Ethics Arts Festival” allows employees from across General Dynamics Armament and Technical Products to use the power of artistic creativity to promote ethics in the workplace.  Employees enter a contest by creating artwork on their own time, using their own resources, to demonstrate what business ethics means to them.  The event includes four categories: videos, music, graphic arts and stories.  The highly creative works address a wide variety of topics such as quality, financial integrity, appropriate use of company assets, environmental, health and safety, and the importance of customer relationships.  The festival raises awareness and promotes discussion among employees about ethical issues in the workplace.  The logo promoting this festival is shown to the left. Regular ethics-related columns in the internal newsletters at General Dynamics Land Systems, Electric Boat and Bath Iron Works to remind our employees that ethics matters for everyone. A partnership between General Dynamics Ordnance and Tactical Systems and the University of Florida Poe Center for Business Ethics to sponsor the Third Annual Ethics Conference, to be conducted in November, 2009. The “President’s Ethics and Integrity Award” at General Dynamics Advanced Information Systems, which recognizes individuals who exemplify our ethical standards in their everyday conduct. At General Dynamics Information Technology and Gulfstream, communications campaigns using brief video vignettes called “Ethical Moments” explore the ethical dilemmas employees may face on the job and provide guidance on ethical decision-making.  These video vignettes tackle such subjects as conflicts of interest, retaliation and protecting confidential information.

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