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Earning and maintaining the trust of our stakeholders is essential to our business. We are proud of our culture of integrity and work to create an environment that supports ethical behavior and empowers employees to speak up with concerns. We are deeply committed to doing business the right way and strive to strengthen our programs to ensure our employees and anyone who works with us adheres to the same high ethical standards.

Ethical Business Practices

SUSTAINABILITY MANAGEMENT PLAN GOAL

Score at or below 35% of the total percentage of employees who observe misconduct within the past 12 months, but neither report it nor take action to address it by 2025.

2021 PROGRESS

Survey results indicate 29% of employees who have observed misconduct in the workplace in the prior 12 months did not report or take action to address it. We continue to encourage employees to take action and provide multiple contact methods for guidance and reporting. Lockheed Martin does not tolerate retaliation and this is communicated in training, policies and during contacts to the Ethics Office.

A core component of an effective ethics program is ensuring employees feel empowered to raise concerns to their leader or Ethics Officer for guidance or to report potential misconduct. Promptly responding to concerns promotes trust and accountability in the workplace. Lockheed Martin’s sustained reputation for ethical conduct instills confidence in our customers and suppliers, and helps attract and retain high quality employees whose values and integrity align with the company.

Our Code of Ethics and Business Conduct and corporate policy Ethics and Business Conduct provide the foundation for Lockheed Martin’s ethics program, reinforcing our Core Values to Do What’s Right, Respect Others and Perform with Excellence. Training and policies support the program, clarifying the expectation for behavior and compliance, while ensuring employees know how to raise concerns. Our Board of Directors provide program oversight, reviewing metrics, initiatives and project status three times each year. In addition, business area Ethics Steering Committees review similar information and provide oversight for their business. Our ethics program is reviewed annually as part of our entity level controls assessment. This assessment includes a comprehensive review of existing policies, procedures and business conduct compliance training to ensure the program is relevant, comprehensive and effectively managed.

The biennial 2021 Employee Insights Survey provides insights on employee perceptions of ethics, integrity and trust. Employees who do not take action when observing misconduct primarily believe no action will be taken, and/or they fear potential retaliation from peers or leadership. These concerns are addressed in multiple ways including Integrity Minute videos, business conduct compliance training, ethics awareness training and other leadership and local Ethics Office engagement.

Survey data helps gauge the health of our ethics program and provides tracking against the sustainability management plan goals. Employees are asked if they have personally observed misconduct in the workplace in the past twelve months. If they respond yes, they are asked if they reported it, took action or did nothing. The sustainability management plan goal is not to exceed 35% of employees who observe misconduct taking no action. Employees are expected to not only recognize misconduct, but take action to address it through Voicing our Values techniques or reporting. Lockheed Martin has seen a steady decline in observations of misconduct, as well as employees unwilling to take action.

GUIDANCES
CASES

CAROL R. MARSHALL AWARD WINNER

Blair Marks, recently retired Vice President, Ethics and Business Conduct, received the Carol R. Marshall Award for Innovation in Corporate Ethics from the Ethics and Compliance Initiative. This non-profit organization founded in 1922 and based in Vienna, VA, has helped build cultures of integrity. This prestigious award is named after the late Ethics and Compliance Initiative Fellows Chair and coincidentally the first Lockheed Martin Vice President, Ethics and Business Conduct. This award honors individuals who model Carol R. Marshall’s leadership, achievement and innovation.

ETHICS IN ENGINEERING COMPETITION AWARD

We are honored to receive a Gold Brandon Hall Human Capital Management Excellence Award for Excellence in Human Resources for “Best Advance in Social Impact” for our 2021 Ethics in Engineering Case Competition. This event took place in February 2021 during Engineers Week. Twenty-four college and university teams, each with two undergraduate students and an accompanying faculty member, presented their solution to a fictional case involving ethical, business and engineering dilemmas with a focus on supersonics and hypersonics. Texas A&M University won; semi-finalists included Brigham Young University, University of Illinois and first-time competitor University of California-San Diego. More information about this competition can be found on our Ethics website.

MISSILES AND FIRE CONTROL ETHICS WEEK

Missiles and Fire Control hosted its fourth annual Ethics Week in March 2021. This effort raises awareness about the importance of workplace ethics, compliance and business conduct and serves as a reminder that we must all work together to embrace our Core Values. This year's theme was "Who Wants to Be An Ethics Champion?" where employees were encouraged to visit the ethics website homepage and select answers to common ethics questions for a chance to win a grand prize. Each day was based on a different topic. Day one focused on the ethics process, day two was about charging practices, day three was about gifts and business courtesies and day four focused on retaliation.

Anti-Bribery and Corruption

SUSTAINABILITY MANAGEMENT PLAN GOAL

Achieve 100% completion of required employee training on gifts and business courtesies and international business practices annually through 2025.

2021 PROGRESS

We achieved 100% completion of these two trainings for required employees.

At Lockheed Martin, we have zero-tolerance for bribery and corruption. We will walk away from business engagements associated with improper conduct and that would violate U.S. and other applicable anti-corruption laws.

Included in our comprehensive approach to anti-corruption compliance are our Gifts and Business Courtesies and International Business Practices business conduct compliance training modules. These courses, required annually for employees with applicable roles and responsibilities, inform and deliver resources to employees about our expectations for ethical business practices, and support employee awareness of, and compliance with, applicable laws. Additional employee engagements about the importance of anti-corruption compliance are provided through a variety of topical spot briefings within functional teams. For example our legal team engages employees several times a year on the history, importance and risks related to corruption during our Doing Business Overseas course.

In 2021, we created two high-impact, supplemental modules with specific situational scenarios illustrating corruption risks and behaviors for employee awareness. These included:

  • Country-specific training: We created country-specific training for certain employee populations and locations, such as Saudi Arabia. We plan to create similar content for additional countries in the future.
  • “What do you do?” scenario training: This scenario training reflects real-world situations employees may encounter during international field deployments or travel, which may implicate bribe requests, including where personal safety may be at risk. We plan to release these trainings in 2022 through a variety of internal media resources.

Our corporate policies Gifts, Hospitality, Other Business Courtesies and Sponsorships and Compliance with Anti-Corruption Laws provide specific guidance and procedures for the company. For example, the first policy outlines thresholds of permissibility, exception request processes and approval responsibilities associated with offering of certain business courtesies. We use an analytics tool to scan company data and flag questionable transactions for review and any policy violations that may occur are reported to business area legal teams for remedial actions, as well as to the Senior Vice President, General Counsel and Corporate Secretary on a quarterly basis. Please refer to the Lockheed Martin Code of Ethics and Business Conduct for more information on our anti-corruption policies.

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