Policy Letters and Directives

At Ford, Policy Letters establish a framework of broad, basic principles within which the Company conducts its business globally. Corporate Directives provide more in-depth information on narrower topics than Policy Letters, and therefore may only apply to a particular segment of the business or specific activities. In addition to Policy Letters and Directives, numerous descriptions of business practices, handbooks, guidelines and statements of business standards govern the conduct of employees globally.

The following are Ford standards with particular relevance to sustainability.

Human Rights

Ford’s commitment to human rights is embodied in our Code of Basic Working Conditions, Human Rights and Corporate Responsibility, which forms the foundation for work within our own operations and our supply chain. This Code articulates our commitments on key human and labor rights issues. First adopted in 2003 as the Code of Basic Working Conditions, it was more formally issued as Policy Letter 24 in 2007. In early 2012, Policy Letter 24 was revised, and its title was changed to the Code of Human Rights, Basic Working Conditions and Corporate Responsibility.

Policy Letter 24 is based on fundamental elements of internationally recognized labor standards, including the Universal Declaration of Human Rights, International Labour Organization Covenants, the Organisation for Economic Co-operation and Development’s Guidelines for Multinational Enterprises, the United Nations’ Global Compact Principles, the Global Sullivan Principles, and standards of the Fair Labor Association and International Metalworkers’ Federation. Ford encourages businesses throughout our supply chain to adopt and enforce similar policies, and seeks to identify and do business with organizations that conduct business to standards that are consistent with Policy Letter 24.

Policy Letter 24 covers workplace and recruitment issues such as working hours, child labor and forced labor. It also reflects our increasingly integrated approach to managing human rights and community issues by articulating our commitments on several key issues that extend beyond the fencelines of our facilities, including community engagement and indigenous populations, bribery and corruption, and environment and sustainability.

One of the aims of the early 2012 revision to Policy Letter 24 was to develop an implementation plan for the “protect, respect and remedy” framework designed by John Ruggie, Special Representative to the United Nations Secretary General on business and human rights at the international level. Ford is eager to implement many of these recommendations, and we are using the framework to benchmark our own strategies and to integrate the principles into the assessment process. The revised Policy also includes a commitment to work with local, indigenous people on sustainable water use and language to specifically address human trafficking. In previous versions of Policy Letter 24, Ford has considered human trafficking to be a potential element of “forced labor.” However, given the new California law requiring disclosure on supply chain due diligence related to forced labor and human trafficking, we felt it important to make our definition of forced labor and human trafficking more explicit to our suppliers and stakeholders.

Finally, Policy Letter 24 – consistent with our Standard Terms and Conditions – communicates our encouragement of suppliers to adopt and enforce similar policies for their suppliers and subcontractors. We actively promote and assess implementation of sustainable policies and practices in our own operations and in our supply chain (see Human Rights in the Supply Chain). The performance criteria for assessments of Ford-owned facilities and facilities operated by Ford now address several key community issues and evaluate engagement with members of the local community.

We encourage employees who have a good-faith belief that there may have been a violation of this Policy to report it through established channels, which vary by region, or to Ford’s Office of the General Counsel. These reports are then forwarded to the Manager of Social Sustainability, who takes action to clarify, validate and correct the situation, if necessary. No retaliatory actions are taken against employees who report concerns about violations of Policy Letter 24.

In December, we supported an all-day conference hosted by the George Washington University and the United Nations Global Compact in which government officials, corporations and nongovernmental organizations shared stories of best practices and challenges to improve overall performance on human rights issues.

Another way we can continue to lead in human rights business practices is to go beyond compliance and focus on critical issues that impact our business. For example, we began implementation of SUMURR – Sustainable Urban Mobility with Uncompromised Rural Reach – in Chennai, India, in February 2012. The project objective is to leverage SYNC® technology and the IT “cloud” to provide access to health care services to women in the rural areas outside of Chennai.

See the SUMURR case study for more information.

Diversity

We are committed to equal opportunity in all aspects of our business and to fostering diversity in our workforce. Our Policy Letter and Directives relating to diversity address equal opportunity and require that there be no disparate treatment because of race, religion, color, age, sex, national origin, disability, gender identity, sexual orientation or veteran status, and/or other factors that may be covered by local law. We recognize that diversity in our workforce is a valuable asset, and we strive to provide an inclusive work environment in which different ideas, perspectives and beliefs are respected.

Bribery and Corruption

Our Policy Letters and Directives govern integrity within Ford and state that it is our policy to comply fully with the laws of each country in which we do business. Further, no employee may agree to, make or solicit, for their benefit or that of the Company, any improper payments or other improper benefits, directly or indirectly, to or from any government or government agency official, legislator or other government employee or person purporting to represent government agencies. Employees and contract personnel must immediately report through the Company reporting system any requests or solicitations for an improper payment, except in countries where mandatory reporting is restricted.

Political Contributions

Ford’s Policy Letter on governmental relationships covers issues relating to public policy and political contributions. These issues are discussed in depth in our Public Policy section.

Customer Satisfaction and Safety

Ford has several policy statements aimed at increasing the quality of our products and promoting the safety of our customers. Our Policy Letter on quality sets the foundation for a process that emphasizes the importance of quality in everything we do and notes that the customer defines quality. It establishes a Quality Operating System and the use of metrics and data to make decisions. Our Policy Letter on vehicle safety sets forth Ford’s commitment to design and build vehicles that meet or exceed applicable laws and regulations, and to advance the state of the art in safety wherever practicable. We strive for continuous improvement in vehicle safety, which applies to accident avoidance attributes as well as occupant protection systems. This policy requires that we will be demonstrably active and responsible in all areas of automotive safety, including vehicle design and manufacture, operator behavior and the highway environment.

Environment and Employee Health and Safety

Our policies on health, safety and the environment make clear that sustainable economic development is important to the future welfare of Ford and society in general. Protection of employee health and safety and the environment are important considerations in the business decisions we make. These factors are integral parts of the planning process. Our products, services, processes and facilities are planned and operated to incorporate objectives and targets and are periodically reviewed to minimize to the extent practical the creation of waste, pollution and any adverse impact on employee health, safety or the environment. Protection of health, safety and the environment is a company-wide responsibility of employees at all levels.

Privacy

The trust and confidence of our customers are important to Ford Motor Company, and essential to building long-term relationships and delivering excellent products and personalized services. The Company recognizes that customers, employees and others have concerns about privacy and expect us to protect and handle personal information responsibly.

Ford is committed to implementing responsible privacy and data-handling practices. The Company’s Policy Letters and related Directives are designed to ensure the continuing trust and confidence of individuals who entrust us with personal information.

Social Media Interactions

The recent proliferation of social media – such as Facebook, Twitter and LinkedIn, as well as blogs and other web-based discussion forums – has led us to examine our policies relating to employees’ use of these technologies. We encourage responsible employee participation in social media and have developed a set of “digital participation guidelines” for our employees. A version of the guidelines is available publicly. We also use online training to educate our nonmanufacturing workforce on the guidelines and how they affect their use of social media.

Completed in 2010, the guidelines encourage employees to use social media in a responsible way. They advise employees to be mindful that online communications require the same kind of ethical behavior and honesty that we expect in other external communications.

Specifically, the guidelines emphasize several key points. For example, if a discussion relates to Ford or the automotive industry, employees are expected to be honest about the fact they work for Ford. At the same time, employees need to make clear their opinions are their own and they are not official spokespeople for the Company. Conversations should remain respectful and in good taste, just as would be expected in any other medium. Employees should use good judgment in not revealing confidential Company information, including financial information. And finally, employees should always remember that whatever they say or write is there for all to see, permanently.