Progress

Sound governance and management systems enable a company to operate in a transparent and accountable way. They provide effective oversight and help a company translate its aspirations into action while operating to high ethical standards.

During 2007, Ford strengthened its sustainability governance, further integrated sustainability into key business processes and undertook initiatives that reinforce our commitment to conducting business ethically and with integrity. These efforts included the publication and dissemination of our new Code of Conduct Handbook in multiple languages.

Integrating Sustainability Governance and Management

The Ford Board of Directors' Committee on Environmental and Public Policy oversees sustainability issues for the Company. At the executive level, in April 2007, Sue Cischke was appointed to a newly created position of Senior Vice President, Sustainability, Environment and Safety Engineering, reporting directly to Ford's CEO. In April 2008, she was promoted to Group Vice President. Ms. Cischke oversees several important functions (see Figure 1 opposite) and participates in the regular Business Plan and Special Attention Review meetings of Ford's most senior executives, helping to keep sustainability at the top of the agenda.

During 2007, top executives reviewed several key sustainability issues, including Ford's approach to human rights, the product fuel economy and CO2 strategy, the corporate sustainability strategy and the 2006/7 Sustainability Report. Ford's Sustainable Mobility Group, a cross-functional team based in Global Product Development, led the development of the fuel economy and CO2 strategy. Executive compensation is affected by the Company's performance in a range of areas, including sustainability.

Beginning in 2008, our Board and top management will have access to some of the preeminent thought leaders in sustainability through Ford's Transformation Advisory Council. These leaders will come together several times a year with Ford experts to help shape our thinking about future technologies and global trends. They will bring a unique blend of skill and perspective aimed at making Ford the leader in sustainability. They will also help us develop ideas to solve the challenge of energy independence and the threat of climate change.

This system of governance and management, together with the structures, processes and management systems discussed in this section, integrates sustainability strategy into Ford's business in an unprecedented way.

Reinforcing Our Commitment to Ethical Business Practices

Our Corporate Compliance Office has a comprehensive program in place to guide compliance with Ford Policies and Directives and key legal requirements, and to provide training and education on those requirements, as well as monitoring and auditing of compliance. The Corporate Compliance Office is part of Ford's Office of the General Counsel, and our corporate compliance program is overseen by a senior management compliance committee and the Audit Committee of the Board of Directors.

Ford took a number of initiatives in 2007 to increase awareness of and adherence to ethical business practices. We rolled out mandatory online courses for employees on several key ethical topics, enhanced our Policies and Directives pertaining to anti-bribery issues, and provided in-person anti-bribery training. One high-impact initiative in 2007 was the completion of a major revision of our ethical guidance document, now called the Code of Conduct Handbook. The document was restructured and revised to make it easier to understand and use as a reference manual. In its new incarnation, the Code of Conduct Handbook is a compilation of the most important and relevant Policies, Directives and standards for Ford employees. It is now more global in content and is available in 13 languages. The online version available to personnel includes active links to the original source documents, thus providing a single source for the relevant information.

The revised Handbook outlines employee behavior requirements and provides background resources for a wide range of business-related situations, including gifts, favors and conflicts of interest; political activities; and competition and antitrust laws. While Ford has had well-developed Policies and Directives for many years, the new Handbook ensures that Ford employees everywhere in the world receive consistent information and the tools they need to respond appropriately when ethical issues arise.

Virtually all salaried employees around the world are required to certify that they have reviewed the new Handbook. In 2008, contract personnel will also be required to make the certification. Employees also take mandatory online training on key ethical topics, including anti-bribery; gifts, favors, and conflicts of interest; internal controls; fair competition; and mutual respect.

We assess compliance with our Code of Conduct Handbook, encourage employees to report potential ethical issues and provide a variety of means for them to do so.