Doing Good Business

Ethics, Integrity and Human Rights

As a truly global enterprise, we understand that we have an obligation to play a larger role in the world. We lead by example, encouraging respect for human rights in our own company and through our business relationships. Every employee engagement, partner affiliation and customer touchpoint represents an opportunity for Xerox to exercise its commitment to human rights.

Our Code of Business Conduct supports the principles of the United Nations Universal Declaration of Human Rights. We make sure those standards are followed in our labor relations and employment practices, relationships with suppliers, risk management, internal audit systems and our approach to building business in emerging markets. Each year, Xerox employees are required to take refresher training and acknowledge their conformance with the Xerox Code of Conduct.

Xerox is a member of the Responsible Business Alliance (RBA), an organization that promotes a standards-based process for monitoring the social responsibility of suppliers. Through the RBA, we further our commitment to human rights in such areas as labor, health, safety and environmental activity.

See Supplier Relations for more information.

We also manage a comprehensive data privacy program. We take utmost care to preserve protection of customer and employee personally identifiable information.

See Data Privacy for more information.

A corporate-wide global policy letter serves as the foundation of our position on human rights.

Business Ethics and Compliance Program

New Office of Compliance

In 2017, the Xerox Office of Compliance was established to ensure sustainable compliance in response to constantly changing global regulatory requirements and guidance from the U.S. Department of Justice (DOJ) and U.S. Federal Acquisition Rules (FAR). Xerox operates in a global business environment and is expected to maintain an effective corporate compliance program that ensures compliance with a variety of global regulatory requirements, including the U.S. Foreign Corrupt Practices Act (FCPA), U.S. Sarbanes Oxley Act, U.K. Bribery Act, French Sapin II, Brazilian Clean Companies Act, E.U. General Data Protection Regulations (GDPR), and a range of Restriction of Hazardous Substances in Electrical and Electronic Equipment (RoHS) regulations around the world.

The Office of Compliance oversees and coordinates the work of the company’s subject matter experts to ensure that the organization is in full statutory compliance with global rules and regulations related to all applicable laws in our industry as well as internal policies. The Office of Compliance also collaborates with other departments such as internal audit, corporate security, legal, human resources, government affairs and ethics to ensure sustainable corporate compliance.

The Office of Compliance is managed by the Compliance Leader who reports to the Vice President, Global Government Affairs, Sustainability, Citizenship and Compliance and the Executive Vice President, General Counsel and Secretary. The Compliance Leader acts as a liaison between the company and external, independent audit and compliance companies/contractors and advises and makes recommendations to the Office of General Counsel and management team regarding the state of statutory compliance at the company. The Compliance Leader prepares quarterly compliance updates for executive management and the Board of Directors. The Executive Vice President, General Counsel and Secretary reports directly to Xerox’s Vice Chairman and Chief Executive Officer.

Xerox established a Chief Ethics Officer who reports to senior management and the Board of Directors. In addition, the Xerox Ethics and Compliance Governance Board integrates the Business Ethics and Compliance Program into worldwide business operations. The Ethics and Compliance Governance Board represents business and corporate organizations within Xerox and its subsidiaries and participates in quarterly meetings chaired by our Business Ethics Office.

Board members have the following duties within their area of responsibility:

• Establish a business ethics and compliance network.
• Implement ethics training and education programs.
• Ensure consistent enforcement of discipline policy.
• Ensure organization-specific policies are consistent with existing laws, the Xerox Code of Business Conduct and other company policies.
• Oversee and make recommendations for changes to Xerox policies, including the Business Ethics Office Charter.
• Evaluate ethics and business conduct issues and attest annually that organizational ethics and compliance programs are effective and all employees have completed required business conduct training and acknowledgements.

Code of Business Conduct

Our Code of Business Conduct serves as the foundation of our Business Ethics and Compliance Program and our means to implement the Xerox Human Rights Policy. It embodies and reinforces our commitment to integrity and helps our people resolve ethics and compliance concerns consistent with our core values and legal and policy controls. Our Code of Business Conduct is available in 19 languages and accessible on our internal and external websites. The Code is aligned to our core values and covers policies and guidance on key topics, including sales and marketing activities, controllership, insider trading, bribery, non-discriminatory employment practices, privacy rights, human rights and environmental stewardship. It also specifies employees’ obligations to report suspected ethical violations and reinforces our strong “no retaliation policy.” 

In addition to our global Code of Business Conduct, we have a supplemental code of conduct for finance employees and a specific code of conduct for the Board of Directors. Xerox uses the code of conduct of the Responsible Business Alliance (RBA) with its suppliers.

Communication and Training

At the start of every year, our CEO distributes a message on business ethics to employees. All employees must complete ethics training annually and acknowledge that they have read the Code of Business Conduct. At the same time, officers and senior managers must certify their compliance with Xerox Code of Business Conduct and that they have processes in place to support the company’s Business Ethics and Compliance Program.

We promote awareness of our Business Ethics and Compliance Program on our Ethics and Policies website and our intranet. Periodically, we send ethics surveys to employees in several countries to gauge the state of the company’s ethical culture and help us focus on areas in need of improvement.

We provide a variety of channels for employees, suppliers and customers to report suspected ethical violations, including phone, web, email and postal mail. Our Ethics Helpline is available globally 24 hours a day, seven days a week, in multiple languages, via toll-free telephone numbers (see www.xerox.com/ethics) and our web reporting tool (www.xeroxethicshelpline.com) also supports multiple languages. We have contracted with an independent third party that specializes in helpline reporting with immediate electronic transfer of all reports to our Business Ethics and Compliance Office for case management.

For some cases, the Business Ethics and Compliance Office provides guidance and takes immediate action; for others, including allegations of wrongdoing, an ethics investigation is required. The Office follows a formal, consistent method for assessing alleged violations and complaints and directs them to the appropriate functional areas for investigation, resolution and closure. Our Business Ethics Office Charter includes a “Worldwide Assignment of Responsibility Matrix for Handling Potential Ethics Violations and Associated Penalty Guidelines.” This tool includes a wide range of possible ethics and compliance violations within each category of our Code of Business Conduct. Ethics allegation matters substantiated, in whole or in part, result in disciplinary action either counseling, training, warning letter, job reassignment, financial penalty or, in some cases, dismissal from the company. In addition to disciplinary action, resolution of many cases also may involve changes in processes or policies to prevent future occurrences.

Our Business Ethics and Compliance Office tracks all cases from initial reporting to closure. Additionally, the Office reports quarterly case activity and trends to the Business Ethics and Compliance Governance Board and the Audit Committee of the Board of Directors, including the number of matters reported, case categories, outcomes and disciplinary action.

See www.xerox.com/ethics for additional information regarding Xerox’s Business Ethics and Compliance Program.

Matters Reported to Business Ethics Office (BEO)

Matters Reported	2015	2016	2017
Human resources	60%	61%	42%
Internal policy violations	3%	3%	6%
Fraud	5%	5%	8%
Misappropriation of assets	3%	3%	3%
External relationships (customers, agents, vendors, etc.)	5%	5%	10%
Conflict of interest	3%	3%	3%
Confidential information	2%	2%	2%
Accounting and financial reporting	2%	2%	7%
Policy inquiries	7%	8%	6%
Other	10%	8%	5%1

¹Note: Approximately 8% of the total number of matters reported to BEO were redirected to Conduent Incorporated because the matter applied to Conduent employees, processes or facilities. Conduent was created following the separation of Xerox’s Business Process Outsourcing from its document technology business on December 31st, 2016.

Anti-Corruption

Xerox operates an active and comprehensive anti-bribery and anti-corruption program that complies with all related laws and regulations. We have developed a global compliance program, supported by policy and training, to ensure zero tolerance for the giving or offering of a bribe of any amount or value, including so-called “facilitation payments.” The program also includes risk assessment of third-party intermediaries, followed by the application of appropriate due diligence, training and certification prior to engagement. We are committed to enhancing the program continually.

Banknote Anti-Counterfeiting

The risk of banknote counterfeiting has increased with the quality of digital imaging tools and color printing technology. In response, we have joined other companies, the U.S. Secret Service and the Central Bank Counterfeit Deterrence Group (a consortium of 32 central banks and note printing authorities) to assess threats to currency and support the use of anti-counterfeiting technologies. Technology to deter the use of digital equipment for counterfeiting banknotes is being standardized. Xerox sales and service employees are trained to respond to inquiries about our anti-counterfeiting efforts.

Black Market Supplies

Every year, the global imaging industry — and the customers who use its products and services — suffer the loss of millions of dollars due to counterfeiting or theft of supplies. We continually remind our customers that counterfeit supplies can result in poor equipment performance, low supply yields, inferior print quality, toner leakage, increased failure rates and equipment downtime — all of which can cost time and money. To avoid this risk, we advise our customers to purchase solely from Xerox Authorized Resellers. We work closely with our Procurement Department to call attention to “blending” of supplies — the mixing of counterfeit with original materials to achieve lower pricing and make detection of counterfeit items more difficult.

Theft of customer supplies represents an increasingly costly problem for Xerox and its customers. It is difficult to prevent because web-based sales channels make it easy to purchase stolen products and then to sell them. We continue to invest in technology and resources to bring the problem to the attention of customers and to identify their obligation to maintain the security of supplies (contracted and purchases). Through engagement and support of our customers and local law enforcement agencies, we also provide tracing of stolen goods to identify and close the sources of theft.

Xerox is leading the charge against counterfeiting and other black market activities, independently and in collaboration with other original equipment manufacturers (OEMs). To combat acts of piracy and fraud, our security team routinely works with the U.S. Federal Bureau of Investigation, attorneys general offices, the Postal Inspector’s office and other global law enforcement agencies. In addition, we are a member of the Imaging Supplies Coalition (ISC), a trade association that serves to heighten customer awareness of black-market activities. Wholesalers, dealers and consumers may submit questionable goods to the ISC for authentication by the manufacturer.
For more information, visit www.isc-inc.org.

Public Policy Engagement

Xerox has a longstanding tradition of civic engagement. Our involvement in the political process and global public policy debates is a natural extension of our core values. We work with governments, others in our industry, and the broader business community to advocate for public policies that are consistent with our business objectives.

Xerox’s Office of Global Government Affairs coordinates and oversees all policy-based interactions with governments and governmental organizations across the nation and around the world. We engage on issues that range from corporate governance, trade, employee benefits and tax policy to regulatory compliance, intellectual property and government procurement.

International Trade

We support open markets and free trade. International trade is a powerful engine of global economic development that fosters job growth, improved living conditions, and opportunities around the world. We support government-to-government negotiations aimed at liberalizing trading rules and opening markets, both on a bilateral and multinational basis. Open markets offer important opportunities to showcase our products, services, and business solutions to new customers.

Corporate Taxation

As a global enterprise, we comply with the tax laws and regulations in all 160-plus countries where we operate. For more detail on the taxes we pay, please see our 2017 Annual Report. In the United States, corporate tax reform has been a top priority of Xerox for many years, as the U.S. tax code became out of sync with other nations. Xerox continues to prioritize appropriate implementation of the 2017 tax reform legislation.

Education

Xerox has had a longstanding tradition of supporting efforts aimed at ensuring American students graduating from high school and college have the necessary skills to compete. We are particularly passionate about programs that further American students’ access to science, technology, engineering and math (STEM) curricula. These efforts help Xerox recruit and retain a skilled workforce and allow us to compete globally. We have worked with Congress and several Administrations to reform higher education programs, vocational education funding and K─12 standards.

Intellectual Property

As a participant in the Coalition Against Counterfeiting and Piracy, we play an active role in combating theft of intellectual property by counterfeiters who manufacture “knock-off” products. We also strongly support changes in the law that would reduce the impact of frivolous intellectual property litigation that imposes unnecessary costs on innovative companies.

Environment

Our Environment, Health, Safety and Sustainability governance policy, adopted in 1991, forms the foundation of our environmental leadership program. We are committed to designing, manufacturing, distributing, and marketing products and processes to optimize resource utilization and minimize environmental impact. Global Government Affairs is working on the Energy Star 3.0 to ensure maximum compliance upon implementation.

State Legislation

Xerox promotes policy positions that make Information Technology (IT) more effective in supporting state and local government missions, improve government technology acquisition processes, maximize the positive financial impact of IT investments, and create better outcomes for Americans served by state and local government agencies and programs. Our Office of Global Government Affairs has an established network of state and local government consultants whose responsibilities include monitoring legislation and policies that would impact our various government lines of business.

Retirement Policy

We believe policymakers should foster a legal and economic framework that encourages employers to provide high-quality retirement security options to their employees. We take our commitment to our employees, both current and retired, very seriously, and our Office of Global Government Affairs works closely with the U.S. Congress and the Administration to formulate policies that allow us to meet this obligation.

Healthcare

Xerox advocates for policies that allow for sustainable, high-quality health care systems that are more accessible, less costly and more patient-centered. We will continue to work to address the many obstacles — regulatory mandates, inaccessible data, inefficient processes, incomprehensible billing and ever-rising costs — that undermine our ability to provide quality healthcare coverage for our employees.

Professional Organizations and Associations

Trade associations around the world play an important role in assisting our company with business development opportunities and citizenship activities, as well as in helping us meet certain public policy objectives. We are a member of a wide array of trade associations. Any trade association dues, or portions thereof, that are not deductible for tax purposes are reported in our lobbying disclosure reports. Our senior managers play a leadership role in a number of these organizations, including the Business Roundtable and the U.S. Chamber of Commerce. These organizations develop and promote public policies that are considered important to our public policy interests and operations.

While we prefer to make political expenditures directly rather than through professional organizations and associations, Xerox, like all major corporations, is a member of various 501(c) organizations that may engage in political activities. While we may not necessarily agree with every position taken by each organization to which we contribute, we determine that the intended use is consistent with our mission and core values before donating to any such group. We inquire and make a reasonable effort to obtain from those associations a determination of the portion of the dues or payments that are used for lobbying expenditures or political contributions. To the extent it is reported to us, we disclose the non-deductible portion of our contributions annually.

The Xerox Code of Business Conduct contains explicit information on our policies governing contact with elected and appointed government officials and agencies, as well as lobbying and political contributions. All Xerox employees are required to participate in annual training on the Code of Business Conduct and must certify adherence to the Code upon the conclusion of the course.

Employee Personal Political Contributions

While we encourage our people to participate in community and political activities, we do not endorse any organization or activity in which employees choose to participate; and, we do not discriminate in favor of or against employees based on the organizations they choose to support. Employees are not reimbursed directly or through increases in compensation for their personal political contributions and expenses.

Xerox Corporate Political Contributions

We have a long-standing policy that nothing of value may be given, paid, promised or offered — directly or indirectly — from corporate treasury funds for any of the following: (1) political party, committee and/or candidate for any federal, state or local government office anywhere around the world; (2) independent expenditure or ballot measure committees; (3) electioneering communications; or (4) candidates for judicial office.

We have an established policy that does not permit any in-kind political contributions. The only authorized method to make political contributions on behalf of Xerox is through the Xerox Corporation Political Action Committee (XPAC).

The XPAC guidelines used as a basis for supporting candidates and elected officials include:

• The integrity and character of the candidate
• The candidate’s position on significant policy issues of importance to our company
• The candidate’s overall support for our company and industry
• The candidate’s overall support for the free enterprise system and U.S. competitiveness
• A demonstrated willingness on the part of the candidate to work with our company and industry to achieve responsible public policy solutions
• The candidate’s representation of a state or district in which our company has significant employees or facilities
• Whether the candidate holds a leadership position within their political party
• The candidate’s electability
• Permissibility under applicable law

In addition, XPAC focuses on contributions that go directly to candidates for office; special exceptions are required for:

• Out-of-election-cycle contributions
• Contributions to leadership PACs
• Contributions to trade association PACs
• Contributions to ballot measure committees
• Contributions to political parties

XPAC does not permit contributions for:

• Independent expenditure committees
• Electioneering communications
• Candidates for judicial office
• Presidential candidates

XPAC discloses all contributions made and received on reports filed with the Federal Election Commission and the various state and local campaign finance commissions, as required by law. In accordance with XPAC’s Articles of Organization, an audit of the accounting books of the XPAC are performed at least once during every two-year election cycle to assure compliance with the Federal Election Campaign Act of 1971, as amended, and its regulations and all other applicable laws.

We use outside legal experts to provide periodic oversight of the company’s political activities.

XPAC Oversight

The Corporate Governance Committee of the Xerox Board of Directors is responsible for overseeing the company’s political and charitable contributions and receives annual reports on XPAC activities.

The Vice President, Global Government Affairs, Sustainability and Citizenship is responsible for the management of Xerox’s participation in the political process. This position reports directly to our Executive Vice President, General Counsel and Corporate Secretary, who reports to the company Chairman and Chief Executive Officer.

XPAC is led by a Board of Trustees, which includes a cross-section of managers from Xerox who represent their unique business unit and geographic areas. A Contributions Committee appointed by the XPAC Chairman and consisting of five members is responsible for selecting by majority vote the candidates to receive a contribution from XPAC. Our General Counsel, the Vice President of Global Government Affairs, Sustainability and Citizenship and the Manager, Global Government Affairs oversee all spending.

The Xerox Board of Trustees hold the following positions within Xerox:

Manager, Global Government Affairs
Senior Vice President, U.S. Federal Market
SVP, Acquisitions, Corporate Service and Marketing at Global Imaging Systems
Vice President, Public Sector
Vice President, Worldwide Taxes
VP of Global Government Affairs, Sustainability and Citizenship

Xerox contributions and other spending in 2017 are itemized below:

• Lobbying, interest representation or similar = $579,448
• Local, regional or national political campaigns/organizations/candidates = $22,500
• Trade Associations or tax exempt groups = $80,208
• Other (spending related to ballot measures or referendums) = $685,658
• Total = $1,367,814

Risk Management

With global leadership comes global responsibility – not only to our people and shareholders, but also to the suppliers, distributors and citizens of the countries where we operate. That’s why we devote considerable resources toward Enterprise Risk Management (ERM), anticipating and mitigating risks to the financial and operational health of our business.

ERM follows a clearly defined business strategy that is shared across the company and aligned with our strategic and organizational goals. Our ERM process is based on the COSO II (Committee of Sponsoring Organizations of the Treadway Commission) framework. We assess business risk based on the risk of failing to attain our strategic objectives. Steering committee members meet monthly to assess emerging risks, risk appetite and occurrence probability. The committee also monitors action plans put in place to mitigate risk at the enterprise level. ERM assessments are coordinated with our Internal Audit Risk Assessment to ensure consistency between the ERM plans and upcoming internal audits.

Several executive committees integrate ERM with business management by monitoring both risk exposure and how effectively those risks are managed.

These committees include:

• Management Committee
• Enterprise Risk Management Steering Committee
• Business Ethics and Compliance Governance Board
• IT Risk Governance Board
• Credit Committee
• Currency Strategy Committee
• Reputation Management Committee
• Management Audit Committees

In addition, the Audit Committee of the Board of Directors plays a key role in ERM oversight, while the roles of other committees (including Compensation, Governance, and Finance) are restricted in scope. As needed, the Board will establish special committees to focus on specific business risks.

Business Continuity

We respond to major events that could disrupt our business operations or those of our customers with comprehensive business continuity action plans. Major events may include natural disasters and pandemics. Our plans are designed to minimize adverse effects to our people, customers, shareholders, suppliers and assets. They are documented and communicated across all business units and tested annually to ensure rapid and effective response

Xerox is a leader in telecommuting practices. When weather, power outages or other work disruptions affect specific geographic areas, we often are able to continue our high level of service by redirecting the affected activities to employees and/or systems in other locations.

As an example, severe winter weather forced the closure of our American Logistics Center for parts and supplies. In accordance with our business continuity action plan, we routed requests to distribution centers throughout the U.S. and set up regional locations to fulfill the requests. In doing so, we protected our people and assets while meeting our customers’ needs.

Safety always is our top concern. Often, local customers experience the same work interruptions; that is why communicating with clients and other stakeholders is paramount.

Our Business Continuity Program Office is responsible for the business continuity assurance process. All Xerox organizations assess their plans against a standard set of criteria and report the status during operational reviews.