Procedures and Standards of Conduct for Employees

Introduction

It is the responsibility of each and every Baxter employee to understand and demonstrate integrity in the work that is done every day. How employees work within the ethical framework of various and diverse professional fields is also important. To this end, Baxter has adopted the fundamental principles of the Office of Inspector General (OIG) Compliance Program Guidance. In addition to the HHS-OIG Guidance, Baxter has adopted the following professional codes of conduct:

Baxter employees adhere to the company's written Code of Conduct and procedures related to interactions with healthcare professionals. This includes a funding policy and procedure for providing grants to support medical/scientific research, retaining medical consulting services and making charitable contributions and/or corporate sponsorships to customers and non-customers alike. In addition to employees, Baxter’s Code of Conduct extends to its contractors, agents and suppliers.

1. Personal Responsibilities

Baxter employees are responsible for the integrity of their own work. Baxter's policies and procedures provide additional, more specific guidance.

Each employee must acknowledge receipt of Baxter's Code of Conduct and confirm that they will follow the standards. In addition, employees are asked to confirm that they understand and comply with these standards through the annual Certificate of Integrity and Compliance process. The certificate measures the implementation of Baxter’s Code and how well the value of integrity is integrated into the culture at Baxter. It ensures that Baxter's Code of Conduct is being applied uniformly and provides a channel for employees to raise issues. Recipients of the certification include middle managers and above, as well as other selected employees around the world. Every sales representative in the company is also required to sign the certificate.

Since Baxter's Code of Conduct and the supporting policies and procedures may change from time to time, Baxter employees are responsible for knowing and complying with the current laws, rules, regulations, standards, policies and procedures that govern their work. Baxter employees are also individually responsible for reporting wrong-doing. If a law or company policy has been broken, employees are required to report it promptly. If a Baxter employee fails to comply with applicable laws, rules, regulations, standards, policies and procedures, he or she risks being disciplined or terminated. If a Baxter employee breaks the law, they also may be personally liable.

2. Manager's Responsibilities

Baxter managers are responsible for maintaining an ethical climate.

Every Baxter manager must:

  • Explain to their employees why it's important to comply with Baxter's Code of Conduct.
  • Encourage discussion of the Code and situations.
  • Respond promptly and properly to concerns raised by employees.
  • Protect employees against reprisals when they report, in good faith, actions they feel violate the law or these standards.
  • Ensure that significant ethics and compliance issues are shared with Baxter's Corporate Responsibility Office.

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3. Baxter's Board of Directors and Vice President of Ethics and Compliance

Any waiver of Baxter's standards for executive officers or members of the board of directors may be made only by Baxter's Public Policy Committee and is subject to approval by the entire board. Also, any waiver must be promptly disclosed to shareholders as required by applicable law and stock exchange rules.

Baxter's Public Policy Committee of its board of directors is responsible for reviewing and evaluating the company's policies and practices to ensure that they are consistent with Baxter's social responsibility to act with integrity as a global corporate citizen to employees, customers and society. As part of that responsibility, the Public Policy Committee oversees Baxter's Code of Conduct.

To assist the Public Policy Committee in carrying out these responsibilities, the board of directors created a Corporate Responsibility Office in 1993. The company's Vice President of Ethics and Compliance and the Corporate Responsibility Office are accountable directly to the Public Policy Committee and regularly report to the committee about ethics and compliance matters.

Baxter's Vice President of Ethics and Compliance is responsible for the coordination, oversight and enforcement of Baxter's compliance programs and activities. The Vice President of Ethics and Compliance helps promote an organisational culture that encourages compliance with laws and regulations and ethical conduct for all Baxter employees and agents. The Vice President of Ethics and Compliance ensures that the CEO and board of directors are knowledgeable about the company's compliance and ethics program. The Vice President of Ethics and Compliance heads the Corporate Responsibility Office, which assists the Vice President of Ethics and Compliance in carrying out these and other responsibilities. Additionally, the Corporate Responsibility Office is responsible for communicating Baxter’s ethics and compliance standards, providing guidance and training to employees and directors, maintaining multiple channels for employees to report concerns and monitoring compliance.

4. Education and Training

Baxter's Code of Conduct requires compliance with laws, regulations and internal policies that govern how the company works. All Baxter employees must complete Code of Conduct awareness training. In order to reinforce the company's standards and help employees understand the policies and regulations, Baxter continues to offer compliance training for employees across a variety of topics, and also is extending the reach of such training through e-learning and other efforts for Baxter's global work force.

Compliance training enables employees to perform with integrity by understanding the legal and regulatory implications of their actions. Baxter provides risk-specific training to appropriate employees, reinforced with guidance from compliance staff and resource guides to ensure compliance.

In addition to traditional training methods, Baxter maintains e-learning programs discussing antitrust, preventing discrimination, export controls, federal government ethics, global privacy principles, trade compliance, HIPAA, healthcare fraud and abuse, data integrity, electronic media use, Foreign Corrupt Practices Act, among others.

Making courses available electronically, in multiple languages, makes them more accessible to more employees, improves productivity and fosters consistency across the company. E-learning enables the appropriate compliance training across the world to meet the ever-changing requirements of legislative and regulatory bodies. The training content is evaluated and updated periodically to ensure it remains relevant and current.

E-learning complements training efforts in other areas such as good manufacturing practices, environment, health and safety, and quality. The goal is to give Baxter employees the understanding and tools needed to comply with all necessary laws and regulations wherever they are based and wherever Baxter does business.

5. Ethics and Compliance Communications and Investigations

5.1 Communications and Reporting

Baxter strives to develop a culture that produces conscientious and ethically-minded employees who are committed to integrity, honesty, openness and fairness. If Baxter is to be successful, employees need to allow team members to be able to openly communicate and ask questions regarding Baxter's Code of Conduct. To support this concept, Baxter has established the following resources.

The Integrity-Based Decision-Making model helps employees decide the most appropriate course of action, consistent with Baxter's Code of Conduct and values.

Baxter has a number of resources available for those who are seeking information about or guidance on the company's Code of Conduct or, who wish to report a potential violation of the standards. This process encourages employees, as a first step, to seek out local management or resources for assistance in handling their inquiry. Alternative contacts are available to employees, including Regional Compliance Counsel or Corporate Responsibility Office resources.

Baxter's Ethics and Compliance Helpline, a telephone and web resource, is available to employees, their families, suppliers and customers as another channel to report or seek guidance on issues. The Ethics and Compliance Helpline has the ability to connect counsellors, 24-hours a day, seven days a week in 150 languages, at 1-877-BAXTER-3.

The Ethics and Compliance Helpline is an independent channel of communication to raise issues and open communications about Baxter's ethics and compliance issues. Employees, customers, suppliers and other Baxter constituencies may use this communication vehicle to seek guidance, discuss concerns or report issues relative to Baxter's Code of Conduct. Persons calling the Ethics and Compliance Helpline may choose to remain anonymous. There are no caller identification features attached to this line.

5.2 No Retaliation Policy

Baxter employees will not be punished for asking about possible breaches of law, regulation or company policy. Any allegation of a reprisal will be investigated. Baxter managers, as well as the Corporate Responsibility Office and Regional Compliance Counsel enforce this policy.

5.3 Investigations

Upon receipt of reasonable indications of suspected noncompliance, the Ethics and Compliance department, along with the management team, as appropriate, will investigate the allegations to determine whether a material violation of the applicable laws, regulations or policies has occurred, and if so, take appropriate steps to correct the problem.

6. Monitoring and Auditing

Baxter's Ethics and Compliance department conducts periodic compliance assessments covering an array of regulatory regimes, often in conjunction with Baxter's Corporate Audit function. The compliance assessment program is risk-based and adapts to the business and competitive landscape.

Baxter's Corporate Audit function provides worldwide financial, information technology and Sarbanes-Oxley audits and consulting services to the Audit Committee of the board of directors, senior management, business units and corporate functions.  Responsibilities include planning and executing audits by reviewing and validating business processes and procedures, systems, financial and operational controls and assessing financial reporting, management reporting and business practices.

7. Enforcing Standards/ Hiring and Disciplinary Action

Baxter is committed to hiring a workforce whose actions reflect a high degree of integrity and ethics. Accordingly, Baxter takes efforts to conduct strict background checks on potential employees and is developing other measures to ensure that it does not employ or do business with persons or organisations that have been excluded, debarred, suspended or are otherwise ineligible to participate in Federal healthcare programs. Baxter has committed significant resources in hiring highly qualified and skilled individuals. Additionally, Baxter requires all new hires to receive and sign its Code of Conduct.

If after all investigations of potential wrongdoing are completed, any employee who is in intentional and material violation of applicable laws, rules, regulations or corporate policies will be subject to appropriate disciplinary corrective action up to and including termination. Although each situation is evaluated on a case-by-case basis, Baxter consistently undertakes appropriate disciplinary action to address inappropriate conduct and deter future violations.

8. Correction and Preventative Action

Baxter is committed to preventing and detecting violations of law or internal policies and procedures and taking appropriate corrective actions as necessary. Baxter 's ethics and compliance program is designed to ensure that potential violations of law or company policy are responded to promptly, appropriate disciplinary action is taken, and evaluation is given to prevent future violations.