Compliance
Compliance with laws and regulations is fundamental to working responsibly. Microsoft's goal is to meet or exceed legal requirements by conducting our business ethically, responsibly, and with integrity. This is about doing the right thing and creating trust and not just about maintaining our license to operate.
Challenges
- It is complicated to mandate accountability for compliance standards among more than 90,000 employees and contractors who work in many languages and across more than 100 jurisdictions.
- The different legal standards and expectations of many different countries and jurisdictions can be challenging to integrate.
Opportunities
- Going beyond training to build a strong culture of accountability
- Building trust with governments and industry stakeholders by adhering to laws and operating by our own guidelines
- Spurring technology innovation by enabling companies to build on one another’s products and platforms
Viewpoint
Huguette Labelle Chair of the Board of Transparency International
Strong leadership in corporate citizenship is invaluable. In recognizing the importance of accountability and responsibility, companies commit to live by them by developing Codes of Ethics or Conduct, and they demonstrate that commitment by reporting on their compliance with them.
What We're Doing
Competing responsibly within our industry
- Supporting web standards: With the release of Windows Internet Explorer 9, we published more than 40 documents that explain its support for web standards, as required by the European Undertaking. No other browser vendor provides this depth of documentation regarding use of web standards.
- Promoting innovation, choice, and opportunities: We adhere to a range of principles, including our Interoperability Principles, to ensure that our products continue to promote innovation, user choice, and opportunities for developers. These principles have been kept front of mind in our development of new products and services, such as Microsoft Office 365.
- Acquiring Skype: Our acquisition of Skype was cleared by the U.S. Department of Justice in June 2011 and will be reviewed in other jurisdictions over the coming months. We believe the merger will enhance competition and bring a range of new communication services and choices to people around the world.
- Responding to the i4i ruling: In June 2011 the U.S. Supreme Court ruled in favor of the Canadian company i4i, which claimed that Microsoft violated certain patent rights related to an XML technique that was implemented in Microsoft Word. Although Microsoft’s arguments were supported by Apple, Facebook, Cisco and many other leading companies, the U.S. Supreme Court ruled that the i4i innovation was patentable, enforcing a $290 million award against Microsoft.
Respecting antitrust laws and principles
We have continued to comply with antitrust rulings and applied principles that support innovation, choice, and opportunities for developers in the development of new products and services. On May 12, 2011, the U.S. Consent Decree that ended the competition lawsuit against Microsoft in the late 1990s reached its termination date. The U.S. Department of Justice, various state attorneys general, and the court overseeing compliance concluded that no further extensions were warranted and that Microsoft had met its obligations under the decree, including its documentation obligations for various Windows protocols. The experience under these orders has shaped how we view our responsibilities and how we compete fairly in the market.
A broad range of competition exists in the market today. That includes new operating systems from Apple, Google, and other software developers for all kinds of devices, including PCs and smartphones.
Training employees
In FY2011, more than 99 percent of Microsoft employees received training on our Standards of Business Conduct, which includes topics such as anticorruption, conflicts of interest, and financial integrity. This training was delivered in eight languages. It is authorized by our Board of Directors and is filed publicly with the U.S. Securities and Exchange Commission and NASDAQ.
Each year, a survey measures employee satisfaction with the training provided. The FY2011 survey showed that employees were extremely satisfied with the training, scoring the program 167 out of 200. This was broadly consistent with the score achieved in 2010.
Promoting global compliance and governance efforts
We work with industry peers and global organizations to promote good governance and compliance practices. Our achievements have included:
- Promoting anti-corruption initiatives among intergovernmental organizations and other multinational companies through our membership in the World Economic Forum Partnership Against Corruption Initiative. This engagement also shows our support for the United Nations Global Compact principles on anticorruption.
- Partnering with the United Nations Office on Drugs and Crime to develop a technology tool to help in the fight against corruption and organized crime. The effort is creating a tool for transnational collaboration and enabling a new knowledge management portal.
- Supporting the International Anti-Corruption Academy in sharing private-sector expertise on compliance and anticorruption.
- Being recognized by and receiving awards from groups such as Ethisphere Magazine, Corporate Secretary magazine, and the American Business Awards for the effectiveness of our compliance efforts and quality of our online compliance and ethics training initiatives.
What's Next
Our priorities for FY2012 include:
- Working in partnership with governments around the world and intergovernmental organizations to achieve new compliance and ethical standards that create meaningful governmental guidance and industry practice.
- Adhering to our principles and releasing technical information about new Microsoft products to enable interoperability.
- Maintaining collaboration with international governance organizations and industry to promote good governance and compliance practices, particularly related to anticorruption.
Huguette Labelle, Chair, Transparency International
Strong leadership in corporate citizenship is invaluable. In recognizing the importance of accountability and responsibility, companies commit to live by them by developing Codes of Ethics or Conduct, and they demonstrate that commitment by reporting on their compliance with them.
The commitments of the IT industry to the principles of transparency and third-party assessment included in the Global Network Initiative—which brings together civil society, academics, and investors concerned with freedom and privacy in IT and of which Microsoft is part—are to be welcomed as further support of anticorruption efforts by business.
Unless a commitment to integrity is widespread, and a zero-tolerance approach enforced, companies face the risk that an employee or partner company will break trust and flout the rules to win business through bribery.
Compliance guidelines have become more common in the business world - more than four in five companies have a formal compliance programme, according to a recent KPMG survey. To make the code a practical part of a business, companies need to provide training programmes that are dedicated to helping staff. There is no lack of practical guidelines that help train personnel.
In addition, the UN Global Compact provides a template for self-assessment. Further reporting and compliance guidance comes from other organizations like the International Chamber of Commerce and Transparency International.
The true test of compliance is whether it happens where it is most needed: on the front line. A Code of Conduct gets a passing grade only after a culture of integrity, transparency and accountability permeates an organization, from top to bottom.
Transparency International is the global civil society organization that is leading the fight against corruption
