BAE Systems plc - Business Update

BAE Systems plc has today issued its interim management statement for the period from 1 January 2011 to 3 May 2011.

Trading for the period has been consistent with management expectations at the time of the 2010 preliminary results announcement on 17 February 2011.

Ian King, Chief Executive BAE Systems, said:

“BAE Systems has continued to perform in line with management expectations announced at the preliminary results in February. The period has been characterised by the completion of a number of acquisitions totalling £0.6bn which support the Company’s strategy to grow its Services and Electronic Systems businesses.”

Business Conduct

This week also marks the third anniversary of the publication of the Woolf Committee’s Report. To date, BAE Systems has:

significantly strengthened its governance and business conduct related policies
acted upon all 23 of the Report’s recommendations - which the Company committed to do, prior to its publication
rolled out a Global Code of Conduct and supporting training, which will be updated and reissued this year, outlining clear standards to all employees
begun to develop a culture of Total Performance, based on clear values - trusted, innovative and bold - that will enhance the way the Company does business

In accordance with recommendation 23 of the Report, an external independent expert (Ethical Leadership Group) was engaged to conduct an assessment of progress against the recommendations.

Their report concludes that “we find BAE Systems has a solid business conduct program that includes many best practise components. There is also evidence of substantial progress over the last three years against the Woolf recommendations and we find that there are well designed processes and plans in place to ensure continued improvements”.

ELG also made recommendations on the ongoing business conduct programme and one of the key steps they identified is that the Company needs to provide middle management with the resources and incentives to become more engaged in the business conduct programme and to take more responsibility to embed it within the company.

This, and all of ELG’s findings will be incorporated into future work in this area. As the standards of business conduct expected of global companies continue to evolve BAE Systems is always looking at how to improve and become recognised as a leader in this area.