The Ethical Organization

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The Ethical Organization

• Dan Warmenhoven

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NetApp Today
Millions
1,170

• Founded in 1992
• Headquarters Sunnyvale, CA
• FY2004 Revenue 1.17B
• 3,500 employees
• Distribution in 120 countries
• Over 56,000 installed systems
• 2.2 B balance sheet 1.1 B in cash
  investments
• No long-term debt
• SP 500 and NASDAQ 100

50 CAGR
Current as of February 2005
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(No Transcript)
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What is Business Ethics?
Business ethics is an opportunity to
differentiate yourself and your company
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Can Ethics be Legislated?

• Sarbanes-Oxley Act, SOX
• Section 404
• Public Company Accounting Oversight Board, PCAOB
• SEC 17 a - 4
• NASD Conduct Rules
• Health Insurance Portability Accountability
  Act, HIPAA
• Graham-Leach-Bliley Act
• California Senate Bill 1386
• Patriot Act
• GxP
• Data Protection Act
• GoBS
• Basel II

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Ethics Start with Values
VALUES
Ethical Behavior
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The Stakeholders
Customers
Employees
Shareholders
Partners
Neighbors
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Create a Model Company by

• Driving customers success and earning their
  loyalty through products, services, knowledge
  sharing and other solutions that further the
  appliance concept, delivering unparalleled value,
• Providing our shareholders with exceptional value
  through predictable performance and significant
  growth in revenues and profits,
• Attracting and retaining performance oriented
  employees who thrive in a challenging and
  supportive environment, and are recognized and
  rewarded for their achievements and
  contributions,
• Developing and nourishing partnerships to
  deliver superior solutions for our customers, and
• Maintaining good relationships with neighbors and
  communities where we work.

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Create a Model Company
Network Appliance is committed to achieving
market leadership through living its values and
embracing these principles.

• Trust and Integrity
• Leadership
• Teamwork and Synergy
• Simplicity
• Go Beyond
• Get Things Done!

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Ethical Dilemmas

• Outsourcing jobs to lower income regions
• How to treat whistleblowers
• Tax minimization strategies
• Preferential hiring of women and minorities
• Employment of (illegal) migrant workers
• Corporate donations to non profit organizations
• Business practices in China and Indonesia

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Business Ethics Applied
BusinessResults
Law
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An Ethical Foundation

• While I am grateful for the education that the
  School provided me, I am more grateful for the
  sense of ethics, morality, and social compassion
  that you impressed upon a very impressionable
  personThese lessons and values come back to me
  on a daily basis, and are even more valuable in
  this increasingly moral-less society fixated on
  financial and material wealth. In the business
  world, it never ceases to amaze me that the
  subject of ethics and social responsibility are
  devoid in almost every discussion and decision.
  While I work with some very bright and highly
  educated people, it amazes me how many of these
  people have seemingly not developed any
  moralistic or ethical foundation
• Joseph P. BrunettiBellarmine College Prep, Class
  of 1983

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Leaders Must Walk the Talk

• Define and communicate the values that guide the
  organizations decisions and actions
• Build a shared understanding of what the
  organization is about and how it should operate
• Build and maintain the organizations culture
• Model the behavior you expect from the
  organization
• Catch someone doing something right
• Remember that with rights, you also have
  responsibility

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The Ethical Corporation

• The behavior cannot be legislated
• Must be evaluated for 5 constituent groups
• Is a combination of strong values and leadership
  by example

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