Ensuring the highest ethical standards

The Reed Elsevier Code of Ethics and Business Conduct (Code), disseminated to every employee and publicly available at www.reedelsevier.com, sets the standard for our corporate and individual behaviour. It incorporates the ten principles of the UN Global Compact. The Code begins with an introduction from the CEO and sets out our standards on key ethics and compliance matters, including: policies related to protecting company interests and assets; relationships with business partners, customers, suppliers, and competitors; dealings with governments; respecting colleagues and communities; and data protection. The Code also explains the responsibility of employees to report wrongdoing. The Code has been translated into 11 languages to improve accessibility by all employees, including Chinese, Dutch, French, German, Italian, Korean, Japanese, Polish, Portuguese, Russian, and Spanish.

The Code is reinforced by other policies to further assist employees in complying with laws in key areas, such as bribery, competition, export and trade controls, and workplace harassment. The Code (and a related supplemental policy) also addresses political contributions, which are strictly prohibited except in the United States, where such contributions and activities are permitted in certain states within allowable limits if they comply with stringent reporting and disclosure regulations. Employees must obtain senior management approval for any proposed corporate political contributions; all corporate contributions are reported as required by law. Reed Elsevier companies in the United States contributed $85,680 to political parties in 2011. There were no donations made in the European Union for political purposes.

To aid employee understanding of our policies, we offer interactive online training to explain topics and the importance of compliance, with examples of how policies apply in practice. Courses also highlight resources available to help those with questions or concerns. All employees receive training on the Code, data privacy and security, and preventing bribery; other courses are rolled out to those for whom the topic is relevant. By year end 2011, over 99% of current employees completed Code training at least once; 99% of employees completed preventing bribery training; 99% of employees in English-speaking countries completed data privacy and security training; 100% of relevant employees in English speaking countries completed a course on fair competition, and 100% of US managers completed a course on preventing workplace harassment. In 2012, we will be implementing translated versions of our privacy training, and issuing refresher training on fair competition and workplace harassment.

We further enhanced our preventing bribery compliance efforts to align with the UK Bribery Act (the “Act”) that came into force on 1 July 2011, and Adequate Procedures Guidance under the Act. We issued additional procedures to help ensure compliance with our preventing bribery policies, and we conducted extensive in person training for employees in the highest risk roles, in addition to requiring computer-based training for all employees. Each of our businesses designated Preventing Bribery Working Groups, which have been engaged in implementing and overseeing compliance activities. We make extensive due diligence materials available to all employees including guidance on researching intermediaries, joint venture partners, and acquisition targets, among others, as well as due diligence process flow charts, questionnaires, and checklists. The importance of compliance with the UK Bribery Act and all bribery laws, resources available, and the individual responsibility of each person in the company, was highlighted in an email to staff from the CFO in the year.

We maintain Compliance Committees for all parts of the business. Employees are encouraged to report suspected violations of the Code or law to their manager, a human resources representative, a company lawyer, or the appropriate compliance committee. We also offer employees a confidential reporting line, which is accessible by phone or online 24 hours per day. As allowed under applicable law, employees may submit reports to the Confidential Line anonymously. The Code stipulates protection against retaliation if a suspected violation of the Code or law is reported. Substantiated Code breaches are subject to swift disciplinary action, up to and including termination.

In addition to our Code of Ethics and Business Conduct, which applies to all directors, officers, and staff, there is a Code of Ethics for Senior Officers for Reed Elsevier’s CEO, CFO, and Group Financial Controller.