Why it matters At HARMAN, we are dedicated to delivering products and services that enhance, enrich and simplify

Dinesh C. Paliwal
Chairman, President and Chief Executive Officer

HARMAN is a company of action. We love cars, and we work with automakers all over the world to design connected car and sound management solutions that elevate the driving experience in every way. We love music, and we invest millions in R&D to develop technologies and products for the artists who create music and the listeners and concert goers who want to hear the music as the artist intended. And we love to find new ways to improve the workplace by introducing software and systems that enhance enterprises in all sectors.

When it comes to sustainability, our commitment is just as strong and our pace just as fast, thanks to our 29,000 people around the world who are constantly identifying new processes and practices to reduce our environmental footprint and increase our positive social impacts. In addition to our own high standards and ambitious goals, we are committed to public accountability and transparency, which is reflected by our continued support of the United Nations Global Compact (UNGC). We commit to making the UNGC and its ten principles regarding human rights, labor, environment and anti-corruption part of our business strategy, culture, and day-to-day operations at HARMAN.

HARMAN’s 2016 biennial sustainability report, Actions Speak Louder, focuses on our efforts and outcomes. Equally as important, it highlights the people who are driving these accomplishments. I’d like to offer special recognition to our cross-functional and multi-divisional Sustainability Council, which ensures that sustainability principles and best practices are built into everything we do.

While this report highlights our progress to date, our global commitment to sustainability is always growing. From the manufacturing floor to our engineering labs to the board room, HARMAN is putting sustainable practices into action to improve our company, enhance our communities and generate maximum customer value and shareholder returns. On behalf of the HARMAN senior leadership team, I hope you enjoy this report and appreciate our stories. There’s no one better to tell them than through the people who are living them.

Connectivity is what drives so much of what we do day after day, year after year — from our technological innovations for home, on the go and in the studio to the indelible relationships between our employees, suppliers, customers and communities, we are constantly working to harness its potential.

In the spirit of cultivating our relationships and sharing successes between our business practices and our ideals, HARMAN announced the formation of a dedicated Sustainability Council in 2014. Appointed by HARMAN’s Executive Committee, including our CEO, CFO and Group Presidents, the Council brought together individuals from HARMAN’s four business units and all relevant corporate functions, each with a vested interest in continually supporting sustainability as a core character of our organization.

In fiscal year 2016, the Council underwent a reorganization to reflect HARMAN’s new structure and better capitalize on our new capabilities and opportunities. The refreshed Council includes strong champions of sustainability reporting, stakeholder engagement, operations initiatives and community outreach. Individuals on this Council have been a conduit of information regarding initiatives and sustainability stories, strengthening One HARMAN connections throughout the organization.

Our Council continues to define, promote and execute HARMAN’s global economic, environmental and social sustainability goals as well as drive behavior change and report progress. Member responsibilities include:

• Setting short-term and long-term sustainability goals for HARMAN
• Representing his/her respective business area in decision-making
• Leading implementation of new policies and programs
• Helping drive cultural change and inspire employee engagement

While we’re proud of the impact it has had on our organization, the Council is just one part of a larger equation that will produce greater success in promoting sustainability at HARMAN. This responsibility belongs to each of us, and we are all expected to do our part to make HARMAN and our partners and customers stronger and more sustainable.

In fiscal year 2017, HARMAN will begin tracking progress toward Operational Key Performance Indicators for energy reduction, health and safety, community engagement and sustainable procurement at our global manufacturing locations.

Meet the Sustainability Council

At HARMAN, we believe responsible business is good business. To ensure our continual commitment to best practices and ethics, we define our corporate governance through a set of guidelines and codes available on our website at http://investor.harman.com/corporate-governance.cfm

HARMAN’s Corporate Governance Guidelines

• The Board of Directors is elected by our stockholders to oversee management and to ensure that the long-term interests of the stockholders are being served.
• The Board reviews and approves the corporate strategy.
• HARMAN’s day-to-day business is conducted by its officers and employees under the direction of the Chief Executive Officer with oversight and counsel from the Board.

Our leaders provide the guidance and oversight that makes HARMAN a globally sustainable, ethically accountable business. To ensure adherence to these ideals, our company, as well as its employees and suppliers, are bound by well-established codes of conduct.

Employee Code of Conduct
Supplier Code of Conduct
Governance Guidelines

HARMAN holds itself to the highest standards of conduct and accountability. Our culture embodies an unwavering commitment to ethical business practices and good corporate citizenship everywhere we operate.

Our official policies meet rigorous industry and regulatory standards. HARMAN’s management approach to employee health and safety is embedded in our TS 16949 (quality management system) and ISO 14001 (environmental management system). It also includes elements of OSHAS 18001.

Internal accountability standards

Ensuring our employees, senior officers and Board members are accountable for complying with federal, state and local laws applicable to HARMAN, as well as those of private and public regulatory agencies, are at the core of our corporate Code of Ethics. Ethical behavior is required amongst employees, their subordinates and their peers at all times. Any violation of our Code of Ethics is handled promptly on an internal level. Our mandatory training on anti-corruption policies and procedures has proven to resonate with our stakeholders, as evident in the results of the Materiality Assessment we conducted earlier this year.

• In fiscal year 2016, there were no material fines paid for non-compliance with laws and regulations
• 100 percent of the Board and Executive Committee have received HARMAN's written anti-corruption policies and procedures; the HARMAN Board of Directors does not receive formal training, but as leaders of the organization, they are committed to upholding the highest of ethical standards.

99.7% of our 1,923 employees who hold the designation of manager or above (also known as GR12 employees) have completed anti-corruption training. In Asia, this training is supplemented by in-person training, completed by 2,043 employees to date.

Our Human Resources team has policies and practices in place to proactively address a wide range of potential challenges and support our base values, goals, and principles. Our guidelines and policy implementations are designed to vigorously support diversity and inclusion globally.

Employee Ethics

We conduct regular employee ethics and compliance training to reinforce our values and tenets in our workforce. Where warranted, we also institute additional training programs, specifically targeting HARMAN’s supply chain partners on issues of human rights and labor.

Statement on Human Rights

HARMAN is committed to developing an organizational culture that acknowledges and respects the principles contained within the Universal Declaration of Human Rights issued by the General Assembly of the United Nations. Our devotion to the realization of human rights is embedded in the Company’s environmental and social responsibility policies.

Visit our Ethics Hotline site for comments or concerns.