The Ethical Organization Dan Warmenhoven

NetApp Today Current as of February 2005 $ Millions 50% CAGR 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  S&P 500 and NASDAQ 100

What is Business Ethics? Business ethics is an opportunity to differentiate yourself and your company

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

Ethics Start with Values Corporate Policy Law VALUES Ethical Behavior

The Stakeholders Customers PartnersNeighbors EmployeesShareholders

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.

Create a Model Company  Trust and Integrity  Leadership  Teamwork and Synergy  Simplicity  Go Beyond  Get Things Done! Network Appliance is committed to achieving market leadership through living its values and embracing these principles.

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

Business Ethics Applied Business Results Law Values

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 person…These 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. Brunetti Bellarmine College Prep, Class of 1983

Leaders Must “Walk the Talk”  Define and communicate the values that guide the organization’s decisions and actions  Build a shared understanding of what the organization is about and how it should operate  Build and maintain the organization’s culture  Model the behavior you expect from the organization –“Catch someone doing something right”  Remember that with rights, you also have responsibility

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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