Honesty and Integrity

Our Value: We uphold high standards of business ethics and integrity, enforce strict principles of corporate governance, and support transparency in all of our operations.

 

 

Business Ethics Strategy

A reputation for integrity and ethical business conduct is one of the most valuable assets an individual or company can possess. Marathon promotes and supports high standards of ethical behavior and invests in education, training and infrastructure to encourage awareness of and compliance with laws, regulations and policies. The Company respects local laws and promotes the principles of justice, fairness and equality. Within its sphere of influence and as appropriate, Marathon encourages local authorities to observe the rule of law.

 

Business Integrity Resources

The Vice President of Corporate Compliance and Ethics oversees the Company's compliance and ethics programs, BI Office and Office of the Ombudsman. This officer is a member of the BI Advisory Committee, along with representatives from Law, Audit, Human Resources and Operations. The committee influences policies on integrity, provides guidance and advice on the Code of Business Conduct, and promotes training and compliance. To bring an external perspective, a subject matter expert in ethics from the University of St. Thomas in Houston is a member of this committee. This expert also provides guidance to the Company with benchmarking various initiatives and programs with peer companies.

The BI Office directs the Company's emphasis on ethical standards, maintains the Code of Business Conduct, develops and implements ethics education programs, communicates internally and externally about ethical business conduct, and administers the Integrity Helpline. It also coordinates with the Law, Audit, HES&S and Human Resources organizations to ensure program compliance.

Approximately 50 employees designated as BI Partners raise awareness in their respective organizations and locations about Marathon's commitment to business ethics and how to access related resources. BI Partners provide feedback on employees' understanding of ethics messages and issues.

Employee training on Marathon's commitment to integrity begins with required ethics computer-based training (CBT) during new employee orientation. Marathon requires all employees, except SSA employees and union members, to complete mandatory ethics training every three years. Voluntary training is offered in intervening years. Annual ethics training is made available to union members.

Approximately 65 percent of eligible employees completed voluntary ethics CBT or participated in live, facilitated training sessions in 2008. Training covered sections of the Code related to individual accountability and responsibility; responsibility to one another; and responsibility to the public. The remaining three Code sections will be covered in voluntary training in 2009.

SSA conducts ethics training using CBT, which is provided for all newly hired retail store associates, then annually thereafter for all store level employees regardless of job title. Ethics training for all SSA headquarters employees was conducted via CBT in early 2009.

 

Reporting Potential Ethical Issues

Marathon's Integrity Helpline is a confidential, 24-hour global resource for reporting suspected unethical or illegal activity and for seeking guidance for Code of Business Conduct compliance. The Helpline is available in several languages to employees, contractors and the general public. Reporting may be done on a personal or anonymous basis.

The number of calls made to the Integrity Helpline has been increasing for several years. The Company attributes this trend to employees' growing awareness and trust in the reporting process, and assurances that if they report concerns in good faith, Marathon's Code prohibits retaliation. Marathon conducts an internal investigation of all Helpline allegations. To ensure consistency, internal groups involved in the investigation process received training in 2008. By year-end, 253 of the 280 cases were closed following the completion of internal investigations.

The Internal Investigation Steering Committee was formed in mid-2008 to ensure consistent, thorough investigations into allegations based on their nature and potential significance. The committee, comprising officers and senior management from organizations involved in the internal investigation process, monitored eight cases in 2008. At the conclusion of the investigations, reports were made to the committee and recommendations were made to senior management in the affected organizations regarding disciplinary and/or corrective actions.

In 2008, Marathon initiated a third-party, Web-based case management system for tracking and documenting cases and investigations resulting from Helpline calls. This system centralizes information to improve internal collaboration and case management consistency.

 

Communicating about Disciplinary Actions

Acting on a BI Advisory Committee recommendation made in 2008, Marathon is developing an internal report on disciplinary actions resulting from substantiated concerns and allegations. The report will protect the confidentiality of individuals who are disciplined, while demonstrating that Marathon applies discipline consistently for employees across the Company.

 

Assuring Code of Business Conduct Compliance

The Code of Business Conduct articulates Marathon's commitment to comply with the law and to conduct its business ethically. The Code reinforces the values that underpin good business decisions: trust, respect, dignity and honesty. It applies to every person who works for or represents Marathon.

The Code covers accountability and responsibility; individual responsibilities to one another, the public, shareholders, business partners, governments and the law; and resources for assistance and reporting. It is available in English, Spanish and French on Marathon's external Web site.

Marathon takes steps to ensure Code compliance and allows employees to disclose situations or concerns related to their personal compliance, particularly conflicts of interest. Most employees based outside of the U.S. are required to complete an annual Code questionnaire and certification statement. The Law and Audit departments review all responses. Approximately 8,400 Marathon and SSA employees received the questionnaire covering calendar year 2008 and all completed it as required. Employees made approximately 400 disclosures. The BI Office and SSA address relevant disclosures that require follow-up or response.

Marathon's Policy for Whistleblowing Procedures establishes methods for handling concerns raised by employees, vendors, contractors and other third parties about accounting and audit- related issues. Concerns may be reported through the Integrity Helpline or the Business Integrity Office. All reports are documented and categorized by the BI Office to ensure compliance with applicable policies and regulations. Marathon is committed to protecting any employee who makes a good faith report about these issues. The whistleblowing policy is available on the internal BI Web site and Marathon's external Web site.

 

Anti-Corruption Compliance

Wherever it does business, Marathon and its majority-owned subsidiaries comply with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (FCPA). The FCPA, like the laws of other nations, forbids bribing foreign officials or representatives of foreign governments. The Law Organization is responsible for anti-corruption compliance, with guidance from the Company's chief compliance officer. The policy is available on the Company's external Web site.

Annual FCPA and anti-corruption training is mandatory for all employees whose job responsibilities include operations outside of the United States, Canada and Western Europe, or whose job responsibilities otherwise involve anti-corruption compliance. Employees who transfer outside the U.S. receive additional anti-corruption training. In 2008, 1,879 employees worldwide attended FCPA training to fulfill a requirement or voluntarily participated in training. This includes 97 percent of employees required to take the training. Employees who require training must also certify annually that they have complied with Marathon's Anti-Corruption Compliance Guidelines.

Marathon maintains a comprehensive annual anti-corruption compliance audit program for its non-U.S. operations and outside-operated interests, particularly in countries that are not in the Organisation of Economic Co-operation and Development (OECD). Audits review recordkeeping, financial controls, personnel training records, documents related to hiring contractors and consultants, and business expense reports of managers responsible for operations in non-OECD countries. Managers also are interviewed as part of the audits.

 

Political Advocacy

Through an active government affairs program, Marathon promotes pro-business public policies that encourage responsible energy development while making a positive impact on the countries, states and communities where it operates. In addition to engaging U.S. public policy makers, Marathon meets with representatives of governments outside the U.S. where Marathon has interests to promote good governance and business practices and a positive investment climate. The Company is working with numerous coalitions to expand its outreach opportunities, as well as raising employee awareness of public policy issues and encouraging employees to express their views on key issues to their elected officials.

Marathon advocates U.S. energy security through an adequate, reliable and sustainable supply of affordable energy to meet the needs and aspirations of private citizens, commercial enterprises and public sector functions. The Company has put forth energy security solutions to meet these challenges, emphasizing energy efficiency and conservation, energy supply diversity (both geographic and type of energy), and technologies to access more energy while reducing environmental impacts.

In 2009, Marathon's public issue advocacy will focus on U.S. energy policy, including climate change and carbon emissions reduction strategies. The Company believes carbon emissions solutions should address all fossil fuel users globally. Marathon is participating in the public policy debate and monitoring the status of potential solutions to address climate change. Marathon also plans to proactively engage with federal and state governments to manage issues such as taxation, low carbon fuels and renewable fuels standards, and to promote access to North American resources, including Canadian oil sands.

 

Political Contributions

The Marathon Employees Political Action Committee (MEPAC) is a vehicle for employees to make voluntary contributions to support candidates for U.S. federal and state elected office. In 2008, MEPAC donated approximately $508,250 to 365 federal and state candidates, political party organizations and political action committees.

Where allowed, Marathon supports candidates for elected office through corporate donations. These donations totaled $62,450 to 66 candidates and organizations in 2008. The Public Policy Committee reviews, approves and monitors compliance with the Company's political contributions budget.

MEPAC and corporate donations are made to support a policy-making environment that promotes responsible energy development. Political contributions are based solely on a candidate's position on business issues, not social issues. MEPAC is registered with the U.S. Federal Election Commission (FEC) and complies with all reporting requirements of the FEC and state and local laws.

 

Transparency

Marathon promotes openness in all business dealings, especially records and revenue flow, through cooperation and dialogue among producing countries and companies. Within its sphere of influence and where permitted by contracts, Marathon strives for financial transparency.

 

Encouraging Transparency in Equatorial Guinea and Gabon

To demonstrate its active encouragement of financial transparency as a means of improving governance in resource-rich countries, Marathon is engaged with the Extractive Industries Transparency Initiative (EITI). This voluntary international initiative of governments, companies and civil society works to strengthen governance in producing countries by improving transparency of payments and accountability in the extractive sector.

Equatorial Guinea qualified as an EITI candidate country in February 2008 and continues to progress its revenue transparency efforts through EITI. EG named a national coordinator in 2007, hosted a civil society workshop in 2008 and plans to publish its first report in 2009. EG's full validation as an EITI compliant country is due by March 2010. Marathon plans to actively participate in the EG National EITI Commission.

Gabon is an EITI participant and published its third EITI report in March 2008, covering revenues and incomes for 2006. Independent audit experts gathered Gabon's financial flow data from the government and extractive industry companies. Gabon's report is due to be validated by March 2010.