O.C. Tanner Legal

Quality Standards

O.C. TANNER’S QUALITY, ENVIRONMENTAL, AND SOCIAL STANDARDS

Great work. O.C. Tanner delivers it day-in and day-out to more than 8000 clients in 125 countries around the world. We delight our clients with the highest quality products and best customer service imaginable. Our dedication to improvement gives clients confidence in our capabilities, helping them appreciate and recognize the great work of the people in their organizations.

Our standard of excellence reaches beyond our walls, extending to our partners and suppliers.

We consider excellence fundamental to our continued success and will not do business with any organization that cannot meet our quality, social, and environmental guidelines.

QUALITY STANDARDS

O.C. Tanner exceeds industry standards when it comes to quality. This quality is ensured and delivered through rigorous employee training, a thorough documentation process, and the Tanner Improvement System.

The Tanner Improvement System is an in-house department that applies lean practices companywide. Its mission is to safely reduce waste, defects, and quality-related costs.

Our deep commitment to quality includes the most comprehensive warranty policy available in the business. We guarantee all awards—excluding high-end watches—for a period of five years. In addition, we guarantee jewelry for life and work tirelessly to ensure on-time delivery, keeping clients happy. In fact, our overall client satisfaction rate is at 97 percent.

When we work with partners and suppliers, they commit to the same high quality standards by agreeing to meet the following quality initiatives:

• A potential supplier must submit an evaluation survey before a relationship is established with O.C. Tanner. The survey includes questions about the suppliers’ environmental and social initiatives, quality standards, warranty expectations, anticipated delivery timetables and stock requirements.
• Once a partnership is established, we conduct annual reviews on the top 80% dollar volume spend of our suppliers with the O.C. Tanner Supplier Scorecard. The scorecard evaluates lead time, inventory turnover, on-time delivery, and performance. If a supplier fails to meet standards, we work with them to clearly define a corrective action plan to meet expectations before we terminate the relationship.
• We diligently resolve quality-related issues across the supply chain. We track vendor-related quality issues monthly. Purchasing managers also meet monthly to discuss improvements and resolutions reached with suppliers. Product audits are conducted and resolved on a case-by-case basis to determine disposition of product and resolve quality related-issues.
• O.C. Tanner strives to adopt lean manufacturing techniques throughout our entire company. As we make lean improvements, we also encourage our suppliers to adopt lean manufacturing techniques and processes.

For more information on our supplier quality initiatives, please consult the O.C. Tanner Quality Manual or your local sales office.

SOCIAL STANDARDS

Our diverse staff represents 56 countries and 64 different languages. We partner with employees, their families, and the local community to improve their quality of life. O.C. Tanner employees enjoy freedom of association, safe working conditions and competitive wages.

Likewise, we expect the organizations we work with to behave ethically and with sensitivity toward social, cultural, economic and environmental issues. Relationships are fostered with like-minded companies that have a positive impact on society, and make a positive contribution to bottom-line results. We work with our suppliers to address social responsibility, but still respect cultural and legal differences in other economies.

Equal opportunities are key in the execution of our social standards. We are committed to partnering with Minority and Women-Owned Business Enterprise (MWBE) companies, and work to utilize them in all areas of procurement.

Fair standards also apply to our manufacturers, vendors, and suppliers. We expect partners of new goods to maintain fundamental labor and human rights standards. As a manufacturer of finished goods, O.C. Tanner operates in compliance with the California Transparency in Supply Chains Act of 2010, or S.B. 657. It requires our supply chain to refrain from the direct or indirect use of forced labor or any forms of human trafficking. By agreeing to a statement in the O.C. Tanner Supplier Set-up Survey, all new suppliers agree to operate in compliance of S.B. 657.

O.C. Tanner conducted a S.B. 657 compliance audit of its current supply chain in 2012. All suppliers are encouraged to exceed the minimum requirements of S.B. 657. Suppliers who fail to meet our standards would be in breach of our agreement.

Vendor shall destroy all O.C. Tanner data at all locations where it is stored after the data is no longer needed to deliver the purchased goods or to satisfy regulatory or other retention requirements. Vendor shall have information destruction schedules and processes in place to ensure O.C. Tanner Information has been deleted within 120 days of delivery completion or after applicable warranty period and when O.C. Tanner Information and data is no longer needed. These information destruction requirements are to be applied, as applicable, to paper, microfiche, disks, disk drives, tape and other destroyable electronic or digital media containing O.C. Tanner data.

Personal data of O.C. Tanner clients and/or their recipients must never be compromised. All recipient information will be used exclusively for delivery of awards and merchandise to the end recipient.

• No recipient data will be retained for marketing purposes.
• No recipient data will be retained or sold for 3rd party marketing purposes.
• No recipient data will be collected or retained for the purpose of ‘upselling’ or upgrading awards or merchandise.

Any security incidents involving O.C. Tanner data are required to be reported to infosec@octanner.com and the O.C. Tanner Service Desk at 801-483-8235 within 24 hours of discovery.

We also align our social standards with a statement from The International Organization for Standardization (ISO):

“In the wake of increasing globalization, we have become increasingly conscious not only of what we buy, but also how the goods and services we buy have been produced. Environmentally harmful production, child labor, dangerous working environments and other inhumane conditions are examples of issues being brought into the open. All companies and organizations aiming at long-term profitability and credibility are starting to realize that they must act in accordance with norms of right and wrong.”

Suppliers must also meet a minimum of the following social responsibility requirements:

• Any violation of a child labor law is not tolerated.
• Suppliers must abide by minimum wage, time and overtime laws established in their respective countries. Working conditions and equality standards must meet guidelines set by local government authorities. This includes discrimination in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation or age.
• Companies must not engage in or support the use of corporal punishment, mental/physical coercion or verbal abuse.
• O.C. Tanner will not purchase or sell conflict diamonds. Our diamond suppliers must comply with all international requirements. In addition, they are required to provide written certification and warranties with each shipment that the diamonds they provide to us are “conflict-free”. All diamond acquisitions are carefully monitored.
• O.C. Tanner operates in compliance with the Dodd Frank Wall Street Reform and Consumer Protection Act that regulates the purchase and use of “conflict minerals.” Dodd–Frank Section 1502 defines “conflict minerals” as cassiterite, columbite-tantalite, gold and wolframite, as well as their derivatives and other minerals that the US Secretary of State may designate in the future. O.C. Tanner only purchases “conflict minerals” from suppliers that have certified that they also operate in compliance with Dodd Frank Wall Street Reform and Consumer Protection Act. O.C. Tanner keeps certification documents on file from all suppliers that provide O.C. Tanner with “conflict minerals” used in our manufacturing processes. An annual audit of direct suppliers of “conflict minerals” used in O.C. Tanner’s manufacturing processes is performed in conjunction with ISO certification to ensure continued compliance.

Partnership with suppliers is an effective way to drive positive chain throughout our supply chain. O.C. Tanner participates in collaborative efforts that promote the goal of creating a more transparent supply chain. If a supplier violates any of these standards, we will work with them to align standards before we terminate the relationship through our corrective action/preventative action (CAPA) program.

Learn more about O.C. Tanner standards, practices and policies by contacting your local sales office.

ENVIRONMENTAL STANDARDS

Our founder, Obert C. Tanner, was passionate about building a better future. We have built our environmental philosophy from his belief that growth and opportunity cannot happen at the expense of the environment. Safe, healthy, and beautiful surroundings have been provided for employees and visitors. We are a committed, responsible corporate citizen of our community, state, and nation and comply with all environmental laws and regulations.

As an advocate and leader in environmental compliance, we continually look for new ways to improve environmental practices and create sustainable development. This goal is achieved by establishing policies and processes that incorporate responsibility into our economic growth, energy and water consumption, air quality, manufacturing, waste reduction and grounds beautification.

We expect the same environmental responsibility from our domestic and foreign suppliers. We believe in purchasing products and resources from organizations with environmentally conscious initiatives in place.

Our environmental supplier requirements are:

• Suppliers must have environmentally responsible and sustainable strategies and practices in place.
• New import suppliers are qualified after questions regarding environmental practices on their supplier survey are completed.
• Key import suppliers are audited regularly by a contracted independent third party to maintain and elevate environmental responsibility.
• Pollution and disposal of hazardous waste must abide by and fall within government regulations.

THIRD PARTY AUDIT PROGRAM FOR INTERNATIONAL SUPPLIERS

In keeping with the philosophy of our founder, Obert C. Tanner, O.C. Tanner aims to “touch the fringes of perfection.” We reach for perfection in all areas of business, whether we are building a recognition solution for a client or purchasing materials from a vendor. We produce quality, and we demand it. The high expectations we set for ourselves also apply to our international partners and suppliers.

Our audit program ensures quality. A third party performs international audits on direct suppliers where goods are manufactured on our behalf to determine if an O.C. Tanner supplier is in compliance with our social and environmental standards, as well as our customs, trade, and import standards. Our suppliers also must comply with standards regarding security around the factory, at shipping docks, and when transporting materials. Audits are announced and scheduled, so we can build trust and long-term relationships with our partners. At its core, our audit program helps ensure that all of our suppliers are in the business of valuing and appreciating their people.

When a supplier blatantly violates local law, or O.C. Tanner’s Quality, Environmental, and Social Standards, we will work with factory representatives to resolve the problem. If a supplier fails an audit, a secondary third party audit will take place within six months of the initial review. Consultation calls and specific requirements from O.C. Tanner management may become a part of the resolution process. Compliance issues will be resolved on a case-by-case basis as they arise. Improvements made during that time period will be documented and retained. If the supplier does not meet the requirements within the allotted period, the relationship with that supplier will be terminated.

Factory and/or social accountability audits will occur in the first or second quarter of the given year. The following structure applies to a supplier’s audit schedule:

• If a supplier has a purchased dollar volume for the previous complete year of more than $1,000,000, they will be audited in the current year.
• If a supplier has a purchased dollar volume for the previous complete year of more than $500,000, they will be audited every even year.
• A third party auditor will perform a supplier’s factory and/or social standards audit when O.C. Tanner surpasses a purchasing threshold of more than $100,000 in a given year.

For more information about the O.C. Tanner supplier qualification or selection procedure, please reference the O.C. Tanner Quality Manual or contact your local sales office.