Ethics and Business Conduct
The highest standards of business conduct and ethical behavior are the foundation for FirstEnergy achieving its vision.
Standards for ethical and legal behavior are set forth in FirstEnergy's Code of Business Conduct and supplemented by related Business Practices. All employees will be provided a work environment free of harassment, discrimination, and unlawful or unethical business activities. Employees will conduct themselves in accordance with all laws and the highest ethical standards when interacting with customers, suppliers, and other employees.
An Employee Concerns Line is provided to ensure that employees have the means to report potential violations and to provide an atmosphere for open communication of ethics and compliance issues. Any employee may use the Employee Concerns Line to report actual or suspected violations of FirstEnergy business conduct standards, without fear of retribution and in confidence.
Authority and responsibility
A designated member of the Leadership Council is the Chief Ethics Officer. The Chief Ethics Officer has the authority to resolve questions dealing with proper ethical conduct, including matters related to conflicts of interest. The Chief Ethics Officer's responsibilities include establishing procedures to monitor compliance with ethics and business conduct standards, overseeing compliance with ethics and business conduct standards, ensuring that appropriate action is taken on reports of ethics and business conduct violations, developing training programs, and making appropriate changes to ethics and compliance policies to respond to violations and potential legal and/or regulatory changes.
FirstEnergy management, with assistance from the Legal Department, is responsible for identifying those laws and regulations that affect their operations and for implementing work practices that promote compliance and timely identification of any violations. If a potential violation of law or FirstEnergy's ethics and business conduct policies occurs, it must be communicated in a timely manner to the Chief Ethics Officer by local management or through the Employees Concerns Line. Employees are also encouraged to discuss problems or concerns with their supervisors. If they are unable to resolve the issue or if employees are uncomfortable discussing the issue with them, employees should seek assistance from other channels such as: the Legal or Human Resources departments, the Chief Ethics Officer or the Employee Concerns Line.
The Chief Ethics Officer will ensure that the appropriate action is taken on reports of ethics and business conduct violations.
The policies related to ethics and the Code of Business Conduct apply to employees of FirstEnergy. The Employee Concerns Line is available to all employees of FirstEnergy for assistance with ethics and compliance matters, reporting improper business conduct and conflicts of interest, and reporting potential instances of non-compliance.
Learn more about FirstEnergy's Code of Business Conduct and Conflicts-of-Interest policy.
On September 19, 2017, as part of its regular review of the corporate governance practices of FirstEnergy Corp. (the "Company"), the Board of Directors of the Company adopted amendments enhancing certain aspects of its Code of Business Conduct (the "Code"), which applies to all employees, including the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The enhancements primarily relate to the reporting of violations and accountability, fair dealings, conflicts of interest, corporate opportunities, and protection of corporate assets sections.
On July 30, 2017, an administrative update was made to the Code of Business Conduct, which applies to all employees, including the Chief Executive Officer, the Chief Financial Officer and the Chief Accounting Officer, to reflect the name of the Chief Ethics Officer.
On May 17, 2017, an administrative update was made to the Code of Business Conduct, which applies to all employees, including the Chief Executive Officer, the Chief Financial Officer and the Chief Accounting Officer, to reflect the name of the Interim Chief Ethics Officer.
The above summary of the amendments is qualified in its entirety by reference to the full text of the Code.
Board of Directors Code of Conduct
On September 19, 2017, as part of its regular review of the corporate governance practices of FirstEnergy Corp. (the "Company"), the Board of Directors of the Company adopted amendments enhancing certain aspects of the Board of Directors Code of Ethics and Business Conduct (the "Directors' Code"), which applies to the Company's Directors, including the Chief Executive Officer who serves as a Director. The enhancements primarily relate to the scope and intentions of the Directors' Code and the conflict of interest, confidential information, compliance with laws, rules and regulations, reporting of violations and accountability and compliance procedures sections.
The above is qualified in its entirety by reference to the full text of the Directors’ Code.
Corporate Political Activity Policy
The results of candidate elections and ballot initiatives and their impact on public policy can have a profound effect on FirstEnergy and its stakeholders. FirstEnergy believes it has a responsibility to its shareholders, customers and employees to participate in the political process and, where appropriate and legally permissible, to make contributions in connection with elections for public office and expenditures in connection with non-candidate state and local ballot initiatives such as referendums and constitutional amendments.
FirstEnergy has decision-making and oversight processes in place for political contributions and expenditures to ensure such contributions or expenditures are legally permissible and in the best interests of FirstEnergy. Accordingly, this policy describes the criteria for certain political contributions and ballot initiative expenditures made with corporate funds and the process for approving such contributions and expenditures.
This policy governs legally permissible corporate political contributions and grassroots lobbying communications, including contributions to candidate campaigns and to entities operating under Section 527 of the Internal Revenue Code, and expenditures for non-candidate state and local ballot initiatives.
Corporate Political Participation – Overview
Under federal law, there are limits on a corporation’s ability to give direct corporate contributions to federal candidates and national political parties. Accordingly, FirstEnergy does not contribute corporate funds directly to federal political candidates or parties.
Each state has different laws, rules and regulations governing political contributions in state and local elections. Any corporate political contributions by FirstEnergy are made in accordance with applicable laws, rules and regulations.
Our contribution decisions are based on what is in the best interests of FirstEnergy and not based on the personal preferences of our executives.
Industry Groups, Trade Associations and Related Organizations
In certain circumstances, where permitted by law, and with the approval of our External Affairs Department, FirstEnergy may use corporate funds for the payment of dues and/or contributions to section 527 organizations (tax exempt organizations that engage in political activities), section 501(c)(4) organizations and trade associations that may use a portion of such dues for political and lobbying activities.
Corporate Political Participation – Process and Criteria
Any request for a FirstEnergy political contribution and grassroots lobbying communications, including contributions to an entity operating under Section 527 of the Internal Revenue Code or an expenditure for a non-candidate state and local ballot initiative, shall be submitted to the External Affairs Department for review and approval. The External Affairs Department will review the request to confirm that the proposed contribution or expenditure is in the best interests of FirstEnergy and, working with the FirstEnergy Legal Department, confirm that any contribution or expenditure we consider complies with applicable election laws, rules and regulations.
The External Affairs Department will keep accurate records of any corporate political contributions and take actions to ensure that where required, complete and accurate disclosures to government entities are made.
FirstEnergy and our lobbyists are required to file reports with the U.S. Congress and state agencies on a regular basis disclosing information about their lobbying activities. The reports are available for review on the websites of the U.S. House of Representatives and the U.S. Senate, as noted below.
- FirstEnergy maintains and files Lobbying Disclosure Act Registration and Reports (Form LD-2) with the U.S. Congress. These reports detail the particular bills and issues on which individual lobbyists engaged, as well as the total lobbying expenses incurred. These reports may be found at: http://www.senate.gov/legislative/Public_Disclosure/LDA_reports.htm
- FirstEnergy and its registered federal lobbyists must also file semi-annual reports detailing, among other things, disbursements and personal and/or direct contributions to federal candidates. These forms (LD-203) may be found at: http://www.senate.gov/legislative/Public_Disclosure/LDA_reports.htm
In many cases, State reports, if required, are also made available for review on the applicable state agency website.
Political Action Committee
FirstEnergy encourages its employees to be active members of their communities. Along with participation in civic, charitable and volunteer activities, this includes participation in the political process. All eligible employees may make voluntary contributions to FirstEnergy’s Political Action Committee (FE PAC). The FE PAC is directed by a board of employees which makes and approves all decisions regarding the FE PAC’s political contributions budget.
FE PAC contributions are publicly disclosed as required on the website of the Federal Election Commission at http://www.fec.gov/.