At Sterling, we conduct business ethically, with integrity, and transparently with all of our stakeholders.
Ethics and Compliance Program Structure
Sterling’s ethics and compliance program involves leadership and oversight. Sterling’s Board of Directors is committed to maintaining an effective ethics compliance program. They delegated Board oversight to the Audit Committee and executive oversight to Sterling’s Chief Compliance Officer. A Compliance Report is presented to the Board and Audit Committee at least quarterly to provide updates on the program.
Overview of Ethics and Compliance
A reputation of integrity is one of the most valuable assets a company can possess. Sterling’s reputation has been built over many years and is dependent on the integrity and sense of responsibility demonstrated by our employees. Sterling is committed to high ethical, moral, professional, and legal standards and is dedicated to operating its business consistent with these high standards of business conduct and ethics.
Our company-wide commitment to ethical business practices is a result of strong ethical leadership coupled with individual ethical standards of each of our employees. Sterling’s Board of Directors adopted the Code of Business Conduct, which applies to all directors, officers and employees of Sterling. The Code sets forth the expected standard of conduct and provides guidance for our legal and ethical responsibilities when acting as a representative of Sterling. Every Sterling employee receives training on the Code and is required to certify that they have received, have read, and understand the expectations of the Code.
Ethics and Compliance Training
The core of our ethics and compliance framework is built around preventive communications, education and training at all levels of the organization. Our education and training programs enable employees to identify and deal with ethical problems, which are implicit in their everyday choices and actions.
In 2019, we revised our Tip-of-the-Month communication format and style, moving from abstract legal concepts to easy-to- understand tools and job aids. Also, we refreshed our Code of Business Conduct training course, rebranded our EthicsLine, and piloted a new ethics and compliance road show for newly hired employees or promoted frontline field and office management about our ethics and compliance program.
During 2019, we completed training campaigns with each Board Member, 325 managers and supervisors, and 653 employees on our Code of Business Conduct, harassment and bullying, conflicts of interest, HIPAA privacy, and OSHA Whistleblower.
Looking ahead for 2020, we will continue to promote and encourage a ‘See Something – Say Something’ culture through increased visibility of the Chief Compliance Officer within our business units. We will conduct substantive trainings on anti-bribery and anti-corruption and competition law and continue to strengthen our processes to ensure that all allegations of employee misconduct are reported up through appropriate channels, and are consistently investigated and remediated.
Sterling has several other polices that support honesty and integrity in addition to the Code of Business Conduct. These polices include, but are not limited to, the Insider Trading Policy, Conflicts of Interest Policy, Anti-Fraud Policy, and a Supplier Code of Conduct, which applies to contractors and agents of Sterling. Sterling business unit Employee Handbooks serve as another resource for employees.
Sterling is committed to fostering dialogue between management and employees through multiple channels.
Supervisors are expected to maintain an environment that promotes open communication. In addition, Sterling hosts an independent compliance EthicsLine for employees and external parties to report concerns about ethical or questionable conduct they may not be comfortable discussing with their management or a member of HR.
In addition to the Code, and other policies, Sterling provides several channels for employee communications and training, including an internal publication; Ethics & Compliance Tip-of-the-Month, New Hire Orientation, as well as virtual and instructor-led training.
As part of Sterling’s on-going commitment to developing a strong culture of ethics and integrity, the Sterling promotes a culture of speaking up through our “See Something — Say Something” initiatives.
The goal of this initiative is to —
- Protect both Sterling and our employees from risks by ensuring that we are aligned with both external and internal policies & regulations.
- Promote a culture that encourages Sterling employees to take responsibility for always doing the right thing.
- Help employees grow our business in a compliant way.
Sterling has implemented a multi-faceted management methodology for cybersecurity to best protect company data. This approach includes: people, policies, processes and technology. In addition to protective systems and measures, we believe that ongoing employee awareness and training play a critical role in data security.
- People — The best cybersecurity strategies start with people. At Sterling we are working to create a culture of cybersecurity awareness.
- Policies/Processes — Structure is key, our policies guide our processes and technology.
- Technology — Sterling has focused on the right technologies in the right places for the largest mitigation of cybersecurity risk.
Our Board of Directors (the “Board”) oversees company performance and strategy and provides guidance for the development and implementation of company policies. The Board also establishes standards for Board structure, independence and qualifications of directors, director responsibilities, director resignation standards, Board procedures, director compensation, director continuing education, CEO evaluation, succession planning, and annual Board and Committee evaluations.
Board Composition and Leadership Structure
In 2019, the Board was composed of eight members, seven of whom are independent. Our Board has adopted a formal set of independence standards with respect to the determination of Board independence based on NASDAQ listing standards. Although Sterling’s CEO serves on the Board, the Board Chair is an independent director. Since Sterling became a public company, the positions of chairman and CEO have remained separate.
Shareholders annually elect all Board directors. In evaluating nominees for Board membership, the governance/nominating committee evaluates individuals who have experience relevant to the needs of Sterling, professional and personal integrity, business and/or financial expertise, along with experience in the relevant industries, and a willingness to serve the interest of all shareholders. During 2019, each of our directors attended more than 75% of the aggregate number of Board meetings and meetings held by all committees on which he or she served.
OUR BOARD HAS THREE STANDING COMMITTEES:
Each committee is made up entirely of independent directors. Each committee operates under a written charter adopted by the Board. The committees provide updates to the Board on their respective activities on a regular basis, and Sterling’s executive leadership provides reports to the Board on company performance throughout the year. For more detailed information on the activities and composition of our Board of Directors, please refer to Sterling’s Proxy Statement for the 2020 annual shareholders meeting.
Sterling’s Board of Directors contributes general oversight of our company-wide risk and provides input for our risk management review. Our ELT oversees all aspects of Sterling’s operations, including matters relating to risk. The ELT reports on business risks on a regular basis. We continually review and refine our risk management approach to align our business and strategy.