The Ethical Organization

Dan Warmenhoven

NetApp Today

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1996 1997 1998 1999 2000 2001 2002 2003 2004

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

BusinessResults

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

Storage Simplified.