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Chairman’s Letter

A commitment to corporate responsibility pervades IBM, from new hires to the chairman’s office. In this year’s letter, Chairman, President and Chief Executive Officer Sam Palmisano describes IBM’s long-term approach to corporate responsibility, and the IBMers that make it possible.

IBM’s Approach

Through the years, IBM has consistently expanded the definition of corporate citizenship, pushing the boundaries of what is required to be considered a responsible enterprise. In this section of IBM’s 2010 Corporate Responsibility Report, you will find more detail on our approach to corporate responsibility, and some examples of how that approach manifested itself during the past year.

Communities

At IBM we engage with communities around the world by offering our technology, services and expertise to help solve some of the world’s most complex problems. While the monetary value of these contributions is great, we eschew checkbook philanthropy whenever possible. We believe that this approach is the most efficient, effective and sustainable way to practice good corporate citizenship. And we believe it is helping to make the world work better. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of the contributions IBM made to the global community this past year.

The IBMer

For the last 100 years, IBM has pioneered innovative approaches to hiring, managing and retaining our work force. From some of the earliest thinking on work force diversity to progressive programs for employee well-being and leadership development, this ongoing commitment to our employees is critical to the success of IBM and IBMers. And as the nature of our business changes, we will continue to apply the same innovation and creativity we use to develop products and services to our relationship with employees. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of the commitments IBM made to its work force this past year.

Environment

IBM has long maintained an unwavering commitment to environmental protection, which was formalized by a corporate environmental policy in 1971. The policy calls for IBM to be an environmental leader across all of our business activities, from our research, operations and products to the services and solutions we provide our clients to help them be more protective of the environment. Download this section of the report (2.2MB)

Supply Chain

IBM manages a supply chain of more than 27,000 suppliers in nearly 100 different countries. We understand that managing a supply chain of this size carries with it considerable social responsibility. Even so, we are continually expanding the definition of what it means to run a responsible supply chain, challenging ourselves and our suppliers to reach ever higher standards of social and environmental compliance. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of IBM’s supply chain responsibility efforts over the past year.

Governance,
Ethics and Integrity

Both the size and nature of IBM’s business necessitate that it adhere to the highest standards of conduct. IBM employs more than 400,000 employees, and provides services and technology that support businesses, governments, schools, hospitals and highways. As such, integrity, transparency, privacy and risk management are all crucial parts of our business, and our commitment to making the world work better. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of how IBM is setting the modern standard for business ethics.

A Different Kind of Company

“Corporations prosper only to the extent that they satisfy human needs. Profit is only the scoring system. The end is better living for us all.”
Thomas J. Watson Jr.

former Chairman of IBM

 

It started with values. From its founding a century ago, IBM has been held together not by a new technology or business model, but by a shared set of beliefs. IBM’s leaders were convinced that a strong company culture and a commitment to good corporate citizenship would lead to success in both business and society.

Over the years, the world has changed many times. Wars have been fought. Economic recessions have come and gone. Technological revolutions have changed the way we work and live. And during that time, IBM has reinvented itself more than a few times.

“IBM is among the progressive companies … that have achieved the seemingly impossible: high levels of business performance—innovation, growth and profit—and social good. They have mastered the tough challenge: building a resilient culture to flourish in turbulent times while leaving a positive mark on the world. While the short-term fortunes of any company, IBM included, can change precipitously, a high-performance, humanistic culture provides the foundation for sustainable growth, profit and innovation over the long term.”
Rosabeth Moss Kanter

Ernest L. Arbuckle Professor of Business Administration, Harvard Business School, and author of SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good.

But through it all, IBMers have defined their actions—and their company’s collective identity—according to a core set of values. They are the foundation that allows IBM not just to react to change, but to embrace and lead it. It is no exaggeration to say that without this steadfast commitment, IBM would not have survived the many challenges it faced during its first century, or be in a position of strength as it embarks upon its second.

It is also safe to say that this commitment has produced significant, measurable results—both in the form of profitable growth and in terms of societal impact. The latter is the subject of this report.

In 1965, then Chairman Thomas J. Watson Jr. described the company’s values this way: “We accept our responsibilities as a corporate citizen in community, national and world affairs; we serve our interests best when we serve the public interest … We want to be at the forefront of those companies which are working to make our world a better place.”

In 2003, IBM Chairman Sam Palmisano opened the company’s global intranet to ValuesJam, a broad-ranging re-examination of the role of beliefs and values within a radically different economic and societal reality. Most importantly, it aimed to further define what we, as IBMers, actually do value.

Being IBMers, tens of thousands of us joined in. Being IBMers, we took this opportunity very seriously—indeed, with a sometimes brutal honesty about where IBM stands as an enterprise, and what it needs to become. And being IBMers, we came to thoughtful and broad agreement on what distinguishes us at our core:

  • Dedication to every client’s success
  • Innovation that matters—for our company and for the world
  • Trust and personal responsibility in all relationships

IBM has always been grounded in beliefs—under the Watsons, they were even called the Basic Beliefs. What has changed is the recognition that people’s values can no longer be dictated to them from above. ValuesJam signaled a new management philosophy for a new era—a profoundly different way of forging enterprise identity from the bottom up.

In this report you will find examples of IBM’s values-based decisions, strategies and actions throughout its history. These accomplishments from our past reinforce our belief that values can be the driving force behind a successful business and add societal value. They also remind us of the role that private enterprise can and should play in society. And they strengthen our commitment and inform our approach to good corporate citizenship going forward.