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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.

Supply Chain Diversity

IBM is committed to diversity in all parts of its business—and has been for more than 100 years.

In 1899, the Computing Scale Company, one of three companies that would later form the Computing-Tabulating-Recording Company (C-T-R) in 1911 (later renamed IBM), hired Richard MacGregor, a Black employee, as well as Lilly J. Philp, Nettie A. Moore and Emma K. Manske. This occurred 10 years before the National Association for the Advancement of Colored People (NAACP) was founded, 36 years after President Lincoln signed the Emancipation Proclamation and 20 years before women won the right to vote.

$1 Billion

IBM is the first IT company to do more than $1 billion of business with diverse suppliers in the U.S.

IBM’s history of maintaining a diverse supply chain is no less pioneering. The company first established a global supply chain diversity program in 1968. This was four years before the establishment of the National Minority Supplier Development Council (NMSDC) and 29 years before the Women’s Business Enterprise National Council (WBENC). We are the first IT company to conduct more than $1 billion of business with diverse suppliers in the U.S. And we learned early on that fostering diversity is not only the right thing to do for society, but for business as well. A diverse supplier base not only provides talent, it also helps add stability throughout our supply chain—and promotes economic growth is in local communities.

Equal Opportunity Workforce Icon of Progress: Equal Opportunity Workforce

Learn about IBM’s other diversity milestones.

In 2010, IBM conducted $2.7 billion of global business with first- and second-tier diverse suppliers. Of that, $2.3 billion was contracted with first-tier suppliers, up from $2.1 billion in 2009. We also did more than $700 million of business with first-tier, non-U.S.-based diverse suppliers.

IBM also created a full-time supplier diversity position in China, one of the first companies to do so. The position was created in recognition of the fact that while supply chain diversity is well-established in the U.S., it is not well-understood in other countries, especially as compared to work force diversity.

$2.7 Billion

of business across the world with first- and second-tier diverse suppliers.

For these and other accomplishments over the course of 2010, IBM’s Program Director of Supplier Diversity, Michael K. Robinson, was honored by the National Minority Supplier Development Council (NMSDC) as the 2010 Minority Supplier Development Leader of the Year. In addition to the NMSDC, IBM is a founding member of the Women’s Business Enterprise National Council and the National Gay and Lesbian Chamber of Commerce. IBM also participates in international organizations focused on supplier diversity, such as the Australian Indigenous Minority Supplier Council, the Canadian Aboriginal and Minority Supplier Council, Minority Supplier Development United Kingdom, Minority Supplier Development China, WEConnect Canada, WEConnect Europe, WEConnect India and the International Gay and Lesbian Chamber of Commerce.

Amount of IBM business conducted with first-tier diverse suppliers
2009: $2.1 billion, 2010: $2.3 billion

Looking forward, IBM plans to grow the diversity of its supply chain as our business needs continually evolve. IBM works with its supply chain teams to clearly define its requirements in both direct and indirect supply areas, and IBM has actively sought and worked with diverse suppliers that might be able to meet those requirements over time. And we continue to work with diverse suppliers—especially our second- and third-tier suppliers—to help them grow their capacity. This work will continue for many years to come.

$700 million

of business with first-tier, non-U.S.-based diverse suppliers in 2010.