Corporate Governance - Business Policies
Conflicts of Interest
It is the policy of Pepco Holdings, Inc., and its affiliates (collectively, “PHI” or the “Company”) that:
(a) all persons working at the Company avoid conflicts between their private interests and the interests of the Company;
(b) any actual conflicts be resolved before they damage or interfere with the Company's interests, and;
(c) any actual or potential conflicts be disclosed to the Company on a timely basis.
It is also the policy that employees and others working at the Company avoid even the appearance of conflicts of interest because they can undermine trust among employees and others working at the Company and have a negative effect on the Company's reputation.
What is a "conflict of interest"?
It is a conflict between the private interests and the official responsibilities of an employee or other person working at the Company. Each of us has many interests apart from our work at the Company. A "conflict of interest" exists anytime we face a choice between what is in our own personal interest (financial or otherwise) and what is in the best interests of the Company. Such conflicts can also include activities or associations that might compromise, or appear to compromise, the exercise of sound, impartial judgment in determining what is in the best interests of the Company, its shareholders, our customers or our fellow employees and others who work at the Company. The interests involved here may be direct (the employee or other person working at the Company) or indirect (a relative, friend, business associate, or an entity in which one of those individuals has an independent interest).
Importance of the facts of each situation
The facts of each situation will determine whether the personal interest in question could be in conflict with the Company's interests. Here are some examples of situations which could involve a conflict and should be avoided:
- Ownership by an employee or other person working at the Company, or a family member or relative, of a significant financial interest in any outside enterprise which does or seeks to do business with, or is a competitor of, the Company.
- Serving as a director, officer, partner, consultant or in any key role in any outside enterprise that does or seeks to do business with, or is a competitor of, the Company; provided, however, that an interested director transaction approved by disinterested directors in accordance with Section 144 of the Delaware General Corporation Law shall not be considered a conflict of interest under this policy.
- Acting as a broker, agent or other intermediary for the benefit of a third party in transactions involving the Company. To read the Procedure for Evaluating Related Director Transactions, click here.
- Participating in making any decision on behalf of the Company in which a person working at the Company has a personal interest ("participating" includes making recommendations or otherwise seeking to influence a decision to be made by another person).
- Any other arrangement or circumstance, including family or other personal relationships, which might dissuade the person working for the Company from acting in the best interests of the Company.
Outside employment
This may be a conflict of interest if it places an employee or other person working for the Company in the position of appearing to be representing the Company in that employment, or if it provides goods or services substantially similar to those the Company provides or is considering providing. A conflict would also exist if the outside employment lessens the efficiency, alertness, productivity or availability normally expected of an employee or other person working for the Company.
Protecting yourself
Conflicts of interest are not always obvious. There are many areas of uncertainty, as well as actual conflicts that arise despite the best intentions of an employee or other person working for the Company. It is important; therefore, that every employee and other person working for the Company disclose to his or her supervisor any facts or circumstances that could present a conflict of interest. Employees should also contact the Ethics Officer for assistance in thinking through whether a particular situation presents either a potential or actual conflict.
