It also serves the needs of our stakeholders, as increasingly:

• Customers are holding companies to account for the quality and source of their products and services;
  
• Shareholders want to be part of ‘good’ companies, not just profitable ones;
  
• Employees want to feel proud of the companies they work for;
  
• Effective partnerships and business alliances depend on clear values, shared behaviours and common
  understanding;
  
• Society demands that companies have an increasingly positive impact on the communities in which they operate.

It is essential that we maintain and grow our brands and reputation - as a company that people want to do business with, which people can trust, and which makes a valuable contribution to all the communities in which we operate and serve.

Integrity is paramount to us, as the principles outlined in this document are the cornerstone of our long-term success. So if a particular piece of business conflicts with our principles, we will not do it. Organisations are only as good as their people. It is important that all our people and the people working with us, adhere to the principles and guidelines discussed here, and make them part of everyday working life.

We always want to ‘do the right thing’. This often requires balanced judgements about complex and conflicting issues. We recognise that we may not always get this right, but we must seek to explain our actions and, as a principle, engage in appropriate dialogue with affected stakeholders.

Our Business Relationships

We have specific aspirations and commitments which apply in our relations with our customers, employees, stakeholders, partners, suppliers and in the communities where we operate.

ASPIRATIONS

Customers
We want to be customers’ first choice for quality, value and service. Relationships based on mutual trust will help us deliver the solutions that anticipate and meet our customers’ needs.

Employees
We want to attract, develop and motivate the best people. We will create a working environment that is open, honest and unprejudiced and which encourages people to achieve their full potential. We will value people’s individual and team contributions, and offer opportunities to share in the company’s commercial success.

Stakeholders
We will maintain the highest standards of business practice and be transparent in all our dealings.

Suppliers
We will value the diversity of our suppliers and we will work with them in innovative ways that create added value for our customers and trading partners.

Community
We will contribute to the well being of the societies in which we operate through our business activities and the skills of our people.

COMMITMENTS

• Provide products and services that are backed by appropriate guarantees.
  
• Deal with complaints speedily, professionally and courteously.
  
• Respect customers’ special needs and requirements.
  
• Recruit, employ and reward on ability and contribution.
  
• Provide opportunities for personal growth and professional development.
  
• Engage in appropriate communication and consultation with employees.
  
• Provide opportunities for dialogue with everyone with whom we do business.
  
• Have a fair procurement process.
  
• Pay promptly and as agreed.
  
• Promote our principles and values when working with others.
  
• Work with community and other organisations to support non-profit making activities that benefit wider society.

Our Business Principles

The following principles apply to all employees, agents, contractors and others when representing Wolseley UK. As individuals and as a company we should always pursue them.

LEGAL

We will act within the law and any other regulations.

Respect for and compliance with laws and regulations that apply to our business is fundamental, whether in the UK or elsewhere. The laws and regulations that apply to Wolseley UK’s business can be quite complex.

Our business principles should rarely directly conflict with local laws, however if a local law in a country conflicts with one of our commitments, we comply with the law first.

In an event that a customer requests something that would mean breaking our obligations, even just a little, it is imperative that we find another way to satisfy that customer, which stays within the law.

Employees who are involved in the preparation of any information that will be included in any public communication to shareholders or investors or in any document or report that will be filed with the US Securities and Exchange Commission, the New York or London Stock Exchanges or the UK Listing Authority must ensure that such information is full, fair, timely and understandable.

COMPETE FAIRLY

We will compete vigorously but fairly in the market, being honest and trustworthy in all our dealings.

We will use our resources, knowledge and expertise to our competitive advantage, but we will avoid undermining the operation of free markets and we will respect the rights of others to carry on their business. We will also avoid putting undue pressure on customers in ways that may reduce or remove their ability to choose between the services of competitors.

It is always sensible to accumulate information about our competitors’ business, but the information has to be passed on openly in order that we can use it. We would never set out to get such information in an underhand way (for example, by misleading someone about our identity or secretly eavesdropping on a conversation), nor use information about competitors that has been gained dishonestly.

INDUCEMENTS

We will not offer or accept gifts, hospitality or other inducements, which encourage or reward a decision, or engage in any form of bribery.

Bribery covers money or payments in kind which influence or reward a decision. It is also not acceptable to allow third parties to use these inducements on behalf of Wolseley UK.

Gifts and hospitality can be a customary part of building business relationships. Wolseley UK believes that gifts should be kept to a nominal value. This helps protect both the giver and receiver from accusations that a decision has been influenced. Similarly, hospitality should be kept to a level at which people do not feel, or may be thought by others, to be ‘in debt’ due to the generosity of the giver. For example, to avoid any suggestion of influence, hotels should not be paid for by someone else unless as part of a formal business agreement or promptly reimbursed by Wolseley UK.

CONFLICTS

We will avoid or declare conflicts of interest that may lead (or be seen to lead) to divided personal loyalties.

This includes conflicts between Wolseley UK’s interest as well as your interests outside Wolseley UK. It could arise from you spending Wolseley UK's time on other things, or acting as a supplier or competitor to Wolseley UK.

A conflict of interest could also arise in a purely business situation. For example, from having more than one type of relationship with a single external organisation. If you manage Wolseley UK customer and supplier relationship with another company, your personal loyalties may appear to be tied to placing a contract with one company just so that you personally benefit from hitting your target sales to the same company.

You should also declare any relationship you have with someone who may be tendering on a contract or bidding for Wolseley UK work. Imagine how it would look if people realised that you had given a contract to your partner? (Don’t forget you must be authorised to place a contract in the first place!). All such transactions are considered to be related party transactions and should be disclosed in accordance with the procedures set out in the Wolseley Group Policies and Procedures Manual.

If a family member wishes to work for Wolseley UK, even in the same department as you, this should not be a problem, so long as you have nothing to do with the decision regarding the post they have applied for, including the application and interview process. You should also make sure that you are not responsible for any decision regarding their job or pay if they do join, otherwise there may be questions of favouritism or nepotism.

Should you come across some information that is not yet public which makes it clear that now would be a good time to buy or sell Wolseley plc shares, it is imperative that you understand this not only is this in conflict with Wolseley UK standards of integrity, but it can also be illegal. This information should not be given to friends and family. There are specific rules and laws regarding ‘insider trading’ and you must be very careful with information you gain through your work not to contravene these laws. For those employees who have been designated as Permanent Relevant Employees, the Wolseley Group ‘Code of Dealing’, copies of which are available on the intranet or from the Group Company Secretary of Wolseley plc, should be observed at all times.

You should note that you cannot avoid all conflicts. Therefore, if you do face one, discuss it with your manager (or possibly the human resources director) and agree how to deal with the situation in a spirit of openness and integrity.

COMMITMENTS

We will ensure others have confidence in the commitments we make on behalf of Wolseley UK, and that agreements are suitably authorised.

Decisions, commitments, or business agreements made by us, as individuals are seen by the outside world as having been made by Wolseley UK. Our reputation as a trusted company is built by having a track record that justifies confidence in these commitments.

In a company the size of Wolseley UK, there are decisions we can’t make as individuals - because we are not authorised or need the support of others. These internal agreements are important. They ensure we involve people with expertise and experience and help the company allocate the resources needed to meet external expectations. We each have a ‘delegated authority’ which covers the type of decisions that we can make on behalf of the company. The things you are authorised to do should be contained in your job description. With that authority also comes a duty to involve anyone else who may have responsibility for that decision, and to make sure that everything has been accurately
recorded.

Although it cannot be avoided, where you believe there to be an unnecessary amount of bureaucracy and “red tape” before a decision is approved, you are encouraged to make suggestions and challenge the process. We need to eliminate all unnecessary hurdles and you should talk to your line manager about how to improve the system. In the meantime, you should stick to the agreed way of doing things.

RISKS

We will assess and manage risks to our business.

The way a business manages its risks is critical to its success. These include commercial, financial, operational and compliance risks. There is also increasing external pressure to demonstrate that a business takes appropriate steps to control unnecessary risks. We should make decisions about acceptable risks and levels of risk as part of everyday business.

Individual UK businesses should have a system for managing risk - that means firstly identifying and assessing potential risks in order to achieve our objectives, then deciding which to accept or when to act to reduce a risk.

Taking calculated risks are part of successfully running a business, although some risks only have a downside - eg. weather damage to buildings. This kind of risk may need financial insurance and Wolseley UK’s finance director can help you evaluate and manage these risks. The finance director is responsible for ensuring we have sufficient financial insurance, if needed, to protect us. To help in this area, every time there is a significant change, problem or new activity in your area of the business you should seek advice on the best way to reduce the risk.

ASSETS

We will protect our brands, physical, financial and intellectual assets.

We are responsible as individuals for the security and protection of the assets used in our job. This includes proper accounting for the use of any company resources.

One of our most valuable assets is Wolseley UK’s reputation and that of each of the UK’ businesses. A strong trade name is essential for sustainable success, especially in fast-changing and highly competitive markets. Our trade names must be protected with as much care as our buildings or equipment. Products, services or marketing communications that are not consistent with the meaning of the brands, bad press publicity or improper use of the logo, undermine our trade name and our competitiveness.

Our physical assets include buildings, computers, cars and lorries, but we also have intellectual assets which cover a surprisingly broad range, including know how, inventions, product and service names, software, engineering drawings, artwork, written material and confidential information about all sorts of matters, such as processes, commercial plans and customer information. These assets may be legally protected by patents, trademark registrations, design registrations or copyright. Sometimes they are on paper but sometimes they may only be held in electronic form on computers or the intranet.

It has been predicted that, before long, companies’ intellectual assets will become more valuable than their physical assets. You can help to maintain the value of these assets by being careful when and how they are used and shared. Finally, remember, we should not infringe the intellectual property rights of others. For example, we respect copyright in third party software.

INFORMATION

We will protect the confidentiality of company, employee and customer information.

Revealing confidential company information could undermine Wolseley UK’s competitive advantage. Remember to be very careful when discussing confidential Wolseley UK business in public places, and be sure of whom you are speaking to before disclosing information that might be commercially sensitive. Disclosure of information should only be made to the extent necessary to achieve our commercial goals. Information (including telephone numbers and addresses) for our customers should also not be disclosed to family members or friends. This information has been entrusted to Wolseley UK in confidence, and passing it on in such a way would be a very serious offence and you could be in breach of the law.

It is perfectly acceptable to keep information on a business contacts database at your branch, as long as you only use it for the purpose those who disclosed it would expect.

Remember to treat e-mail with the same professionalism and confidentiality as other more ‘traditional’ forms of communication. E-mails can have legal consequences too. All dissemination of commercial information must be dealt with in accordance with the Wolseley Group Corporate Communications Code.

COMMUNICATION

We will be truthful, helpful and accurate in our communication.

Good communication means not just talking, but listening too. It is vital that we listen to our stakeholders and are open with them. We are dependent on what people think of us. Customers, employees and other stakeholders shape how we act. However, we will only know their thoughts by engaging in open, honest and transparent dialogue based on mutual trust and respect.

Although this may sound a little naïve, especially in view of sales, it is important to remember that one of the biggest assets in sales is our reputation. If we are misleading once (for example, in misrepresenting a competitor), people will remember it and we will lose the trust that is so valuable to us. We should compete positively and sell our products and services on their merits. People buy from us for a variety of positive reasons such as good performance, price, delivery, quality, service, value for money and reputation.

Remember that there are some things that it would be irresponsible to reveal. Confidential information is entrusted to us and we must not release it without authority. We also have a responsibility to protect our intellectual assets and sensitive information.

DIVERSITY

We will treat all individuals fairly and impartially, without prejudice and never tolerate harassment in any form.

We are committed to developing a working culture that is fair and ‘inclusive’ - enabling all employees to make their distinctive contributions to the benefit of the business. We are also determined to ensure that we extend this same openness to our suppliers, business partners and all our customers. We expect our managers to exercise leadership in this field by discouraging prejudice and by role modelling appropriate behaviour.

Diversity makes sound business sense. To be a leader in our business we must be flexible, innovative, creative and have an ability to accommodate other people’s point of view. Wolseley UK can include the greatest range of talented people if we respect the ability and contribution of everyone - regardless of gender, race/ethnicity, age, physical ability, religion, sexual orientation or culture. A positive attitude to diversity also means providing excellent customer service, whatever the cultural traditions and individual sensitivities of our customers.

If you feel that someone in your department is being harassed by someone in a position of power, you should not ignore the matter, even if you are afraid of repercussions. If you feel unable to talk about this with someone in your department, you can contact the Human Resources Director in Ripon. Alternatively you can contact the Group Company Secretary of Wolseley plc who will investigate the matter on your behalf or you may also report the situation via the 24-hour confidential telephone service (number 0800 374199). External representatives answer all calls to this service and your details, if given, are kept confidential. A report of your call will be given to the Company and there will be no repercussions if you have acted in good faith. Further details are set out in the Wolseley Group Whistleblowing Policy, a copy of which may be found on the intranet or from the group company secretary of Wolseley plc.

HEALTH & SAFETY

We will care for the health and safety of each other, our products and our operations.

We are responsible for making sure that the way we carry out business does not harm the health and safety of our own people or anyone else affected by our activities, products or services. Although excellent customer service is important to us, you must never break safety instructions. You should never knowingly put yourself or anyone else at risk and we are all expected to follow the appropriate safe system of work.

We also have a duty towards the health and safety of our contractors when they are with us and expect them to meet our own health and safety standards. We also expect a high standard of safe working practices from our suppliers.

ENVIRONMENT

We will minimise the potentially harmful effects of our activities on the environment.

We should be fully aware of the commitments that are laid down in our environmental policy, as they are commitments that affect our every day working lives. They include a commitment to reuse rather than dispose whenever possible, and to promote recycling and the use of recycled materials.

We can be proud that our products and services may not themselves adversely affect the environment but there are other, negative, impacts that we should be aware of and attempt to reduce. These are mainly in the areas of transport, fuel, energy, waste and emissions to air. We are committed to reducing our impact in these areas.

Our environmental policy also impacts on our suppliers, as we want to purchase from people who have a stated objective of continuous environmental improvement.

In this way we can protect the health and safety of our own people and our customers, whilst contributing to the future well being of the environment and society.

Political Donations

Wolseley UK does not make political donations as currently defined in UK law. Further details are set out in the Wolseley plc Group Code of Ethics, a copy of which is available from the Group Company Secretary of Wolseley plc or on the Wolseley plc website at www.wolseley.com

Human Rights

We are committed to protecting and enhancing the human dignity of all those engaged with our company. To this end we have based our policies and procedures on the principles set out in the United Nations Universal Declaration of Human Rights, which set ‘a common standard of achievement for all peoples and all nations’.

It is the responsibility of all member states of the United Nations to uphold and advance these principles and to respect the wide-ranging framework of binding international standards, which have been developed from them. As the global influence of multinational companies widens, many of the principles enshrined in the Universal Declaration of Human Rights are relevant to the way they conduct themselves.

If local customs seem to conflict with our policy, the standards, which flow from the Universal Declaration of Human Rights, are intended to be universal in their relevance and application. In practice this may not always be straightforward, especially when strong local cultural, social or religious traditions seem to differ. In any specific instance where questions arise you should seek advice from your line manager. Our underlying approach is to try to respect the aspirations expressed by the Universal Declaration towards better quality of life for all, especially on such issues as equality, safety and education which are directly relevant to us as a business.

Apart from our own desire to ‘do the right thing’, it is also worth underlining that children are entitled to special care and assistance under international law. This provides for protection of children from economic exploitation and calls on countries to provide a minimum age for admission of children to employment.

We in Wolseley UK will continue to take human rights issues seriously. We shall seek to apply our commitment to human dignity, wherever we operate.

Resolving Conflicts

Deciding how to act in the face of conflicting demands is rarely easy. The following questions may help you to reach the right decision.

• Is it legal?
  
• Are you authorised to do this?
  
• Have you taken account of any Wolseley policies or procedures?
  
• How would you explain your decision to your colleagues in different countries?
  
• How would you explain your decision to your family or in public?
  
• Does it conflict with your own or Wolseley UK’s commitment to integrity?

Implementation and Measurement

We are committed to communicating, measuring and appropriate reporting of our performance against our principles.

• It is critical that all managers fully communicate our philosophy and the principles in ‘How We Work’.
  For Wolseley UK’s employees, failure to conduct business in line with these principles may result in disciplinary
  action up to and including dismissal. Each situation will be considered individually and judged in light of the
  particular circumstances.
  
• Wolseley plc annually reviews the effectiveness of the system of internal controls and presents the results to the Wolseley plc Audit Committee.
  
• In addition Wolseley plc is moving towards publishing more information about environmental and ethical matters in its Annual Report and Accounts, which will include relevant information about Wolseley UK.

Help and Confidential Advice

If you are in any doubt as to the interpretation of any of these standards:

• Talk to your line manager or senior manager.
  
• Talk to your Human Resources manager
  
• Wolseley UK is committed to tackling fraud, abuse or any violation of our standards of business conduct.
  If you have any concerns or you would like advice in confidence, or you do not feel able to talk to your line or senior manager or the Human Resources Director at Ripon, you can talk to the Group Company Secretary at Wolseley plc.
  
• If you are concerned about repercussions from your reports of suspected unethical or unlawful conduct you can call the free phone number [0800 374199] confidentially. Wolseley plc will then review any report made and deal with the matter accordingly. Further details are set out in the Wolseley Group Whistleblowing Policy, a copy of which may be found on the intranet or from the Group Company Secretary of Wolseley plc.