Ethics and Compliance Program

Lilly is committed to the highest standards of corporate conduct in all of our business dealings globally. Lilly maintains an effective ethics and compliance program designed to meet external requirements, guided by our values of integrity, excellence, and respect for people. The Red Book, our code of business conduct, includes key requirements from our corporate policies and sets expectations for how we conduct business. All Lilly employees receive training on The Red Book to enhance understanding of these requirements. We periodically review and enhance the ethics and compliance program to meet changing business needs and external requirements.

Lilly’s ethics and compliance program is a central component of how business is conducted and has oversight from the Board of Directors’ Public Policy and Compliance Committee. The fundamental elements of our ethics and compliance program are outlined below.

Oversight

Chief Ethics and Compliance Officer: Lilly has appointed a Chief Ethics and Compliance Officer to lead ethics and compliance activities globally. The Chief Ethics and Compliance Officer has the ability to lead change within the organization and is responsible for developing, operating, and monitoring the compliance program. The Chief Ethics and Compliance Officer reports directly to the Lilly Chief Executive Officer and to the Public Policy and Compliance Committee.

Compliance and Enterprise Risk Management Committee: Lilly has established a Compliance and Enterprise Risk Management Committee consisting of the top leaders from all company business areas and support functions. The committee is responsible for advising and supporting the Chief Ethics and Compliance Officer in the implementation and oversight of the ethics and compliance program and the enterprise risk management program. The committee is chaired by the Chief Ethics and Compliance Officer.

The Chief Ethics and Compliance Officer provides reports on the state of Lilly’s ethics and compliance program to the Compliance and Enterprise Risk Management Committee and the Public Policy and Compliance Committee multiple times per year.

Written Standards

Lilly’s Code of Business Conduct, The Red Book, is the statement of principles that guide the company’s operations. The Red Book outlines Lilly’s core values as well as the expectation and framework for ethical and compliant behavior by those who work for Lilly or on behalf of the company. For more information, download The Red Book.

The Red Book consists of principle-based statements that set clear expectations for operating in a way that is consistent with our Lilly values of Integrity, Excellence, and Respect for People. It is based on our 11 corporate policies governing all business areas and is supported by more detailed procedures and materials to guide our daily work. The training for The Red Book includes references to company policies that apply globally, as well as examples to illustrate application of The Red Book principles.

Education and Training

Lilly requires ongoing training and education of its employees on application of the Lilly values, and individual obligations under applicable legal requirements and company policies. Lilly trains all its employees on The Red Book, including its content and application to daily activities. Lilly also provides targeted training in key risk areas to those employees whose job functions are affected by those risk areas.

Internal Lines of Communication

Lilly is committed to fostering dialogue between management and employees through multiple channels. Supervisors are expected to maintain an environment that promotes open communication.

Lilly’s goal is that employees know where to turn when they are seeking answers to questions or reporting potential instances of fraud and abuse, or other potential violations of law, regulations, or company policies. Employees may submit reports through their management, or to human resources, a company attorney, the ethics and compliance department, the general auditor, or the chief ethics and compliance officer. Lilly has also established a hotline which is available to employees 24 hours a day, 7 days a week, to report potential violations of legal obligations and policies. Anonymity and translation services are available. Reports may be submitted by telephone to 1-800-815-2481 or online at Lilly EthicsPoint. Some local limitations apply to reports submitted from outside the United States to comply with local laws.

Auditing and Monitoring

Lilly’s ethics and compliance program includes ongoing efforts to assess, evaluate, monitor, and audit compliance with the company’s ethics and compliance policies and procedures. The nature, extent, and frequency of these activities depend on a variety of factors, including new regulatory requirements, changes in business practices, and other considerations.

Lilly conducts annual auditing, monitoring, and assessment activities and reports results to local management and corporate governance committees.

Responding to Potential Violations

Lilly’s ethics and compliance program includes disciplinary principles that outline the consequences to individuals who violate the law, regulations, or company policies. Although each situation is considered on a case-by-case basis, Lilly imposes discipline to address inappropriate conduct and to deter future violations. See The Red Book for further details.

In addition to imposing appropriate disciplinary action, the company also assesses whether a violation may be due in part to gaps in Lilly’s policies, training, business practices, or other controls. If so, the company is committed to implementing corrective measures to enhance its controls to prevent further violations.