Baxter 2021 Corporate Responsibility Report 44 Cross-Cutting Commitments Corporate Responsibility Commitment Introduction 2030 Corporate Responsibility Goals Empower Our Patients Protect Our Planet Champion Our People and Communities Appendix THIRD PARTY PROGRAM Our Third Party Program policy outlines the standards and processes used to review, retain and monitor new and existing third parties for compliance with our anticorruption expectations. The program and policy apply to Baxter employees, officers and directors involved in the review, retention and monitoring of third parties. In 2021, we launched an Annual Certification Ques- tionnaire to all existing third parties to help assure that our third-party partners continue to comply with the terms of their agreements with Baxter and with all applicable laws, rules and regulations. COMPLIANCE ASSESSMENTS Baxter completes risk-based compliance assessments and audits each year, which cover antibribery, anticorruption and trade compliance, among other topics. Our Global Ethics and Compliance function selects locations to audit and assess based on factors such as business complexity, size, risk of corruption, the nature of interactions with the medical community and third parties, enforcement trends and the results of compliance monitoring and investigations. Compliance assessments and audits also focus on relationships with third parties that represent the company to customers, including the medical community, patients and government officials and entities. In 2021, we conducted two compliance assessments using Global Audit and Ethics and Compliance resources: one in our Europe, Middle East and Africa (EMEA) region and one in Latin America. These assessments were performed remotely as a result of COVID-19. We also performed remote compliance audits of 24 distributors globally in 2021. The audits covered eight distributors in EMEA, seven in Latin America and nine in Asia Pacific. Additionally, Baxter worked with external consultants to perform a legal risk assessment of the company’s Trade Compliance and Anti-Trust programs. We are using the findings from these exercises to further enhance and mature our program policies and operations. COMPLIANCE MONITORING Baxter has deployed a data analytics–based monitoring system. The tool is used to perform review of compliance risk metrics, as well as facilitates forensic monitoring procedures in eight countries, including Brazil, China, Italy and Vietnam, among others. The countries are selected on the basis of their past monitoring and assessment results, feedback from Ethics and Compliance Assessments, country compliance environment and taking into account past investigations, if any. This system enables us to perform near-real-time monitoring of metrics related to travel, entertainment, interactions with healthcare professionals and government officials and corruption-related due diligence for certain in-scope third parties. Transactions identified as potentially problematic are reviewed by the Ethics and Compliance Investigations team as appropriate. RELATIONSHIPS WITH HEALTHCARE PROFESSIONALS AND GOVERNMENT OFFICIALS Baxter is committed to transparent reporting about relationships with the medical community and government officials. This includes the continued implemen tation of anticorruption programs to help ensure that these relationships and the related fair market value payments are for necessary and genuine services. Our Global Interactions Policy defines the principles and rules governing our interactions with government officials and members of the medical community. In 2021, we released an update to the policy related to virtual interactions and related controls. The Global Interactions Policy also provides guidance for corporate charitable giving to help ensure compli - ance with the law and with Baxter policy. We have local Contributions Management Committees in select countries, clusters of countries or regions. Where they exist, those local committees have decision-making authority for charitable contribution requests from nonprofit and for-profit healthcare and patient organizations. The Baxter International Foundation, the philanthropic arm of Baxter Interna - tional Inc., is a separate legal entity governed by its own Board of Directors and distinct grantmaking guidelines that govern its charitable contributions to nonprofit organizations. ETHICS AND COMPLIANCE HELPLINE In 2021, Baxter logged 634 reports from 33 countries into our Ethics and Compliance Helpline system and closed 638 cases that were received through 2021. 2 All reports received during the year involving allegations of misconduct were promptly triaged for investigation . For the substantiated cases closed in 2021, appropriate remediation (e.g., training or adoption of new or changed processes) was or is being implemented where warranted. In substantiated cases involving employee misconduct, employees received appropri - ate disciplinary action based on the nature of the misconduct and other relevant factors. Disciplinary action can include a range of outcomes, including coaching and training, verbal or written warnings, compensation reduction or termination. ITEMS REPORTED TO THE ETHICS AND COMPLIANCE HELPLINE IN 2021* * “HCPs” are healthcare professionals. “HCOs” are healthcare organizations. Puerto Rico is counted as part of the United States. Work Environment/Employee Relations 63% Manufacturing/EHS&S/R&D/Regulatory/Quality 13% Conflict of Interest 8% Interactions with Government Officials Including HCPs/HCOs (outside the United States) 5% Asset or Information Misuse or Misappropriation/Confidential Data 4% Financial Management and Reporting 3% Marketing and Sales 3% Competitive Practices 1% Payments/Gifts/Entertainment with HCPs/HCOs (United States) <1% CATEGORY % OF TOTAL*