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The Defense Industry Initiative on Business Ethics and Conduct An Overview Promoting a culture of ethical conduct within the defense industry. The Background. In 1985, defense acquisition at height of the Cold war - PowerPoint PPT Presentation
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The Defense Industry Initiative on Business Ethics and Conduct
An Overview
Promoting a culture of ethical conduct within the defense industry
•In 1985, defense acquisition at height of the Cold war– allegations of criminal misconduct and government mismanagement in
defense contracting– “Ill Wind” influence peddling scandal was the (unfortunate) poster child
•President Reagan appointed the Packard Commission, or “The President’s Blue Ribbon Commission on Defense Management,” to recommend reforms
•The Packard Commission, February 1986 Interim Report– waste, fraud and abuse had eroded the public’s confidence in the defense
industry and the Defense Department. – The Commission urged defense contractors to improve the defense acquisition
process through greater self-governance
The Background
“To assure that their houses are in order, defense contractors must promulgate and vigilantly enforce codes of ethics that address the unique problems and procedures incident to defense procurement.”
“They must also develop and implement internal controls to monitor these codes of ethics and sensitive aspects of contract compliance.”
From the Report
The Response
• Jack Welch of General Electric and the CEOs and senior officials of 17 other defense contractors voluntarily met
• Created the Defense Industry Initiative on Business Ethics and Conduct.
• drafted the principles that became central to the DII. • These principles first appeared in the Appendix to the Packard
Commission's June 1986 final report
• By July 1986, 32 major defense contractors had pledged to adopt DII’s core principles.
• Have and adhere to written Codes of Conduct;• Train employees in those Codes;• Encourage internal reporting of violations of the Code, within an
atmosphere free of fear of retribution;• Practice self-governance through the implementation of systems to
monitor compliance with federal procurement laws and the adoption of procedures for voluntary disclosure of violations to the appropriate authorities;
• Share with other firms their best practices in implementing the principles, and participate annually in “Best Practices Forums”; and
• Be accountable to the public.
Original DII Principles
• Aeronca Inc.• Allied-Signal, Inc.• American Telephone & Telegraph Co.• The Boeing Company• Burroughs Corporation• E-Systems, Inc.• Eaton Corp.• FMC Corporation• Ford Aerospace & Communications
Corp• General Dynamics Corporation• General Electric Company• Goodyear Aerospace Corporation• Grumman Corporation• Hercules Incorporated• Hewlett-Packard Company
• Honeywell Inc.• Hughes Aircraft Co. • IBM Corporation• Lockheed Corporation• Martin Marietta Corporation• McDonnell Douglas Corporation• Northrop Corporation• Parker Hannifin Corporation• PneumoAbex Corporation• Raytheon Company• Rockwell International Corp.• The Singer Company• Sperry Corporation• TRW Inc.• Textron Inc.• United Technologies Corporation• Westinghouse Electric Corporation
Original DII Signatories
•DII is a nonpartisan, non-profit association of responsible U.S. defense companies– committed to conducting business affairs at the highest ethical level and
in full compliance with the law– our members are the professional ethics officers, CEOs and senior officials
of 78 top defense companies serving the United States military•DII provides resources and assistance to help train hundreds of thousands of defense-industry employees in ethics and compliance. •DII holds regular meetings and conferences to share best practices•DII mentors suppliers and new firms in how to comply with the laws and regulations that govern U.S. defense companies.
Who We Are Today
The DII Principles were updated in November 2013:
We, the members of the Defense Industry Initiative on Business Ethics & Conduct (DII), affirm our commitment to uphold the highest ethical standards in all our business dealings with the government, as expressed through the following principles:
1.We shall act honestly in all business dealings with the U.S. government, protect taxpayer resources and provide high-quality products and services for the men and women of the U.S. Armed Forces.
2.We shall promote the highest ethical values as expressed in our written codes of business conduct, nurture an ethical culture through communications, training, and other means, and comply with and honor all governing laws and regulations.
The DII Principles Today
3. We shall establish and sustain effective business ethics and compliance programs that reflect our commitment to self-governance, and shall encourage employees to report suspected misconduct, forbid retaliation for such reporting, and ensure the existence of a process for mandatory and voluntary disclosures of violations of relevant laws and regulations.
4. We shall share best practices with respect to business ethics and compliance, and participate in the annual DII Best Practices Forum.
5. We shall be accountable to the public, through regular sharing and reporting of signatory activities in public fora, including www.dii.org. These reports will describe members’ efforts to build and sustain a strong culture of business ethics and compliance.
The DII Principles Today
• DII Steering Committee: The DII is governed by a Steering committee, a policy-making body comprised of prominent defense industry CEOs
• DII Working Group: The DII Working Group are volunteers, comprised of one representative from each Steering Committee organization, who direct the activities of the DII
DII Leadership
DII Steering Committee ChairMarillyn A. Hewson
Chief Executive Officer and PresidentLockheed Martin Corporation
DII Working Group ChairLeo S. Mackay, Jr.
Vice President, Ethics & SustainabilityLockheed Martin Corporation
DII CoordinatorAngela B. Styles
PartnerCrowell & Moring LLP
DII Leadership
DII Steering CommitteeMarillyn A. HewsonChair, DII Steering CommitteeChief Executive Officer & PresidentLockheed Martin Corporation
William M. BrownChairman, President & Chief Executive OfficerHarris Corporation
Wes BushChairman, CEO & PresidentNorthrop Grumman Corporation
Louis R. ChênevertChairman & Chief Executive OfficerUnited Technologies Corporation
David M. CoteChairman & Chief Executive OfficerHoneywell International Inc.
Scott C. DonnellyPresident & Chief Executive OfficerTextron Inc.
Jerry DeMuroPresident & Chief Executive OfficerBAE Systems, Inc.
Robert (Kelly) OrtbergChief Executive Officer & PresidentRockwell Collins
David L. JoycePresident & Chief Executive Officer, GE AviationGeneral Electric Company
Tony MoracoChief Executive OfficerScience Applications International Corporation
Christopher M. ChadwickExecutive Vice Chairman, The Boeing CompanyPresident and Chief Executive Officer,Boeing Defense, Space & Security
Phebe N. NovakovicChairman & Chief Executive OfficerGeneral Dynamics Corporation
Tom KennedyChief Executive OfficerRaytheon Company
Harold L. Yoh IIIChairman & Chief Executive OfficerThe Day & Zimmermann Group, Inc.
Leo S. Mackay, Jr.Chair, DII Working GroupVice President, Ethics & SustainabilityLockheed Martin Corporation
Jamal AhmedVice President, Internal Audit and Chief Ethics OfficerDay& Zimmermann, Inc
Nick RuscioVice President, Internal Audit and Chief Ethics OfficerBAE Systems, Inc.
Patricia J. EllisVice President, Business Ethics and ConductRaytheon Company
Sandra Evers-ManlyVice President, Global Corporate ResponsibilityNorthrop Grumman Corporation
La Guardia N. MyersStaff Vice President, EthicsGeneral Dynamics Corporation
Eric KantorDeputy General Counsel & Chief Compliance OfficerGE Aviation Legal Operation
DII Working GroupLaura K. KennedySenior Vice President, Ethics & ComplianceScience Applications International Corporation
Denise KingDirector, Business ConductHarris Corporation
Melisse Ader-DuncanAssociate General CounselTextron Systems Corporation
Dorene A. MacVeySenior Director, Ethics & Business ComplianceRockwell Collins
Ellen MartinVice President, Ethics and Business ConductThe Boeing Company
Paul RobertNoelle S. Slifka, Associate General Counsel, Government
ContractsUnited Technologies Corporation
Douglas PerryVice President, Global ComplianceHoneywell
Angela B. StylesDII CoordinatorPartnerCrowell & Moring LLP
• Current Members – 78 Signatories• New Member Companies Since Last BPF
– Agiltron, Inc.– SRA International, Inc.– The Aerospace Corporation
• Monthly Meetings Among Working Group Members
14
Organization Overview
• The DII Model Supplier Code Of Conduct And Tool Kit
• DII On-Line Community, including Job Board• Increased International Focus• Defense Industry Benchmarking• Increase Membership
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Current Initiatives
General Question and Answers
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