2014 Best Practices Forum
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“Consumers, investors, business partners,
regulators, and media organizations now expect
a company and its entire supply chain to be
ethical. The supplier-generated ethics scandal is
probably one of the biggest (and least foreseen)
business risks most leading companies face
today. The damage can be great, and protective
measures can and should be adopted
immediately.”
Michael R. Levin
Building an Ethical Supply Chain
November 24, 2008
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Why create a
Supplier Code of
Conduct?
0 Promote inter-organizational Ethics – each part of
the supply chain affects others
0 Set expectations for supplier behavior
0 Mitigate risk
0 Facilitate supplier collaboration and partnership
0 Reduce redundancy for suppliers
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2013 Signatory
Survey Results
Which of the following would your
organization find helpful when dealing with
supply chain integrity issues?
Several other industries, such as
the Electronics and Pharmaceutical
industries, have created an
industry-wide set of business
conduct principles for suppliers.
Would your organization support a
similar initiative in the defense
industry?
Yes
45%
50%
5%
No
Maybe-I'd like to
hear
more
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Supplier Code
Creation Process
June 2013 Best Practices Forum
Initial working
group session
Volunteers
divided into 2
subgroups
August – November 2013
Selection of
topics for
inclusion
Topics assigned
to various authors
1st draft compiled
December 2013 – February 2014
Volunteer working
group comments
incorporated into
2nd draft
2nd draft
approved by DII
Working Group
April – May 2014
Supplier Code
content
incorporated into
final design
Table of Contents
Compliance with Laws
 Maintain Accurate Records
Human Rights
 Child Labor
 Human Trafficking
Employment Practices
 Harassment
 Non-discrimination
 Substance Abuse
Anti-Corruption
 Anti-Corruption Law
 FCPA
 UK Anti-Bribery
 Anti-Kickback
 Gifts/Business Courtesies
 Insider Trading
Conflict of Interest
Information Protection
 Confidential/Proprietary
Information
 Information Security
 Intellectual Property
Environment, Health, & Safety
 Security
Global Trade Compliance
 Import
 Export
 Anti Boycott
 Conflict Minerals
Quality
 Counterfeit Parts
Ethics Office Explanation
 Whistleblower Protection
 Consequences for
Violating Code
 Ethics Policies
 Contacts/Resources
What does the
Code do?
 Resource for small suppliers without a code of conduct
 Resource for signatories without a supplier code
 Option to adopt code as-is for use
 Starting point for signatories to create new supplier code
 Benchmarking tool for those with a supplier code
 Ideally…
 Serve as common core code with company specific addenda
 Achieve objective of limiting number of codes flowed to
common suppliers
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Future State
Possibilities
Industry standard
certification
Certification
Shared audits of common suppliers
Suppliers agree to abide by
code
Suppliers acknowledge receipt and review
of code
DII Code applied by signatories
Model industry code adopted by
DII
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Next Steps
DII Working Group to
determine next steps
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Purpose of the DII
Supplier Toolkit
0 Provide helpful tips and guidance on how to put
together an effective ethics and compliance program
0 Support them in becoming compliant with FAR
52.203-13 Contractor Code of Business Ethics and
Conduct requirements
0 Engage the supplier community in the ethics
discussion
0 Strengthen the defense industry
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Timeline
June 2013
DII BPF Breakout
Session
October –
November 2014
Solicited
volunteers to
participate on
team
Thank you Team Members!!!!!
• Bruce Anderson – Health Net
• Terry Bridges – Georgia Institute of Technology
• Feyzan Dalay – Sikorsky
• Tundi Darvai – Formerly with Supreme Group
• Denise King – Harris
• Michael Miller – Aerojet Rocketdyne
November –
December 2014
Discussed the
deliverable,
selected and
assigned topics
December Present
Developed
content and had
multiple rounds of
editing
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Table of
Contents
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Introduction
How to Use This Toolkit
Leadership Commitment
Company Values
Risk Assessment
Ethics and Business Conduct
Policy
Code of Conduct
Inquiry and Reporting
Mechanisms
Awareness Training
Communication Plan and
Awareness Initiatives
Program Assessment and
Evaluation
Checklist
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Next Steps
0 Still in draft form because we want your feedback!
0 Do you have any best practices you would like included?
0 Would you be willing to talk with a supplier one on one to
share best practices and offer guidance?
0 Do you have any developed content that would be
valuable to a company putting together a program?
0 Once we incorporate feedback, final review and
approval will be done by the working group
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Discussion
Questions
0 DII Model Supplier Code
0 What would help you apply the DII Model Supplier Code
in your organization?
0 What possibilities and questions should DII consider as
regards future use of the Model Supplier Code?
0 DII Supplier Toolkit
0 What additional resources/examples could we provide to
the supplier community? Do you have any to share?
0 Is their anything beyond the toolkit we could do to
engage the supplier community and help them develop
their ethics and compliance programs?
0 How can DII best share the Model Code and Toolkit
throughout our stakeholder community?
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