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
– 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
From the Report
“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.”
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.
Original DII 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 Signatories
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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
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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
Who We Are Today
• 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.
The DII Principles 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.
DII Leadership
• 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 Chair
Marillyn A. Hewson
Chief Executive Officer and President
Lockheed Martin Corporation
DII Working Group Chair
Leo S. Mackay, Jr.
Vice President, Ethics & Sustainability
Lockheed Martin Corporation
DII Coordinator
Angela B. Styles
Partner
Crowell & Moring LLP
DII Steering Committee
Marillyn A. Hewson
Chair, DII Steering Committee
Chief Executive Officer & President
Lockheed Martin Corporation
William M. Brown
Chairman, President & Chief Executive Officer
Harris Corporation
Wes Bush
Chairman, CEO & President
Northrop Grumman Corporation
Robert (Kelly) Ortberg
Chief Executive Officer & President
Rockwell Collins
David L. Joyce
President & Chief Executive Officer, GE Aviation
General Electric Company
Tony Moraco
Chief Executive Officer
Science Applications International Corporation
Louis R. Chênevert
Chairman & Chief Executive Officer
United Technologies Corporation
Christopher M. Chadwick
Executive Vice Chairman, The Boeing Company
President and Chief Executive Officer,
Boeing Defense, Space & Security
David M. Cote
Chairman & Chief Executive Officer
Honeywell International Inc.
Phebe N. Novakovic
Chairman & Chief Executive Officer
General Dynamics Corporation
Scott C. Donnelly
President & Chief Executive Officer
Textron Inc.
Tom Kennedy
Chief Executive Officer
Raytheon Company
Jerry DeMuro
President & Chief Executive Officer
BAE Systems, Inc.
Harold L. Yoh III
Chairman & Chief Executive Officer
The Day & Zimmermann Group, Inc.
DII Working Group
Leo S. Mackay, Jr.
Chair, DII Working Group
Vice President, Ethics & Sustainability
Lockheed Martin Corporation
Jamal Ahmed
Vice President, Internal Audit and Chief Ethics Officer
Day& Zimmermann, Inc
Nick Ruscio
Vice President, Internal Audit and Chief Ethics Officer
BAE Systems, Inc.
Patricia J. Ellis
Vice President, Business Ethics and Conduct
Raytheon Company
Sandra Evers-Manly
Vice President, Global Corporate Responsibility
Northrop Grumman Corporation
La Guardia N. Myers
Staff Vice President, Ethics
General Dynamics Corporation
Eric Kantor
Deputy General Counsel & Chief Compliance Officer
GE Aviation Legal Operation
Laura K. Kennedy
Senior Vice President, Ethics & Compliance
Science Applications International Corporation
Denise King
Director, Business Conduct
Harris Corporation
Melisse Ader-Duncan
Associate General Counsel
Textron Systems Corporation
Dorene A. MacVey
Senior Director, Ethics & Business Compliance
Rockwell Collins
Ellen Martin
Vice President, Ethics and Business Conduct
The Boeing Company
Paul Robert
Noelle S. Slifka, Associate General Counsel, Government
Contracts
United Technologies Corporation
Douglas Perry
Vice President, Global Compliance
Honeywell
Angela B. Styles
DII Coordinator
Partner
Crowell & Moring LLP
Organization Overview
• Current Members – 78 Signatories
• New Member Companies Since Last BPF
– Agiltron, Inc.
– SRA International, Inc.
– The Aerospace Corporation
• Monthly Meetings Among Working Group Members
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Current Initiatives
• 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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General Question and Answers