US and EU aerospace and defense industries unite to establish common principles on business ethics
Major companies in the defense and aerospace industry have adopted the « Global Principles of Business Ethics”. What are they and how do they contribute to the field?The Global Principles of Business Ethics is an initiative launched by both the Aerospace Industries Association of America (AIA) and the Aerospace and Defence Industries Association of Europe (ASD). This initiative represents company commitments to develop responsible and ethical business behavior, particularly in preventing corruption. Companies sign a statement on a voluntary basis wherein they commit to observing these principles. Moreover, companies that endorsed these Principles have since established an International Forum on Business Ethical Conduct (IFBEC), a think-tank where members can exchange business ethics best practices, discuss openly with stakeholders and promote self-regulation and the concept of a “responsible company” label.
What role has ASD played in implementing the business ethics principles?
ASD was the initiator of international principles in this matter. In 2007, EU Common Industry Standards (CIS) – a series of concrete minimal procedures that European companies need to implement in order to prevent corruption – were signed by over 400 companies. The ASD wished to involve every actor in this sector – including contractors – by providing them with the necessary tools (including training programs and model contracts) to implement efficient corruption prevention policies. The ASD then exchanged with the AIA to work jointly on setting a common vision for ethical conduct within the aerospace and defense industry and to promote this vision among the industry’s stakeholders via the IFBEC (International Forum on Business Ethical Conduct).
Competition among American and European companies in the aerospace and defense industry is particularly strong. How did the dialogue start and how was the relationship between ASD and AIA built?
Competition between American and European companies is indeed fierce in this sector and has long been characterized by mutual distrust. In the field of business ethics and anti-corruption, legal frameworks for the criminalization of the corruption of foreign public officials were very different prior to 2000. However, the OECD Convention and its transposition to national laws has since established a common legal ground and led the way to a gradual cumulative definition of best practices to prevent corruption. Informal meetings demonstrated that we had much more in common than we thought. We were able to develop these principles in an environment of confidence and trust. It can be said that there is no competition in the field of business ethics between the AIA and the ASD.
It seems that Thales is very active in promoting business ethics. What particular role are you playing in implementing common ethics standards within the aerospace and defense industry?
Given the nature of its clients (governments), the aerospace and defense industry is exposed to corruption risks worldwide. This has prompted Thales to develop over several years a strong and comprehensive anti-corruption program which is fully integrated into its business strategy. But we quickly realized that we couldn’t act alone on this issue; it became evident that we needed to combine efforts and initiatives that were being developed around us. The size of Thales and the importance of its international activities allowed us to be heard and I had the full support of my CEO to launch and pursue this project. Soon after, other major European companies such as EADS, BAE Systems and SAAB joined the movement and together we gained support from professional organizations in our sector.
How have these business ethics initiatives affected the aerospace and defense industry?
These initiatives have changed the industry in several ways. First, they have increased the awareness and understanding of corruption issues among all industry participants: nowadays, no one can ignore what corruption really means, what risks are involved or what must be done to prevent it. Second, they have contributed to standardizing best practices between the E.U and the U.S. This is extremely important to “level the playing field” within the industry, and in particular to encourage emerging countries’ industries to adopt these same measures. Moreover, the image of the entire aerospace and defense industry has improved, particularly within civil society. But this is just a beginning. We will pursue business ethics initiatives and make them a competitive advantage for “responsible companies” in public tenders. These ethics standards will support “competitive intelligence” and fuel competitiveness among ASD and AIA member companies. Ultimately, everyone should benefit from the momentum.
23 January 2012
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Tags : ethical business behavior, responsible company, self-regulation
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