Viewpoint
Ethics as a Global Business Practice
By Marion C. Blakey
The global nature of our industry comes into sharpest focus every year at the Paris (last year) or Farnborough (this year) Air Show. As impressive as the exhibitions and the flying displays are, a primary goal for the international delegations is to engage in dialogue as much as possible in a compressed schedule.
It would be easy for an outsider to presume that this talk is all about the bottom line, cold-hard cash, P&L. And yet there’s also a steady stream of consultations reflecting how seriously companies take their stewardship of our industry. AIA’s collaboration with our sister European organization, the AeroSpace and Defence Industries Association of Europe (ASD), on the International Forum on Business Ethical Conduct (IFBEC) is a telling example.
IFBEC has its roots in the United Kingdom with consultations starting in 2005 between AIA and ASD member companies organized by former NATO Secretary-General Lord Robertson on the idea of developing common standards on business ethics. Initial reactions were not promising, given the seemingly insurmountable obstacles represented by cultural, regulatory, legal and language differences (and that was just within Europe – even more so between Europe and the United States). However, conversations continued as did the interest and encouragement of the CEOs of the major U.S. and European aerospace and defense companies who recognized a valuable initiative.
The corporate leadership of AIA and ASD recognized the financial benefits of supporting trans-Atlantic collaboration on ethics. Our companies all have global supply chains and compete as much as they cooperate with each other. No one wants to face a skewed playing field because a competitor is using unethical business practices, and no one wants to have a partner jeopardize a contract with the same behavior. Therefore, last October AIA and ASD developed and formally endorsed a set of Global Principles of Business Ethics for the Aerospace and Defense Industry that address corruption, use of advisors, conflicts of interest and respect for proprietary information. And if this initiative had been only about money, things might have stopped there.
Instead, during subsequent conferences in Berlin in January and again in Washington, D.C. in June, it has become readily apparent that the IFBEC initiative is prompting a new form of competition in our industry. Our companies are coming together to hear about each other’s challenges and best practices to implement the Global Principles. They take pride in their accomplishments even as they continually seek out new ways to improve their own ethics programs. The ultimate objective is a “highest common denominator” of business practices that reinforces the credibility of our industry and preserves the trust of our customers.
The next steps for IFBEC are, like the Global Principles, simple to understand but challenging to put into practice. In the months to come, IFBEC will develop its operating charter and a set of formal requirements for annual public endorsement of the Global Principles (and any revisions) by adhering companies. The IFBEC will begin planning its next meeting (likely first quarter 2011 in Washington, D.C.) where companies and industry stakeholders can once again come together to evaluate ethical business trends in the international marketplace, including fresh developments that could become the basis for new issues to be addressed in the Global Principles.
At Farnborough, we intend to live up to the “global” in the principles to engage our counterparts in other key aerospace countries, like Brazil, Canada and Japan, to inform them of our activities and solicit their active participation. Going forward, it will be critical to develop verification mechanisms that can monitor adherence and provide recommendations on mitigating risk.
In the end, I expect that when Air Show time comes around in Paris next year, we will be able to report success on all of these fronts, and in new areas that we have not yet considered. More importantly, I expect we will also set new challenges for ourselves in raising the bar for ethical business conduct in our industry.
