Industry ethics: going beyond the call of duty.

• Author: Farrell, Lawrence P., Jr.
• Position: PRESIDENT'S PERSPECTIVE

A seemingly endless stream of bad news about U.S. weapon programs should cause all of us to revisit our approach to ethics in the defense industry.

Last year, the Government Accountability Office sent shockwaves through the defense community when it reported $300 billion in cost overruns in 96 major weapons systems, which were on average 22 months behind schedule. These findings were reported by every major news media, including a recent New York Times editorial, titled, "Military-Industrial Redux."

Following these revelations of massive cost overruns, Congress embarked on new procurement reform legislation and the Defense Department announced the hiring of 20,000 civil servants for engineering and management jobs to tighten up oversight of acquisition programs. These measures should help to turn around the negative trends in program performance.

But these developments also should offer industry an opportunity to ponder the delicate balance of ethics, corporate profits and national security.

There are many definitions of ethics and more than one code of ethics on the street. But there is always some minimum structural or process definition involved. The many codes that abound differ in specifics, but hew in general to some common minimum.

There is a tendency, too, to have' a code or be part of an organization with a stated code that might serve as an inoculation against charges of unethical behavior. The line might go like this, "We couldn't have stepped across the ethical line because we have an 'Ethics Code.'" The code in this case is treated as the Good Housekeeping Seal of Approval.

The NDIA code and the accompanying discussion of ethics (http://www.ndia.org/Resources/Pages/TheEthicsSource.aspx) lays out not only the actual code, but also references those of four of our members (Boeing, Day & Zimmerman, Lockheed Martin, Raytheon) as well as other ethics references from government and other industry organizations. This reflects our view that ethics is an open subject. No one has the corner on it and all should be invited to play vigorously.

The NDIA code takes as a given that companies and their boards have a fiduciary responsibility to profit, but that ethical behavior has to be on an equal or higher footing with profit as a corporate objective. The industry has an obligation to U.S. troops, to give them the highest...