STATEMENT OF DEFENSE INDUSTRY ETHICAL STANDARDS
NDIA Member Companies are asked to adhere to the highest ethical standards. Because of who we are and what we do it is our duty to place the greater good of the nation above our business interests, and to behave in an honorable way, demonstrating respect for key principles that include honesty, fairness, equality, dignity, diversity, individual rights and the rule of law.
NDIA seeks to place the defense industry at the forefront of business ethics in America. At a minimum, NDIA members must adhere to applicable laws and regulations governing the conduct of their business. Moreover, entrusted to our care are the lives of men and women of the Armed Forces, who willingly bear the ultimate risk for their country and their fellow citizens. We believe the ethical mandate we share as an industry is a higher imperative than our individual business interests. This statement of ethics is intended to capture that mandate by setting forth common ethical principles and emphasizing particular practices that NDIA members may use to put those principles into action.
NDIA shall serve in a leadership role in setting high ethical standards and practices for the industry. NDIA will communicate to the public and government officials the efforts of the industry to assure understanding of and adherence to these principles.
PRINCIPLES AND PRACTICES
Common Ethical Principles and Practices
NDIA members should aspire to the following ethical principles and make every effort to implement the following practices:
- Advance National Security by promoting trust among the Defense Industry, our government customers, the U.S. public, and our men and women in uniform.
- Strengthen the integrity of a federal procurement system that encourages competition, rewards technical innovation, and ensures that American fighters have the decisive advantage on the battlefield and wherever else our nation’s enemies may be found.
- Operate our businesses from a foundation of ethical readiness where economic pursuits do not overtake our responsibility to our soldiers, sailors, marines, and airmen while acknowledging that America’s technological and military preeminence is sustained by promoting the financial health of the defense sector.
- Contribute to the common good of our industry and promote industry ethics whenever and wherever possible by sharing best practices in ethics and business conduct among NDIA members and including ethics training in NDIA sponsored events.
- Implement effective ethics programs for company activities at home or abroad. When contemplating any international sale to a governmental or quasi-governmental buyer, it is imperative that effective measures be undertaken to ensure full compliance, not only with the letter, but also the spirit of the Foreign Corrupt Practices Act, as amended, and the FCPA’s bar against improper payments to foreign officials.
- Establish effective mechanisms of control over employees and agents operating overseas to promote ethical conduct based upon principles, not geographic location.
Protect U.S. national security when performing contracts with foreign parties by committing to compliance with U.S. export control licensing regimes, and with all anti-boycott and embargo requirements.
- Establish corporate integrity as a business asset rather than a requirement to satisfy regulators by making ethics integral to all aspects of corporate life and culture to create an environment where employees aspire to do the right thing.
- Recognize that self-governance is key to management’s commitment to abide by ethical standards. Accordingly, charge Corporate Boards with responsibility for creating an environment where ethical conduct is the order of the day, including, developing and implementing a corporate-level procedure/process to review company best practices, policies, and procedures governing ethics.
- Demonstrate the Company’s and its leadership’s commitment to ethics by making the Chief Executive the top ethics officer.
- Implement a formal company ethics program that includes a written code of conduct to communicate institutional values and expectations and guide employees and management in their decisions and conduct.
- Organize training programs as an integral component of company ethics programs to commit employees to the Company’s written code of conduct, encourage them to discern the difference between right and wrong, and act on that knowledge despite pressures to compromise standards.
- Establish and communicate procedures for employees to identify and report suspected violations of the code of ethics without fear of retribution, establish mechanisms to promptly and effectively communicate violations to the government, and promote full cooperation with government investigations.
- Establish written remedial measures for prompt and appropriate corrective action, including disciplinary measures, where instances of unethical conduct are discovered.
Applicable Law and Regulation
– DoD Directive 5500.07, Standards of Conduct. (November 29, 2007)
– DoD 5500.07-R, The Joint Ethics Regulation (JER), including Changes 1-7. (November 17, 2011)
– 5 C.F.R. 2635. Standards of Conduct for Employees of the Executive Branch.
– 5 C.F.R., Part 3601. Supplemental Standards of Conduct for Employees of the Department of Defense.
Defense Industry Initiative on Business Ethics and Conduct
Sharing best practices to maintain the highest standards of ethical conduct and to encourage employees to be ethical.