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Copyright © 2014 Raytheon Company. All rights reserved. Customer Success Is Our Mission is a registered trademark of Raytheon Company.
International Forum onBusiness Ethical Conduct
and theGlobal Principles
Timothy Schultz
Acting Vice President
Ethics and Business Conduct
Vice Chair, IFBEC
June 4, 2014
The Path to IFBEC
2004 - 2005– Preliminary discussions between defense contractors,
enforcement officials, other stakeholders to join in a common strategy to fight corruption as an industry and level the playing field in international defense procurements
– AIA encourages initiative
2005 - 2007– Engagement with TI-UK– Creation of International Coordinating Council of Aerospace
Industry Associations (ICCAIA) Round Table on Business Ethics
– Europe develops Common Industry Standards (CIS)
Industry collaboration on anti-corruption6/4/2014 2
The Path to IFBEC
2008– Preliminary discussions held between ASD Anti-
Corruption task force and AIA Ethics Task Force
2009– Drafting and signing of the Global Principles of
Business Ethics for the Aerospace and Defense Industry
A path forward with agreed upon principles6/4/2014 3
Signatory Commitments
To implement the Global Principles with comprehensive policies and integrity programs promoting awareness and compliance through communication and training
To encourage reporting of concerns by employees relating to compliance with the Principles and the integrity program
To sanction non-compliance in appropriate cases
Programs implementing the Principles have teeth6/4/2014 4
Zero Tolerance to Corruption
Compliance with applicable anti-bribery laws No things of value to obtain or retain business, gain improper
advantage. Keep appropriate, traceable books and records Internal controls and training to comply with integrity policies Business partners required to comply with integrity policies Seek to eliminate facilitation payments even where not
prohibited by law
Strong stance against corrupt practices6/4/2014 5
Use of Advisors
Written policies govern use and payment of agents, consultants, intermediaries engaged in business development
Due diligence assessments required for advisors Remuneration of advisors must be for legitimate services rendered
and be properly recorded Awareness program for advisors concerning integrity policies and
anti-bribery laws Written agreements with advisors require compliance with anti-bribery
policies and laws Regular reports from advisors on their activities should be required
Signatories agree to closely govern advisors6/4/2014 6
Managing Conflicts of Interest andRespect for Proprietary Information
Follow applicable laws, regulations regarding employing former public officials to properly manage conflicts of interest. Maintain related policies
Safeguard proprietary information entrusted to them according to non-disclosure agreement terms
Will not solicit or accept third party’s proprietary information unless agreed upon with owner of the data
Unauthorized receipt of third party’s proprietary information will be handled by not disseminating or reviewing it, destroying or returning it, and the third party owner should be informed
Level playing field: conflicts, proprietary information6/4/2014 7
Global Principles of Business Ethics for theAerospace and Defense Industry
Shared executive level commitment
Multi-year, sustained effort by Working Group to achieve alignment and draft Principles
Journey toward common framework noted differing points of departure and emphasis
Process built greater trust and understanding, plus recognition that the Principles are a starting point not an endpoint
Principles are a unifying achievement for the industry6/4/2014 8
IFBEC is Founded
IFBEC formed in 2010
Charter developed
Governance structure established• Steering Committee
– Subcommittees
Engagement with stakeholders
Organizational structure to guide our progress6/4/2014 9
IFBEC BEST PRACTICE FORUMS
Berlin 2010
Washington, DC 2011
Madrid 2012
Washington, DC 2013
Brussels (Nov 6-7) 2014
Sharing to inspire program excellence for members
6/4/2014 10
International Forum on Business Ethical Conduct
Pedro MontoyaSenior Vice-President, Group Ethics & Compliance Officer
DII 2014 Best Practices Forum , 4-6 June 2014
1. Foster outreach activities to increase the number of companies, both prime and
subcontractors, that act ethically and in accordance with IFBEC’s Global Principles.
2. Enhance governance to become more effective: New working groups and a new
facilitator for IFBEC key topics.
3. Improve internal communication tools (newsletters, blogs, publication releases, public
commitments, webinars, monitor policy development and implementation), and IFBEC
milestone documents (IFBEC Charter, Global Principles, Public Accountability Report)
4. Create and consolidate an external communication strategy to engage key
stakeholders, such as NGOs, national governments, and international organizations in
coordination with the facilitator.
12
Boosting IFBEC for the future:
Settle a long term Engagement Strategy: ethical business as
competitive advantage, recognized by our key stakeholders
Set clear priorities to address risks:
i. Responsible Supply Chain
ii. Compliance risks in Offset Programmes
13
IFBEC way forward
Position IFBEC as the international leader forum for business ethics in aerospace and defence