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Vol. 17, No. 45, May 9, 2005


This Reveille Home Page | The Friday Program: Boeing Shores Up Its Ethics | Jim Owens Receives RI Foundation Award | Committee Sign-Ups | Summer Festival Set for Overlake School | Friday Potpourri | Golf Around the Corner | 27 Members Achieve 100% Attendance | Web Fun


“Corporate Storytelling," a program by Evelyn Clark, author and speaker on the value of telling good stories in the company. Find out about this interesting topic Friday morning, 7:00 a.m. at Glendale Country Club.


The Badge Box will be restructured on Friday, May 20. Look for your badge in a slightly different place at the next meeting.

REMINDER: Just a few weeks left to put a cap on the club’s Rotary Foundation campaign. Contact Don Chandler if you have questions.

The Friday Program:
Boeing Shores Up Its Ethics

x0509Carar2The BBRC’s Vocational Awareness Committee—the sponsor of annual ethics programs for the membership—introduced Ed Carr, Director of Ethics and Business Conduct at the Boeing Company, and a team of advisers who explained the topic Ethics Initiatives at Boeing.

“A series of unfortunate events over the past two years underscored Boeing’s integrity problems, hiring problems and ethical failures,” Carr said. He was speaking about the scandals surrounding the hiring of a former Air Force procurement officer who was involved in the Boeing-Air Force Tanker deal and the failure of the company’s CEO to follow his own set of ethical standards put in place only a few years ago.

“All of these events came into focus in the last two years,” Carr said. “I believe we have a really sound governance program in place today. Our job now is to share some of the lessons we’ve learned with the community and industry. The company’s thrust is on education and awareness, not teaching. We believe that ethics starts at home and at an early age. The values and culture of a company are the most important assets it has.”

Just 18 months ago, there were only three staff members assigned to company ethics. Today, that number has ballooned to 102, with 80 ethics advisers assigned to Boeing units around the world. The structure of the company organization has been revamped to strengthen the emphasis on providing awareness to the 160,000 employees of the company.

Boeing has established an Office of Internal Governance, led by a Senior Vice President. The new office oversees the Corporate Audit, Global Trade Controls, and Compliance. During this early period, four different independent studies were conducted to review and evaluate what the company’s ethics programs should look like. It was evident that a more structured ethics program was necessary, with a need to change the governance program. Now the ethics emphasis is aligned with the company’s CEO and Senior Management.

Last year’s sales of the Boeing Company were $52 billion. The company is represented in the U.S. and in 67 other countries. It has more than 5000 suppliers in 100 countries and maintains research and design centers on many continents. In addition to its well-known commercial airline products, the company is a leader in weapons and satellite systems. Boeing was founded in 1916, merging with Rockwell, Hughes and McDonnell Douglas in the mid-90’s.

As the company approaches its 100th anniversary, a project called Vision 2016 has adopted a values statement. “People working together as a global enterprise for aerospace leadership” is the quote, and Carr said that integrity is the underpinning of the values program.

The new ethics program is built around training given to all employees around the world. Anthony Smith is a person involved in these programs, a “business partner representing ethics in the various work teams.” Smith explained how the system works and the fact that all Boeing employees received training and education to reach maximum awareness of the “value of an ethics program.”

In the past year, 14,000 calls have been fielded by the new ethics office. Of these, 3,000 were considered ethics allegations, resulting in 1,000 actual cases investigated. Ed Carr said that “behavioral issues appear to be at the core of the problem.”

x0509CarrJohnsonEnhanced ethics training has resulted in some challenges. Boeing has created three major initiatives. 1) A Code of Conduct, signed by every employee each year. 2) An ethics recommitment, a half-day event held in major areas with other business leaders designed to expand the awareness of ethics. And 3) Ethics challenge, where relevant and interesting case histories are explored by work teams. “Informed employees make better decisions.”

Carr closed his comments saying that the company’s emphasis on ethics and business conduct has a “24/7 role. It’s the hardest job you’ll ever love. Our goal is a world-class ethics program.”

In response to audience questions, Carr responded to a query:

"How do you deal with ethics being practiced on a different level in other countries?"

A: Our guideline is current Boeing policies, unless it’s in conflict with local laws and culture. We take a conservative approach, taking the high road, even if we lose business.

In dealing with suppliers, Procurement Integrity/Trade Secrets, the tone is set company-wide. As the change of culture within the company is adopted, the goal is to restore the reputation of the firm, particularly in view of the ethics failures of its former CEO Harry Stonecipher. Carr pointed out that a direct connection has been made with the company’s board of directors to accept ethics allegations from employees. “The company has stumbled, but is coming back from its problems with a strong, new program of ethics training, education and awareness.”

For his presentation, Ed Carr was presented with a certificate showing the BBRC has donated 1,220 pounds of fresh food in his name to area food banks in cooperation with Rotary First Harvest. President Johnson also gave Ed a handful of laminated four way test cards. The thought for the week featured the entire audience reciting Rotary’s 4-Way Test. Thanks to Doug Cameron and his committee for arranging this illuminating program.





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