| PREAMBLE: The Defense Industry Initiative on Business
Ethics and Conduct (herein “DII”) was established
in June 1986 by 32 major defense contractors who pledged to adopt
and implement a set of principles of business ethics and conduct
that acknowledge and express their federal-procurement-related
corporate responsibilities to the Department of Defense, as well
as to the public, the Government, and to each other. The establishment
of the DII is described in “A Quest for Excellence”,
Final Report to the President by the President’s Blue Ribbon
Commission of Defense Management, June 30, 1986. The DII has sustained
its vitality by faithful adherence to these founding principles.
The governance of the DII has been informal, but its activities
consistently have been based on the original concept and principles.
To better assure sustainment of its principles, the DII has determined
to adopt this statement.
This statement, therefore, is intended to record the nature
of the DII and its governance, such that the DII may continue
to be a force for ethical business conduct within the defense
industry.
ARTICLE I
Name and Legal Nature
This organization is known as the Defense Industry Initiative
on Business Ethics and Conduct, hereafter referred to as DII,
and its members are known as Signatories. The DII is a not-for-profit
organization, domiciled in Washington, D.C.
ARTICLE II
Purpose
DII’s essential purpose is to combine the common dedication
of its Signatories to a culture and practice of ethics and right
conduct in all business with the U.S. Defense Department and with
others. The defense industry Signatories are united in the commitment
to adopt and implement principles of business ethics and conduct
that acknowledge and address their organizational responsibilities
under federal procurement policy and law, thereby contributing
to the National Defense. Further, they each accept the responsibility
to create an organizational culture in which ethics is paramount,
and compliance with federal procurement laws is a strict obligation.
The DII’s essential strength lies in sharing best practices
to maintain the highest ethical standards, encouraging employees
to ethical conduct, and requiring compliance in the course of
its business activities. The DII, while not a lobbying organization,
is an advocate of its principles to the defense industry, to the
Government and to the Public.
ARTICLE III
The DII Principles
The DII Principles were adopted at the time of the establishment
of the DII in June 1986, and have been periodically reconfirmed.
The Principles are:
(1) Each Signatory shall have and adhere to a written code
of business conduct. The code establishes the high ethical values
expected for all within the Signatory’s organization.
(2) Each Signatory shall train all within the organization
as to their personal responsibilities under the code.
(3) Signatories shall encourage internal reporting of violations
of the Code, with the promise of no retaliation for such reporting.
(4) Signatories have the obligation to self-govern by implementing
controls to monitor compliance with federal procurement laws
and by adopting procedures for voluntary disclosure of violations
of federal procurement laws to appropriate authorities.
(5) Each Signatory shall have responsibility to each other
to share their best practices in implementing the DII principles;
each Signatory shall participate in an annual Best Practices
Forum.
(6) Each Signatory shall be accountable to the public.
In addition to adopting and adhering to this set of principles
of business ethics and conduct, Signatories have assumed a leading
role in making the principles a standard for the entire defense
industry, and a model for other industries.
ARTICLE IV
Organization
Section 1. The DII is governed by a Steering
Committee, consisting of not less than seven (7), but no more
than fifteen (15) board chairmen or chief executive officers of
Signatory organizations. The Chairmanship of the Steering Committee
is rotated; the Committee prescribes its own governance practices,
and meets at its pleasure.
Section 2. Each Signatory designates a Principal
Representative, usually an officer of the organization who has
authority for ethics and conduct within the organization. The
Principal Representative is the key liaison between the DII organization
and the Signatory organization. The Principal Representative keeps
his/her officers and organization employees informed of DII activities
and may act to convey the guidance of the Steering Committee to
the DII Working Group.
Section 3. The Working Group is comprised of
one representative from each Steering Committee organization.
The Working Group officers shall consist of a chairperson and
a treasurer, each of whom generally serve for two years. The Working
Group may employ, and compensate, others in the administration
of the DII. The Working Group shall select a DII Coordinator to
coordinate the programs and activities of the DII.
Section 4. DII financial affairs shall be managed
by the DII Coordinator, with oversight and control exercised by
the Working Group.
ARTICLE V
Duties and Responsibilities
Section 1. The Steering Committee, through the
Working Group, shall set the policies for the DII.
Section 2. The Working Group is responsible
for the continuing activities of the DII, and shall determine
the annual assessment for each Signatory organization, commensurate
with the Signatory’s annual revenues, to fund the expenses
of the DII programs and activities.
Section 3. The DII Coordinator, selected by
and reporting to the Working Group, shall manage and administer
the DII budget and finances, administer the public accountability
process, plan and organize Best Practices Forums, arrange meetings
and other programs, maintain an information clearinghouse, maintain
a Website, be the principal liaison with other defense organizations,
encourage new membership, conduct the day-to-day business of the
DII, and perform other duties as assigned by the Working Group.
ARTICLE VI
Membership
Membership in the DII is open to any defense contractor organization,
subject to approval by the Working Group, provided it demonstrates
a commitment to the DII Principles of self-governance and agrees
to apply the resources necessary to fulfill that commitment. The
DII does not anticipate refusal of any good faith membership applications
or renewals, but does, however, reserve the right to refuse or
suspend membership privileges for good cause. Such a decision
shall be based on a majority vote of the DII Working Group and
the reasons for such a decision will be provided.
THIS STATEMENT IS APPROVED AND ADOPTED BY THE WORKING
GROUP THIS 20TH DAY OF JANUARY 2004.
PATRICIA J. ELLIS
CHAIRMAN, DII WORKING GROUP
ATTEST;
RICHARD J. BEDNAR
DII COORDINATOR
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