Leadership

Aerospace Defends its Ethics (Again)

By Joanna Higgins

Updated on: September 9, 2009 / 11:23 AM EDT / MoneyWatch

The timing seems unfortunate. The UK-based, soon-to-be-formed AeroSpace, Defence and Security trade body, A|D|S, is shining a spotlight on the "leading role that the defence industry is playing in ethical business practices" at the DSEi trade show today.

According to a press announcement, the public's perception of the defence industry as negative is at odds with reality, and the DSEi show offers the industry a chance to show off its clean-living credentials and offer small UK defence-sector operators the chance to fine-tune their anti-corruption credentials.

Leaving aside the question of why small and medium-sized firms are singled out for help. the bigger question is simple: is big AeroDefence a beacon of ethical practice? Why, then, have the industry's biggest players been blacklisted by Norway's Council on Ethics (admittedly, an unyielding group)? (Notably absent: Rolls Royce)

Sadly, you don't have to cast your mind too far back to come up with reasons why this might've happened:

At European aerospace giant EADS, the former joint CEO, Noel Forgeard,was charged last year with insider trading for offloading company shares before disclosing costly delays to the Airbus A380 'Superjumbo'.
UK-based BAE's own chairman admitted to overlooking ethical standards in the report following Lord Woolf's investigation of the company last year.
Although this was six years ago, Boeing lost a lucrative US Air Force contract when it was revealed that it had got hold of proprietary documents from rival Lockheed Martin. More recently, an employee posed as an independent blogger in order to sit in on rival Northrop Grumman's briefings.

Then there's the WTO's recent ruling against EADS civil aviation arm, Airbus, part of an ongoing dispute between Boeing and Airbus over government subsidies. Accepting subsidies isn't an ethical lapse (discuss). But the publicly conducted squabble casts neither Boeing nor Airbus in an especially favourable light. Given, this is business and aerospace companies must compete for incredibly lucrative long-term contracts. Even so, their conduct often seems more playground than professional.

Public perceptions matter, particularly when aligned to political interests. And overall, the public wants both governments and businesses to show more integrity, according to Transparency International's 2009 Global Corruption Barometer. The feeling among its 73,000 respondents was that corruption was becoming more commonplace in the public and private sectors, and that EU governments were losing the fight against it.

Come to think of it, maybe the DSEi's showcase is a good idea, after all.