Boeing Chief Executive Officer Jim McNerney made a powerful statement to Congress last week during a hearing on the company’s $615 million settlement with the Justice Department.
First, he noted that the company accepted full responsibility for past wrongful acts that had “brought dishonor on a great company and caused harm to the U.S. government and its taxpayers.”
Then he promised that ethics will be woven “into the fabric” at all levels of the company, with a strong ethics code and an annual recommitment to it.
Boeing has a lot of wrongdoing to atone for. The best known in our neck of the woods was the recruiting (and subsequent hiring) of an Air Force official while she oversaw contracts such as the deal to turn Everett-built 767s into refueling tankers for the military.
Boeing won that $23 billion contract, and it was later rescinded.
The Air Force official, Darleen Druyun, served a nine-month prison term for violating conflict-of-interest laws. Michael Sears, a former chief financial officer, spent four years in the clink for recruiting her.
The refueling contract, which is now being rebid, will decide the future of the 767 line and of the people who work on it. If the plane isn’t chosen again for the tanker program, the line will disappear. The company has sold four 767s this year, but the 787 will eventually make it obsolete as a passenger jet.
In addition to the $615 million fine, Boeing also lost $1 billion in rocket launch contracts for unethical behavior.
With that much at stake, it would have been easy for the company to look for a way to spin things, to be able to deduct the fine or to look for some other way to lessen the load.
McNerney would have none of that. He accepted blame, said he would seek no tax write-offs and explained the company’s new ethics program.
More power to him.
In the end, Boeing will be a better company not only in the eyes of Congress, but where it really counts – with its own employees.
At least that’s my interpretation of a survey released last week by LRN Corp., which works with businesses on ethics issues.
Unethical managers contribute to lower productivity, drive away potential employees and cause others to leave, the company reported, noting that ethics is a growing concern among American workers.
According to the survey, 82 percent of a group of 834 full-time employees across the country said they would work for less to be at a company that had ethical business practices, and more than a third said they have left a job because they disagreed with the actions of fellow employees or managers.
In January, a similar survey showed 76 percent of respondents saying that how they perceived the company’s ethics would affect whether they would want to work there. In the most recent survey, 94 percent said it was either critical or important that the company they work for is ethical.
Boeing had been a slippery slope with its industrial spying and coercion of an Air Force official. Phil Condit, Boeing’s chief executive at the time, resigned over the issue. Harry Stonecipher, who was pulled out of retirement to replace Condit and restore the company’s reputation, was forced to resign because of his affair with a company employee.
His actions turned Boeing from a shady corporation into a laughingstock.
Under those conditions, McNerney has no option for spin. The company needs the best workers it can find. And those workers deserve a company they can trust and be proud of.
How do you create an ethical workplace? Here’s some advice from the International Business Ethics Institute:
* Foster a culture that values two-way communication.
* Create effective communication channels.
* Develop standards for raising concerns and deterring retaliation.
* Train all employees.
* Implement a process for investigating problems and resolving concerns.
For more information, go to www.business-ethics.org.
Mike Benbow: 425-339-3459; benbow@heraldnet.com.
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