INSIDERS VERSUS OUTSIDERS

An ethics or compliance officer may be an insider or someone brought in from the outside. We talked to past and present ethics officers who represent both categories. It can sometimes be more difficult for an outsider to achieve credibility in the ethics or compliance role. But someone brought in from outside the company has the advantage of being able to evaluate the situation with a fresh eye. If change is needed, that person may be better able to guide the organization through the change process. Most of those we interviewed believe that, if available, a respected and trusted insider who knows the company’s culture and people is usually the best choice. Results of a 1995 survey support the insider preference.10 Eighty-two percent of the firms responding to the question hired their ethics officer from inside the firm. The very best situation may be when the ethics officer is also a part of the senior management team or being groomed for an executive position.

At Lockheed Martin, ethics is taken so seriously that an assignment managing an ethics office is part of the grooming process for executive positions that high potential employees receive. Lockheed has a vice president of ethics for the entire corporation and five ethics directors—one for each of Lockheed’s five huge business units. These positions report to the senior business and ethics executives in the business units and are rotational. High-potential executives are recruited into these jobs as a development experience; they serve for two to three years and then go back to the businesses. Other high-potential employees replace them as ethics directors, and the process continues. This is a novel approach to enhancing an ethics program and grooming executives, and it should go a long way toward truly integrating ethics and integrity into how the business is run. Lockheed will soon have a full cadre of executive- level employees who have served the company as ethics officers. One employee involved in this process is Srinivas Dixit, who currently is the director of ethics and business conduct for Lockheed Martin Electronic Systems in Bethesda, Maryland. Dixit holds an undergraduate degree in engineering and an MBA, and he was working in business operations in Lockheed’s finance area when he was tapped for the ethics director job in late 2008. Now he is managing investigations, overseeing ethics and compliance training, tracking metrics through surveys and other studies, and looking for trends in this area. He is also talking to leaders, working with them to integrate ethics and compliance into the business by creating a ‘‘culture of trust’’ throughout the organization. What has Dixit learned in his new job? ‘‘I’ve learned how seriously Lockheed integrates ethics into the business. Ethics is fundamental to who we are and what we do. Integrity is at the beginning, middle, and end of every message our senior leaders send. This job has shown me how seriously we take ethics—how much we respect people, and how much time and care we take in reaching decisions.’’