Almost half of the total companies assessed in this Index—60 out of 129—provide very little evidence of having basic systems in place to prevent corruption and instil strong ethical values, scoring in Bands E and F. This includes companies from all the major arms exporting nations: USA, Russia, Germany, France, the UK and China.
Ten companies score in the top two bands. Fluor Corporation is the only company to score in Band A. In Band B are Accenture, BAE Systems, Fujitsu, Hewlett-Packard Company, Meggitt, Northrop Grumman Corporation, Serco Group, Thales, and United Technologies Corporation.
These companies publicly demonstrate in considerable detail the systems and procedures that they have in place to prevent corruption. This is to their credit, and demonstrates clearly that there is no confidentiality or secrecy barrier to good public disclosure about anti-corruption in the defence industry. However, this group represents less than ten per cent of the companies studied. Two thirds of defence companies do not provide adequate levels of transparency.
Bands A and B
Of the 129 companies, ten score in Band A or B, which means they have good, publicly available evidence of having at least basic ethics and anti-corruption compliance systems in place. The group includes four American companies: (Fluor Corporation in Band A), (Hewlett-Packard Company, Northrop Grumman Corporation and United Technologies Corporation all in Band B), five European companies (Accenture, BAE Systems, Meggitt, Serco Group and Thales all in Band B) and one Japanese company (Fujitsu in Band B). Both publicly owned and privately owned companies are represented.
Half of these companies are not ‘pure’ defence companies—for example, Fluor (9% defence revenue), Accenture (3% defence revenue), Fujitsu (1% defence revenue) and Hewlett Packard (0.8% defence revenue). These companies have valuable good practices of anti-corruption procedures that may be useful for the defence community.
Within Band B there is nonetheless significant variation. Six companies publish good information on three of the five pillar areas—Leadership, Polices, and Personnel—but provide little to no information on the other two areas: assessing corruption risk and training. Few of the companies show public evidence of sustained leadership engagement promoting anti-corruption and ethics.
The companies in Bands A and B demonstrate a number of good practices and a strong dedication to ethics and anti-corruption. Almost all combine a values-based approach and a legal-based approach. They focus on building strong values—such as integrity, honesty, accountability, and openness—across the organisation. Additionally, they provide clear rules, grounded in compliance with anti-corruption laws.
It is clear from Fluor and the nine companies in Band B that there is no secrecy or confidentiality bar to defence companies publishing good information about anti-corruption systems on their websites. Not disclosing, or hiding behind supposed confidentiality of information, is clearly not justified. As the key customers of defence companies, taxpayers, investors and governments have a legitimate expectation to learn what mechanisms companies apply to prevent corruption so that they can monitor the company’s adherence to these commitments.
We recommend that companies in Band B upgrade their website disclosure to Band A levels. Such clarity sends a clear message to clients, to governments and to the public about the company’s commitment not to tolerate corruption.
Bands C and D
There is a large block of companies in the intermediate Bands C (34 companies) and D (25 companies). Those in Band C score just above 50 per cent—not poor, but definitely not a good level of public disclosure; and those in Band D score above 33 per cent, signifying only limited disclosure. To understand them better, we have analysed these groups according to the five pillars of 1) Leadership, governance, and organisation; 2) Risk assessment; 3) Company codes and policies; 4) Training; and 5) Personnel and helplines. The average results across these companies are shown below:
Band C Companies
|Band D Companies|
Policies & Codes
The analysis shows that both groups of companies provide a good level of detail on personnel and helplines, provide moderate levels of disclosure on their company policies and codes, disclose equally little on risk management, and differ in what they disclose about leadership and training.
The other interesting distinguishing feature, which may also reflect the difference noted above on leadership, is that more than half of the companies in Band C chose to participate in our study by providing internal information (20 of 34), whilst only 7 of 25 from Band D participated.
Bands E and F
Almost half of the defence companies in our index are not able to publicly demonstrate that they have basic anti-corruption systems in place. This includes companies from all the major arms exporting nations: USA, Russia, Germany, France, the UK and China. Sixty out of the 129 defence companies score less than 33 per cent on the basis of their public information, which means they are ranked in Bands E or F. Forty-seven of the 129 companies score in the lowest of the six bands, Band F. This means that they disclose little or no information on the company’s basic anti-corruption measures.
Some of the largest global exporters are in Bands E and F. These include all nine Russian companies and the three Chinese companies included in the survey. Additionally, it includes two of the six French companies, Dassault Aviation and DCNS (Band E); two German companies, Rheinmetall (Band E), Krauss-Maffei Weggmann of Germany (Band F); Ultra Electronics of the United Kingdom (Band E); and several US companies. Others include Navantia of Spain (Band E), Fincantieri of Italy (Band E), Damen Schelde of The Netherlands (Band F), Israel Aerospace Industries and Israel Military Industries (Band F), Patria of Finland (Band E) and RUAG of Switzerland (Band E).
We recommend that the CEOs of the 119 companies in Bands C to F use the evidence from this study to inform and develop a plan to improve their anti-corruption systems, and upgrade the disclosure of these on their websites.
ACCENTURE, BAE SYSTEMS*, FUJITSU*, HEWLETT PACKARD COMPANY*, MEGGITT*, NORTHROP GRUMMAN CORPORATION, SERCO GROUP*, THALES S.A., UNITED TECHNOLOGIES CORPORATION
BECHTEL CORPORATION*, BOEING*, CHEMRING GROUP*, COBHAM, CSC*, DAY & ZIMMERMAN*, DYNCORP INTERNATIONAL*, EADS, FINMECCANICA S.P.A., GENERAL DYNAMICS CORPORATION, GENERAL ELECTRIC AVIATION*, GKN, GOODRICH CORPORATION, HARRIS CORPORATION*, HONEYWELL INTERNATIONAL*, INDRA SISTEMAS S.A.*, ITT EXELIS, JACOBS ENGINEERING*, KBR INC.*, KONGSBERG GRUPPEN ASA*, L3 COMMUNICATIONS HOLDINGS, LOCKHEED MARTIN*, OSHKOSH CORPORATION, QINETIQ GROUP*, RAYTHEON COMPANY*, ROCKWELL COLLINS*, ROLLS ROYCE, SAAB AB*, SAIC*, TELEDYNE TECHNOLOGIES, TEXTRON, THYSSENKRUPP AG*, URS CORPORATION, VSE CORPORATION
AAR CORPORATION, ALION SCIENCE & TECHNOLOGY CORPORATION, ALLIANT TECHSYSTEMS, AVIO S.P.A., BABCOCK INTERNATIONAL GROUP, BOOZ ALLEN HAMILTON, CACI INTERNATIONAL, CAE, CUBIC CORPORATION*, CURTISS WRIGHT CORPORATION, DAEWOO SHIPBUILDING & MARINE ENGINEERING*, DIEHL STIFTUNG & CO. KG*, ELBIT SYSTEMS, EMBRAER S.A., FLIR SYSTEMS*, HINDUSTAN AERONAUTICS, MANTECH INTERNATIONAL, MBDA MISSILE SYSTEMS, MTU AERO ENGINES GMBH*, NAMMO AS, NAVISTAR INTERNATIONAL CORPORATION, NEC CORPORATION*, RAFAEL ADVANCED DEFENSE SYSTEMS, SAFRAN S.A., TOGNUM*
ASELSAN, DASSAULT AVIATION, DCNS S.A., FINCANTIERI, GORKY AUTOMOBILE PLANT, IHI MARINE, MITSUBISHI ELECTRIC CORPORATION, MITSUBISHI HEAVY INDUSTRIES*, RHEINMETALL AG, RTI SYSTEMS, RUAG, SAMSUNG TECHWIN, ULTRA ELECTRONICS HOLDINGS
ABU DHABI SHIPBUILDING, ALMAZ ANTEY, ANTONOV ASTC, ARAB ORGANISATION FOR INDUSTRALISATION, ARINC, ARSENAL AD, AVIATION INDUSTRY CORPORATION, AVIBRAS INDUSTRIA AEROSPACIAL, BATTELLE, BHARAT EARTH MOVERS LIMITED (BEML), BHARAT ELECTRONICS, BOUSTEAD NAVAL SHIPYARD, BUMAR GROUP, CHINA SHIPBUILDING INDUSTRY CORPORATION, DAMEN SCHELDE NAVAL SHIPBUILDING, DENEL SOC, DOOSAN DST, GENERAL ATOMICS, HEAVY INDUSTRIES TAXILA, IRKUT CORPORATION, ISRAEL AEROSPACE INDUSTRIES, ISRAEL MILITARY INDUSTRIES, KAWASAKI HEAVY INDUSTRIES, KHARKOV STATE AIRCRAFT MANUFACTURING COMPANY, KRAUSS-MAFFEI WEGMANN, LIG NEX1, MC DEAN, NAVANTIA, NEXTER, NORINCO, OTOKAR, PAKISTAN ORDNANCE FACTORIES, PATRIA OYJ, POONGSAN, RUSSIAN HELICOPTERS, SAPURA GROUP, SATUMA, SRA INTERNATIONAL, SRC INC, ST ENGINEERING, SUKHOI, TATRA A.S., TRV CORPORATION, TULA KB PRIBOROSTROYENIYA, UNITED ENGINE CORPORATION, WYLE LABORATORIES, ZODIAC SA HOLDING