22 November 2012

Lockheed Martin has a reputation as an ethics-focused enterprise. Senior executives in the company regularly receive awards for their promotion of business integrity. Lockheed is a major sponsor of the Ethics Resource Center.

This pedigree received a set back this month, which fortuitously for the company, coincided with the Patraeus scandal at the CIA . The nominee as the company’s CEO was forced to resign before taking up the role when an ethics issue involving another Lockheed Martin employee became public.

A “close personal relationship with a subordinate employee” which led to the resignation apparently breached the Lockheed code of ethics and business conduct.

The reaction of the company, applauded by some, is to appoint a woman to the position for which she would have been overlooked but for the ethics breach.  It’s an ill wind….

Lockheed Martin, a competitor of Boeing, is the world’s largest defence contractor, with sales of about US$50 billion annually. In 2005 the CEO of Boeing, the major competitor of Lockheed, resigned after a similar relationship with an employee became public.

Marillyn Hewson the new CEO at Lockheed Martin is reported by Forbes as being a very experienced and effective defence industry manager, “hard as nails” but recognised for her humility. She is a product of the “culture of ethics” for which Lockheed Martin prides itself.

Although this is the first appointment of a woman to lead a major US defence manufacturer, women now hold many senior positions at Boeing and Northrop Grumman also. This is a reflection of dramatic demographic shifts in the defence industry;  “… the day is within sight when a majority of the top executives in the sector will be women…”