BAE Systems hires Woolf to lead ethics committee
LONDON: BAE Systems, the biggest British weapons maker, said Friday that it recognized concerns about how it conducted business and that it expected a review by an ethics committee to reassure clients, investors and employees.
BAE hired Harry Woolf, the former lord chief justice of England and Wales, to be the chairman the four-member committee, which will review current BAE policies, procedures and compliance with ethical business policies and anti-corruption legislation.
The step followed earlier allegations of corruption in the so-called Al Yamamah arms deal negotiated with Saudi Arabia in 1985, which have been investigated by the Serious Fraud Office. In December, the inquiry was abruptly canceled after Prime Minister Tony Blair said that the investigation would threaten British jobs and damage diplomatic and intelligence ties with Saudi Arabia. But last week British media reports about the allegations revived calls among some lawmakers to restart the investigation.
Dick Olver, the BAE chairman, said Friday in London that the committee would have access to any information it needed to review how BAE conducts business but would not aim to duplicate work done by the Serious Fraud Office. He declined to answer questions about the Saudi arms deal and said it would be “unwise for us to delve around into anything the SFO is doing.”
The groups report will be made public, and the company has pledged to follow its recommendations, Olver said.
Woolf said that those who criticized how BAE had conducted business in the past were to be assured about the standards of the business now.
Woolf will be joined by Philippa Foster Back, director of the Institute of Business Ethics in London, and David Walker, former chairman of Morgan Stanley in Europe and head of a task force to draw up a code of conduct for private equity firms. Woolf has not yet named the fourth member of the committee.
BAE will pay Woolf 6,000, or $11,825, per day for his work, which he will conduct two days a week during the next six to nine months, he said.
British news reports last week alleged that BAE paid more than $2 billion into bank accounts in Washington operated by Prince Bandar bin Sultan of Saudi Arabia as part of the arms deal. Bandar denied the reports and said Monday that the allegations were “untrue” and “grotesque in their absurdity.”
BAE had denied allegations of wrongdoing in relation to the Al Yamamah deal, saying it was a government-to-government agreement.
