Fluor Corporation Engineers Sound Ethical Culture
// BY ALAN BOECKMANN
SCENARIO
Several years ago, Fluor was doing a significant project for a major client when we came into some evidence by virtue of an employee who used a confidential ethics hotline. We investigated and found out that our project manager on that site was receiving significant kickbacks from a supplier of a subcontractor. In fact, he had systematically gone and performed additional scopes of work for this subcontractor. Apparently, he also had a Swiss bank account set up where they were funneling money back to him. When we found out about it and had obtained sufficient evidence, I made a call to the CEO of our company at that time. This was a significant issue and we stood to have considerable liabilities and penalties under that specific contract. Within twenty-four hours, I received a call back from the client saying that, while they were aware of the situation, they wanted us to know that they would not pursue any retaliatory courses of action, but that they appreciated our candor in bringing it to their attention. We jointly dealt with the case and put it behind us. As I investigated and handled the issue, I suspected that a reaction like that from the client was what we would get, but it was definitely nice to experience first-hand. The situation and outcome speaks for itself when it comes to self-reporting you just always have to do the right thing. It may be painful, but you must use a zero-tolerance approach whether you are dealing with an extremely large case like this or a situation that is not quite so significant. .
WHAT ACTUALLY HAPPENED
Alan responded quickly and proactively to a situation which could have had potentially severe consequences for the entire corporation. A serious offense was committed by the project manager, and Alan and his superiors at Fluor sent an unmistakable message of zero-tolerance and ethical compliance as they dealt with the situation internally and disclosed the issue to the client.
WHY WAS THIS IMPORTANT?
With corruption being widely perceived as rampant within the construction industry, the leadership at Fluor showed considerable integrity and initiative in addressing the allegations. It is also very important to emphasize the use of a confidential reporting system in this instance: a complaint was made, the reporter’s identity was kept confidential, and the claim was investigated and appropriately addressed by Fluor leaders. This reinforces not only a strict zero-tolerance policy within the company, but encourages ethical behavior and a culture of accountability from the top down. It also strengthens the viability of an anonymous self-reporting tool and reassures employees that any reports made will not be taken lightly, but that their anonymity will be protected. Alan believes that employees “should take action because they’re proud of the company they work for, and they practice the zero-tolerance approach themselves. You have to ingrain that in the culture.”
About Alan Boeckmann
Alan Boeckmann is the CEO of the Fluor Corporation, one of the worlds leading and largest engineering, procurement, construction and maintenance services companies. Prior to assuming his current position in February 2002, Boeckmann served as president and chief operating officer of Fluor since January 2001. He has served as president and chief executive officer of Fluor Daniel, the engineering and construction unit of Fluor Corporation, and president of Fluor Daniels Energy & Chemicals group, Fluor Daniels Chemicals, Plastics & Fibers operating company and the Chemical Processes & Industrial business group. Prior to that, he served as vice president of the company’s business unit that formed its DuPont alliance and as the functional leader of Engineering. For the past four years Alan has also been leading a global effort for the World Economic Forum (WEF) to eradicate corruption from businesses via the Partnership Against Corruption Initiative (PACI). His efforts initially centered on the engineering and construction industries, but soon came to include the metals and mining sectors as well. Today, PACI functions as one of the most vigorous programs at the WEF.
About Leaders on Ethics
Leaders on Ethics is an ongoing project involving CEOS and other leaders providing insights into challenging ethical situations they’ve faced, decisions they’ve made, and lessons they’ve learned. Curriculum is being developed for use in the classroom to help future leaders consider the role that character will play in career success.
TWO WAYS TO GET INVOLVED IN LEADERS ON ETHICS
- Nominate a leader
- Become an organizational sponsor for Leaders on Ethics
Call (800) 369-7583 for more information.
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