NSPE Gateway to Industry Fall 2012
In This Issue of PEI e-News...

Industry Leadership Still Necessary To Advance Ethical Paradigm

Steve Storts

It has been more than two decades since a Business Roundtable study debunked the myth that there is an inherent contradiction between ethics and profits, emphasizing that sound values, purposes, and practices are the basis for long-range achievement and bottom-line success. Although this finding was deemed somewhat controversial by some advocacy groups seeking financial reforms in the large industrial community, the engineering profession as a whole embraced the Roundtable report, Corporate Ethics: A Prime Business Asset, and continues to do so today.

With information gathered from 100 companies, the Roundtable cited the crucial role of chief executive officers and top managers in establishing a strong commitment to ethical conduct and providing constant leadership in tending and reviewing the values of the organization. Equally important, there should exist a deep conviction among managers that a good reputation for fair and honest business is a vital corporate asset that all employees should nurture with the greatest care.

The study further recognized the need for corporate obligations to extend to a variety of constituencies or stakeholders, and that these responsibilities are key to the ethics of an organization. Customers, shareholders, employees, suppliers, local communities, and the larger society are basic constituencies that must be considered in planning and evaluating ethical policies and actions. Carrying out all corporate obligations requires a comprehensive ethical perspective that is understood and acted upon throughout every sector and all levels of an organization.

"It may come as a surprise to some that corporate ethics programs are not mounted primarily to improve the reputation of business,” the report noted. “Instead, many executives believe that a culture in which ethical concerns permeate the whole organization is necessary to the self-interest of the company. This is required, they feel, if the company is to be able to maintain profitability and develop the necessary competitiveness for effective performance."

While no organizational code or standard can address all potential ethical issues, the following provides a good foundation of ethical areas or topics to consider:

  • Fundamental honesty and adherence to basic laws and moral conduct;
  • Product safety and quality;
  • Health and safety in the workplace;
  • Conflicts of interest;
  • Employment policies;
  • Fairness in selling and marketing practices;
  • Financial reporting;
  • Supplier relationships;
  • Pricing, billing, and contracting;
  • Trading in securities and using inside information;
  • Payments to obtain domestic or foreign business; 
  • Acquiring and using information about others;
  • Political activities;
  • Protection of the environment;
  • Intellectual property and security of proprietary information;
  • Protection to employees for reporting violations; and
  • Disciplinary action for ethical misconduct.

In 2009, the Arthur W. Page Society and the Business Roundtable Institute for Corporate Ethics released a new related report, The Dynamics of Public Trust in Business: Emerging Opportunities for Leaders. As the title suggests, the document examines three core dynamics of trust—mutuality, balance of power, and trust safeguards—and then proceeds to discuss successful trends in conducting responsible businesses, eliminating or reducing mistrust, and engaging public confidence.

The report reviews several fundamentals. First, to build and sustain trust at the most basic level, an organization must manufacture and market quality products or services that are reasonably priced. A business also needs to provide steady jobs in a safe and healthy environment and to support community institutions that serve both employees and customers. Finally, an organization must provide shareholders with a reasonable return on their investments. Beyond these fundamentals, the report recommends specific actions that industry leaders might consider in building mutuality, balancing power, and creating trust safeguards within their organizations:

  • Create a set of values that define and clarify what the business enterprise and its stakeholders are at their root or foundation and then work to ensure that these values are adhered to consistently;
  • Build and manage strong relationships based on mutual trust with mediating institutions;
  • Embrace transparency and open communication;
  • Work within a targeted business sector to build trust in that sector; and
  • Reinvest in the trustworthiness of the organization by making a commitment to enhance the core contribution that the organization makes to society at large.

It is fact that in changing any standard of living for the better, globally or domestically, risks must be taken, and further responsibilities must be accepted by everyone—engineers, scientists, and the public alike. However, because basic engineering principles are not always consistent with perceived principles of safety and public health, the public must always be informed prior to entering unknown territory, and that discussions of risks vs. potential benefits call for transparency and forthright explanations.

Moreover, ethical conduct is often equated with moral responsibility and professional integrity. William Scheessele, president and CEO of Mastering Business Development Inc., a business consulting services firm based in Charlotte, N.C., says it is evident that some of the underlying errors in thinking, responsibility, and judgment still remain from the “new economy” mentality that tarnished the reputation of solid, old guard industries.

The Sarbanes-Oxley legislation passed in 2002 has not fostered long-term ethical choices, either, according to Scheessele. In an article titled “Ethics in the Energy Industry Revisited,” he notes that the ethics issue goes much deeper into the character of a professional, and that integrity cannot be legislated into adherence at any price. The energy industry requires well-qualified technical professionals with the knowledge base to solve current and future global energy challenges.

Following the Enron scandal, the power industry took a major step forward by looking internally to its people, largely engineers and technical professionals with a higher set of standards for their actions, Scheessele explains. “It is from our experience that the more highly technical an industry is, the better to encourage the technical professionals on staff to be at the forefront of developing business and growing the bottom line,” he contends. “This is true in our opinion because . . . technical professionals know what problems and issues need to be addressed for clients.”

Engineers and scientists look externally to solving client problems, Scheessele points out. Sales people look internally at making quotas. In learning to think like a business person, an engineer can look at the business ramifications of a technical issue and think in an externally focused way from the client’s point of view to find a solution to the problem. “It’s the notion that serving the client should be placed above profit that is inherent in the engineering profession and believing that in the long run, these are not two mutually exclusive concepts,” he emphasizes.

Happenings on the Hill

Final Drilling Safety Rule Requires Extensive PE Oversight

NSPE achieved a victory when the Department of the Interior's Bureau of Safety and Environmental Enforcement issued a final rule that makes permanent the additional safety measures authorized in the wake of the 2010 BP oil spill. The rule requires professional engineers to be more involved in the design and certification of offshore oil wells. NSPE General Counsel Arthur Schwartz commented before the Chemical Safety Board in 2010 that professional engineers should supervise all engineering design, operations, and maintenance of offshore oil wells.
Specifically, the new rule stipulates that:

  • PEs must be involved in the well casing and cementing design process;
  • PEs must certify that well casings and cementing are appropriate for expected wellbore conditions;
  • PEs must certify well abandonment designs and procedures; and
  • PEs must certify that well designs include two independent barriers in the center wellbore and all annuli.

The rule also requires independent third parties to conduct blowout preventer inspections. These third parties must be licensed professional engineers, professional engineering firms, or technical classification societies. [ return to top ]

PEI Seeks New Product Award Submissions

Don’t miss an opportunity to get national visibility for your product by entering the 2013 PEI New Product Award competition. The competition recognizes any process, machine, or material developed in the U.S. that improves the public’s standard of living.

Winning products will be honored with the PEI New Product Award crystal and are entitled to use the coveted PEI New Product Award logo. Winners will also be recognized in PE magazine, through NSPE’s Web site and print communications, and through significant media coverage.

Submit your entry by February 15, 2013! For an application and list of past NPA winners, visit the PEI New Product Award Web page. [ return to top ]

2012 PEI Scholarship Winner

The 2012 PEI Scholarship winner is Cheryl Dilks. Dilks graduated summa cum laude from Arcadia University in 2007, earning a B.A. in sociology with minors in international studies and Spanish. She is now pursuing her second bachelor’s degree in environmental engineering at Northern Arizona University, with the goal of applying technological skills in the field of international development through the design of water treatment devices, sewage facilities, and solid waste systems.

As a dedicated member of NAU’s chapter of Engineers Without Borders, she is the first project lead for a renewable energy and water systems project on the Navajo reservation in northern Arizona. She is also an intern for the Colorado Plateau Cooperative Ecosystems Studies Unit, a collaboration between federal land management agencies and university partners across the southwest. In addition, she was awarded a Climate Science Research Fellowship sponsored by NASA and has also worked as a laboratory assistant for computer-aided drafting courses in the civil and environmental engineering program at Northern Arizona.

For more information on how to apply or donate to the $2,500 PEI Scholarship, please visit the PEI Web site.
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NSPE Fall 2012 Web Seminar Line Up

This Fall, NSPE brings a wide selection of new and live online education opportunities. Each session is sold per connection, allowing your colleagues to join you. These sessions offer outstanding value. So don't hesitate to earn your PDHs, sign up for one of our online sessions now!

Engineering Ethics: Technical Issues
October 24, 2012, 12:30–1:30 p.m. (E.D.T.), 1 PDH

This session will examine a variety of issues including codes and standards, expert witness testimony, patents, preparation of technical proposals, use of technology, and other issues. Participants will have the opportunity to offer comments, pose questions, and participate in interactive polling surveys.

Ethics and Sustainable Development
October 30, 2012, 12:30–1:30 p.m. (E.D.T.), 1 PDH

Sustainable development involves the simultaneous pursuit of economic prosperity, environmental quality, and social equity. In this webinar, Carlos Bertha will unpack what this means from a moral perspective. Is it possible for an engineering venture to remain profitable and still be environmentally and socially responsible? Is it ethical for such a venture not to expand its “bottom line” this way? Carlos will use a variety of examples to show that sometimes the problem isn’t as simple as it sounds. As a special case, he will discuss how his experiences as a resident engineer in Afghanistan shaped his perspective on sustainable development.

These are just some of the courses NSPE has to offer. For full course listings, visit our Web site. [ return to top ]

Register Today For The CI Summit!

Join Justin Weisberg, P.E., M.ASCE, the incoming chair of the EJCDC Committee, as he and a team of experts present a workshop on EJCDC: Engineering the Terms and Conditions to Plan, Design and Construct Improvements for Infrastructure, the Environment and Industry. 

This program will provide the participant with a working understanding of front end documents and important contract terms for the design and construction of engineered projects. The program will provide an overview of the contract documents provided by EJCDC, the prominent partnership that provides forms specifically for engineered projects. The knowledge gained from this program should assist the participant in all aspects of design and construction, from negotiating a contract for engineering services with the owner to administering the construction contract.

Get your questions answered by experts and become an active participant in the workshop's discussions, including a panel on disputes: Payment, time, and completion are probably the most likely factors to result in a dispute on the construction project. Due to the current economy and increased competition between contractors, disputes and the necessity to terminate contracts due to the inability of a contractor to perform have been occurring at an increased frequency. This panel will discuss cutting issues regarding change orders, delays, claims, disputes, completion, and termination.

The 2012 CI Summit / ASCE Texas Section Fall 2012 Conference is coming to beautiful downtown Fort Worth November 7–10, 2012. The ASCE Texas Section has partnered with the Construction Institute (CI) and the International Committee on Sustainable Design, Engineering and Construction (ICSDEC) to bring you three conferences in one. [ return to top ]

Contact the 201213 PEI Executive Board Officers

Stephen A. Hutti, P.E.

Austin Lin, EIT

Franklin Fong, P.E.

Immediate Past Chairman
Curtis A. Beck, P.E.

Young Engineer Representative
Peter E. Pisasale, P.E.

Northeastern Region
Thomas J Kesolits, P.E.

Southeastern Region
Stanley Nurnberger, P.E. 

Central Region
Howard R. Jones, P.E.

North Central Region
Donald W. Mitchell, P.E.

Southwestern Region
Neerali J. Desai, P.E.

Western & Pacific Region
Thomas Smailus, Ph.D., P.E.

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