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Members of the Huntington Ingalls Industries, Inc.
(HII) law department help their clients build some of
the most sophisticated products in the world: ships,
nuclear aircraft carriers and nuclear submarines. Spun
off in 2011 from a company with a 125-year history,
HII is publicly traded and employs 38,000 people
around the globe. The challenges inherent in working
in this highly regulated industry are reflected in the
company’s motto: “Hard Stuff Done Right.” The
law department took the motto to heart in carefully
crafting a new compliance program designed to be
effective and proactive—and to add value.
“The nuclear culture is really about getting it right.
We’re lucky to have clients like that,” says Bruce
Hawthorne, corporate vice president, general
counsel and secretary. “The HII spinoff gave us an
opportunity for a fresh start on governance issues and
compliance. We asked ourselves, ‘Who do we want to
be as a law department?’”
Hawthorne heads a department of about 30 people, two-thirds of whom are lawyers; more than half the headcount
has been added since it was spun off from Northrop
Grumman Corporation. Ninety-five percent of the
work is government contracting, and the department is
also responsible for litigation. HII is a manufacturing
company, but it has no factories or assembly lines.
Building its products relies heavily on employees’
advanced teamwork skills. As a result, it was critical that
the legal team also be competent and effective in working
with one another and with their clients.
HII inherited an ethical culture cultivated by
generations of shipbuilders, but the company’s
compliance activities were, Hawthorne believed,
too reliant on individuals doing the right thing.
“Accomplishing big things is part of our DNA, but we
weren’t proactive about measuring the effectiveness of
compliance efforts,” he says.
To determine future direction, it’s helpful to
know where you’ve been. Some of the steps the
law department took included assessing inherited
policies, commissioning an independent compliance
review and conducting interviews with more than
100 key company personnel. The CEO appointed
the company’s first chief compliance officer, Chad
Boudreaux, and work on crafting the new program
began in earnest.
“Respecting the authority and accountability of the
business was critical,” says Boudreaux. “We didn’t
want a program that had the lawyers taking that away.
Realizing that forced us away from a traditional, top-down compliance program structure. We had to create
a program that pushed compliance down into the
To that end, the law department began
by defining compliance (“the prevention,
detection, and timely and appropriate
response to misconduct”) and created
compliance plans that outline the
program’s core principles:
n Maintaining Present Responsibility
n Setting the Right Tone Throughout the Company
n Hiring the Right People and Business Partners
n Providing Effective Policies and Procedures
n Providing Effective Training
n Promoting the Reporting of Misconduct
n Ensuring Proper Timekeeping
n Creating Incentives and Enforcing Discipline.
HUNTINGTON INGALLS INDUSTRIES | NEWPORT NEWS, VA
Building a Lean Compliance Program from Bow to Stern
Left to Right: Chad N. Boudreaux, Bruce N. Hawthorne,
Charles A. Neff