MODULE C - LEGAL

1. MODULE C - LEGAL

2. REVISIONS DATE SLIDE CHANGE 6/16/06 11 Notes 20 & Notes Second bullet, “Committee on Legal Affairs” changed to “Committee on Ethical Standards and Review” Last bulleted item revised. ASME C&S Training Module C1

3. MODULE C - LEGAL SUBMODULES C1. Conflict Of Interest/Code Of Ethics C2. Antitrust C3. Torts C4. Intellectual Property C5. Speaking For The Society ASME C&S Training Module C1

4. C1. Conflict of Interest/ Code of Ethics

5. OBJECTIVES This submodule will • Describe ASME policy on ethical conduct and conflict of interest ASME C&S Training Module C1

6. AGENDA • Introduction • Society Policy P-15.7, Ethics • Society Policy P-15.8, Conflicts of Interest ASME C&S Training Module C1

7. I. INTRODUCTION ASME C&S Training Module C1

8. ASME COMMITMENT TO ETHICAL PRACTICE • ASME Constitution (C2.1.1) • One purpose of the Society is to promote a high level of ethical practice • Members shall be governed in all professional and business relations by the Code of Ethics as stated in the Society Policies ASME C&S Training Module C1

9. ASME COMMITMENT TO ETHICAL PRACTICE • By-Law B2.1, Fulfillment of Purpose requires that the Society shall: • Maintain a Code of Ethics of Engineers • Promote and encourage practice within this Code • Arrange for adjudication of violations of the Code ASME C&S Training Module C1

10. THE DEFINING POLICIES • Ethics • Society Policy P-15.7, Ethics • Conflict of Interest • Society Policy P-15.8, Conflicts of Interest ASME C&S Training Module C1

11. WHY STUDY THE POLICIES? • ASME codes and standards referenced by a jurisdiction have the force of law. • Awareness of these policies… • May reduce the liability imposed on an organization for the actions of its “agents”, and the “apparent authority” that members may wield as representatives of the Society ASME C&S Training Module C1

12. FORMAL ACCEPTANCE OF POLICY • Requirements • ASME committee membership conditional upon written acceptance of: • Society Policies P-15.7, Ethics • P-15.8, Conflicts of Interest • Responsibilities • ASME volunteers have the primary responsibility for assuring their adherence to this Society Policy • ASME retains oversight responsibility ASME C&S Training Module C1

13. COMMITTEE ON ETHICALSTANDARDS AND REVIEW • Responsibility • Oversight of professional practice and ethics • Authority • To review questions of ethics and conflict of interest and render opinions • May issue letter of warning or admonishment • May refer matters to Executive Director and request that a hearing be conducted ASME C&S Training Module C1

14. INDEMNIFICATION • Indemnification • Provided for in the ASME Constitution, C4.1.12 • Potential for loss of indemnification • Volunteers are indemnified provided that the individual: • Acted in good faith for a purpose which he reasonably believed to be in the best interests of the Society • Had no reasonable cause to believe that the conduct was unlawful ASME C&S Training Module C1

15. POP QUIZ #1 • True or false: • Written acceptance of the Society’s policies on ethics and conflict of interest is required for all committee members. • The Codes and Standards Board of Directors may issue a letter of warning or admonishment regarding violations of ASME’s Policy on Ethics. ASME C&S Training Module C1

16. II. SOCIETY POLICY P-15.7,ETHICS ASME C&S Training Module C1

17. SOCIETY POLICY P-15.7, ETHICS • Description • Requires ethical practice by every Society member • Contents • Code of Ethics of Engineers • Fundamental Principles • Fundamental Canons • Criteria for interpreting the Canons NOTE: These principles also apply to all C&S committee members, including non-ASME members. ASME C&S Training Module C1

18. CODE OF ETHICS OF ENGINEERS • The Fundamental Principles Engineers uphold and advance the integrity, honor and dignity of the profession by: • Using their knowledge and skill for the enhancement of human welfare • Being honest and impartial • Serving the public, their employers and clients with fidelity • Striving to increase competence and prestige of the profession ASME C&S Training Module C1

19. (cont’d) CODE OF ETHICS OF ENGINEERS • The Fundamental Canons • Hold paramount the safety, health and welfare of the public • Perform services only in the areas of their competence • Continue their professional development throughout their careers • Provide opportunities for the development of engineers under their supervision • Act as faithful agent or trustee and avoid conflicts of interest ASME C&S Training Module C1

20. CODE OF ETHICS OF ENGINEERS • The Fundamental Canons (cont’d) • Build professional reputation on merit of services • Do not compete unfairly with others • Associate only with reputable persons or organizations • Issue public statements only in an objective and truthful manner • Consider environmental impact • Consider sustainable development ASME C&S Training Module C1

21. THE FUNDAMENTAL CANONS • ASME Criteria for Interpretation • Guidelines that represent the objectives toward which members should strive • Principles which can be referenced in specific situations • Interpretative guidance to the Committee on Ethical Standards and Review on the Code of Ethics of Engineers • Can be found on asme.org from the Ethics Centers page ASME C&S Training Module C1

22. III. SOCIETY POLICY P-15.8, CONFLICTS OF INTEREST ASME C&S Training Module C1

23. SOCIETY POLICY P-15.8, CONFLICTS OF INTEREST • Description • Recognizes the importance of objectivity and impartial professional judgment to the integrity and public confidence in ASME’s work • Acknowledges that professionals may have conflicts of interest • Holds each individual responsible for determining when a conflict of interest exists • Establishes guidelines and procedures to help individuals act ethically ASME C&S Training Module C1

24. POLICY • When does a conflict of interest exist? • The potential exists whenever a person owes a loyalty to multiple interests or organizations. • A conflict of interest occurs only when loyalty to one interest would impel a course of action different from that impelled by another interest. • An individual’s identification with a particular “interest category” is not grounds for raising an issue of the appearance of conflict of interest. ASME C&S Training Module C1

25. POLICY • The volunteer’s fundamental responsibility is • To refrain from participating in Society decision-making when • A competing interest precludes or inhibits the volunteer’s independent professional judgment • Continued participation would unreasonably jeopardize the integrity of the decision making process ASME C&S Training Module C1

26. (cont’d) RESPONSIBILITIES • Individual responsibilities • When an individual believes his/her participation represents a clear conflict of interest: • Should disqualify him/herself from decision-making NOTE: This does not preclude participation in any meeting on the same basis as a non-member. ASME C&S Training Module C1

27. (cont’d) RESPONSIBILITIES • Individual responsibilities (cont’d) • When a member of a decision-making body* believes his/her participation may give the appearance of conflict of interest: • Individual should make facts and circumstances known • Body will vote by secret ballot (three-fourths majority required for participation) • Decision may be referred to the supervisory body or appealed to Committee on Ethical Standards and Review by any party * Board, committee, etc. ASME C&S Training Module C1

28. RESPONSIBILITIES • Individual responsibilities (cont’d) • When an individual serving on a committee or group wishes to bypass the step described on the previous slide • Individual should make facts and circumstances known to the appointing committee or supervisory body • Decision may be appealed to Committee on Ethical Standards and Review by any party ASME C&S Training Module C1

29. RESPONSIBILITIES • The right to challenge participation • Any member of a decision-making body may challenge the participation of any other member • Issue decided by same process as described in the previous two slides ASME C&S Training Module C1

30. POP QUIZ #2 Which of the following are true? • Identifying situations where conflict of interest may exist is not an individual’s responsibility. • A member’s identification with a particular interest category automatically disqualifies him or her from considering issues affecting that group. • If a committee member recognizes that his or her participation may appear to be a conflict of interest, but is confident that he or she can decide fairly, the member is free to participate. ASME C&S Training Module C1

31. AVOIDING THE APPEARANCE OF CONFLICT OF INTEREST • Balance in a Committee • Members are appointed as individuals, not representatives of companies or organizations • Members are categorized by the nature of their employment or financial support for Committee activities • A balance of interests may prevent a single interest group from controlling an action • Open Meetings • Disclosure of issues ASME C&S Training Module C1

32. SUMMARY • Introduction • Society Policy P-15.7, Ethics • Society Policy P-15.8, Conflicts of Interest ASME C&S Training Module C1

33. REFERENCES • ASME Constitution* • C2.1 Purposes • C4.1.2 Indemnification • Society Policies* • P-15.4, Ethical Conduct Violation Procedures • P-15-7, Ethics • P-15-8, Conflicts of Interest • Codes and Standards Policy** • CSP-11, Canon of Ethics *Available on ASME Web site at: http://www.asme.org/governance/constitution_bylaws.cfm **Available on C&S Web site at http://cstools.asme.org/csconnect/CommitteePages.cfm?Committee=A01000000&Action=7609 ASME C&S Training Module C1