1. MODULE C - LEGAL

2. ASME C&S Training Module C1 Slide 2 MODULE C - LEGAL SUBMODULES C1. Conflict Of Interest/Code Of Ethics C2. Antitrust C3. Torts C4. Intellectual Property C5. Speaking For The Society

3. C1. Conflict of Interest/ Code of Ethics

4. ASME C&S Training Module C1 Slide 4 OBJECTIVES This submodule will –Describe ASME policy on ethical conduct and conflict of interest

5. ASME C&S Training Module C1 Slide 5 AGENDA I.Introduction II.Society Policy P-15.7, Ethics III.Society Policy P-15.8, Conflicts of Interest

6. ASME C&S Training Module C1 Slide 6 I. INTRODUCTION

7. ASME C&S Training Module C1 Slide 7 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

8. ASME C&S Training Module C1 Slide 8 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

9. ASME C&S Training Module C1 Slide 9 THE DEFINING POLICIES Ethics –Society Policy P-15.7, Ethics Conflict of Interest –Society Policy P-15.8, Conflicts of Interest

10. ASME C&S Training Module C1 Slide 10 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

11. ASME C&S Training Module C1 Slide 11 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

12. ASME C&S Training Module C1 Slide 12 BOARD ON PROFESSIONAL PRACTICE AND ETHICS 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

13. ASME C&S Training Module C1 Slide 13 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

14. ASME C&S Training Module C1 Slide 14 POP QUIZ #1 True or false: 1.Written acceptance of the Society’s policies on ethics and conflict of interest is required for all committee members. 2.The Council on Codes and Standards may issue a letter of warning or admonishment regarding violations of ASME’s Policy on Ethics.

15. ASME C&S Training Module C1 Slide 15 II. SOCIETY POLICY P-15.7, ETHICS

16. ASME C&S Training Module C1 Slide 16 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.

17. ASME C&S Training Module C1 Slide 17 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

18. ASME C&S Training Module C1 Slide 18 CODE OF ETHICS OF ENGINEERS The Fundamental Canons –Hold paramount the safety, health and welfare of the public (cont’d) –Build professional reputation on merit of services –Do not compete unfairly with others – Act as faithful agent or trustee and avoid conflicts of interest –Associate only with reputable persons or organizations –Consider environmental impact

19. ASME C&S Training Module C1 Slide 19 CODE OF ETHICS OF ENGINEERS The Fundamental Canons (cont’d) –Issue public statements only in an objective and truthful manner –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 in professional matters for each employer or client

20. ASME C&S Training Module C1 Slide 20 THE FUNDAMENTAL CANONS FOR C&S (ASME Criteria for Interpretation) Canon 1: Engineers shall hold paramount the safety, health and welfare of the public. a.Shall recognize that the … health and welfare of the general public are dependent upon engineering judgments … incorporated into structures, products… b.Shall not approve … specifications that are not …safe… and in conformity with accepted engineering standards. c.If overruled…where the safety, health and welfare of the public are endangered, …shall inform their clients and employers of the consequences… and the proper authorities of the situation. d.If [aware that] another person or firm may be in violation of these Canons, shall [inform] the proper authority in writing… and cooperate…as may be required.

21. ASME C&S Training Module C1 Slide 21 THE FUNDAMENTAL CANONS FOR C&S (ASME Criteria for Interpretation) Canon 4: Engineers shall act …as faithful agents and trustees and shall avoid conflicts of interest… (cont’d) a.Shall avoid all known conflicts of interest and inform clients of…interests or circumstances which could influence their judgment b.Shall not knowingly undertake assignments which would create a potential conflict of interest c.Shall not accept compensation… from more than one party on the same project… d.Shall not solicit or accept financial or other valuable considerations…without disclosure to their clients…

22. ASME C&S Training Module C1 Slide 22 THE FUNDAMENTAL CANONS FOR C&S (ASME Criteria for Interpretation) Canon 4: Engineers shall act …as faithful agents and trustees and shall avoid conflicts of interest… e.Shall not accept gratuities… f.When in public service as a member…of a government body…shall not participate in actions [concerning] services provided by them in private practice. g.Shall not solicit an engineering contract from a government body…on which an … employee of their organization serves as a member without disclosing… (cont’d) h.Engineers working on codes, standards...shall exercise careful judgment... to ensure a balanced viewpoint...

23. ASME C&S Training Module C1 Slide 23 THE FUNDAMENTAL CANONS FOR C&S (ASME Criteria for Interpretation) Canon 4: Engineers shall act …as faithful agents and trustees and shall avoid conflicts of interest… i.When…believe a project will not be successful, shall so advise their employer… (cont’d) j.Shall treat information coming to them as confidential… k.Shall act with fairness and justice to all parties… l.Before undertaking work…which justify seeking copyrights, patents…, shall enter into agreements regarding the rights…

24. ASME C&S Training Module C1 Slide 24 THE FUNDAMENTAL CANONS FOR C&S (ASME Criteria for Interpretation) Canon 4: Engineers shall act …as faithful agents and trustees and shall avoid conflicts of interest… m.Shall admit their own errors… n.Shall not accept professional employment … outside of their regular work without the knowledge of their employers. o.Shall not attempt to attract an employee…by false or misleading representations.

25. ASME C&S Training Module C1 Slide 25 THE FUNDAMENTAL CANONS FOR C&S (ASME Criteria for Interpretation) Canon 7: Engineers shall issue public statements only in an objective and truthful manner a.Shall endeavor to extend public knowledge and prevent misunderstandings of engineering achievements d.Shall issue no statements…inspired or paid for by interested parties…unless disclosing…the party…and any financial interest… e.Shall be truthful in explaining their work and merit b.Shall be completely objective and truthful in all professional reports, statements or testimony c.When serving as an expert witness…, shall express an engineering opinion only when it is founded on adequate knowledge of the facts… technical competence…and belief in accuracy…

26. ASME C&S Training Module C1 Slide 26 III. SOCIETY POLICY P-15.8, CONFLICTS OF INTEREST

27. ASME C&S Training Module C1 Slide 27 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

28. ASME C&S Training Module C1 Slide 28 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.

29. ASME C&S Training Module C1 Slide 29 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

30. ASME C&S Training Module C1 Slide 30 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. (cont’d)

31. ASME C&S Training Module C1 Slide 31 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 BPPE by any party * Board, committee, etc. (cont’d)

32. ASME C&S Training Module C1 Slide 32 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 BPPE by any party

33. ASME C&S Training Module C1 Slide 33 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

34. ASME C&S Training Module C1 Slide 34 POP QUIZ #2 a.Identifying situations where conflict of interest may exist is not an individual’s responsibility. b.A member’s identification with a particular interest category automatically disqualifies him or her from considering issues affecting that group. c.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. Which of the following are true?

35. ASME C&S Training Module C1 Slide 35 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 Code activities –A balance of interests may prevent a single interest group from controlling an action Open Meetings Disclosure of issues

36. ASME C&S Training Module C1 Slide 36 SUMMARY I.Introduction II.Society Policy P-15.7, Ethics III.Society Policy P-15.8, Conflicts of Interest

37. ASME C&S Training Module C1 Slide 37 REFERENCES ASME Constitution* –C2.1 Purposes –C4.1.1 Government Society Policies* –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: www.asme.org/asme/constitution/cn_toc.html **Available on C&S Web site at www.asme.org/cns/departments/procedures.html