Ian King, the new chief executive of BAE Systems, has pledged to salvage the reputation of Europe's largest defence company by turning it into a global ethics leader.

In laying out his manifesto as chief executive, Mr King highlighted ethics as an important area of focus, following the bribery and corruption allegations which have dogged the company. Mr King, the former chief operating officer, also said that BAE would continue to grow in its core markets, including the United States, while also pushing into emerging markets such as India.

Mr King was appointed today after a seven month search for a replacement for Mike Turner, who announced his retirement last year. The search was led by Egon Zehnder, the headhunters, and Mr King is understood to have been the only internal candidate.

Defence industry commentators had thought that the company's board might favour an external candidate in an attempt to introduce a new culture at the former British Aerospace.

Rumours in the defence industry had identified Chris Kubasik, executive vice-president of America’s Lockheed Martin, and Andrew Inglis, chief executive of BP’s exploration and production division, as potential candidates.

BAE has faced repeated allegations of bribery and corruption in recent years and the company remains under investigation by the US Department of Justice (DoJ). It is also under investigation by the UK Serious Fraud Office (SFO) over arms deals done in a number of countries and faces the possibility that a SFO inquiry into its activities in Saudi Arabia could be reopened.

The British government shut down the SFO's Saudi investigation at the end of 2006 citing national security concerns but a High Court ruling has shown this was unlawful. A decision on whether the case will reopen will be reached next month.

Lord Woolf, the former chief justice, published a report on BAE's ethics last month and offered 23 recommendations on how to improve its operations, which Mr King is committed to implementing.

Mr King said: "My big challenge will be to implement the Woolf recommendations and to get the changes into the DNA of the company. I am up for it. We are all up for making these changes. The big issue for us is reputation and we are raising that bar very high so we are a global leader in the area."

Mr King, 52, started his career as an accountant with Marconi in 1976 and joined BAE when the two companies merged in 1999. He was head of group strategy and then become chief operating officer and head of BAE's operations outside the US just 18 months ago.

BAE has grown rapidly in the past 10 years and has acquired numerous companies to give it a leading position in its six home markets of the UK, US, Saudi Arabia, Australia, South Africa and Sweden. The company said earlier today that it had completed its A$775 million acquisition of Tenix, which will make it the largest defence contractor in Australia.

Mr King said: "The strategic plan is for a good combination of both organic growth and acquisition. We have a broad church of activity and will continue to grow in our home markets. We are also expanding our presence in emerging markets."

The new chief executive added that BAE would handle a possible downturn in military spending in the UK and US in the medium term by focusing on emerging markets and also by developing its security and anti-terrorism business.

Dick Olver, BAE's chairman, said: "What we are going to see is BAE becoming the most international defence company in the world and we should also be the most ethically responsible."

Analysts at Numis Securities said: "There could be a slight perception that Ian King is not the ideal candidate to resolve the DoJ investigation, which has been a drag, but we feel that his track record of improving the relationship and successfully partnering with the UK MoD, along with international experience are a major asset to the company."

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