Archive for the ‘values’ Category
Does the Right Tone at the Top Guarantee Success? Part 1
Filed under: accountability, boards, CEOs, codes of ethics, employees, leadership, management, values |
Comments (1) I spent the morning today speaking at Centre for Accounting Ethics Symposium called “Accounting Ethics and Tone at the Top” (put on by the School of Accounting and Finance, University of Waterloo). I was part of a panel discussion that took on the provocative question of whether positive ethical tone at the top ensures success.
It’s a provocative question because the word “ensure” pretty much points to a negative answer. Success is never guaranteed in business. In fact, it is the constant fear of failure that drives competition, that drives the pursuit of efficiency, that drives innovation. Nothing – literally nothing – guarantees success. Will a killer product ensure success? Of course not! You need the right financial model, the right marketing channels, the right organization, and the right competitive environment too. Will a great team ensure success? No, of course not. Other organizations have great teams, too. You also need the right leadership, a product that consumers want, and so on.
So positive tone won’t guarantee success, but neither will anything else. The right tone won’t guarantee ultimate victory in the marketplace, but that’s hardly a criticism. The fact that a positive ethical tone won’t guarantee success doesn’t mean it’s not important, indeed, essential. Without it, an organization’s chances of long-term success – defined either in terms of integrity or in terms of the bottom line – are considerably diminished.
So what do we mean when we refer to “tone”? Tone is much more complicated than it sounds.
In this context ethical “tone” means the tone or tenor that a leader sets with regard to choices between right and wrong, between more and less admirable forms of behaviour. Tone is the signal that is sent from top to bottom within an organization about what kind of behaviour is to be admired and emulated, and what kinds of behaviour will not be tolerated. Ethical leadership means taking responsibility for the tone you set.
But tone takes many forms. It is crucial to see that setting the right tone means much more than just sounding ethical. It also means acting ethically, and being seen as acting ethically. Tone consists in the set of signals given through the words a leader says and the deeds she does and the attitudes she displays.
It means doing what you can to manage that elusive something called “organizational culture,” and knowing that culture trumps strategy every time.
In particular, setting the right tone means avoiding – in both words and deeds – excuses and rationalizations. Rationalizations (“I had no choice;” “No one was really hurt;” “It’s not my job;” “It’s a stupid rule anyway…”), are an absolutely key ingredient in a great many instances of wrongdoing. And we don’t generally make up rationalizations on our own and learn how to apply them from scratch. We learn them, unfortunately, from our role models, from people we look up to, from people we see as leaders. Leaders can and must set the tone, in neither helping themselves to such rationalizations, nor tolerating them when used by others.
Setting the right tone also means fostering open conversation about ethics, about the obligations of and obligations within your organization. It means putting ethics on the table. It means letting those who work for you know that it’s OK to ask questions about ethics, and to make values and principles an explicit part of their decision-making. A leader needs to build decision-making capacity and empower employees to take responsibility.
We can sum up the significance of tone this way: A great deal has been written about ethical leadership, and the significance of ‘tone at the top.’ That literature might be usefully summed up by two sweeping statements, two unavoidable truths:
1) Ethics must come from the top down. People take their cues from their leaders. Yes, people learn their basic values from their parents and other childhood role-models, long before they become employees. But they learn how to enact those values in a business context from their workplace mentors and leaders. All of us learn basic lessons about honesty and integrity from our parents. But few of us learn about technical concepts such as Conflict of Interest from our parents. They don’t teach us about the moral obligations embodied in fiduciary relationships, or about how to balance the various interests at stake in a quasi-adversarial relationship between buyer and seller. We need leaders – specifically business leaders – to teach us those things. So: Ethics must come from the top down.
The second grand lesson is this:
2) Ethics cannot come from the top down. It cannot be imposed. You need buy-in. You can lead a horse to water, but you cannot make it drink. You can hand every employee a copy of “their” brand-new code of ethics, commissioned by HR and endorsed by the CEO and the Board. But that doesn’t guarantee that anyone will read it, let alone take it to heart. A code won’t overcome an organizational culture that puts short-term profit-seeking above all else; or a culture where individuals put moral blinders on, focusing narrowly on their own jobs rather than taking responsibility for the ethically-significant elements of the organization’s mission. It won’t make up for a culture that tacitly endorses playing fast and loose with accounting rules. That’s why tone – not just sermons handed down from on high – is so important.
A focus on tone can of course easily become confused with a focus on words, and on the personal integrity that a leader takes him- or herself to have. We see this all the time. When the mayor of a major city prides himself on integrity, on wanting to “clean up City Hall” and to put an end to the “gravy train,” but then cannot recognize a blatant conflict of interest when he sees one, you see “tone at the top” gone awry.
In my next blog entry, I’ll continue this topic by addressing what it means to focus on “tone at the top” and whether it can ensure or at least contribute to success.
The Business Significance of the ‘Trolley Problem’
Filed under: accountability, codes of ethics, critical thinking, decision-making, ethics, excuses, values |
Leave a Comment 
There’s a famous philosophical thought experiment known as “the Trolley Problem.” It goes roughly like this. Imagine one day you see a trolley — the famous San Francisco variety, or something more like a Toronto streetcar — hurtling along its track. The driver is incapacitated, and the trolley is bearing down on 5 people, mysteriously unconscious on the track. You happen to be standing next to a switch, which can divert the trolley onto a different track. But lying on this other track is another unconscious person.
So assuming (as the philosophy professor insists you must) that you don’t have time to haul any of the various unconscious persons off the tracks, your choice is effectively this: should you divert the trolley, thereby killing one person, or do nothing, and allow 5 people to die?
The puzzle is intended to get you to think about what’s more important: promoting good outcomes (fewer deaths instead of more) or sticking to cherished principles (like the principle that you should not cause the death of an innocent person). It makes for a fun and often fruitful classroom discussion.
But as a model of real-life ethical decision-making, the trolley problem is pretty bad. Seldom does life present you with two cut-and-dried options, neatly packaged by your philosophy professor. As Caroline Whitbeck points out, real life isn’t a multiple-choice test. In real life — in business, for example — ethical problem solving is more like a design problem: you need to design the options, before you get to choose among them.
But the trolley problem can still serve as a useful starting point for talking about business ethics. The key is to ask the right questions. Here are a handful of questions designed to make the trolley problem relevant to business ethics. Each, of course, requires a bit of mental translation. We are not, after all, primarily interested in actual trolleys.
1) Does your business need a policy for situations like this? Is your business one in which trolley-problem-like dilemmas come up often? Are employees often faced with situations that require them to trade off outcomes against principles? If so, do existing policies tell them how to deal with such dilemmas appropriately?
2) Is there anything you can do to prevent situations like this from happening in the first place? One of the key characteristics of the trolley problem is that it’s a lose-lose situation: either you kill an innocent person, or you allow several people to die. It’s worth asking (especially if such problems are common; see #1 above) whether there’s something you can do to avoid such situations so that you don’t have to deal with them at all.
3) What kind of corporate culture have you fostered, and how will that culture push people one way or the other in such situations? The trolley problem is a true dilemma, and reasonable people can disagree about it. But what about situations in which you can throw a switch and kill 5 people (metaphorically, at least) in order to save one? And what if that one isn’t a person, but is your company’s bottom line? Will your company’s culture encourage employees to put short-term profit ahead of all other considerations
4) Will people in your organization recognize situations akin to the trolley problem as being ethical problems in the first place? Or will they make the decision on purely technical grounds? Will they see past the fact that flipping switches is, you know, their job? Or past the fact that hey, the trolley has to run on time, and we always flip this switch that way at this time of day?
5) Finally, if the decision were being made by a team, or members of a hierarchy, rather than by an individual, would members feel empowered to speak their mind if they felt the team, or their boss, was making a bad decision?
Philosophical puzzles like the trolley problem become famous for a reason. They get at something deep. And they can provide fruitful fodder for discussion as part of corporate ethics training. The core of a great discussion is there: you’ve just got to know the right questions to ask.
Is Fare by Weight Fair?
Filed under: discrimination, energy, pollution, pricing, values |
Comments (1) Is it fair to charge airline passengers based in part on weight? That’s the plan recently announced by Samoa Air, and it’s a plan that is raising a few eyebrows.
Yes, it’s an ethical issue. But no, there’s no clear answer.
Interestingly, the mainstream media stories I’ve read about this thus far have made little mention of the obvious moral worry, namely discrimination. On the face of it, this looks like systemic discrimination against overweight and obese flyers. You and I could be in adjacent seats, booked seconds apart, but if you happen to be 20 pounds chubbier than me, you’ll pay more.
Whether being fat is sufficiently under personal control to make it a permissible basis for discrimination is hotly debated. But it’s worth noting that a weight-based policy also discriminates against those whose extra pounds are pure muscle. A heavyweight boxing champ would be about fifty pounds heavier than me, and would therefore pay more. The same goes for someone with the same build as me, who happens to be 4 inches taller. So if this is discrimination, it’s discrimination against those who are heavy, not those who are fat.
The other factor not mentioned in the few stories I’ve read about this is the environment. In aviation terms, weight translates into fuel, and more fuel burned means more environmental impact. So in charging by weight, an airline is basically levying a kind of carbon tax. And while how much you weigh isn’t fully within your control, the amount of luggage you bring with you is, and Samoa Air charges based on the total weight of you plus your luggage. Charging more on that total encourages people to carry less, and in principle might nudge frequent flyers, at least, to lose a few pounds. Such reductions eventually mean reductions in carbon emissions, and that’s a good thing. So even if there is a problematic form of discrimination going on here, there’s at least one factor on the other side of the moral equation.
Finally, it’s worth noting that to the extent that we’re worried about discrimination against bigger people (regardless of why they are big), being charged extra for their weight is far from the only price bigger people pay. Sufficiently large people also “pay,” for example, in the form of pain suffered by squeezing into airline seats not designed for people their size. That’s one of innumerable ways in which people who are outside the norm suffer in a world of products and services that are mass produced. But then, if the unusually large person pays a price for being squeezed into a seat designed for smaller folk, the person next to them pays a part of that price, too.
Of course, Samoa Air is a tiny airline, based in a tiny country. And commentators suggest that the company’s example is unlikely to be copied by major airlines. Indeed, it’s probably next to impossible: Samoa Air not only charges more to heavier passengers, it gives them more space — something likely impossible on standardly-configured passenger jets. But it is precisely for this reason that Samoa Air makes for a good case to use in ethics training and education. Before coming down on one side or the other, it’s important to tease out not just that there’s an ethical issue at all, but that there are in fact a range of ethical questions here.
The Ethics of Innovation
Innovation is a hot topic these days. It’s been the subject of studies and reports and news reports. In fact, I spent the entire day this past Monday at the Conference Board of Canada’s “Business Innovation Summit,” listening to business leaders and civil servants talk about how Canada is lagging on innovation, and how much is left to be done to promote and manage innovation. And certainly technological innovations like Google’s new glasses and 3D printing make for compelling headlines.
So sure, hot topic. But how is it connected to ethics? What is an ethics professor like me doing at an event dedicated to innovation?
If you understand the domain of ethics properly, the connection is clear. In point of fact, innovation is an ethical matter through and through, because ethics is fundamentally concerned with anything that can promote or hinder human wellbeing. So ethics is relevant to assessing the goals of innovation, to the process by which it is carried out, and to evaluating its outcomes.
Let’s start with goals. Innovation is generally a good thing, ethically, because it is aimed at allowing us to do new and desirable things. Most typically, that gets expressed in the painfully vague ambition to ‘raise productivity.’ Accelerating our rate of innovation is a worthy policy objective because we want to be more productive as a society, to increase our social ‘wealth’ in the broadest sense. The 20th Century has seen a phenomenal burst of innovation and increases in wellbeing, exemplified not least by the fact that life expectancies in North American have risen by more than half over the last hundred years. The extension and enriching of human lives are good goals, which in turn makes innovation generally a good thing.
Indeed, when looked at that way, innovation isn’t just a ‘good,’ but a downright moral obligation. Yes, lives for (most) people in developed countries are pretty good. But many still don’t have happy and fulfilling lives; many children, even here, still go to bed hungry. Boosting productivity through innovation is a key ingredient for making progress in that regard. And if less developed nations are going to be raised up to even a minimally tolerable standard of living, we need innovations that will help them, and we need innovations that will make us wealthy enough that we can afford to be substantially more generous toward them than we currently are.
Which brings us to ethical evaluation of the specific fruits of innovation. Some innovations are plainly good: they make human lives better in concrete ways. Penicillin was a very good innovation. So was the birth control pill. So was the advent of the smartphone. Other innovations are less good: nuclear weapons are a clear candidate here, as perhaps are complex financial instruments such as derivatives, which Warren Buffet famously referred to as “financial weapons of mass destruction.”
The problem, of course, is that innovation brings risks. Some of those risks are of course borne by the innovator, by the entrepreneur. Others are borne by society. For one thing, we often don’t fully understand which category a particular innovation will end up in until years later. Is the net benefit of splitting the atom positive or negative? The jury is still out.
But ethical evaluation doesn’t just apply to individual innovations: systems of innovation bring a mix of risks and benefits. If we set ten thousand entrepreneurs loose on the world, and tell them (or incentivize them) to make something innovative that sells, some will bring us the proverbial ‘better mouse trap,’ and others will bring us video lottery terminals, biological weapons, and other bits of detritus that only serve to increase human suffering. If you give your tech company’s R&D department free reign, someone may invent the next ‘killer app,’ and someone else may simply crash your server. And the only way a system can preclude ‘negative’ innovation altogether is probably to discourage innovation altogether.
Hence the recent interest not just in innovation, but in managing innovation. The notion of managing innovation reflects the fact that innovation can be fostered — doing so is an obligation of ethical leadership — and is an activity rooted in creativity, not anarchy. So for practical purposes, the ethics of innovation ends up being a branch of the ethics of management and leadership. Organizations, from small teams to nations, face a range of ethical questions as a result. They need to figure out how much to spend on encouraging innovation, as compared to spending on existing programs. They need to figure out what combination of carrots and sticks to use to foster innovation. They need to figure out how much autonomy to give potential innovators, how much freedom to experiment. And finally, they need to figure out how to spread the risk of innovation, in order to make sure that risks and benefits are shared fairly, and to make sure that fear of risk doesn’t dampen our appetite for innovation. And all of those are fundamentally ethical questions.
Lance Armstrong: How the Mighty (Book) Has Fallen
Filed under: books, character, competition, corruption, pharma, scandal, sports, values |
Comments (2) 
Lance Armstrong: It’s Not About the Bike.
The picture above is one I took, of a box of free books a neighbour of mine left outside on the sidewalk. When I ran by one recent Saturday afternoon, only one book remained: Armstrong’s book. Funny but sad, I thought. When I passed again roughly 24 hours later, the box looked exactly the same: just one book, unwanted even for free. I snapped a picture.
(Another perspective on the book’s value: Amazon is still selling the book, for about $11, though you can also buy a used copy via Amazon for just a penny — in other words, for the cost of shipping it.)
The book, as you can surmise from reading any of a number of reviews, tells the story of Armstrong’s rise to prominence in cycling, his battle with and ultimately triumph over cancer, through to his victory at the 1999 Tour de France. It is, in short, the story that made him a hero to so many.
We are now all but certain that Armstrong’s meteoric rise to the pinnacle of the cycling world was aided by pharmaceuticals, a sophisticated and rigorous doping program that he not only stuck to but bullied his teammates into adopting. Should he still be regarded as a hero in any sense? And is his book still worth reading? We all know now that the book left out crucial details, but as far as I’ve heard there’s no reason to doubt the basics: he had cancer, he had surgery, he “beat” the cancer, he trained hard, he won the Tour de France. So the basics of the hero story remain as valid today as they were when the book came out over ten years ago. So why is the book now effectively — literally! — consigned to the trash-heap?
For some, the explanation might be simple personal disillusionment. When a hero falls, he falls really hard. So some who previously lionized Armstrong may not want even to think back upon what they now see as their own naiveté. Others may not want to be ‘inspired’ by someone they see as a liar: perhaps they just don’t want to listen to life lessons and inspiring stories, no matter how useful, told by someone who cheated and then lied about it.
The best answer, I think, lies in the loss of trust. Armstrong’s message was one of hope and courage, and it can only really bring hope and courage to the reader if the reader trusts Armstrong’s words. Armstrong’s message was like that of the kind, experienced physician in whom the cancer patient puts his or her faith. “We’re going to take good care of you,” says the physician. Armstrong’s message: You too can triumph over adversity. Neither messenger can guarantee results: surviving cancer is much more a matter of luck, and good medical care, than it is of gutsy determination. But the other half of the message — the reassurance, the comfort, the message of hope — requires that the patient put their faith in the messenger. And that is the part of his own message that Armstrong so effectively killed.
Ethics Lessons from Toronto Mayor’s Ouster from Office
Filed under: accountability, character, codes of ethics, conflict of interest, corruption, governance, government, leadership, pollution, taxpayers, values |
Comments (1) Toronto Mayor Rob Ford has been found guilty of violating the Municipal Conflict of Interest Act, and will be removed from office. The much-anticipated court decision was handed down this morning.
Regrettably, this is unlikely the end of the story. Ford had announced, prior to the decision, his intention to run again should the judge remove him from office. The judge had the option to include, as part of Ford’s sentence, a prohibition on running again, but opted not to do so.
Ford has plenty of detractors. Some don’t like his politics. Some question his aptitude for the job of mayor of Canada’s largest city. Others worry about his being implicated not just in one but in a string of conflict of interest violations. But he also has plenty of defenders — after all, there are an awful lot of people out there who voted for him, and many of them are sticking to their guns on that choice. So the debate will rage. Plenty of ink is sure to be spilled in by both camps in the wake of this decision. I’ll limit myself here to just two quick points. One is about leadership, and the other is about governance.
First, leadership. Whatever your views of Ford, and whatever your views about the severity of his breach of the Conflict of Interest Act, you pretty much have to agree that Ford demonstrated a disappointing lack of leadership ethics, here. Yes (as his lawyer pointed out) people do make mistakes, and even a mayor can be forgiven for an incidental breach of a rule now and then. But what’s particularly worrisome here is that Ford, who by all rights ought to be the guy who leads Council in understanding its ethical obligations, seems to be utterly clueless about them. And he doesn’t seem terribly worried about that, either. According to a report of the court proceedings, Ford “testified he never read the Conflict of Interest Act or the councillor orientation handbook. Nor did he attend councillor training sessions that covered conflicts of interest.”
My second point has to do with governance. As Marcus Gee pointed out in the Globe and Mail recently, bumping Ford from office might be a case of ‘out of the frying pan, into the fire.’ Turmoil is likely to ensue. Council is now faced with the choice of having someone else — someone not elected to be mayor — serve out the rest of Ford’s term, or spending several million dollars of taxpayer money to hold another election. The result of turfing Ford seems especially troubling when we compare Ford’s ethical cluelessness with the out-and-out corruption that has brought down mayors in other major cities.
But what was the alternative? A judge has no choice but to call ‘em like he sees ‘em. Ford violated important rules, and those rules say he should be removed from office. Note that the judge in this case would have had the same range of sentencing options if the dollar amount at the heart of this case had been $3.15 rather than $3,150. A more sane system would perhaps allow for a broader range of penalties. Examples could be found in other systems and at other levels of government. A fine? Censure? Limitation of future mayoral discretion? Mandatory ethics training? I don’t know the answer. But a governance system that allows a political leader to blunder this way and then throws a city into turmoil is not a good system. Principles matter, but so does the way we implement them.
Opus Dei Sues Game Publisher
Filed under: ethics, freedom, intellectual property, values |
Leave a Comment As you may have heard, Opus Dei, a branch of the Catholic church, is suing a Danish game publisher, Dema Games, for alleged infringement of its trademark. The game is called “Opus Dei: Existence After Religion.”
The case is pretty much entirely without moral merit. Never mind the David-vs-Goliath image raised by the thought of the powerful Catholic prelature focusing its lawyers’ energies on a tiny Danish publisher. Beyond that, there’s no indication that Opus Dei, the organization itself, is portrayed in any way in the game. So this is unlike the dispute that went on back in 2006, when Opus Dei tried to get Sony to remove references to the organization from the movie version of The DaVinci Code. The issue in the present case is simply whether the organization has the right to control how its name is used.
Trademark protection is effectively a limit on free speech. You can say whatever you want, generally, but you can’t help yourself to words or phrases that are specifically used by other people for commercial purposes. Opus Dei isn’t what we would normally think of as a “commercial” organization, but close enough: its name is the “mark” under which it carries out its “trade.” So it has some claim to a trademark. On the other hand, the words “opus Dei” are just a phrase with multiple uses. As those of you who remember your high school Latin will recall, “opus dei” is translated “work of God.”
This case might best be thought of a question of free speech versus respect for religion. The organization can’t rightly expect to exert worldwide control the use of the two words “opus” and “dei,” words that have many uses in conjunction beyond describing the Catholic group. But on the other hand, should the game publishers relent and remove those words from the title of their game? Opus Dei does have an interest at stake, here, even if it’s not clearly an overriding one embodied in a right. A sufficient degree of respect for the organization and its interests might lead a company to adopt a hands-off policy, regardless of whether the trademark claim is legally enforceable.
All indications are that Dema has no intention of manifesting that level of respect, and I suspect many people — including those who are dismissive or even critical of the Catholic church — will applaud the company in this regard. But what is the unbiased observer to think, from an ethical point of view, about cases of this sort? Here, it is important to recognize the crucial ethical difference between a value, on one hand, and a principle, on the other.
Respect — including respect for other people’s religions — is a value. As such, it is something we generally want to promote. It is good, other things being equal, to demonstrate a degree of respect for other people, and arguably for their religions and the organizations that promote them. Even when we do not support or encourage other people’s beliefs, it is generally a good thing, socially, if we respect them.
Free speech, on the other hand, is a right, and respect for it is a moral duty. And rights and duties tend to be moral absolutes, rather than merely things we want to promote. As a right, free speech is something that is to be breached only under very limited and carefully prescribed circumstances. A right is a line drawn in the sand, and across which we step only when absolutely necessary. When a right (like free speech) and a value (like respect) come into conflict, generally the right has got to win.
Hopefully the Danish court will agree.
Will the UK Outlaw Ethical Investing?
OK, so the answer to the question in the title is almost certainly “no,” but outlawing ethical investing is precisely what is being implied, no doubt inadvertently, by a new plan being attributed to the UK’s Labour Party.
Over the weekend, several UK news sources reported on a press release indicating that the Labour Party’s leader, Ed Miliband, was about to announce his intention (if elected) to impose tough new rules on the financial industry. The idea was to be put forward during a speech at the party’s annual conference this past weekend. According to the Daily Mail,
Mr Miliband is proposing a sweeping new legal duty on any financial service which manages savings, including pension funds and banks, to maximise the saver’s returns. Failure to do so would mean them breaking the law.
(While I haven’t seen the actual press release upon which this analysis is based, a very similar report appeared in The Guardian.)
On the face of it, this is just another promise by a politician to fight for the little guy by imposing constraints on big business.
But hold on a minute. As Tim Worstall at Forbes.com astutely points out, requiring a bank to maximise a saver’s financial returns implies a legal duty not to pay attention to any factor other than money. No more attention to sustainability. No more doing good deeds. No more avoiding investing in tobacco or arms dealers. It’s gotta be all about the money.
But focusing on something other than money is precisely what financial institutions promise to do when then offer various ‘ethical’ or values-based investment instruments. The promise made by such funds is that they’ll aim at a “solid” return on investment, while at the same time paying due attention to social and/or environmental concerns. Miliband’s proposal would make such funds illegal. Indeed, if taken seriously, Miliband’s proposal goes much farther than that: it would criminalize all attempts at corporate social responsibility by financial services companies.
Indeed, legally requiring banks to maximize return to savers is exactly parallel to the (fictional) requirement for corporations to maximize return to shareholders. (Why “fictional?” Because the directors of a corporation are only legally obligated to serve loyally, not to maximize profits per se.)
Now as Worstall points out, such announcements regarding what a politician is going to say sometimes don’t come true. And heaven knows that even if Mr. Miliband does or did make the promise out loud, there’s no guarantee that he will make good on it, even if he has the opportunity. Hopefully he or his advisors have seen the folly in such a law, and will find some subtler way to achieve their policy objectives.
Obamacare and Business Values
Yesterday, the US Supreme court mostly upheld Obamacare, also known as the Patient Protection and Affordable Care Act. (See the full decision here [PDF].)
The Big Decision may have been made, but clearly lots remains to be sorted out. One of the questions that arises, from an ethical point of view, is the way that businesses, including especially insurance companies, should conduct themselves under the new plan.
Under Obamacare, Americans will be required to carry health insurance (or face a penalty) and, importantly, insurance companies will be required to sell policies to all comers, regardless of pre-existing health conditions. While the debate has focused primarily on the proper role of government, the Patient Protection and Affordable Care Act clearly has significant implications for private companies.
Note how different this is from, for example, Canada’s system. In Canada, insurance is provided by provincial health plans, and care is provided by physicians (as private contractors) and private, not-for-profit hospitals. Private insurers still play a role in pharmaceutical coverage, but almost no role at all in basic healthcare. Under Obamacare, in comparison, insurance companies effectively become an instrument of public policy: important elements of the way they conduct their business (and in particular the actuarial rules they apply) will no longer be up to them. This is far from the only example of private companies playing a role in public insurance: in the UK, private companies play a significant role in administering employment insurance services, and in some Canadian provinces private insurance brokers sell auto insurance plans underwritten by a public insurer. With regard to insurance, the distinction between private and public is far from water-tight.
How should companies conduct themselves when they play a role in delivering publicly-mandated insurance? Should they continue to think of themselves entirely as private, profit-seeking entities? Or should they — like industrial firms during times of war — take up public values?
Just what values are instantiated in a public insurance scheme is a matter of some debate. Public insurance schemes are often seen as promoting egalitarian values — ‘we’re all equal and hence all deserve equal access to basic healthcare.’ Others argue that what’s really at stake in such schemes is not equality, but efficiency (and argue that the current patchwork American system, for example, is quite inefficient in a number of ways). Others argue that, for insurance quite generally, solidarity is the key value — and one with obvious salience when insurance is part of the welfare state. Of course, to the extent that insurance companies are “merely” private corporations, they are guided by basic norms related to loyally seeking profits for shareholders. But even private insurance companies are subject to special limits on their profit-seeking. From a legal point of view, it is recognized that insurance companies are morally special: the legal principle of uberrima fides implies that the level of trust required between insurer and insured makes the relationship special, from an ethical point of view. And then, with regard to mutuals and not-for-profit insurers, stewardship of a shared resource (i.e., the insurance fund upon which members rely) is a key value. It seems right that private and public insurers would be guided by different mixes of these values.
So the question American health insurance companies face, at least in principle, is whether they should conduct themselves like private or public entities. And the question Americans face is which standard to hold them to. The answer, I think, is not clear. But it’s worth pointing out that the goals of an institution — public or private — don’t automatically have to be the goals of the larger system of which it is part. As I’ve pointed out elsewhere, the individual parts of a system don’t need to act according to the values of that system — sometimes they contribute by playing a more narrow role.
The coming years are sure to see significant changes in the US insurance industry. Whether the US government can succeed in getting private insurers to play a public-policy role remains to be seen, and depends in part on the willingness of those insurers to take up a public mission. But it depends just as much on whether the system Obama has designed is capable of harnessing the profit motive of insurance companies using it to get them to perform an important social function.
Flexibility in the Workplace?
What kind of workplace do you want? Should your workplace experience be determined by regulations, or instead be negotiated between you and your employer?
A recent survey sheds interesting light on what people love, and hate, about their workplaces. They survey, carried out by Wakefield Research for Citrix, produced lots of interesting tidbits. For example, among male workers, the part of office life they secretly hate most is office baby showers. 32 percent of workers would give up their lunch breaks in exchange for the chance to work at home just one day per week. Oh, and 7% of workers, when given the chance to work from home, prefer to work in their underwear or in the nude. And so on.
Citrix is an internet and cloud computing company, so naturally the take-away lesson they suggest has to do with the advantages of telecommuting, and in particular with the desirability of employers offering employees the flexibility to work, at least occasionally, from home.
But the question of flexibility arises at more that one level. It arises at the level of what employers offer employees — will they offer employees the flexibility to work from home occasionally if they choose? It also arises at the level of employers: should employers have the option to either offer such flexibility or not, or should all employers be required to offer the same kinds of flexibility? In other words, should there be a firm rule (entrenched in either law or regulation) requiring employers to offer such options?
More generally, what elements of work life ought to be regulated to the point of being standardized? And which elements ought to be up to employers and employees to sort out? The generic argument for uniformity is reasonably clear: people are people, and ought generally to be treated in similar ways regardless of where they work.
But there are also arguments for diversity in employment arrangements. Most obviously, there’s an argument based in the importance of freedom of choice. Why should everyone be forced to work under one set of circumstances? Shouldn’t the terms of the employment contract be a matter of free negotiation — within broad limits, perhaps defined in terms of fundamental human rights — between employer and employee?
But customization of workplace experience also holds the promise of better outcomes, at least in theory, because different workers likely want and value different things in a workplace. And there will always be tradeoffs. Some may prefer a workplace that rewards long hours with high pay. Others may prefer “good” pay in return for “reasonable” hours. Some may want to work in a close-knit team that works and plays together, while another may prefer a strict separation of work and pleasure. In this sense, a workplace is a product like any other, one that we “buy” with our labour. And, as with food or anything else, different people will want different things. If you can find ways to give more people what they want, you’ve done a good thing.
I find this a useful way of framing questions related to employment standards. For any given question, we should ask: is this something that we need to legislate into regularity, or something on which we need to allow diversity? If the former, then we’re faced with the hard challenge of figuring out what the single best standard is for all to follow. If the latter, then the challenge is to figure out how to make sure that the choices employees make are free and informed.
How can we decide which category a particular workplace issue falls into? That’s the hard part. It’s tempting, philosophically, to say that we just need to figure out whether the issue at hand is an issue with regard to which rational argumentation seems to lead to a single solution. But whether a single, clear answer is available is itself something over which people can disagree. Closer to the truth is that what we need to do is figure out whether the gains made by enforcing regularity are sufficient to outweigh the positive outcomes that come from a tailored workplace experience.
