The Business Ethics Blog

Here’s a somewhat odd example of honest advertising, at the hardware store near my house:

Well, it’s blunt at least. I haven’t seen the light fixtures they’re selling, so I can’t vouch for the accuracy of this claim…

Merck (the pharmaceutical company) has apparently decided to stop lobbying state legislatures in the US to make their new HPV / Cervical Cancer vaccine mandatory for young girls.

(I blogged about this last May: Merck’s Cancer Vaccine & the Religious Right)

Here’s the recent story, via ABC News: Drug Giant Merck Suspends Campaign for HPV Vaccines

Drug manufacturer Merck & Co. announced Tuesday that it would suspend its campaign urging states to implement mandatory vaccination programs for preteen girls with Gardasil, its human papillomavirus vaccine .

According to the company, Merck made the move to avoid having its campaign take attention away from the bills being drafted in many U.S. states that would make the vaccine mandatory for preteen girls.

So, essentially the folks ar Merck are stopping their lobbying campaing because they’ve realized that it’s actually counterproductive. Corporate lobbying generally is a really great business ethics topic: it seems perfectly legitimate for companies large and small to try to influence public policy, but with great power comes great responsibility.

Of course, Merck hasn’t stopped promoting Gardisil altogether. If you haven’t already, you’ll soon bump into an ad like this, which I ran into while reading the news this morning:
What’s interesting about the ad campaign is the focus on parents protecting their daughters. I assume this campaign is going to result in some serious soul-searching for a lot of parents — parents who love and want to protect their daughters, but who don’t want to admit (or foresee) their daughters being sexually active. It’s going to make for some rather complicated parent-daughter conversations, I’d say…

Oil execs must wake up every day and thank their lucky stars that there are tobacco companies out their making oil companies look good in comparison.

Yesterday, I blogged about a plan by RJ Reynolds to spend a lot of money to promote a new brand aimed specifically at women.

Now comes news that 3 tobacco companies will challenge a Canadian law that restricts cigarette advertising in various ways, including forcing companies to place graphic health warnings (like the one above) on cigarette packages.

Here’s the story, as told by the Halifax Chronicle Herald’s Christopher Maughan: Tobacco industry challenges ad laws

Canada’s three major tobacco companies are at the Supreme Court arguing for looser restrictions on tobacco advertising, saying the current law is so vague it amounts to a total ban and violates the companies’ constitutional right to advertise.
Under the current federal Tobacco Act, cigarette manufacturers can advertise in adult-only public places, in certain magazines, and through direct mail. But few companies have actually bothered because of what they say is a vague section of the Tobacco Act aimed at forbidding advertising aimed at kids.

The debate over freedom of commercial speech is a complicated one. Freedom of speech is a dearly-held freedom in all civilized parts of the world. But does that right extend to corporations? When you limit the free speech of a corporation, are you effectively limiting the free speech of the people who collectively make up the corporation? What kinds of ill effects must be anticipated from commercial speech before we’re justified in restricting it. Or are restrictions never justified?

I’ll just add one further thought, specific to the current case: It’s hard to square the tobacco companies’ opposition to limits on advertising with their claim (which they often make) that their ads are only aimed at converting people who currently smoke to their brand. The limit on advertising affect all firms equally (well, except that it’s tougher on new firms, firms that don’t have well-established brands). So, generally, big tobacco can only complain if it sees the limit on advertising as preventing them from expanding the total number of smokers, something they have claimed not to be trying to do.
So, evern IF they’re right that the limit on advertising is a wrongful restriction of commercial speech…why exactly are they bothering to fight it? Please don’t try to tell me that they’re doing it on principle.
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Thanks to Lorraine for alerting me to this story!

It’s almost as if, with increasing attention being paid to breast cancer lately, the folks at R.J. Reynolds figured they could afford to help a few more women get lung cancer, and maybe no one would notice. Never mind that lung cancer already kills a lot more women than breast cancer does.

R.J. Reynolds, the tobacco company, is about to start a new advertising campaign, at an estimated cost of $25 to $50 million, the foreseeable consequence of which will be the deaths of a lot of women.

That’s the estimated cost of the ad campaign to introduce Camel’s latest sub-brand, “Camel No. 9,” which is aimed at women. Apparently Joe Camel has been a guy’s guy for too long. As of this year, he’s got an equal helping of love for the ladies.

See the New York Times story here:
A New Camel Brand Is Dressed to the Nines

THE next time R. J. Reynolds Tobacco asks smokers to walk a mile for a Camel, watch how many of them are in high heels.
Reynolds, eager to increase the sales of its fast-growing Camel brand among women, is introducing a variety aimed at female smokers. The new variation, Camel No. 9, has a name that evokes women’s fragrances like Chanel No. 19, as well as a song about romance, “Love Potion No. 9.”

What can I say that’s not obvious? Yeah, cigarettes are legal, but not everything that’s legal is ethical. Sure, people choose to smoke…well, sort of. Most people start due to peer pressure (and advertising?), and keep smoking because nicotine is addictive. But hey, everyone’s got a right to make a living, right? And sure, RJR says it’s only trying to attract women who already smoke to switch to their brand. But that’s neither plausible nor exculpatory. All of that is obvious.

So, here’s the discussion question for the day. How much individual, personal responsibility falls on each and every employee at R.J. Reynolds, for selling a deadly, addictive product? The industry, as a whole, doesn’t care about the ethics of selling their product, and from a legal point of view, their huge profits allow them to survive even enormous lawsuits. But don’t the people who work for these companies deserve some blame? (Clearly, the blame can’t be too specific, and can’t be shared equally. A janitor mopping the floors at RJR’s corporate headquarters is indeed an employee, but he can’t reasonably be blamed for the death of some specific individual smoker, even though he’s contributing to the success of the business that made the product that contributed to her death. But just as clearly, senior executives can’t escape personal moral responsibility for statistical increases in deaths associated with their products. Right?)
But I’ve said enough. Discuss among yourselves.

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Tip of the hat to Andrew potter, who appropriately labelled Camel the “evil brand of the day.”

The CRO (Corporate Responsibility Officer) Magazine has just announced its 8th annual list of the “100 Best Corporate Citizens 2007”. As always, the list itself and the article that accompanies it both make for interesting reading.

Topping the list are:

1. Green Mountain Coffee Roasters, Inc.
2. Advanced Micro Devices, Inc.
3. NIKE, Inc.
4. Motorola Inc., and
5. Intel Corp

Here’s a bit of the article that accompanies the list:

Environmental responsibility. Corporate governance and ethics. Fairness toward employees. Accountability to local communities. Providing responsible products and service to customers. Maintaining a healthy rate of return for investors.

Those are just some of the challenges of responsible business in the 21st century, challenges that are being met head-on by the 100 companies listed. These are the 100 Best Corporate Citizens for 2007—companies that are proving that good corporate citizenship and good business go hand in hand.

The 100 Best Corporate Citizens list takes a systematic approach to assessing the social and environmental characteristics of a good corporate citizen. The list is drawn from approximately 1,100 publicly held U.S. companies in the Russell 1000, S&P 500 and Domini 400 indices, relying on extensive data collected by KLD Research & Analytics, an independent investment research firm in Boston.

A couple of comments….

My first comment is about size. It’s interesting that the list seems to be dominated by big companies. This means one of two things. It could be that the evaluative criteria used are biased in favour of big firms (in which case they ought to be fixed). The other possibility is that, on average, big firms make better corporate citizens, a thesis that is strongly at odds with many people’s perceptions (though that doesn’t make if false). (FYI, there’s a small but useful literature about the various ethically-significant ways in which small-and-medium enterprises — SME’s — differ from big firms. See, for example, Laura Spence, “Does size matter? The state of the art in small business ethics,” Business Ethics, A European Review, Volume 8, Number 3, July 1999.)

My second comment is about aggregation of indicators. As regular readers will know, one of the criticisms that Wayne Norman and I aim at the so-called Triple Bottom Line is that it’s impossible, even in principle, to meaninfully aggregate various measures of social performance to generate a social “bottom line.” But of course, CRO does reach a sort of “bottom line” of corporate citizenship for each company it studies, upon which it bases its ranking. In particular, it does so by averaging the scores that a company attains in each of 8 categories (Community, Diversity, Environment, etc.). And this method probably does a decent job of indicating social performance. But please do take note of the method used: mathematical averaging. Averaging implies that each of the factors averaged is exactly equally important. So, for example, it implies that Employee Relations is no more important than Community (an ethical perspective which is at the very least debatable). It also means that lousy performance in any area (even a really crucial area) can be hidden. Doing poorly on environment? That’s OK, you did great on Employee Relations, so it ‘all averages out.’ Now, I’m not actually trying to criticize the methodology here. It actually seems pretty reasonable, for the purpose at hand. I just want everyone to be aware of the value assumptions that go into the design of such a ranking.
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(p.s. Here’s a curious question. I saw a press release today from Motorola, touting the fact that they were #4 on the Top 100. Given that thousands of companies are eligible, ranking ANYWHERE in the top 100 is an accomplishment. But rhetorically, it might sound funny to brag about being #92 or something. I wonder, of all the companies that issued press releases about their ranking, what was the LOWEST ranked company?)

This is a messy posting about a messy topic. It’s about an unflattering review of an unflattering book about a whistleblower.

Here’s the brief version of the long, messy story, for those unfamiliar with it:
Dr. Nancy Olivieri is a specialist in the treatment of thalassemia, an inherited blood disease. She works at the Hospital for Sick Children in Toronto. In 1996 she came to believe that the experimental drug she was studying, called deferiprone, was having serious side effects on the children she was treating. She decided to inform patients and their families. Apotex, the copmany that makes deferiprone, didn’t like that. They stopped the trials, withdrew funding for the research, and reminded Dr. Olivieri that she had signed a confidentiality agreement. Then, basically, everybody sued everybody. The Hospital and the University of Toronto (with which the hospital is affiliated) didn’t back Olivieri, and some think that had something to do with a large donation the university was expecting from Apotex. Olivieri was hailed as a hero, a whistleblower, protecting her patients by standing up to powerful corporate interests. A report was commissioned by the hospital; it was critical of Olivieri, but this report was itself later demonstrated to be based on misinformation. An indepedent inquiry sponsored by the Canadian Association of University Teachers exhonerated Olivieri, but was highly critical of Apotex, the University, and the Hospital.

OK, fast-forward a few years.

Miriam Shuchman (a psychiatrist and medical journalist) publishes a book called The Drug Trial: Nancy Olivieri and the Science Scandal that Rocked the Hospital for Sick Children. The book is highly critical of Olivieri.

Fast forward another year or two. Philosopher Arthur Schafer publishes a review of Schuchman’s book in the scholarly journal, Bioethics, called “Science Scandal or Ethics Scandal: Olivieri Redux” (subscription required) The review is devastating. According to Schafer, the book manifests a clear bias against Olivieri: it focuses on the woman’s alleged character flaws, and papers over those of her critics. It also unfairly (and unrealistically) blames Olivieri for the deaths of patients who didn’t get access to deferiprone. Further, Schuchman relies extensively on quotations from anonymous sources — nothing wrong with the odd anonymous source, of course, but it’s a dodgy way to build a case. And some of the sources she does cite explicitly are people who have already been thoroughly discredited. Finally, Schafer notes a number of serious factual inaccuracies in Schuchman’s book, including at least one instance in which a quotation is wrongly attributed to Schafer himself.

I haven’t read the book myself (nor do I plan to), but if even half of Schafer’s criticisms are valid (and he’s a thorough scholar, so I suspect it’s all valid), there’s a serious problem with the book having been published at all (by Random House Canada…).

But what concerns me most about the book, and about the decade-long controversy, is the focus on one person, on Olivieri. For Shuchman to focus on a single individual might have been good from the point of view of selling books, but from the point of view of understanding the ethics of the case, it was a mistake. It might even be a mistake to lionize Olivieri as a hero. This shouldn’t be a story about heroism. Personally, I have great respect for Olivieri (though I know her only by reputation), but the point is that this case isn’t about her. It’s about sick children, the institutions that are supposed to be dedicated to helping them, and the standards and procedures that smart, well-intentioned, compassionate people put in place for reviewing novel medical treatments.
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Update: Arthur Schafer says that people who want to see his article may feel free to contact him by email. Schafer asked me to add that — as he notes in his review — Shuchman also accuses Olivieri of being wrong about the science in this case, but that Shuchman does a poor job of defending that claim.