Author Archive
Corporate Responsibility and the “Rule of Rescue” (Video)
Leave a commentA couple of weeks ago I blogged about the obligation to rescue trapped miners.
On a recent visit to the Kenan Institute for Ethics at Duke University, I was interviewed on the topic for the Institute’s “Conversations in Ethics” series. Here’s the 4-minute YouTube video that resulted.
(I should point out that the view I articulate in the video owes a significant debt to comments made by Jim Gaa on my original posting on this topic. Thanks, Jim!)
Greenwashing the Tar Sands
Regular readers will know that I have an interest in what’s often referred to as “greenwashing”.
Here’s a good example. An ad for Suncor (a big Canadian energy company) appeared in a recent issue of Canadian Business Magazine (May 10, p.24). The ad includes the obligatory green imagery (excerpted at left). The text of the ad reads as follows:
“As Canada’s premier integrated energy company, Suncor has achieved success by seening the possibilities. Developing Canada’s oil sands, as well as energy resources from coast to coast and beyond, brings us even more opportunity to take action on environmental issues. Just as innovation made oil sands production viable, new technology is helping us reduce our impact on air, land and water. For Suncor, seeing the possibilities is the first step towards responsible development.”
What makes this greenwash? Well, to start with, there’s the green imagery and allusions. The pretty picture, and the vague reference to “taking action on environmental issues,” etc. Put that against the backdrop of Suncor’s reality: the oil sands (a.k.a. “tar sands”) are an undeniably dirty source of energy, and more generally the company’s environmental record is far from stellar. Now, it’s worth noting that this ad goes beyond mere associative advertising. Suncor isn’t just trying to put its name next to a pretty picture of trees and fluffy clouds. The ad cites stats. In particular, it brags about:
- “45% decrease in GHG [greenhouse gas] emission intensity at oil sands based on progress to to the end of 2008 compared to 1990 baseline.” Sounds good, but is it? How does that compare to other companies? Is that a legislated reduction, or voluntary?
- “22% decrease in absolute water use at oil sands from 2003 to 2008.” Again, sounds good. But while “absolute” (i.e., total) water usage is important, a reduction in that doesn’t necessarily imply an improvement in methods. It could just as easily imply a change in overall production.
- “$750 million actual and planned investments in renewable energy.” Again, a big number. But not quite so big once you consider that Suncor is a company with over $30 billion in revenues each year. And most importantly, notice that the $750 million includes planned investments. In other words, the company is taking credit for stuff it hasn’t done yet, or even (as far as we can tell) started.
So, what’s wrong with the ad? Are there any lies? Not literally, I think. And probably no lies in the sense of false claims that would be actionable under false advertising legislation. Is the misleading? Well, it’s certainly a rather glossy portrayal of a company engaged in a dirty business. So, like other examples of greenwashing, it’s a distraction from the truth. It attempts a bit of sleight-of-hand. Is a stage magician lying when he distracts you with the flowers in his right hand while his left hand dips into his pocket to retrieve the missing coin? No, not really. But then, the magician is offering entertainment, making our lives better. Greenwash offers a form of distraction that does little more than muddy the waters of discourse about corporate environmental responsibility.
(Thanks to Robin Hansen for showing me the ad and pointing out the greenwash.)
Pharmacists and Candour About Homeopathy
If someone selling something believes that it doesn’t work, should they tell you so? Does it matter if the person doing the selling is a licensed professional, someone with advanced training and a sworn duty to promote the public good?
From the BBC: New guidance for homeopathy use
The regulatory body for pharmacists in NI [Northern Ireland] has proposed that patients be told that homeopathic products do not work, other than having a placebo effect.
The draft guidance comes following a report on homeopathy published earlier this year by the House of Commons Science committee.
It reviewed the evidence base for homeopathy and concluded that it was “not an efficacious form of treatment”….
Of course, some people believe — despite the best available evidence — that homeopathy really works. But pharmacists (being educated in the scientific evaluation of evidence) generally do not. And as professionals, they have an obligation not just to be honest with customers about that, but indeed to be candid about it.
Here is the Code of Ethics for the Pharmaceutical Society of Northern Ireland. The Code calls upon Pharmacists to “Maintain public trust and confidence in [their] profession by acting with honesty, integrity and professionalism”. That’s pretty vague, so applying it requires interpretation. And in the literature on professional ethics, the argument is usually that what we need from professionals like Pharmacists is not just old-fashioned honesty, but candour. Why? Because mere honesty really just boils down to telling the truth when someone asks you a question. And that’s a very good start, of course. But in many situations — the kinds of situations where we turn to professionals for help — we often don’t know the right question to ask. So we rely on the professionals to be candid; in other words, we rely on them to be open and forthright, and to volunteer information that they think we would want and/or need. And health products are among the most difficult for consumers to understand. So, it’s not at all surprising that the professional body in this case advised its members to be candid with the consuming public about the lack of evidence in support of homeopathy. In fact, it’s barely even commendable, given that candour about such things is a basic professional responsibility.
Judge Says Corporate Person Should Be Held Responsible
Here’s a story that will warm the hearts of all who think more should be done to hold corporations responsible for their bad behaviour:
“Judge Rejects Plea Deal on Guidant Heart Device”
A federal judge in Minnesota on Tuesday rejected a plea agreement between the federal government and the Guidant Corporation, saying that the deal did not hold the company sufficiently accountable for an episode in which it sold potentially flawed heart defibrillators.
…
Judge Frank said that prosecutors should have sought probation for Guidant and its parent, Boston Scientific….
Hey, but wait! This judge is treating Guidant — a corporation — like it’s a person or something. But that’s clearly crazy, right? I mean, “probation”? How can you put something like a corporation on probation?
Remember all the hullabaloo over the Citizens United case back in January? (One of my blog entries on the topic is here.) In that decision, the US Supreme Court effectively expanded the free speech rights of corporations and unions. Much of the criticism of that decision was leveled at the Court’s implicit assumption that corporations are in some sense “persons.” Critics claimed that rights can only be held by persons (which is perhaps true), and being a person meant being a human (which is not necessarily true) and if we admit that corporations are persons, then there’s nothing to stop them from having the right to vote, adopt children, etc. (which is utterly false).
The Guidant case cited above provides a nice illustration of how important it is for corporations to be treated as legal persons — as entities with some range of rights and responsibilities. Now, as I emphasized in the aftermath of the Citizens United case, to think of corporations as persons is not in any way to argue for a specific set of rights or responsibilities. There’s plenty of room for debate about just which rights and which responsibilities make sense. Not all persons have exactly the same range of rights and responsibilities. (Compare adult persons with infant persons, for example.) But there’s no denying that if you want to hold corporations responsible for their behaviour — behaviour that might not be attributable to any particular executive, or at least to any executive still with the company — you need for courts to be able to see the organization as an entity, a person, in its own right.
Business Ethics & Compliance 3: FCPA, Ethics Training, Social Media
I’m just back from New York, where I attended the Conference Board’s Business Ethics and Compliance Conference, as a guest of the organizers.
This is the third of 3 blog entries about the event.
This morning I saw two presentations. The first was by Matthew Tanzer, VP and Chief Compliance Counsel at Tyco. Tanzer’s talk was nominally about “Communicating and Managing FCPA Risk.” (The FCPA, or Foreign Corrupt Practices Act, is what makes it a crime under U.S. law for an American company to engage in bribery overseas, regardless of whether there are laws against bribery in the country in which the bribery takes place.) But more generally Tanzer’s talk was about the very sophisticated program Tyco has in place to train its roughly 110,000 employees on ethics & compliance. Tyco’s program includes a “Vital Values” newsletter, online training modules, and having 100% of its employes — many of them in far-flung branch offices in something like 60 countries — sign the company’s Code of Conduct every year. My initial critical thought about the latter: how much value is there in having people merely sign a Code of Conduct. Signing doesn’t reliably indicate understanding. But Tanzer’s justification was a good one: the ordeal involved in achieving a 100% signature rate signals commitment. In his words, “It says to employees that we’re serious about this.” Add to that the fact that something like 50,000 employees go through online training every year, and you start to see that Tyco does take this stuff seriously. (Oh, and on the topic of the relationship between ethics & legal compliance, Tanzer’s advice to the audience, most of whom have legal training: Not everyone in your organization is a lawyer, so don’t focus on law. Focus on ethics.)
The other presentation I saw this morning was by Douglas Smith, a lawyer with McGuireWoods LLP, on the impact of social networks and new communications technologies. Smith opened some eyes in the audience, I think, with regard to various ways in which employee use of social media can result in risks for their employers. But he also had words of caution for companies tempted to peek at employees’ (or prospective employees’) use of social media. Even when doing so doesn’t constitute actual invasion of privacy, it can, for example, result in employers seeing personal information that they are not legally allowed to use (under, e.g., Title 7 of the US Civil Rights Act).
(One point of criticism if Smith’s talk: given that it was a talk about new communications technologies at a conference on ethics & compliance, I would have liked to hear his thoughts on the positive ways in which companies are using blogs and Twitter to communicate with customers, critics, and other stakeholders.)
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p.s. here are direct links to my last 2 blog entries from the conference:
Business Ethics & Compliance and Business Ethics & Compliance 2.
Business Ethics & Compliance 2
I’m currently in New York, at the Conference Board’s Business Ethics and Compliance Conference.
This is the second of 3 blog entries I’ll be doing from the conference.
I went to two very different sessions this afternoon. The first was on “Enforcing Ethics and Compliance in Your Supply Chain.” Speakers from Texas Instruments and El Paso Corporation (a natural gas pipeline company) talked about the challenges faced by their companies in making sure the companies they buy things from have their own ethics-and-compliance affairs in order. Both T.I. and E.P.C. are publicly-traded companies, subject to a range of “ethics” regulations, and are required by law to have in-house ethics programs. But many of the smaller firms they deal with are privately held, and hence aren’t legally required to have such programs. But in effect, in seeking to do business with big firms like T.I. and E.P.C., these smaller firms are in effect required to meet standards set by the SEC. Interesting questions from the audience during this session included:
- Do big companies go beyond monitoring their suppliers, to monitoring their suppliers’ suppliers?
- If a small company supplies goods and services to more than one large, publicly-traded company, are there ways for those big companies to avoid duplicating efforts (in terms of the time and effort expended to verify that the small company’s affairs are in order)?
The second session I attended was called “In Search of the Good Corporate Citizen,” a session about the documentary that bears that name (see the website here.) The show was originally aired on Connecticut Public Broadcasting, and was sponsored by Altria. The producers (Denny and Win Swenson) were at the session this afternoon, along with Frank Geovannello, Manager, Compliance and Integrity, for Altria. They showed a few segments of the video — real-life stories of corporate malfeasance, mostly, along with some panel-discussion segments. (It looks like a great teaching tool, both for university teaching and for corporate training.) The discussion today, sparked by the video, focused on issues such as the significance of excuse-giving and herd mentality in facilitating wrong-doing. Keep an eye on this blog for a review of the entire video in the coming weeks.
Business Ethics & Compliance
I’m currently at this U.S. Conference Board conference in New York: Business Ethics and Compliance Conference: Priorities in Today’s Regulatory and Enforcement Environment.
I’m here as a guest of the Conference Board. I was invited so that I could blog about the event. This will be the first of 3 blog entries (1 per half-day).
Reflections on what I saw this morning:
I’m a bit of a fish out of water at this event. I’m the only academic here, as far as I can tell; the attendees are overwhelmingly corporate, and overwhelmingly lawyers. This latter fact, of course, mirrors the complaint that many people (including many philosophers who do business ethics) have about the particular way in which the corporate world has tried to put ethics into practice, namely by creating Departments of Ethics & Compliance, and by creating positions like “Director of Ethics & Compliance” or “VP, Ethics & Compliance.” Now, compliance is about following laws & regulations. The scope of ethics is broader than that. So the worry is that when you pair “ethics” with “compliance” and put lawyers in charge, you’re going to end up focusing on the “compliance” part and forgetting about “ethics”, broadly understood.
But what I’ve seen here so far, today, is heartening. The lawyers I’ve heard speaking thus far today (including speakers and audience members) are very clearly interested in much more than narrow legal compliance. It’s clear that legal compliance is fundamental, here, but it’s also clear — clear to people at this conference — that other stuff matters too. It matters both for its own sake, and because of the role that ethics plays assessing legal culpability. Both the US federal sentencing guidelines, for example, and the US Air Force’s standards for contractors, essentially imply that corporate character matters.
So, this is a field dominated by lawyers. But it’s good to see that they care about more that just the law, narrowly construed. Of course, there’s a self-selection effect at play here: lawyers who go into this field are likely to be precisely the lawyers who don’t think narrowly about the law. There’s also the possibility, I suppose, that what I’m hearing is rhetoric rather than true belief. But given the audience, here, I’m effectively seeing how Ethics-and-Compliance-oriented corporate lawyers talk to each other. And if they talk as if they truly care about ethics, I doubt it’s because there’s a blogger in the room.
(FYI, so far I’ve heard Win Swenson (godfather of the US corporate sentencing guidelines) and Donna Boehme speak about “Priorities in Today’s Regulatory and Enforcement Environment” and Steven Shaw (Deputy Counsel, US Air Force) and Timothy Schultz talk about ethics in government contracting. Swenson and Shaw were particularly great.)
(p.s. I’m also Tweeting about the conference. If you’re on Twitter, you can follow at #tcbethics )
Profits & Disaster Relief
I’m currently spending a few days this week at the wonderful Kenan Institute for Ethics, at Duke.
Last night I was part of a Kenan panel discussion with Jacob Remes (a Kenan Graduate Colloquium Fellow and a Ph.D. candidate in the department of history here at Duke). Jacob sketched some of the history of disaster relief, and argued that the kinds of aid most likely to prove effective have typically been ones rooted in solidarity, rather than in charity. He said that the informal help of family and neighbours has most often proven more useful than official aid. (Here’s an editorial Jacob wrote on the topic: Aid that will work in Haiti.)
I’m no expert on disaster relief, but regular readers will know that I’ve touched upon it once or twice on this blog. In particular, I blogged about the role of both cruise lines and credit card companies in the wake of the earthquake in Haiti.
To try to link my own thinking on disaster relief to Jacob’s historical account, I looked at what features of solidarity (or, roughly, friendship) make it so important in disaster relief. My quick causal hypothesis is that the crucial features of friendship, here, are knowledge and motivation. And if those really are the two key factors, then it’s worth looking at what other mechanisms have those features. Human solidarity is a beautiful thing, but it’s not always there. So it’s worth considering other mechanisms.
So, I argued that, at least to a certain extent, market-based solutions have those same two features. First, consider motivation. Aid based in friendship is likely to be enduring aid because our friends (even loosely speaking) are motivated to help us. But famously, another pretty reliable motivator is profit. I hope that companies see opportunities for profit in Haiti, for example. Most of us who help will help by making a quick, one-time donation. Companies who see business opportunities in Haiti are more likely to make longer-term investments.
Next, consider knowledge. One of the most important features of markets is that market prices convey information about needs. So, knowing that the price for x has risen in a particular region tells entrepreneurs that there’s a need for more x. And that equals an opportunity to profit by meeting that need. The other way in which business can do well in terms of knowledge is this: those of us who are distant from the scene can contribute by helping local businesses — businesses that are likely acutely aware of local needs. Microcredit organizations like Kiva and Zafèn are in effect ways to combine local knowledge with foreign capital to help build local economies.
Now, I hasten to add that I’m not suggesting that all (or even the most important) answers to the big questions of disaster relief are going to come from the world of business. But when it comes to disaster relief, we need ‘all hands on deck.’ So it’s worth thinking carefully about just what the profit motive can, and can’t, do in terms of disaster relief. The profit motive may not be the noblest of human motives, but it is surely one of the more reliable ones.
Consumer Protection & Homeopathy
Here’s a guest posting I’ve just done, for the Science-Based Pharmacy Blog: Homeopathy and Consumer Protection.
Here’s a snippet:
I’m going to pose two questions for homeopaths to answer, questions that I would likewise pose to any other kind of reputable business, especially any other reputable business in the field of health.
1. How do we detect phoney homeopathic preparations? In order to protect consumers, we need to be able to detect fake remedies — fake versions (sold by counterfeiters) that are really just inert look-alike copies of genuine remedies. In an age of international trade and Internet-based pharmacies, phoney pills are a big problem. …
2. What advice would you give a potential patient/customer who is trying to choose among various alternative therapies? How should a potential customer/patient choose between homeopathy, Therapeutic Touch, acupuncture, Angel Therapy, and so on? In other words, how can consumers know that they’re about to buy something good, rather than something bogus? “Trust me” won’t do…
Basically, the blog entry is an attempt to have a constructive conversation about consumer protection in a realm typified by name-calling and mutual mockery. The online “debate” over homeopathy typically involves science-minded folks smacking their foreheads at the scientifically-implausible claims made by homeopaths, and homeopaths smacking their foreheads at how skeptics “just don’t want to see” the truth. But the topic is too important to leave at that level. The two sides are never going to agree about how (in)effective homeopathy is. But they must agree on the importance of protecting consumers. The question, then, is how best to do that.
Ethics of Unpaid Internships
When is a voluntary transaction between consenting adults not permitted? Well, there are a few cases, but one interesting one is where one of the consenting adults is an unpaid intern at a for-profit company.
Now, the usual presumption is that people only consent to something if they see it as being in their interests, broadly construed, to do so. So why does the law frown on these voluntary unpaid internships?
For a bit of context, see this story (from last week) by Steven Greenhouse, from the New York Times:
Growth of Unpaid Internships May Be Illegal, Officials Say
With job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor.
Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers….
So the central ethical issue is this: how can the law prevent me from accepting an unpaid internship if I see it as being in my interest to do so?
Well, there are two potential reasons. One is that the law is effectively preventing companies from taking advantage of people with few other options. If you really need to get your foot in the door of your chosen industry, you might be willing to undergo significant hardship — including unpaid labour — in order to do that. And a company preying on that desperation might be seen as exploitative. But then, “exploitation” is a lot easier to say than it is to explain. Someone who is being paid in opportunities and connections, rather than in cash, is still being paid.
The other potential reason is that we have minimum wage laws — which generally preclude a wage of “zero” — not to protect the person whose wage is at issue, but in order to protect others from having the price of labour driven downward. That is, the law forbidding me from working for $2/hr (in Canada or the U.S., for example) isn’t merely to protect me. That law is really there to protect you — it’s to make sure that I don’t accept (for whatever reasons) such a brutally low wage, and thereby bring about the expectation that you, too, should work for that little.
Still, it’s interesting to note that non-profit organizations are (mostly) exempt from such laws. You’re allowed to donate your time to them. But what’s the difference, really? As Henry Hansmann points out in The Ownership of Enterprise, the essential difference between for-profit firms and charities lies in the separation of buyer and beneficiary that typifies charitable organizations. When a customer gives money to a store, he or she receives some benefit in return; but when he or she gives money to a charity, it is so that someone else can receive some benefit. It’s not clear how that difference justifies a categorical difference in labour standards.
The Business Ethics Blog 