The Business Ethics Blog

The controversy over corporate jets hasn’t died. (Back in November I blogged about corporate jets and moral outrage; then in early December I blogged about silly behaviour that outrage prompted on the part of certain auto execs.) Corporate jets are back in the news this week. See this story, from CNN Money, today: Bank CEOs Taking Commercial Flights, Amtrak To DC Testimony.

Here’s a good story summarizing the case to be made in defence of corporations making use of private jets, by Colin Campbell, in MacLean’s: In defence of the corporate jet. Here’s a good paragraph, quoting a certain business ethics blogger:

For a lot of companies, the benefits of the corporate aircraft far outweigh the costs. Wal-Mart, for instance, uses private jets, and is “probably the most penny-pinching, efficient company on the planet,” says Chris MacDonald an ethics expert and visiting professor at the Keck Graduate Institute in Claremont, Cal. Even companies that have taken public money aren’t necessarily engaging in unethical or inappropriate behavior by flying corporate jets, argues MacDonald. “If the decision to have an executive jet was the right decision last year when the company was beholden only to its shareholders, what would make it the case that it’s suddenly an unwise decision?” asks MacDonald. “At a well-governed corporation, those sorts of moves would be carefully thought out and cost-benefit analyses would be done.”

Boards of Directors ought to be ensuring that jets are really necessary; otherwise, shareholders are being poorly served. But it’s just silly to think that corporate jets are always a bad idea, or that they always represent some sort of corporate excess. Even when public money is being handed out, it’s not clear that the rules should change.

I’m not sure what’s more disconcerting, here: the discrimination aspect, or the superstition aspect. Discrimination, in the pejorative sense, always (by definition) involves treating people differently on some irrelevant ground. But when the grounds for discrimination are superstitious ones… oh, boy.

From the UK Daily Mail: We only employ workers born under specific star signs, says insurance company

A row has broken out in Austria after a company tried to recruit workers born under certain star signs.

The Salzburg insurance company posted an advert in major newspapers seeking employees for sales and management that were born under certain constellations, claiming statistics indicated that they were the best workers.

‘We are looking for people over 20 for part-time jobs in sales and management with the following star signs: Capricorn, Taurus, Aquarius, Aries and Leo,’ read the ad that appeared over the weekend.

It was followed by a wave of protests from equality groups and led to an investigation by the country’s anti-discrimination authorities.

OK, sure. The company says they’ve got good reason, based on a study of their own workforce:

A statistical study indicated that almost all of our best employees across Austria have one of the five star signs. [i.e., one of the five sought in their ad]

But seriously, how many employees can their company have? That likely makes for a very weak statistical result. Now, in fairness to the managers of this company, it should be noted that management is at least as much art as science. Managers very often have to make judgment calls based on less than robust statistical evidence. There’s an old saying that “you can’t manage what you can’t measure,” but that saying is entirely false. Management consists to a very large degree in managing things that can’t (easily) be measured. But weak statistics probably just give management decisions like this a misleading patina of scientific respectability.

Besides, we should be especially skeptical — they should be especially skeptical of their own data — given that there is good prior reason to think there’s no correlation: namely the fact that there is precisely zero evidence that astrological sign is correlated with any meaningful personality trait out in the rest of the world. They should be looking carefully for a more plausible, non-superstitious explanation of the pattern they think they see in their workforce. And unless they’ve done that, discriminating based on the signs of the zodiac should be relegated not just to the dust-bin of science (where it’s been for decades) but to the dust-bin of business ethics.

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Thanks to KM for the story.

Across the ideological spectrum(s), there is universal agreement that business ought to “play by the rules of the game.” The most ardent fans of free markets say, essentially, that that is the only ethical obligation businesses have, beyond the pursuit of profit. It is up to government (and perhaps society more broadly) to make the rules. It is up to business to play by them. Fair enough. But what ethical standards apply to the practice on the part of business of trying to influence the very rules to which they are expected to adhere?

See this story from a few days ago, in the NY Times: Geithner Sets Limits on Lobbying for Bailout Money

The new Treasury secretary, Timothy F. Geithner, announced on Tuesday that he would crack down on lobbying to influence the $700 billion financial bailout program by companies that are receiving billions in taxpayer money.

Mr. Geithner, who was confirmed on Monday, also said he would set new limits intended to prevent political interference with decisions about which companies received bailout money.

Among other steps, the Treasury department said it would make public a log of all contacts by public officials and bank officials regarding specific financial institutions.

(Here’s another take on it, from the Washington Post: Treasury Moves to Restrict Lobbyists From Influencing Bailout Program.)

For Mr. Geithner and the Obama administration, this is matter of ethics in government, and of public accountability. And it’s not an easy one. Certainly no one thinks that decisions about how to spend the bailout money ought to be influenced significantly by the fact that some senator had his or her ear bent for half an hour by a suave lobbyist acting on behalf of a well-heeled client. On the other hand, the right to petition one’s government and thereby to have a say in public policy is a fundamental democratic freedom.

But what does it look like from the point of business ethics? What ethical limits — if any — ought there to be on lobbying by businesses? If it’s true that corporate managers ought to pursue profits within the limits of the law, ought they also attempt to influence the law in ways that stand to enhance profits? Surely if they do that, it leaves the whole “we played by the rules” defence robbed of much of its normative force: it’s pretty easy to agree to play by the rules when you get to influence what those rules are.

I’ll offer just 2 factors relevant to the current issue:

1) This looks to me like a classic example of the kind of ‘social’ dilemma that economists & philosophers refer to as ‘the Prisoner’s Dilemma.’ It’s a situation where all (businesses) would be better off if they could all just keep their noses out of the process, but each business would do better (better for its shareholders) if it interferes. P.D.’s are notoriously hard for participants to resolve; it might be unreasonable to expect businesses to forego profit-seeking in this instance.

2) Lobbying for bailout money is in some ways different for other kinds of lobbying (say, lobbying for a change in health & safety regulations). In most regulatory matters, government suffers from a pretty serious information deficit: industry often knows much more about what sorts of regulatory standards are feasible, and which will achieve desired public policy goals. So, there’s a public-interest argument for allowing (even encouraging) industry to share information & points of view with government. The spending of bailout money, it seems to me, isn’t like that. I’m not an expert on finance, but I suspect that the U.S. government (via its various regulatory and taxation agencies) has all the information it needs, in this case. So there’s not much weight to the public-interest argument here.

The publicly-subsidized transit company in Halifax, Nova Scotia (the town where I live & work) is in the news today for its decision to reject what it considers “controversial” ads.

Here’s the story, from the Chronicle Herald: Metro Transit rejects Godless ad

Metro Transit will not allow an advertisement saying You Can Be Good Without God on its buses.

“We’re a public transit service first, and then we sell advertising on the side, and normally the standard procedure is we have a contracted agency who sells our advertising,” said Metro Transit spokeswoman Lori Patterson on Monday.

“If there’s something that’s viewed to be controversial, as part of our contract we get to see the messaging on it, and so they advise us if they think something’s going to be controversial and then we review the message.

“If we feel it’s going to be something that’s going to upset a number of people, we don’t choose to advertise it,” Ms. Patterson said.

Humanist Canada, the organization behind the advertisement, says on its website that it hopes to place the message in bus terminals and subway stations across Canada over the next few weeks.

“We want people to know that belief in a god is not necessary to live a full, moral and happy life. Humanists embody this concept every day,” Humanist Canada president Pat O’Brien wrote on the website on Friday.

Metro Transit doesn’t have a leg to stand on, here. They’re not wrong when they say that a number of people could be upset by the ad. But that’s a lousy criterion. In a society that values free speech, messages can’t be suppressed just because they might upset someone. (And for what it’s worth — though I think this is technically irrelevant — the message in question, here, is pretty inoffensive. Indeed, it’s a happy, hopeful message. And one that rings true. Readers of this blog will know that the arguments presented here never mention God. Ethical behaviour, and most ethical argumentation, does not have to be rooted in religious belief. Religious belief is a source of ethical inspiration for some, but religion is neither necessary nor sufficient for ethics.)

Private companies have more ethical leeway in terms of deciding what messages to broadcast. As I said three days ago, “When your local paper decides not to publish your letter to the editor, they’re not censoring you, they’re just not letting you use their privately-owned resources to make your point.” But Metro Transit is a public service, subsidized by tax-payers. It’s subject to a different standard.

Toronto has faced this issue, too. The Toronto Transit Commission did the right thing. Here’s the story, from City News:
‘No God’ Ads, Soon To Appear On TTC Vehicles, Spark Heated Debate

“There’s probably no God. Now stop worrying and enjoy your life.”

It’s certainly not everyone’s opinion, and it may or may not be yours – but if you’re a transit user in this city you’ll soon be seeing that message frequently.

It’s part of a controversial ad campaign by the Toronto-based Freethought Association of Canada that has been approved by the TTC to appear on buses and inside subway cars.

Let’s hope Metro Transit comes to its senses, and decides to be a little more open-minded and supportive of free speech.

Back in 2005 I wrote about “Bumvertising,” the unfortunate name given by Ben Rogovy to his company’s practice of hiring homeless people to hold placards with ads on them. The practice was roundly criticized — people thought it tasteless at best, and perhaps seriously exploitative. (I offered a limited defence: the name “Bumvertising is demeaning, but Rogovy was actually providing employment to people who desperately need it — which is more than most of us do for them.)

Now a Toronto radio station is playing on the same turf: an ad campaign for talk-radio CFRB has panhandlers holding signs that say “Should panhandling be illegal?” and prostitutes holding signs that ask “Should prostitution be legal?”

Here’s the story, from the National Post: Ad agency hires prostitutes for talk-radio stunt

As the snow fell Saturday night at the corner of Jarvis and Carlton streets, vehicles slowed to watch two sex workers on the corner. Some drivers honked. Others rolled down their windows to talk about the law.

The women held signs with a question: “Should prostitution be legal?”

The stunt is part of a controversial ad campaign created by the zig ad agency for CFRB 1010; it is its latest ploy to get people talking about issues in Toronto.

Again, as with Rogovy’s Bumvertising, I don’t see much of a problem here. Indeed, I can see even more plusses, here: the prostitutes in question were paid the “normal fee that they would get for a job,” for carrying a sign for an hour — in other words, they were paid the usual, to do a safer-than-usual job.

Now, the prostitutes involved clearly thought this was a good deal; advocates claiming to represent those same prostitutes disagreed, calling it exploitative. But as is so often the case, the charge of exploitation received no useful explanation: if “hiring” counts as “using,” then all employed people are being used. Is it “use” in the negative sense, just because they were being used to draw attention to an issue — and to provoke public debate? That doesn’t make sense: they were carrying signs asking a question that they have a legitimate stake in.

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Thanks to Paul for the story.

Facebook Rejects Image from Gay Magazine

Here’s the story, from Toronto-based Xtra magazine: Xtra cover too sexy for Facebook

Facebook hit 150 million registered users on Jan 7, and the site’s founder boasts that if the social network were a country, it would surpass Japan, Russia and Nigeria in population.

But if Facebook Nation really existed, it would be a prudish state of the worst kind.

Censors at the popular site have removed the cover image of the Sep 11, 2008 issue of Xtra, with only a vague explanation: Facebook was trying to “protect” children from viewing the image.

(The image in question (shown incompletely above) shows several people — men and women — all nude and clearly in the midst of a menage-à-five-or-six or something. The only “private” parts showing are one woman’s breasts.)

In the article cited above, Xtra fights back. Says the author, “Clearly, the breasts in question are neither violent nor malicious. One could assume that Facebook decided that the image is obscene or offensive — but under what criteria? Facebook won’t say.” What the author leaves out is that, if you look closely at the picture (down near the, um, bottom of the cover) you see much much more than a couple of bare breasts. You see evidence that an actual sex-act is going on. I’m not sure Facebook’s decision in this case is prudishness “of the worst kind.” (To be fair: gay publications have historically been disproportionately subject to censorship, so it’s forgivable if they’re a little sensitive to the subject.)

But ok, that’s beside the point. The point is that Facebook is censoring content posted by its members. And on one hand, why shouldn’t they? It’s a privately-owned company, and people enjoy its services for free (since Facebook is supported by advertising, rather than by subscriptions). Indeed, it’s not clear that the term “censorship” applies, here. That term is usually limited to the suppression of ideas (including images) by government. When your local paper decides not to publish your letter to the editor, they’re not censoring you, they’re just not letting you use their privately-owned resources to make your point. Seen from that point of view, Facebook is totally justified in autocratically enforcing its own rules, and even, arguably, refusing to clarify what those rules are.

But it’s worth considering whether the scale & pervasiveness of a company makes a difference. With regard to most companies, it’s easy enough to say, look, if you’re not satisfied with the service (if you find the company unacceptably prudish, for example), take your business elsewhere. No one is forcing you to use their service. If you don’t like it, take your business elsewhere. But that line of argumentation weakens, perhaps, with regard to companies like Facebook. For a certain demographic, Facebook is basically the social networking site. If you’re not on it, you might as well not exist. My point is that it’s worth considering whether there’s a point at which the market share of a company, and its degree of integration into clients’ lives and communities, becomes such that it needs to function, ethically, more like a democratic government than like an autocratic business.

At what point does business ethics become political philosophy?

(Note: I also posted this item on the other blog I co-write, the The Research Ethics Blog, under the title, “Pfizer: Sued in U.S. Courts over Nigerian Experiments.”)

From MSNBC: Pfizer faces NY lawsuits over human medical tests

Nigerian families can sue Pfizer in U.S. courts with claims that the giant drug maker violated international law banning involuntary medical experimentation on humans when it tested an antibiotic to treat meningitis, an appeals court ruled Friday.

The 2nd U.S. Circuit Court of Appeals overturned rulings by a lower court judge who had tossed out the lawsuits in litigation that began in 2001.

The lawsuits sought unspecified damages on behalf of children and infants who were part of a 1996 study of the oral antibiotic Trovan. The testing occurred during a meningitis epidemic that killed more than 15,000 Africans.

(Here’s an entry from the Business Ethics Blog back in 2006 that gives some of the back story: Pfizer’s Unapproved Drug Tested on Nigerian Children)

The main reason this court decision is news is that the court is reaffirming that foreigners can sue U.S. companies when those companies seem to have violated international law. If that seems obvious, it’s not: though I think there are good arguments, it’s important to see that you do need good arguments for why a U.S. court should have jurisdiction over something that happened in another country, with its own government and its own courts.

From a research ethics point of view, it’s worth nothing (and criticizing) the fact that — at least as reported by MSNBC — part of Pfizer’s defence seems to be that the ends justified the means. Whether the fact that the trial in question went on under exigent circumstances, during an epidemic, matters to the validity of that defence is an interesting question.

Here’s an interesting interview with the Chief Executive of diamond giant DeBeers, from the Wall Street Journal: De Beers Polishes Its Image

When Gareth Penny became De Beers Group’s chief executive in 2006, the world’s biggest diamond producer was mired in some of the worst crises in its 120-year history.

Rapper Kanye West’s “Diamonds From Sierra Leone” in 2005 and the movie “Blood Diamond” in 2006 were triggering a wave of negative publicity about buying “conflict diamonds,” which were sold in the 1990s by African rebels to help pay for their wars. De Beers had already worked with the United Nations, governments, and human-rights groups to introduce the Kimberley Process, a voluntary certification program for rough diamonds that allows the origin of the gems to be traced, but the company was vulnerable to a consumer backlash nonetheless.

The most interesting part of the story is about the Kimberly Process. The WSJ interview, read alongside (say) the Wikipedia page for the Kimberley Process Certification Scheme (seriously worth reading!), makes for a pretty good case-study of how industry, NGOs, and international “soft law” can together go a considerable distance towards rescuing a once-dubious product.