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Thinking Critically about Social Responsibility

I recently participated in a conference on Corporate Social Responsibility (CSR), where I gave a short presentation on the role of critical thinking in leading a company toward better social performance. Basically, I argued that in order to motivate employees to embrace some version of CSR — whatever you take that to mean — you need need to think critically about the way your CSR activities dovetail with the goals of your organization, and with the values and commitments that are already motivating your employees.

Interestingly, I received some push-back, in the form of a question from the audience, from someone who suggested that what CSR efforts really need is passion and a sense of purpose. What’s really needed, this person said, is not critical thinking at all. Indeed, for purposes of pushing the CSR agenda forward, critical thinking is actually a bad idea.

As someone who teaches critical thinking for a living, I was naturally somewhat taken aback.

This person had a point, of course: getting something done — whether it’s opening a new division or launching a new product or strengthening your CSR profile — takes passion. It takes commitment. And sometimes critical thinking, which involves asking questions, could seem like a stumbling block. Now isn’t always the right moment for asking annoying questions and expressing doubt.

But I thought I would take the time to lay out, here, the role that critical thinking can play — indeed, must play — in launching CSR activities and bringing them to fruition.

To begin, what is critical thinking anyway? Most of us have a sense of what it is, and most people are generally in favour of it, in most contexts, but what is it? The textbook definition is that critical thinking is the systematic evaluation or formulation of beliefs or statements by rational standards. In other words, it’s about figuring out what to believe, and doing so by determining what beliefs are backed by good reasons. It means asking questions like, “Is that really true?” “How do I know that?” “How certain am I?” and “What assumptions am I making?”

So, how in particular does this apply to CSR?

First of all, a company needs to think critically in order to decide what its CSR objectives are. It doesn’t make sense for a company to dive into CSR by tackling any and every project that anyone has ever associated with that concept.

So, think critically. Will you focus on minimizing (or off-setting) the environmental impact of your operations? Will you incentivize employees to volunteer for charities? Will you build a hospital in a remote village? Will philanthropy be part of your CSR portfolio? Passion is important, but so is directing your passion. Setting objectives requires asking hard questions. It requires, in short, critical thinking. (For a more detailed take on how to think critically about your company’s CSR agenda, see Michael Porter and Mark Kramer’s article, “Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility”).

Second, a successful CSR program requires that a company think critically about methods. The need for businesses to think critically about methods is quite literally why universities have business schools. Managing is not easy. Regardless of the issue at hand, managing requires developing a strategy that makes good use of the materials at hand in order to reach your objectives.

So once you’ve decided that, for example, that you want one chunk of your CSR program to focus on literacy, then what? Do you leverage your highly-educated workforce by sending your employees out to volunteer at an adult literacy clinic? (And how do you motivate them? Simply offer them the chance to do it on company time? Offer bonuses? What else?) Do you partner with other like-minded companies to raise awareness? Do you build pro-literacy messages into your own product-oriented advertising? Or do you merely donate money to the first literacy-oriented charity you find? Is there evidence that that will have an impact? The most impact?

Finally — and this was the part I focused on in my presentation — think about engagement. It should go without saying that a successful CSR program requires the engagement of your employees. After all, a profit-oriented company that suddenly decides that it takes its social responsibilities seriously may well find itself facing a skeptical, or otherwise hesitant, workforce. If you say “we put community first,” but employees secretly believe that the unwritten rule is “profit above all,” they’re going to find all sorts of ways, passive or active, to undermine your CSR activities.

So you need to think critically about what your own argument in favour of CSR is. If you can’t express why you believe in CSR (again, whatever you take that to mean) then you’re not going to be able to convince others that they should believe in it. In other words, can you actually explain, in a credible way, what’s motivating the company (or you, the boss) to take CSR seriously? Is it that you think some version of CSR dovetails so well with the company’s mission? Or is it because you see a win-win outcome that links the good of the community to the company’s own strategic needs (e.g., the need to foster a healthy workforce)? Explain the rationale, in order to convince employees that the move is an authentic one.

A further element of critical-thinking-for-engagement is to help employees see that active support for your CSR program makes sense given what they already value and believe in, and that it’s OK for them to bring those values — their generosity, their sense of community, their passion for the environment — to work with them. In other words, give your employees a pro-CSR argument that is grounded in their own values and beliefs. Doing so requires thinking critically about the various arguments in favour of social responsibility, understanding their structure, and deciding which ones both work logically and are rooted in starting points your employees can accept.

That, in short, is the role that critical thinking must play in any company’s attempt to take corporate social responsibility seriously. This obviously isn’t anything remotely like a full and complete recipe for carrying out a CSR agenda. There are lots of people who can give you better advice about that than I can. But it’s worth giving due credit to the role that critical thinking needs to play. Because while a successful CSR program does need passion, passion that is not guided by critical thinking might well prove fruitless, or worse.

Socrates taught us that the unexamined life is not worth living. One tiny implication of that is that the unexamined CSR initiative is not worth initiating.

Fired for being a jerk in public: does the punishment fit the crime?

I wrote recently about why Hydro One was wrong to fire an employee over the crudely sexist way he and his friends treated a female journalist at a soccer game.

Lots of people disagreed with me, apparently sensing a kind of cosmic justice in a man losing his job over acting like a jackass in public. As I indicated in my previous entry on this case, I have no interest in defending this particular guy’s behaviour, which was sexist and boorish. But I’m disturbed by the glee with which so many people celebrated the fact that he lost his job — his source of income, his means of supporting his family — as a result of his drunken bad behaviour.

And while I think this case is unique in many ways, it is similar enough to other kinds of cases involving bad behaviour off-the-job that it warrants further discussion. Just why were so many people so sure that justice was served when Hydro One fired this guy?

We can think about this in terms of both the substance of the outcome, and the process or mechanism by which it came about.

First, let’s talk substance. Consider, if you will: of all the punishments (or more neutrally, all the bad outcomes) that could befall a sexist buffoon, which one do you think is most fitting? Here’s a short illustrative list:

  • Public ridicule?
  • Forced public apology?
  • Loss of employment?
  • Sensitivity training?
  • Divorce?
  • Expulsion from social clubs?
  • Banishment (along with his family) from the community?
  • Community service (perhaps at a women’s shelter)?
  • Incarceration?
  • A fine?

Which of these outcomes (or which combination of them) do you think fits the crime, here? And why is it that so many people think that loss of employment is the right answer to this very complex multiple-choice question? Yes, arguments in favour of the appropriateness of firing have been offered (e.g., an employer should worry that a man who is a sexist jerk in public will also be a sexist jerk at work). But I’ve yet to see a really robust version of that argument, let alone an explanation of why firing makes more sense, ethically, that punishment alone is the right one, ethically, than all those other outcomes, or — for those who believe this is true — why he deserves everything on the menu.

(Nerdy footnote: if you want to get technical, which of the various extant theories of punishment are you relying on if you think that firing was the right outcome? Deterrence? If so, what evidence do you have that people like that are deterred by punishments of that kind? Retribution? If so, what makes loss of employing the right way to “get back at” this guy? And so on.)

So was firing him the right result, or just the one that was most readily available?

Next, let’s talk process. Let’s talk about the mechanism by which justice was meted out to the employee in question. And let us assume now, just for the sake of argument, that losing his job does seem like an appropriate and proportionate punishment for acting like a jerk (or, perhaps, for being one). The very substantial question that remains is who has the right to decide to enact that penalty? Who do we think, generally, should have the moral right to carry out such punishments?

Not to be too dramatic, compare this to the death penalty. There are a lot of people who are opposed to the death penalty not because they think no one ever deserves to die for their crimes, but because they think the government shouldn’t have the power to hand out such a punishment, even when that punishment is justified. It is not inconsistent — in fact, it is wholly reasonable — to say that some people (people guilty of multiple child murders for example) absolutely ‘deserve to die,’ but at the same time to say that the state shouldn’t be trusted with the discretion to hand out that sentence.

Now, back to the incident at hand. It is entirely reasonable to believe a) that someone who is a sexist buffoon in public deserves to lose his job, and b) that employers should not be encouraged to take it upon themselves to impose such a penalty in such circumstances. We risk handing to corporations a very potent weapon if we arm them with the moral license to pass judgment on our off-the-job behaviour. And nor is the burden of such a license a burden that corporations should be too eager to bear.

Hydro One Was Wrong to Fire Hooligan Employee

A substantial minority of men are capable of boorish, sexist behaviour in public. A world in which all such men were unemployed would not be a better world.

By now many of you will have seen the video that led Hydro One to fire one of its employees. The government-owned electricity distribution company fired engineer Shawn Simoes after he and friends shouted vulgarities at a female news reporter during a live broadcast at a soccer match in Toronto.

This much is clear: what Simoes did was boorish, and offensive. The reporter who was the target of their abuse should not have to put up with that sort of thing — nor should any other woman. What’s less clear is whether his employer is ethically justified in firing him for it. And as much as I hate to say it, I think the answer is no. I’m not going to defend the man’s actions, which are indefensible. Drunkenness is a factor, but not a defence. But just as there is a difference between what is unethical and what is illegal, there is a difference between what is boorish and offensive and what you should be fired for.

Recall the case of Ray Rice, the NFL player who was caught on video knocking his fiancee unconscious. Nothing about this behaviour implied any lack of ability to do his job, indeed to do it very well. But Rice’s behaviour was good grounds for dismissal because, as a football player, he’s a brand ambassador and is supposed to be able to serve as a hero for kids. And his behaviour made him terrible at both. Or compare the case of Jian Ghomeshi, fired by the Canadian Broadcast Corporation after he was accused, by a number of women, of various forms of abuse and assault. This, too, was good grounds for dismissal. After all, in addition to being a brand ambassador, Ghomeshi needed to be able to work closely with female co-workers, something no one would reasonably trust him to do in the wake of such serious and credible allegations.

Simoes’ case is quite different. He wasn’t wearing a Hydro One t-shirt or anything. (The fact that he was a Hydro One employee apparently took considerable online sleuthing.) And it’s not at all clear that his boorish behaviour implies a threat to his female co-workers. Is there a pattern here? Perhaps his supervisor has insight into that.

Hydro One says Simoes violated the company’s code of conduct. But the relevant section of the company’s Code merely says “We treat employees and persons with whom we do business with dignity and respect. Hydro One does not tolerate harassment or discrimination.” It’s a stretch to think that that applies to all employees, all of the time, including when they’re off the job.

There are two key reasons to worry about the firing. One is that the punishment doesn’t fit the crime. The behaviour was very bad, yes, but not physically dangerous and it doesn’t imply an inability, on Simoes’ part, to do his job. Also, there’s reason to worry about the consequences. We don’t know whether Simoes has dependents, but what if he did? It’s bad enough, as a kid, to have a dad seen behaving like that. It’s even worse when Dad loses his job and can’t afford to support you anymore.

The other reason to worry about the firing is that the move implies that employers own you, and your behaviour, 24 hours a day. It implies that there’s no private sphere. After all, there are all kinds of things that you could do, off the job, that might displease your employer. Should they all be firing offences? What if you were filmed taking part in an illegal environmental protest? What if you were spotted smoking marijuana in the park? That’s illegal in many jurisdictions. What if you were spotted taking part in your local Gay Pride parade? That’s legal in most places, but what if your employer is super conservative? It’s simply not healthy for employers to be allowed to make those kinds of calls about off-the-job behaviour.

So I think Hydro One made the wrong call in firing Simoes. We should not tolerate sexual harassment, in public or at work. But unwillingness to tolerate it means we should be ready and willing to speak up against it, even to do so quite aggressively. It doesn’t mean that our employers should get to hand out punishments for behaviour that happens off the clock.

The Downside, and the Upside, of the Underground Economy

Statistics Canada has just released this report on The underground economy in Canada, 2012 — essentially an attempt to gauge the extent of “market-based economic activities, whether legal or illegal, that escape measurement because of their hidden, illegal or informal nature”.

The report’s key finding:

In 2012, total underground activity was $42.4 billion in Canada or about 2.3% of gross domestic product.

The residential construction industry is the key culprit, accounting for 28.3% of the total. In other words, lots of people are having home renovations done, paying cash, and the contractors aren’t charging — or forking over to government — the required taxes.

The government’s concern, of course, is not merely with measuring the extent of the underground economy. Market activities that “escape measurement” because of their “hidden, illegal or informal nature” are not just unmeasured, but untaxed. So the missing $42.4 billion means a lot of forgone tax revenue.

Ethically this is not good. Contractors (for example) who don’t charge the required taxes are not competing fairly. And consumers who are complicit in such tax avoidance aren’t paying their fair share of the national tax burden; they are, to use the standard mass transit metaphor, “free riders,” letting the rest of us pay to support the tax-funded services that we all enjoy.

Part of the problem, naturally, is that those who engage in ‘underground’ transactions may tell themselves that it’s a victimless crime. But that’s simply false. If you don’t pay your share, you’re not stealing from the government — you’re stealing from the rest of us.

Naturally, some will blame the tax system. Taxes are too high, they’ll say. Or the tax system is too complicated. Fair enough: if that’s your view, work to change the system. Go vote. Write your MP. I realize none of that is guaranteed to get results. But if you break the law in order to protest it, you should at least do it openly. Anything else requires an awful lot of self-serving rationalization. The fact that you feel like you’re already paying too much doesn’t mean that you actually are.

Of course, we needn’t be entirely sanctimonious about this either. Consumers, for their part, can’t plausibly be expected to enquire, for every cash transaction, whether the business involved is paying its taxes. And there’s room for sympathy — always — for those on the bottom rungs of the economic ladder. If you’re living below the poverty line and cutting lawns or babysitting to make ends meet, I have some sympathy for playing fast and loose with the tax rules. But then, that same justification doesn’t apply to the upper-middle-class household paying under the table to have a deck built on the back of their suburban house.

Finally, it’s worth noting the upside, the good news implied by the fact that a bunch of people aren’t actually paying their share. The upside is this: if a bunch of people are getting away with not paying their share, it means we don’t live in an utterly repressive totalitarian state. Consider what it would take to reduce the underground economy to zero: that kind of government intrusion into our lives would be unbearable.

So, the fact that some people get away with it is a good thing. But the impulse to do it — the impulse to avoid paying your share — is not.

Why Gravity Payments’ $70,000 minimum salary, sadly, won’t catch on

What are we to think when a CEO slashes his own salary by 93%, and then uses the money — along with a big chunk of corporate profits — to ensure that every one of his employees makes a minimum of $70,000 per year?

That’s what Dan Price, founder and co-owner of Gravity Payments is doing. The CEO of the Washington-based firm made jaws drop when he announced that, over the next couple of years, all of his employees would be brought up to the $70k mark — a change that would mean doubling the income of his lowest-paid employees.

This has been the feel-good news story of the week. I, too, think it’s a terrific thing, and I congratulate Mr. Price on the move.

But still, there are a few points worth raising.

1) It seems to me that different people are applauding the move for different reasons. Is Price’s decision a move towards social justice? Or, on the other hand, is it an admirable act of charity — a rich guy giving a bunch of his own money to a few dozen colleagues? Note also that market conservatives can applaud the fact that this is a purely private move, involving no statutory fiddling with minimum wage.

2) It matters a great deal that Gravity is a private company. Since Mr. Price is not just the CEO but also the majority owner, he can pretty much do as he pleases with his own salary. At a publicly traded company, it wouldn’t be so straightforward. A corporate board could not pillage profits that way to top up employees. And they couldn’t lower CEO compensation without risking losing a talented leader. This fact limits the generalizability of the Gravity move.

3) It’s worth at least contemplating what effect this change will have on people at Gravity who were already at the $70k mark. Just picture it: you went to college for 4 years, and got your degree. You interviewed successfully for a job at a hip young firm, and struggled to get recognized, to get promoted, to earn a raise. And next thing you know, the kid in the copy room is making the same salary you are. What was the point? I’m sure no one is going to begrudge the raises, but it does make me wonder about the possibility of demotivating certain employees.

4) As an act of charity, the move isn’t a winner. If you want to do good in the world, you don’t do it by giving someone who already earns $60k an extra ten. Instead, you donate it to an organization that is engaged in helping those who are worst off. As an act of solidarity, however, the move fares much better.

5) It’s worth at least considering the possibility that the move is a savvy business move on Mr. Price’s part. Surely this is going to be terrific for morale, generally. And I think we can reasonably expect that applicants will be lined up around the block the next time Gravity posts a job opening. This is not to impugn his motives. It’s just to say that he might well, and reasonably, be aware that there’s an upside to his generosity. (And note: his own salary is set to rise again once the company has its profits back up to the level they were at before this move.)

6) Is this the first step towards a new trend? That’s hard to say. One report says Price has already “heard from almost 100 other CEO via email and text who say they support his move.” Emails are one thing. Volunteering to cut your salary is another. But we shouldn’t be too cynical about this: sometimes one person doing something is what makes others realize that it’s a real possibility. Bill Gates giving away the bulk of his vast fortune to charity was clearly instrumental in convincing Warren Buffett to do the same thing.

6) As Matthew Yglesias points out, it also matters that Gravity is a small company. Gravity has something just over 100 employees. So the money Price is redistributing from himself to others goes a long way. But consider what difference a similar move would make at, say, a company like Starbucks. There, CEO Howard Schultz makes about $21 million per year. That’s a lot. So what would happen if Schultz magnanimously offered to cut his salary by 93% and distribute the money across the company’s 182,000 employees? Each employee would see their annual income increase by $107.31. In other words: don’t look to CEO salaries as the well from which economic equality is going to be drawn.

So, congrats to Dan Price and his employees. The changes at Gravity are a genuinely good thing. Economic disparity has been diminished in a meaningful way for a handful of people, and that’s a welcome change. But we should be cautious about reading into it anything more than that.

Journalists and Ethics Experts

I do a lot of media — I’ve been quoted in plenty of newspaper articles, I’ve done 30-second spots on the TV news, and I’ve done hour-long radio call-in shows. Along the way, I’ve had good and bad experiences. I’ve been misquoted, and quoted out of context. I’ve also been treated with great respect — sometimes more respect than is warranted. But overall, doing media can be fun, and I hope in doing this stuff I put my expertise to good use and help to inform public debate over important issues.

But journalists are often confused about just what to expect from someone like me. Some expect me to give quick “yes that’s unethical” answers. Some expect me to adopt a reflexively negative attitude towards business and innovation. Some expect me to predict the future. I’ve been interviewed by sloppy reporters, and by amazingly sharp and diligent ones. But in general, I sympathize with the reporter’s task, which often includes needing to get up to speed on a new topic several times a week, or even several times a day.

So that’s why I wrote this: Finding & Interviewing Experts in Business Ethics: What Journalists Need to Know. It’s a distillation of years of experience with journalists both good and bad. I hope journalists, and perhaps others, find it useful.

Indiana, Commerce, and the Ethics of Tolerance

Indiana’s new Religious Freedom Restoration Act (RFRA) has not been popular. Critics (such as Apple CEO Tim Cook) worry that it will be used to allow businesses to discriminate based on sexual orientation. More precisely, the new law limits the ability to use legal mechanisms to restrict the freedom to exercise one’s religion, including the exercise of one’s religion while engaging commerce. The “standard” example: if the baker’s religion says homosexuality is a sin, then under the RFRA no one can force the baker to bake a wedding cake for a gay couple.

It’s easy to miss a couple of key distinctions, here.

One is the difference between public law and private law. The government using legislation to force business owners to do something that violates their religion, is one thing, and that, on my understanding, is what the Federal RFRA and various other state-level RFRA’s are intended to limit. Historically, protection against the power of the state is, after all, an important liberal-democratic principle. But the Indiana RFRA apparently extends protection of religious freedom to cases in which the government plays no role. So if the gay couple in Indiana sues the baker, the baker can (apparently) point to Indiana’s RFRA and say, “no, the law protects me.” But having one’s religious conscience protected from intrusion by one’s fellow citizens is a much less compelling need than having it protected from the government. That doesn’t settle the issue of whether Indiana’s RFRA is a good law, but it’s an important distinction to note.

The second distinction is between rights, on one hand, and what is right, on the other. The RFRA is designed to protect bad behaviour — namely discrimination based on sexual orientation. Or to put it more generously, the RFRA is designed to protect religious freedom, and to protect it even when your religion requires you to do something bad, such as violating another human being’s right to be treated with dignity and respect.

Alas, living in a free society does sometimes require that we protect bad behaviour.

If you are a wealthy homeowner, and on a hot summer day a homeless passerby steps off of the sun-baked sidewalk and onto your lawn to pause in the shade of your tree, you are within your rights to tell him to get off your lawn. It’s your property, after all, and technically he is trespassing. And it would be wrong for government to tell you, “No, you must welcome everyone onto your lawn.” Respect for private property is a cornerstone of civilization, and so the right to property must be given broad respect, even when exercising that right means engaging in grotesque incivility.

(In the case of the motivations behind the Indiana law, the incivility in question has in fact been highly organized. As political theorist Jacob Levy points out in a blog entry, the anti-gay-marriage camp has historically been not just aggressive in defence of its take on religious freedom, but viciously and hatefully so.)

It bears considering that civility in the relevant sense is not just a set of behaviours; it’s a disposition, a way of being, a way of carrying oneself in life. In this regard, it is worth pointing out that those who would exercise their religious freedom by refusing to do business with gay consumers are not only engaging in morally-unjustifiable discrimination (as if that weren’t bad enough); they’re also conducting themselves in a way that is anathema to capitalism itself.

Consider this lovely quotation from Voltaire — pardon the somewhat dated vocabulary and examples — written in response to seeing people of various faiths interacting peaceably in pursuit of commerce in London.

Take a view of the Royal Exchange in London, a place more venerable than many courts of justice, where the representatives of all nations meet for the benefit of mankind. There the Jew, the Mahometan, and the Christian transact together, as though they all professed the same religion, and give the name of infidel to none but bankrupts. There thee Presbyterian confides in the Anabaptist, and the Churchman depends on the Quaker’s word. At the breaking up of this pacific and free assembly, some withdraw to the synagogue, and others to take a glass. This man goes and is baptized in a great tub, in the name of the Father, Son, and Holy Ghost: that man has his son’s foreskin cut off, whilst a set of Hebrew words (quite unintelligible to him) are mumbled over his child. Others retire to their churches, and there wait for the inspiration of heaven with their hats on, and all are satisfied. Voltaire (Letters on the English, Letter 6. 1734)

Voltaire’s point here isn’t about religion, but about the civilizing tendency of commerce, and the in turn about the virtues upon which commerce is founded. Non-discrimination is central among those virtues. When we engage in commerce, it’s not supposed to matter whether you’re black or white, Muslim or Jew, straight or gay. As my friend and fellow philosopher Alexei Marcoux wrote,* “To survive and flourish…a commercial culture must be populated in significant part by individuals possessing the virtues, habits, and dispositions that complement classically liberal institutions.” And that includes a commitment to treating each other with respect. If your religion doesn’t encourage such respect, then the law may well protect you, but so much the worse for society’s reverence for your religion.

(*See: “Is a Market for Values a Value in Markets?” Here’s the PDF.)

Kevin Crull, the CRTC, and CTV News: Is apology enough?

Note: News that Bell Media president Kevin Crull has apologized for interfering in news coverage has meant I’ve had to revise this blog entry, and change its headline.

The headline I originally proposed was “Bell Media President Kevin Crull Must Resign.” And my opening paragraph was, “Bell Media president Kevin Crull should resign. He has behaved dishonourably, and tendering his resignation is the honourable thing to do. Here’s why.”

Here’s the rest of what I wrote. At the end, I’ll talk about resignation vs apology.

It was recently reported that Crull, who is president of Bell Media, interfered with the journalistic independence of producers and reporters at CTV, a TV station that Bell owns.

Crull didn’t like a decision made by the CRTC (the Canadian Radio-television and Telecommunications Commission). So he reportedly ordered Wendy Freeman, the president of CTV News, to make sure that CRTC chairman Jean-Pierre Blais didn’t get any airtime on the Bell-owned station.

This was a flagrant violation of the fundamental tenets of journalistic ethics. According to the tradition of that honourable profession, according to sound ethical reasoning, and according to the tenets of the Code of Ethics of RTNDA (the Radio Television Digital News Association), journalists need to be free of interference from outside forces (including, for example, advertisers) and corporate bosses. Their duty is to report in the public interest, not in the corporate interest.

In particular, the RTNDA code stipulates that journalists must “Refuse to allow the interests of ownership or management to influence news judgment and content inappropriately.” Of course, Crull himself isn’t a journalist, so he himself isn’t bound by the code. But his position as head of a media company implies a need to respect the code nonetheless. You can’t plausibly run a company that employs professionals subject to such a requirement if you don’t intend to respect it. You couldn’t run a company that employs engineers and instruct them to build bridges out of papier mach&eacute. So Cull’s attempt — successful, at least in part — to interfere with reporting at CTV is a dire offence.

Normally, the head of a company has fairly wide latitude, ethically, in pursuing the best interests of the company. It’s your job, as the person entrusted with the care and feeding of a corporation, to do your best to protect its interests. But that task must always be carried out within the limits of the law and society’s ethical code. And media companies are in a special category. A significant portion of the value they bring to the table — the reason so many people are willing to watch, read, or listen — is that they make a promise, explicit or implicit, to report news based on what’s newsworthy, not based on what’s conducive to the corporation’s own interests.

Since some might wonder, I’ll point out that I’m not technically a professional journalist myself — I’m a professor who dabbles at blogging — but I take my independence seriously, and I assure you that the first time anyone in management at Rogers Media (owner of CB) tries to tell me what to write here at Canadian Business, that will be the very last day I write for them. Luckily, that has never happened. And even more luckily, I have another gig and so I have the luxury of saying “bye-bye” if anyone tries to tell me what to write. The journalists at CTV don’t have the luxury.

That is why I had concluded, when I drafted this piece, that Kevin Crull needed to resign. But instead, he has apologized. That’s a good move. Is it enough? Maybe. But anyone in a position like his — at the head of a media empire — ought to have the good judgment not to do things that require such public apology in the first place.

From Oxycontin to Fast Food: The Ethics of Selling Not-Too-Much

Business is about sales. From a business point of view, your mission is to make a product that people want, and to sell a lot of it. The drive to sell a lot is what motivates cleverness in product design, efficiency in production, and consumer-friendly low prices.

Sure, the idea of selling more-more-more has its critics. There’s a strain of anti-consumerism that sees the drive to sell (and hence buy) more as the root of all evil. And certainly in some product categories, maximizing the selling-and-buying cycle can have pretty bad environmental effects.

But in general, it’s hard to tell a businessperson, with a straight face, that they’re ethically obligated not to sell so much stuff. After all, that’s their function.

There are, however, exceptions, cases in which selling more is so obviously socially destructive that it becomes morally mandatory to try to maybe sell a little less.

See, for example, this must-read piece by Mike Mariani in the Pacific Standard, called “Poison Pill: How the American opiate epidemic was started by one pharmaceutical company.” It’s the story of how Purdue Pharma, maker of the opioid analgesic Oxycontin, used innovative marketing strategies to turn the painkiller into a $100-million commercial success, and how the drug not coincidentally became the darling of millions of addicts. Part of that story is about unethical (and illegal) marketing methods. But the question of methods can’t be separated entirely from the question of goals. And the goal, here, is sales — in particular, maximizing sales. But when you maximize sales of a drug like Oxy, you inevitably encourage a greater amount of “leakage” of the drug from the stream of legitimate uses into the realm of addiction and criminality.

This is clearly an extreme case. Oxycontin is a potent narcotic, subject to strict legal controls for good reasons. Taken incorrectly, it can ruin your life or even kill you, and for that reason distribution channels are limited.But it’s worth noting that this is not a bad product. Used properly, it’s a godsend.

But oxy is far from the only product that is good when used properly, but dangerous when used incorrectly. Consider the Big Mac. Or 7-Eleven’s Big Gulp. Or Coca Cola. Each of those is harmless when consumed the way any reasonable person would consume them, i.e., relatively seldom. A single Coke — or even a Big Gulp-sized Coke, just isn’t going to hurt you. So, it would seem no one is doing anything wrong by selling you one. Or even two. Or even several.

Now, when consumed in excess, both Coke and Big Macs can have, shall we say, a negative impact on your health. But it’s hard to imagine telling the cashier at minimum-wage earning clerk at McDonald’s or 7-Eleven that they’re obligated to cut customers off after they’ve had “one too many.” And besides, with regards to grownups, at least, consumers are allowed to make their own mistakes, even at the risk of significant personal injury. Hey, that’s the price of freedom.

But there’s also the question of social impact. Coke and Big Macs aren’t just having an impact on individuals; they (along with lots of other high-sugar fast foods and snack foods) are implicated in the obesity epidemics currently plaguing so many industrialized countries. From a social point of view, selling more isn’t better. And from the perspective of net sales, it’s slightly more plausible to think that a company might contemplate exercising some restraint.

Of course, it’s all too easy to think that such companies should sell less. But it’s much harder to specify how much less, and how they should do it. Indeed, it’s hard even to enunciate what the relevant moral principle would look like. Go ahead and sell, sell, sell, but only up to…what point?

I don’t have a solution to suggest here. My point is just that the tragic story of oxycontin is merely a grotesquely extreme example of a larger problem, namely how to do business responsibly when selling a product that is at once both good and evil.

Does the punishment really fit SNC-Lavalin’s alleged crimes?

News that Canadian engineering giant SCN Lavalin is facing new criminal charges caused a stir last week, not least because of the penalties that are on the table. The fraud and corruption charges spring from the company’s dealings in Libya. And if convicted, in addition to any other penalties handed out the company could be barred, for 10 years, from competing for contracts with the Government of Canada — a category of contracts that make up an important element of the company’s income.

Jacques Daoust, economy minister for Quebec (where SNC is based) thinks that rule is too harsh, and was quoted as saying, “In 10 years a company might not be the same. Everything can change. And in the case of SNC, they’ve decided to make drastic changes already over a short time…”

But the appropriateness of the punishment depends in part on what your goal is in punishing in the first place.

Some will say that we need harsh penalties as a deterrent. That is, if we punish wrongdoing (including corporate wrongdoing), wrongdoers should be less likely to repeat their offences, and other potential wrongdoers are likely to think twice before stepping out of line. But so far criminologists have been unable to find support for the claim that deterrence actually works. It defies our intuitive understanding of human motivation, but it’s true: we simply don’t have clear evidence (despite having looked for it) that the threat of punishments deters corporate crime.

Another possibility is that punishment is intended to inspire reform. This is presumably what Daoust has in mind: having already suffered significant legal penalties, SNC Lavalin has engaged in a process of reforming itself, making internal changes that (hopefully) will change the organization’s character and make it less likely to offend in future. Will it work? Who knows? But reforming a corporation may be more plausible than reforming a human criminal: after all, you can literally re-engineer a corporation to change the way it makes decisions, but you we don’t know how to do that to a human (and if we could it likely wouldn’t be ethical). And if, as Daoust seems to imply, the key reforms have already been implemented, a prohibition on federal contracts would be baldly punitive, a form of punishment for its own sake.

And to be sure, some will cheer for purely punitive actions. Denunciation — the community, through legal mechanisms, effectively shouting “No!” in the face of wrongdoing — is another of the ‘classical’ justifications for punishment. But in engaging is such denunciation, the Canadian government might be ‘cutting off its nose to spite its face,’ as the saying goes. Because by barring SNC for competing for contracts, just for the pure punitive joy of it, the government would also thereby be cutting itself off from a large, competent, Canadian engineering contractor.

This leaves one possibility, one rationale that would make sense of debarring SNC, in addition to whatever other penalties the company and its officers might suffer. The other classical rationale for punishment — a rationale usually reserved for explaining the value of incarceration — is an interest in removing offenders from settings in which they would be able to repeat their crimes. Criminologists refer to this as incapacitation. When you put the child molester in jail, he no longer has access to children and hence can no longer molest them. Put him away for 20 years, and those are 20 years during which he will molest zero children. By parallel, if you forbid a company from competing for government contracts for 10 years, those are 10 years during which they will engage in precisely zero instances of attempted bribery or other acts of corruption, at least with regard to bribery or corruption of Canadian officials.

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