The Business Ethics Blog

Forbes.com has this slide-show featuring The Most Corrupt Countries. The source for the info is apparently Transparency International (though Forbes.com gives way too little info about the source of the data, how it was gathered, etc. Still interesting reading.)
[Tech note: the slide show proceeds automatically, and too quickly. There are controls just above the pictures that supposedly let you control the speed.]

Topping the list: Chad

What may turn out to be the single most piggish use of philanthropic funds has placed Chad at the top of the list of the world’s most corrupt nations. Proceeds from a project, funded in part by the World Bank, to build an oil pipeline through Chad and Cameroon were to have helped feed the desperately poor people of these nations. Instead, some $30 million was diverted to buy arms to keep in power the government of President Idriss Deby.

I posted a few days ago about a murder at a Montreal gas station. At that time, I noted that there was nothing about this, no response of any kind, on Shell Canada’s website. I also noted that I had emailed Shell about this, and would update you here if I heard back.

Today I received an e-mailed response. Apparently Shell had issued a statement (on January 25, 2006), but hadn’t posted it on their website. Here’s the text of the statement:

The following is a statement distributed throughout Montreal on January 25, 2006 from Shell Canada’s President and CEO.

The Shell family was shocked and saddened today by the news of the tragic death of an attendant at one of our gas stations in Montréal early this morning.

On behalf of the company, I extend my sincerest condolences to the family and co-workers. Care and support services are being provided to family, the retailers and their staff who have been affected by the incident.

Montreal authorities have released few details so far, but I assure you, Shell is cooperating fully with the ongoing police investigation.

We take the safety and security of our people very seriously and we have a variety of measures in place to protect them. We will conduct a thorough examination of this incident to see if there are lessons to be learned to help us to continue to improve.

Clive Mather
President and CEO
Shell Canada Limited

[Apologies for this re-posting. This was posted a few days ago, and then deleted due to technical difficulties.]

This is just a note for those of you who like this blog but don’t want to have to remember to check this page for updates.

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Here’s an interesting editorial from the Philadelphia Inquirer, “How do we repair America’s integrity?” It’s by Jim Lichtman and Richard O. Hanson. [Note: this article seems to have gone off-line. Don’t bother clicking now.]

The article is interesting for 2 reasons.

First, it includes a good, clear recounting of the Enron saga. If you don’t actually know what went on at Enron, read Lichtman and Hanson. It’s as good as any brief account I’ve seen.

The editorial concludes its recounting of the Enron mess with this:

The victim is the trust of the American people. Every time we hear of another personal, corporate, or political ethics scandal, our trust and confidence in individuals and institutions declines. But the deeper question in all of this is: How do we get back America’s integrity?

The second thing that makes this article interesting is that (I think) it’s answer to that question is a very common one, but it’s also quite wrong.

The authors mention the Sarbanes-Oxley Act (“which calls for more independent oversight and internal controls on how companies do business”), but argue that legislation just won’t suffice.

Until there is a clear and consistent change of attitude among top management concerning the method and practice of business; until corporate boards begin to live up more fully to their responsibilities instead of passing the buck; until there is a consistent demonstration of honesty, integrity, accountability and respect from the top down, ethics always will be relegated to empty platitudes on mission statements and speeches given at shareholder meetings.

The problem with this kind of prescription is that it’s silent on just how we’re supposed to achieve the requisite “change in attitude.” Are corporate execs who previously saw their mission as world domination just supposed to wake up one day and suddenly get it? Is that actually our best plan? This is akin to the idea that we could fix the environment if, you know, we all just, like, thought harder about how much we’re screwing up the earth. Of course, changes in attitude are a key part of large-scale change. This is particularly true in cases (which are common) in which we need to rely on lots of people to behave properly with limited supervision.
But the hard part is figuring out how to achieve constructive changes in people’s attitudes. Legislation is one way. Your attitude toward any activity is bound to change if you’re told that the government will take you out behind the woodshed (figuratively, hopefully) for engaging in it. Peer pressure can also change attitudes. But peer pressure results from an influential group of your peers having, and pressing you to have, a certain attitude…clearly a chain that has to start somewhere. Attitudes can also change due to negative press coverage of corporate decisions, or due to religious conversion, mid-life crisis, getting married, or divorced, or having kids, or reading a great book, or…lots of things.
So, yes, corporate attitudes need to change. But achieving the right kinds of changes, on a massive scale, in the short term, is such a serious challenge that we need to stop calling for change, and start proposing ways to do it.

(For a much more detailed, and smarter, account of this issue as it applies to environmental problems, see the chapter of The Rebel Sell called “Spaceship Earth.”)

Canadian readers of this blog are likely already familiar with this sad story.

Brigitte Serre, 17, was killed while working the night shift at a Shell gas station in the north end of Montreal last Wednesday. Several suspects are already in custody.

As Andrew over at Rebel Sell has pointed out, it remains unanswered just what a teenage girl was doing working alone at a gas station on a school night.

This story from the Toronto Sun raises the issue of employee safety, but suggests that a number of safeguards were in place. Why they didn’t work is left unclear.

Louis-Philippe Gariepy, a spokesman for Shell Canada which owns and operates the station, said the teen had been working the dayshift for several months but it was her first time on at night.

Gariepy said there was a surveillance system at the station and there should have been $50 or less in the till.

Safety measures vary from station to station, he said, but the north end location was supposed to be locked during the night shift.

“No one goes in except the cashier and all transactions are processed through a transaction window much like a drive-through,” he said in an interview.

“No one is supposed to enter the site,” he said.

In addition:

Gariepy said shifts are determined by employee availability, operational needs and willingness to work, he said, and the company does not discriminate due to gender or age.

“Minimum legal age in Quebec is 16-years-old,” he said.

Gariepy said employees received extensive safety training and that safety of employees is their top priority.

“As a parent myself, I have to tell you I am very concerned but we have to look at the overall picture,” Gariepy said. “Shell as a company has provided as best we can a safe work environment in normal circumstances.”

So far, nothing is mentioned about all this on Shell Canada’s website. (I’ve e-mailed Shell about this…I’ll update this posting if I hear back from them.)

So, how much responsibility do employers have for the safety of their employees, ethically speaking?

The easy answer, of course, is that employers should do everything they can to keep employees safe. But that answer quickly runs aground: no workplace is ever 100% safe, and so the amount of time, energy, and money that could in principle be spent on workplace safety is literally unlimited. So, instead, maybe we should say that employers should take “reasonable” steps to ensure workers’ safety. The word “reasonable” is the hard part. Who’s to say what is a “reasonable” degree of safety, or a “reasonable” amount of effort to put into ensuring safety?

Here, in no particular order, are some points to consider.

1) Risk is not an objectively determinable property of a situation. Whether a situation is “risky” or not depends upon, among other things, what kinds of dangers you fear, and what kinds of dangers you’re used to. I read somewhere that most coal-miners don’t consider their job risky, though most of us would think of it as very risky.

2) Legal standards matter, but they don’t settle the issue. The simple fact that it’s legal to have a 17-year-old girl work alone at night doesn’t make it right (or wise).

3) From a business manager’s point of view, industry standards do matter. Does your company lead the field in safety? Just barely meet industry standards? Do you lag behind? (So, in the present case, I’d really like to know how Shell’s safety measures compare to those of other gas stations.) Of course, it’s also possible for an entire industry’s way of doing things to be wrong, or to be out of step with the reasonable expectations of the community.

4) Some job-related risks are considered acceptable because they’re “part of the job” (e.g., the risks faced by police & firefighters), and they’re accepted by the people who do those jobs. People may accept job-related risks because a) the pay is worth it, b) they value some aspect of the work itself (e.g., the opportunity to serve their community or to do interesting & challenging work), or c) because they’ve got few other realistic options. For whatever reason, they consent to the risks.

5) The fact that some people consent to job-related risks does not make those risks ok, especially if a) those risks could have been avoided easily, b) the worker has few other real options, or c) the worker is too young to exercise reliably good judgment about the kinds of risks being taken.

Some other relevant links:
Here’s a story on employee safety, inspired by this case, from the CBC’s Manitoba bureau.
According to the Montreal Gazette, Quebec has no plans to change the laws

Coming Clean on the Clothes We Wear: Transparency Report Card was published last month. It’s a fairly detailed report on the supply-chain practices of some of Canada’s most prominent retailers and clothing brands. Interestingly, rather than reporting on actual labour conditions in overseas factories, etc., this report is based on publically available information. That is (and as the title of the document implies) this isn’t a report about how well these companies are doing in terms of fair sourcing, etc., it’s a report on how transparent — how up-front — they are about just what their practices are.

The Transparency Report Card assesses and compares 25 apparel retailers and brands selling apparel products in the Canadian market in terms of their efforts to address worker rights issues in their global supply chains and on how and what they report on those efforts.

Companies are rated according to their programmes to achieve compliance with recognised international labour standards in the factories where their products are made; and the steps they are taking to communicate thoroughly, effectively and transparently these efforts to the public.

The following conclusions are included in the report:

– none of the companies surveyed is currently providing sufficient, credible and verifiable information to consumers or shareholders to allow informed ethical choices
– of those companies that have made codes of conduct available to the public, few have codes that are consistent with International Labour Organization (ILO) standards
– only a small minority of companies report assigning specific responsibility for ethical issues in their supply chains to board members or committees. There is also very little reporting on labour rights issues as a risk factor for investors by any of the companies surveyed for this study.

Here’s a snapshot of key findings (click on the image to see a larger version)…

Conclusions of note:

High marks: Nike, Mountain Equipment Co-Op, Liz Claiborne,Levi Strauss & Co., and The Gap

Mediocre marks: Wal-Mart, The Bay (HBC), Roots

Low marks: Sears, Le Chateau, Giant Tiger, Harry Rosen, Reitmans

Perhaps not surprisingly, several of the companies that got high marks are companies that have, in the past, faced serious pressure (including boycotts, etc.) to improve performance in this area.

OK, it’s hard not to post something about the trial of Enron’s Kenneth Lay and Jeffrey Skilling.

Technically, of course, this (the trial) is not an ethics story. It’s a legal story. The jurors in this case won’t be asked to decide whether Skilling & Lay did something bad. They’ll be asked to decide the legal question of whether the facts presented to them support the prosecution’s charges “beyond a reasonable doubt.”

It’s easy to confuse legal issues with ethical issues, in part because there’s so much overlap. Most things that are illegal are also unethical; and many (but not all) seriously unethical things are also illegal. Further, judges (especially at the Supreme Court level) very often appeal to ethical principles to explain their rulings. I think it’s best to think of ethics & the law as two overlapping circles. Some things are unethical, but not illegal (e.g., lying to a friend about something important). Some things ar illegal, but arguably not unethical (e.g., many forms of civil disobedience). And some things are both unethical and illegal (murder, theft, assault, etc.).
It’s pretty clear (and you don’t need an ethics professor to tell you this) that what Lay & Skilling did was unethical. Whether it was illegal depends on a) the facts of the case, and b) the specific wording of relevant bits of legislation, and legal precedents set in previous court cases. That, as they say, is for the jury to decide.

Here are a few links about the Enron trial:

• Jury Selected for Enron Trial (AP story @ Yahoo news)
• How The Media Missed Enron , by Paul Maidment @ Forbes.com
• Lay-Skilling trial really comes down to lying
• Enron trial set for opening arguments (from Reuters)
• My review of Enron: The Smartest Guys in the Room

Don’t you love it when big companies squabble among themselves over not whether, but how, to help folks in developing nations?

A couple days ago I blogged about the $100 Laptop idea, which has the backing of MIT’s Media Lab, as well as corporate partners like Advanced Micro Devices (AMD), Brightstar, Google, News Corporation, Nortel, and Red Hat.

Now, Microsoft says it has a better idea. Cellphones already pack a fair bit of computational power, and are getting more common even in poorer countries. So, why not use them as the heart of a simple desktop computer setup? Attach a cheap keyboard, and a TV as a monitor, and voila!
Here’s the story from the NY Times: Microsoft Would Put Poor Online by Cellphone

Craig J. Mundie, Microsoft’s vice president and chief technology officer, said in an interview here that the company was still developing the idea, but that both he and Mr. Gates believed that cellphones were a better way than laptops to bring computing to the masses in developing nations. “Everyone is going to have a cellphone,” Mr. Mundie said, noting that in places where TV’s are already common, turning a phone into a computer could simply require adding a cheap adaptor and keyboard. Microsoft has not said how much those products would cost.

Many folks in North America suffered through high gas prices during parts of 2005, supposedly mostly due to instability in the oil industry resulting from Hurricane Katrina.

Of course, the year wasn’t bad enough to prevent Exxon Mobil from reaping the biggest profits of any company anywhere ever.
See the Bloomberg story: Exxon Mobil 4th-Qtr Profit Climbs to Record $10.7 Bln

According to Bloomberg, the company actually benefited from the effects of the hurricane:

Revenue rose 20 percent to $99.7 billion as rising demand and hurricanes lifted prices for crude oil, natural gas and gasoline. The average U.S. profit on refining crude into gasoline and other fuels widened to a record of almost $11 per barrel processed, based on futures prices.

In light of this, it seems suitable to post this bit of anti-ExxonMobil satire…“Toast The Earth”. Now, a funny cartoon lampooning a corporation wouldn’t merit much attention on this blog, except these folks have gone a step further and provided a Fact Sheet. So, it’s not mere mud-slinging.

Update (January 31)
Late yesterday, Reuters ran a story about the reaction to Exxon Mobil’s record profits: Record profits spark new backlash against Big Oil

A few days ago, I asked “Does Google’s “Dont Be Evil” Apply in China?”

I just found out that, coincidentally (I’m sure), that very same day Google’s own blog featured a pretty frank explanation of Google’s rationale for entering the Chinese market and complying with the Chinese government’s insistence that Google assist in censoring search results. (Apparently their main search site, Google.com, while available to users anywhere in the world, works pretty poorly for folks in China. Hence the need to have a local presence and a dedicated Chinese search site.)

Here are a couple of snippets, but it’s worth reading their whole explanation.

This problem could only be resolved by creating a local presence, and this week we did so, by launching Google.cn, our website for the People’s Republic of China. In order to do so, we have agreed to remove certain sensitive information from our search results. We know that many people are upset about this decision, and frankly, we understand their point of view. This wasn’t an easy choice, but in the end, we believe the course of action we’ve chosen will prove to be the right one.
…
Filtering our search results clearly compromises our mission. Failing to offer Google search at all to a fifth of the world’s population, however, does so far more severely. Whether our critics agree with our decision or not, due to the severe quality problems faced by users trying to access Google.com from within China, this is precisely the choice we believe we faced. By launching Google.cn and making a major ongoing investment in people and infrastructure within China, we intend to change that.