Corporate Responsibility, Ethics and Good Business Practices

After the hugely damaging Enron et all fiasco and the resulting public distrust and cynicism, once again we find corporate responsibility, ethics and good business practices at the forefront of many discussions.

Business Ethics Magazine lists its 100 Best Corporate Citizens for 2006 (Spring 2006, Vol. 20 #1) and explains that its methodology goes beyond simply measuring accountability to shareholders:

"Traditionally, firms have been judged on how well they serve stockholders. But in the 21st century -- a new era of ecological limits, corporate ethics crises, and rising societal expectations -- this traditional focus offers too narrow a definition of success. Firms rely upon healthy relations with many stock-holders. That means not only creating healthy returns for shareholders but emphasizing good jobs for employees, a clean environment, responsible relations with the community, and reliable products for consumers."

Companies that made the list for the past seven years are Brady Corporation, Cisco Systems, Inc., Cummins, Inc., Ecolab Inc., Graco Inc., Herman Miller, Inc., Hewlett-Packard Company, Intel Corporation, Modine Manufacturing Co., Pitney Bowes, Inc., Procter & Gamble Company, St. Paul Travelers Companies, Southwest Airlines Company, Starbucks Corporation, Timberland Company and Whirlpool Corporation.

Writing about the 100 Best Corporations list, Mike Swenson asks us to consider, "could your company or client make this list today?  What would have to happen to make your company or client eligible to be one of the 100 Best Corporate Citizens?"

In the same vein, Ethical Corporation released a special report (PDF here) on Corporate Responsibility and Education. The foreward to the report states that:

"... whether corporate responsibility is a moral and ethical imperative or simply a new factor in doing business profitably, there emerging consensus is that it is here to stay and needs to be carefully managed. This requires new knowledge, skills and values that allow managers to balance profitability with stakeholder interests and social and environmental realities.

Academic institutions have a vital role, perhaps even obligation, to equip the next generation of business leaders with the cross-functional skills to cope with and flourish in an era of globalization in a way that creates economic growth and a sustainable future for people and the planet."

However, the report also notes that business school students can still graduate without having had to include corporate social responsibility into their studies. What is therefore being envisioned is a "triple-track approach" to incorporating CSR courses into the curriculum:

• CRS courses offered as electives,
• CRS courses required as part of the core curriculum, and
• CRS components included in other core courses.

The report also provides lists of European business schools offering CRS programs (p. 20) and top U.S. business schools for social and environmental stewardship (p. 24).

In Foreward Blog's Foreward Podcast #3, meanwhile, Trevor Cook discussed the importance of ethics in public relations. Although his interview is geared towards PR students and young practitioners, these two statements apply equally well to all practitioners:

"We'd rather lose a client than an editor... and if we get a reputation of being too slippery with the truth or being too glib... then we're going to go out of business very quickly...

We in the profession should be thinking about... the context and broader implications of what we do, because sometimes just telling the truth can be an easy way out..."

Comments

[makethelogobigger]

Good topic.

I think ethics is reflection of how you're raised. Simplistic view perhaps, but by the time you're in the real world working for a Fortune 500, it's too late to learn how to act the right way.

And ethics issues aren't limited to business. Ad and design schools should address this far more than they do. I’ve never seen an ethics class taught for creatives.

This is all moot though when a company like Enron had a management group who fooled everyone. How can ethics even come into play in that kind of culture? School wouldn't have helped the evil they perpetrated.

Even now, their comments show they just don't get it.

[Andrea Weckerle]

Bill,

Yes, ideally ethics are something that are taught at home, but we all know that too often this isn't so. Furthermore, even when ethics (and perhaps definitions of morality come into play here also) are fostered at home, definitions of what is ethical swing widely -- just look at the wide variation between different cultures that undoubtedly affect business practices as well.

I do agree that the earlier ethical concepts are taught the better. However, we need a common denominator of what "ethical business" etc. means, and perhaps approaching this in an educational environment provides a common starting point and foundation.

Also, it's my opinion that ethics have to overlap to a certain degree with what's legally permissible. Only by mandating (and conversely, prohibiting) certain actions and behaviors can we increase the number of adherents to particular, well-defined standards. And yes, I realize that my comments here are superficial at best and that this topic alone covers the fields of jurisprudence, philosophy, sociology, criminology, business and others.

I'm definitely interested in hearing more about how you think ethics should be addressed in ad and design schools.

[makethelogobigger]

What happens in design schools is that they spend 100% of their time talking about the process of creating, but they spend almost no time at all talking about what happens when non-creatives (account people and clients) enter the picture. Then things become fuzzy as clients ask agencies to do certain things which fall into a gray area.

Such as the use of images and music illegally in presentations and on actual projects. Creation (read: copying) design work of exisiting artwork from another studio.

Ad agencies in turn, not all, but many will do print ads for free and also run them for a client for free just so they can qualify for award shows. Then they can 'technically' say they ran nationally – when they never really did. They also do this with TV spots and will pay for them to run once at 4 in the morning just to qualify. Hollywood studios have done this with feature films to qualify for Oscar consideration too.

Now, there are many great agencies who don’t do this, as there are also many great clients who don't act the way I describe. This is more a product of educating the client as to the right way vs. wrong way to work.

But, there are times when they either don't bother to check what they give an agency in terms of source materials, or worse, they do know but they don't care.

Where ethics comes into it is that we need to teach students ahead of time what to do when faced with these decisions. Too often, junior creatives are under pressure to succeed and will do anything to advance, and that's where little things like I mentioned above are allowed to happen.

[Andrea Weckerle]

Thanks Bill, these are very interesting examples. Yes, there are those who would undoubtedly argue that one or two of these fall within the "gray zone." I've experienced similar situations in my own career, especially when starting out.

[whatsnext]

No doubt about it, ethics is hot and getting hotter. At Ethics Crisis, http://www.ethicscrisis.com the blog I recently launched (and write) for SRF Global Translations, people can anonymously confess the most unethical things they've done in business. Others can rate and comment on the confessions.

The feature, meant to bring a fun and possibly viral element to the Ethics Crisis blog, immediately took off.

The scary part is that no matter what people confess, the community seems to think none of it is too bad.

We are surprised at what people confess, but more surprised at the way many hundreds of people are reacting to the confessions.

There seems to be public ethics, or what one says about ethics, and a darker, more private type of ethics.

Our goal is to generate conversation about ethics, and judging from the response so far, people are hungering to talk about the subject.

[Andrea Weckerle]

B.L., your comment that "there seems to be public ethics, or what one says about ethics, and a darker, more private type of ethics" points out the slippery slope of ethics, i.e., the broad variation within the universe of ethics as a topic. There's so much variation and associated justification for certain behaviors that, as I mentioned to Bill above, I feel we need guidelines regarding acceptable vs. unacceptable behavior in a variey of settings, particularly the work environment. Certainly some fields, such as law, have stringent ethics guidelines that fall within the professional responsibility realm.

[Sox First]

More and more businesses are adopting codes of ethics. The question is whether they are putting them into practice. Remember, even Enron had a code of ethics. Read more at:

http://www.soxfirst.com/50226711/enrons_code_of_ethics.php

[Neeley Odom]

With the increasing importance of social responsibility in today's corporate enviornment, I think the integration corporate social responsibility and ethics classes into the academic curriculum is necessary. It should be taught to all students, including the business majors, journalism majors, and even the art students. Then, when faced with real life situations, everyone will be able to act accordingly and with full knowledge of the impact of their decisions. I feel that being taught about corporate responsibility and ethics in schools will only be positive and it will make people more aware of the emerging issues that important in the world.