Are corporate ethics obsolete?

By Geoffrey James via   Article 
“While many corporations have ‘ethics officers’ or even entire departments dedicated to ‘promoting ethics,’ few corporations are ethical. To explain why, I must make an important distinction. A person who ‘does the right thing’ regardless of circumstances is ethical. A person who ‘does the right thing’ only when it’s to his advantage is a sociopath.

Publicly held corporations are natural sociopaths because they only behave in an ethical manner when it increases stockholder value. Any corporate officer suggesting that a company ‘do the right thing’–even though it damaged the company–would either be fired or laughed out of the job.

I know I keep harping on this issue, but it’s an important one, especially when we’re talking about ethics: the current epidemic of forced labor (i.e. slavery) in the supply chain.As I’ve pointed out previously, slavery has grown alongside with globalization because slavery (when combined with torture) rivals automation as a way to create innovation and efficiency in manufacturing.

Since slavery is a huge moral evil, a truly ethical corporation would delve deeply into its supply chains and eliminate slavery, even if that meant raising prices and lowering revenue. This, however, never seems to happen. Instead, corporations hire third-party firms to do pro-forma investigations and rubber-stamp the paperwork. This provides the corporation and its officers with plausible deniability in the event of a PR disaster.

When they handle slavery this way, corporations are managing risk, not acting ethically. If the risk of being ‘outed’ as supporting slavery remains low, most companies are perfectly happy to import goods that might be slave-manufactured, in part or completely.

This is classic sociopathic thinking. Absent a reward (for acting) or a punishment (for not acting), no sociopath would pay money out of his own pocket to free a slave. Similarly, no corporation is going to open that can of worms if they can help it. …

This is not to say that corporations don’t employ ethical, caring people. However, employees are expected to act ethically if and only when it’s the advantage of the company. Taking a stand on principle is a recipe for getting fired.

Here’s the sad truth: unless constrained by either regulation or public opinion, most corporations will do whatever it takes–including slavery, wage theft, pollution, unpaid overtime–to increase shareholder value.

In other words, ‘corporate ethics’ is an oxymoron. Since that’s the case, let’s stop pretending that corporations will ‘do the right thing’ on their own. That’s not going to happen in corporations any more than it’s going to happen in Congress.

Rather than let Congress police their own ethics, we should instead demand regulations that constrain corporations to act for the greater good (even if it means less profit) and laws (like salary transparency) that open corporate operations to the light of day.”


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: