Ethics Officer?

Many years ago when I was chair of the philosophy department we were gifted $25,000 as a result of a court case involving bid-rigging. The trial was held in a nearby county and as a result of the defendants being caught pretty much red-handed, they were fined $100,000.00. They settled out of court for $50,000.00 and the proviso was that the money should be split between two local colleges who were then directed to set up courses in business ethics. My department was one beneficiary.

Well, as it happens, we already had several courses in business ethics, including one in the Masters program in Business. I always enjoyed teaching that class because the students were older — often folks who had returned for their M.B.A. after deciding it would advance their careers a bit. They brought a fund of information and experience with them and we had some great discussions. And the business arena is a gold mine for those of us looking for ethical issues.

The problem was what to do with all that money when we already had those courses. I decided to set up a lecture series to supplement the business ethics courses and we brought to campus some very interesting people — including the founder of the Parnassus Fund in California which promised to invest only in ethical companies — companies that treated their employees well, didn’t produce cigarettes or liquor, etc. He was most interesting and gave an excellent talk and then went to a couple of business classes and interacted with the students.

We also brought to campus the “Ethics Officer” at Honeywell — a corporation in Minneapolis that bragged about the fact that they were ethically oriented as witnessed by the fact that they donated free computers to the schools and engaged in other charitable acts. In any event, the ethics officer was a lawyer(!) whose job it was to make sure the corporation didn’t take steps that would get them in a legal tangle and to help them out of those tangles if they slipped up. Hardly ethics! (As a footnote, I would add that when the company later ran into financial difficulties the first things they cut were their charitable works!). In any event, it was instructive to get a first-hand look at one corporation’s notion of what ethics is all about.

The problems, of course, is that the law is not always ethical and that, in fact, ethics and legality often conflict in the “real world.” I spent a good deal of time after the lawyer’s visit trying to make that point clear to my students. Something can be perfectly legal and yet replete with ethical conundrums. This would be the case, for example, in those companies that promote dishonest advertising in order to increase sales. The ads may stay within the perimeters of legal strictures and yet violate the principle of honesty. And it is not at all clear that major companies treat their employees with the respect that all persons deserve.

But in those years of teaching business ethics I learned that the publicly owned corporations care not a whit about ethics and focus almost exclusively on the bottom line. Honeywell we simply one of a host of companies that was dedicated to profits and regarded ethics as a bit of a pain in the ass.

This is not to say that all companies were unethical, though most of the publicly-owned companies have terrible track records. There are a number or quite remarkable stories about privately owned companies, however, that go out of their way to do the right thing by their employees and their customers. Malden Mills, a family-owned company in Massachusetts is a case in point. As a news story reported at the time,

[Aaron] Feuerstein, an Orthodox Jew whose grandfather had started Malden Mills in 1906, not only to decided to rebuild. He also resolved to continue paying the 1,400 workers left idle during the construction works their salaries for the next three months, and to cover their health insurance for 180 days.

Asked to explain his decision, he attributed it to the ethics he had learned from studying the Talmud.

“I have a responsibility to the worker, both blue-collar and white-collar,” he told Parade magazine. “It would have been unconscionable to put 3,000 people on the streets and deliver a deathblow to the cities of Lawrence and Methuen. Maybe on paper our company is worthless to Wall Street, but I can tell you it’s worth more.”

There are more such stories, but not as many as the horror stories about companies such as Johns Manville that know they were producing such things as cancer-causing asbestos long before they were forced to change their product by the government. Or the tobacco companies that knew many years before their customers that cigarettes cause lung cancer. Which is why we need governmental controls — contrary to what we hear abroad these days. They act as watch-dogs to try to keep the unethical companies in line.

It’s not a perfect system. But while the law is not always ethical, at times it’s all we have.