Top 10 tips for teaching CSR and business ethics

It's time again for the start of the new school year in universities across much of the globe. For us, this typically means updating course outlines, refreshing our teaching materials and getting ready to hopefully engage and excite a new cohort of students looking to learn about corporate responsibility.

There are many ways to teach courses on CSR or business ethics. Some approaches suit particular professors or groups of students better. But over the years, we've discovered that, as far as teaching in business schools is concerned, there are some fairly common do's and don'ts that can make teaching in this field more effective.  Not everyone will agree with all of these, but here's our list of the 10 best ways to ensure a positive learning experience in ethics and CSR.

1. Be clear and realistic about what you can achieve.
All good courses start with a clear set of learning objectives. This is particularly important in corporate responsibility courses because there are so many different types of outcome that an instructor might be aiming for. Do you want to make your students more ethical managers? Do you want to improve their decision making? Do you want them to be able to practice CSR, or to have a more critical perspective on it? Think about not only what is most important to you, but, most importantly, what you think your students hope t learn. But beware of expecting too much - you're never going to change your students' values in a couple of months of teaching.

2. Use current events to engage students.
Teaching ethics and CSR isn't easy, but one thing we do have an advantage in is that there is hardly a day that goes by without our subject being in the news. This is a golden opportunity to demonstrate to students that what they are learning in the classroom has immediate relevance in the real world, especially when those individual events are part of broader trends, such as globalization, shifts in power, public mistrust of business, etc. Don't waste the opportunity!  

3. Start with a problem or issue, not with a theory
In our experience, business school students respond best when they recognize there's a problem to be fixed and then you give them some theories or concepts to help them do so. So start with a problem - whether a case study, a news story, or your own experience - and then use this to hook them on why theory matters - not the other way round! Starting with the theory and then showing how it applies runs the risk of losing the students' interest too early. It might work for some, but it's a risky strategy.

4. Students’ own experience is valuable class material – don’t waste it!
We are constantly surprised by the rich variety of  experience and opinion that our students have had in corporate responsibility, even without ever having a formal CR position. This is a real treasure chest for teachable moments, when you can flip what you're teaching in the classroom to help students make sense of their own past or current experience. And the rest of the class can learn so much from this too. It brings everything into such clear focus about the here and now rather than some abstract case in a textbook.

5. Don't preach.
In our opinion it is important to avoid imposing a single theoretical position or set of values on students, regardless of what your own perspective on corporate responsibility might be. There are few unequivocal right or wrong answers in this field. So the goal should be to help students understand the breadth of perspectives on the issues at hand and enable them to find their own position not to impose one on them. The professor's job should be more like that of a coach than a preacher.

6. Don’t confuse ‘there are no right and wrong answers’ with ‘there are no better and worse answers’.
The first statement is largely true. The second one is not. One of our most important jobs is to enable students to make better decisions, and to come up with better answers than just simple moral relativism : "my opinion is just as valid as anyone else's". A valid opinion, or a good answer, is one supported by fact, reason, evidence and logic. This may not mean that the answer is right from any universal moral perspective, but is should mean that it gets an A when you're doing your grading - even if you don't agree with the answer!

7. Use (but do not abuse) the business case 
Rightly or wrongly, the business case is the most powerful tool for any corporate responsibility advocate in the workplace. If you can show how a CR initiative will create business opportunities or reduce risks, it has a much better chance of getting approved. So teaching the business case is a crucial part of any course. But there is more to responsibility than only the business case. A good course needs to consider other social and ethical arguments for corporate responsibility beyond the business case so that students do not get trapped inside a purely self-interested mindset.

8. Be mindful of the limits posed by particular forms of business and business system. Not all companies are publicly-held corporations, and not all systems of governance work like the US where the shareholder is king. When teaching corporate responsibility it is essential to help students recognize this, especially if they are using a US textbook. Small firms, privately held companies, co-ops, mutuals, B Corps, social enterprises, etc - these all operate by different rules that give rise to different limits and opportunities for social responsibility. Likewise, the governance of large companies in continental Europe, Asia and and Latin America is quite different from in the Anglo-American system. Corporate responsibility is best understood as a practice than happens within particular constraints - and students need to know exactly what those constraints are in different parts of the world and in different parts of the economy.

9. Provide a good structure for learning. 
This is true for any course, but its easy to forget how important good structure is for good learning when there are so many juicy issues to get your teeth into in our field. An effective course will use a clear relevant organizing framework (such as themes, stakeholders, theories), not just a list of issues. Think about a course as series of building blocks - what's the foundation and what are you aiming at reaching at the pinnacle?

10. Remember to link with other business subjects and courses
Corporate responsibility is not an island. It needs to be linked and embedded with the other subjects that students are taking. Hopefully some of this will be happening in those other courses, but our job as a corporate responsibility professor is also to make those links clear for our students so that they don;t see ethics and social responsibility as add-ons separate from "real" business. So bring in elements of strategy, or marketing, supply chain management, accounting, finance - whatever it is that makes sense in the context of what you are teaching. A joined-up curriculum leads to joined-up thinkers - and one way or another we need a whole lot more of them out there.

Photo ©Schulich School of Business

The “IT-Industrial Complex”

A while ago we commented on whistleblowing in the context of Edward Snowdon’s revelation of the current practices of the NSA. The entire story though is much bigger and has been ongoing for a while now. Just Monday this week, Glenn Greenwald’s partner got detained at London’s Heathrow Airport in a rather unusual manner. Greenwald, as most of us will know, is the journalist who was contacted by Snowdon and has been publishing the crucial pieces of Snowdon’s material in The Guardian.

While in essence the ongoing revelations have the political sphere as the key target, it now more and more emerges that the role of private businesses is far bigger than so far known. From the perspective of scholars interested in business ethics then this case, as it unfolds, raises some rather daunting questions, which – besides being troubling from a normal citizen’s point of view – offer some challenging questions for further research.

1. A new industry

Ever since the Washington Post published Top Secret America we are aware of the fast growing security industry which was created by the US Government in the aftermath of the terror attacks of 2001. What was not that clear is however how far the reach of this industry has gone.

The fact that phone companies provide their records to the NSA, that in principle all our email traffic is public and stored somewhere - just to name a few aspects - takes the entire debate to a new level. It now emerged that in fact most wireless phone providers, many internet service providers (including Google and Facebook) share data with the NSA, as do many classic IT hard- and software producer such as Apple and Microsoft.

When these revelations were made it was conspicuous to see the rather muted reaction of these companies. For long we thought that Google, certainly in their varied approaches to Chinese censorship struggled for an ethical approach here; with regard to their own government though very little of these, in essence similar, concerns obviously played a role. The main defense of these companies overly seems to be the need of compliance. While that argument might carry some way, it is not understandable how for instance Apple, who as a ‘footloose’ company manages to deal with ‘compliance’ to tax legislation in very creative ways just caves in with regard to the privacy of their ‘users’ when the NSA asks for access to their accounts.

So what we see here is not only the emergence of a new industrial sector, which combines rather diverse set of companies (see the list of companies in Top Secret America); it is also not clear anymore where the lines between private business and public administration/government lie. After all Snowdon himself was employed by a private company many of us would primarily remember as a strategy consulting firm (Booz Allen Hamilton). While the blurring of lines between sectors is nothing new, the level and dimensions of the 'securocracy' currently dismantling in front of our eyes in the context of the NSA takes it clearly to a new level.

2. The business model and its ethical implications

Ethical issues in the IT industry have garnered attention for a while in business ethics. Given the numerous court cases, for instance Google and Facebook had to weather recently in the US and Europe it is clear though, that with the growth of the internet and the degree, to which the internet is morphing into a social space, many more questions will arise.

Given that we now know that Google, Facebook, Apple and others are not only basically supplying the government with information but have been monitoring, searching, and organizing our data all long it raises some new questions. In particular it raises the question about the very essence of their business model from an ethical perspective.

Lets stick to the Facebook example. We are told that basically the company will make its money through advertising. Looking at the pathetically annoying adds on our Facebook feeds, for instance, the question really is whether this is the whole story? $800bn for some potentially ingenious advertising platform?

As Facebook ‘users’ we know that we are not their customers. We are their suppliers. What they ultimately want to ‘sell’ is information. This, rather than advertising, is ultimately the business case. This similarly applies to Google, Yahoo, Apple and other who store and ‘use’ many of the data we create through our various internet usages. Most of it is ‘free’ so far, yet still these companies are worth billions of dollars.

This raises some questions, which admittedly can easily be confounded with conspiracy theories. The most important of which is that under the post 9/11 legislation the ‘harvesting’ of our data which for long had been prohibited, is now in full swing. These companies are not primarily in the business of social media, web search or email hosting – they are sources of data about the most intimate details of our lives. While this was always clear to those who bothered to read the small print of the ‘Terms and Conditions’ of these companies, it emerges more and more that this is not just material of value for marketing purposes.

Just today we read in The Guardian that in fact many IT companies such as Facebook, Google, Yahoo, and Microsoft made millions out of providing the NSA with our data. The euphemistic term for this is to see it as a reimbursement for ‘compliance costs’ – but from the perspective of those companies’ CFOs, what else is this other than ‘revenue’? This is certainly the first hard proof that there are clear financial ties between the US government and these companies. But could this also be another hint at what the real business model of these companies is about?

3. The Political role of business

That corporations are political actors in societal governance beyond their direct economic role is by now well established. Looking at the IT-industrial complex though adds some aspects. First, and very much on the surface, it strikes one to see the close ties between senior executives in the industry and the current US government. Eric Schmidt (Google CEO) had and still has key roles in the Obama administration to the degree Google has been called the 'Halliburton of the Obama Administration'; Sheryl Sandberg (Facebook CFO) worked for years in Washington, most notably with Larry Summers.

These are just two examples. Looking at the ferocious reaction to whistleblowers recently, one cannot overlook the commonality of interests between the US ‘government’ and the IT industry. Obama winning a second election was seen by many as a proof that maybe – despite of new campaign financing laws for corporations – business influence on politics is limited and that money alone cant buy campaigns and determine election outcomes. But maybe Obama’s re-election is just THE showcase of what ‘Citizens United’ has done: it got the very president elected whose campaign was crucially supported by Silicon Valley, but whose government now appears to be all long deeply engaged and intermingled with this new industrial network.

As business ethics scholars we see here a new opportunity for research. It is foremost about understanding the structure and value creation models of this industry. But it is also about evaluating the implications of these changes for our democracy, for how society is governed and what the rights and status of citizens in this context morphs into. In short, it is a research field rife with ethical question and issues.

Artwork by Susanne Waldau-te Brake, reproduced under the Creative Commons License

Top 10 tips for publishing CSR research in top journals

Contrary to popular belief, most university faculty don't spend the whole summer lounging on the beach or sitting in the garden. For most of us, summer is the time when we can really focus on our research without the usual distractions of teaching and university administration.

Although many academics do this research because they enjoy it, it is also a critical part of our role. Success in publishing our research is often the number one reason why we get hired or not, or whether we get that promotion or pay rise that we're after. Publish or perish is a mantra that is very real for many of us.

Publication, however, is no easy matter. There is great competition for space in the best scholarly outlets, like high ranked journals and prestigious book publishers. Those of us doing research on corporate responsibility issues, whether CSR, business ethics, business and sustainability, or whatever else sometimes struggle to meet the kinds of standards expected by these outlets. This is not because we're any less smart than other researchers, but we do have a complicated subject that doesn't always lend itself very well to the demands of the top tier journals. There is also just simply lot to learn about the publishing process, especially for PhD students, junior researchers or those relatively new to the demands of publishing their work in premier English-language journals.

As a result of this, we often find ourselves giving advice to other CSR researchers, especially at the many workshops and conferences that crop up over the summer. We tend to tailor this advice to the different audiences we speak to, but we also thought that it might be helpful to give a more general list of top tips that anyone doing work in the area could hopefully learn something from. Our thoughts are particularly relevant to publishing in high ranked management journals, but most of the lessons translate beyond this. Let us know if you find them helpful or if you have your own suggestions, just add them in the comment section below.

1. Make time for research. This is the critical starting place. Good work requires a substantial investment of time and energy and lots of researchers spend a lot of their time on teaching and service. In the CSR space, in particular, many of us are so passionate about our subject that our available research time is easily eaten up by working with our students or lobbying our colleagues to include more CSR content in their courses. Carving out the necessary space and time for research is critical. There are no shortcuts.

2. Find great co-authors … but select them carefully. OK, so maybe there is one shortcut: finding other people to do some of the research with you. But co-authorships go wrong as often as they go well. So choosing carefully is critical. Find people with complementary skills, who understand the subject in different but related ways to you. Remember, CSR issues are complicated, so just as we always advocate partnership by organizations, so too do we need to partner to understand a phenomenon. But if we go too broad, we risk losing the all-essential focus that the top journals aim for. Our no.1 piece of advice for selecting co-authors - find someone you can go for a drink or a coffee with and feel energized afterwards.
 
3. Write for a clearly defined audience, with a carefully targeted paper, that joins a specific conversation. Research doesn't happen in a vacuum. Who do you want to read your work? No, really, who exactly do you have in mind? What have they written about your subject? Answer these questions and join an ongoing conversation rather than trying to start a whole new one. It may seem like CSR issues are new and exciting, but many of the issues, problems or concepts that we find interesting have been addressed by others in other ways. Some scholars live by the maxim that if you think an idea is really new then you probably just haven't read enough. So make sure you do read enough and make sure that your work is crafted for a particular audience. If it helps, think of it like a product that has to fill a clearly defined need.

4. Be clear what the research gap is that you are aiming to fill, and what your contribution is. Probably the number one reason that editors reject corporate responsibility papers is that they don't make a clear enough contribution. Typically, this means, a contribution to academic theory. So nailing down the research gap and deciding for yourself what your unique contribution is will reap rewards. Especially if the contribution is one valued by those other researchers that you're aiming to write for.

5. Try as far as possible to be theory rather than phenomenon driven. This is one that many CSR researchers struggle with. We're doing research in this area because we find the issues themselves fascinating. This means we tend to phenomenon-driven. But the higher ranked journals all typically look for a theoretical contribution and so they expect the research they publish to be theoretically-driven. So if you don't want to take too many risks with that limited amount of research time you have, work out how to make the translation from phenomenon to theory and start as you mean to go on.

6. Different contexts have to be theoretically distinctive (revising/extending theory) not just new applications of existing theory. This is particularly relevant for those doing research on or in particular countries or industries, which is so common in the CSR field just because it has become so ubiquitous. The key thing to remember here is that just because no one has done research on your country or industry before, that doesn't mean it needs to be done now. If you're following the advice we've already laid out, you'll be thinking - what is it about this country or industry that is sufficiently different that it renders existing theories inadequate to explain it. If you can answer this, you have a shot at extending or revising that theory rather than just applying it to a new area. And that's what the reviewers will be looking for.

7. Test out your ideas with working papers, conference presentations, workshops, etc – do not submit too early. Research is a process, and the great thing about that is there are lots of opportunities to get feedback on what you're doing before its too late. Take your time to see if your ideas have the potential for top tier publication before you commit to doing the research. And then as you're doing the research get feedback from the best people you can about your emerging results. Finally, circulate your work and get feedback before you submit to that tier 1 journal that rejects 90% of the papers it receives. You want to be as sure as possible that you're going to be in the rarefied 10%.

8. Beware of avoidable ‘incompetence cues’ . This is one that the former editor of Business Ethics Quarterly, Gary Weaver, always explained very convincingly. If editors and reviewers find sub-standard English, spelling mistakes, poor referencing, formatting that doesn't meet the journal's specification and other minor errors in a paper (especially in the first few pages) you are going to activate the editor's 'incompetence schema'. That is, he or she will already be thinking that you're in some way incompetent before they even get to evaluating your ideas. Don't risk it. Get the basics 100% right, every time, without fail. This will give your work the best chance it can of being judged in the way you want it to be.

9. Remember that reviewers are there to help you improve your work. The community of researchers around CSR and business ethics are a pretty collegiate and supportive group. But it can feel like completely the opposite when you're holding three reviews which all appear to rip your work to shreds ... but are still offering you the chance to resubmit something different (well, actually, better) in the future. But believe us, they do actually want to see your work published, so you just need to work with them, not against them. The most successful researchers spend almost as much time on revising their work as they on the initial preparation. Take criticism on the chin and use it constructively as just another stage in the research process. In the end, you'll appreciate the advice because it almost always improves your research if you're working with a good journal and good reviewers.

10. Get used to criticism and rejection – and don’t forget the bigger picture of why you want to publish in the first place. We all get bucketloads of criticism and we all get our work rejected. Its a part of the job as a researcher. Some people say that if you're not getting rejected from time to time, you're not aiming high enough. So don't take it personally. And remember, the reason you're putting yourself through all this is that you think the issues are important and that you have ways of thinking about it that need to be read. The best journals are regarded a good because they have a higher impact than the others. If you really want your work to be read by other researchers - if you want to leave a mark on the field - you'll need to face the trials and tribulations of aiming for the best journals. So grow a hard skin along with that smart mind and warm heart.

Danger due to: ethics

John Dalla Costa, the renowned business ethics writer and consultant teaches with us at the Schulich School of Business. He's also an occasional blogger at his site www.ceo-ethics.com. We love the piece he's just posted on the dangers of thinking that because you're doing ethics, you're going to be more ethical. With his permission, we're reposting it here since its a conversation we agree that needs to happen.

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Are ethicists more ethical than their peers in other disciplines? It’s an interesting question. A recent study published in the journal Metaphilosophy provides a limited data point, but the news, at least if you’re an ethicist like me, is not good. Comparing how university professors engage students, the researchers found no difference between ethics professors and other faculty. Even though the ethics experts set an ideal, and acknowledged that not following through on that standard was morally wrong, in action, the experts in ethics were indistinguishable from fellow academics.

Are you surprised? I’m not. But I am distressed.

I’m not surprised, because if ethics were truly relevant, or if we really understood them to be effective, we’d be invoking them with much more frequency and rigor. Canada is knee-deep is scandals, with Senators whitewashing expense reports, the Prime Minister’s Chief of Staff paying for the white paint, and the Mayor of Toronto careening from one violation of the public trust to another. Ethics are AWOL, and no one seems to be missing them.

The same is true in business. Ethics have become IKEA-like contraptions for compliance. All the imagination and enquiry have been purposefully engineered away, so that all ethics and compliance officers need to do is follow the illustrated instructions, and assemble the pre-cut pieces.

Before Lehman Brothers and Bear Stearns imploded in 2008, I managed to download the codes for ethics and conduct from their respective websites. It turns out that they were derived from a boilerplate, following numerically identical categories, and using mostly similar jargon, with only one or two cosmetic flourishes reflecting idiosyncrasies of corporate history. It would inconceivable for these global finance behemoths (or their peers) to use Quicken to do their taxes. But that’s basically what they did for their ethics – adopting a four-page template, in the name of the Board of Directors, to set the terms and scope for their ethicality. Not surprisingly, both companies got full return on their investment.

There is a good reason why we’ve talked so little about corporate ethics since the financial crisis: most corporations had already subscribed to compliance projects pre-2007, and nothing has changed since.

I’m distressed because ethics-without-ethicality repeats the diminishment of restraint and responsibility, which led to previous market failures and economic crises.

As bad as were the deceptions perpetrated by Enron, it was much worse that these accounting lies were intentionally papered-over by its auditor, Arthur Anderson. Similarly, as irresponsible as were mortgage tactics and securitizations floated by the banks in the run up to the financial crisis, it was much worse that the ratings agencies, like Standard and Poor’s, assigned Triple AAA credit value to derivates that their own in-house experts considered junk-grade. When sentinels sell-out, when they simultaneously over-estimate their virtue and under-deliver on the promise they are entrusted to uphold, bad things happen to everyone.

In his book, Confronting Vulnerability, Jonathan Schofer reminds us that moral laws and ethical rules need continuous replenishment. His point is that, while established as bulwarks against human vulnerability and exploitation, ethics are themselves vulnerable and exploitable. We fall-back on ethics as if on auto-pilot, with such doctrinaire rigidity that we cease using any critical thinking as we apply them in life’s complex ambiguities. Or, perhaps worse, we take them for granted until they become easy take-over targets for other ambitions or motivations. Principles share with practitioners the fragility of our human finitude. The most unethical thing is often denying our personal limitations for seeing what is right, and deciding what is true.

We don’t know if this research confirms that ethicists too have ceased being reliable sentinels. But it is the question that should distress and challenge us – ethicists and non-ethicists alike.

John Dalla Costa

www.ceo-ethics.com

Photo by blind dayze. Reproduced under Creative Commons licence

Tales from the organ trade

Imagine that you live in poverty. A chance arises for you to earn a year's salary in one day. All being well, no one will get hurt. In fact, what you're going to do will save someone's life. Sounds like quite a deal. Or at least it does until until you realize that what we're talking about here is selling one of your kidneys. And that it's illegal almost everywhere.

The decision to sell an organ is a stark choice. It speaks so much of all that is wrong with our global inequities. It shouldn't be happening. But, like it or not, it does happen. For many people looking to get out of poverty, the sale of one of their organs is clearly a desperate choice ... but it is also a choice that they are sometimes willing to make.

The illegal organ trade is not for the faint hearted. Sure, it saves lives, but it's an ugly business. Ric Esther Bienstock, the documentary-maker behind the award winning "Sex Slaves" documentary about global sex trafficking has taken on the subject head first and eyes open with her new film, Tales from the Organ Trade. It's getting it's North American premiere tonight here in Toronto at the Hot Docs festival. We sat down with her recently to find out exactly what lay behind her decision to focus on such a moral minefield and to ask what she's trying to achieve.

"I'm not advocating for incentivised donation. That door is shut. But I'd love the film to spark debate" says Bienstock. Unlike Sex Slaves, Tales from the Organ Trade doesn't take any sides. As Bienstock says, "sex trafficking is a very black and white issue". But making Tales from the Organ Trade took Bienstock into a lot of grey areas. "It shook me up," she admits. "When I started making the film I had a very different view from when I finished making the film. I started off thinking, its purely exploitative, period. And that's 90% of how it's characterised in media reports, films, and anything I've seen.... but there are thinkers out there, surgeons and ethicists who think that a regulated, incentivised system is the way to go. And there are people who think it is repulsive and exploitative. So I really have a sense of what they all believe, and why they believe that."

The turnaround for Bienstock was going to countries like the Philippines, Ukraine and Moldova and meeting donors. The fact is, she says, so many of the people she met were not coerced. They actively sought out the brokers who would find them a buyer. "You don't need to coerce people in the Philippines," she argues. If they are coerced, she says, they are, as she puts it, "effectively coerced by their own poverty." And what is more, they are forced into the black market, where there are virtually no protections. "If you think about it," she says, "it's a situation where you have extremely desperate people on both sides, crashing together in a black market." It's a situation ripe for exploitation.

Bienstock took more than 3 years to make the film, crisscrossing the world to talk to the different people involved in the organ trade, from donors and recipients, to the brokers and surgeons that make it all happen. Although these characters are operating outside the law, and are often portrayed as evil, exploitative crooks, Bienstock had little trouble finding them - and again, saw them as much more complicated than the typical black-and-white narratives. But getting them to give their side of the story to camera was much more difficult.

One doctor wanted by Interpol only agreed to be filmed after his mother had approved of Bienstock following a lunch date in Istanbul. Another only agreed after Bienstock had flown to Israel to meet him for coffee. "The first thing he said to me", recounts Bienstock, "is I'm not going to be in your film." He eventually agreed after Bienstock convinced him that she wasn't out to vilify him; she simply wanted his side of the story.

Tales from the Organ Trade ends up being powerful for resolutely avoiding taking sides. Rare among documentaries tackling such sensationalist subjects, it doesn't look to reinforce prejudices but invites us to make up our minds. This may make for uncomfortable viewing, but it's a necessary approach to a subject that often defies conventional ethical logic. As the film's publicity materials put it: "This is a world where the villains often save lives and the medical establishment, helpless, too often watches people die. Where the victims often walk away content and the buyers of organs - the recipients - return home with a new lease on life "

Who really should resign for the Barclays interest rate scandal?

The banking sector needs another scandal like a hole in the head. Or maybe that's the wrong metaphor. Because a quick death from a headshot might be more preferable to the excruciating, but likely never fatal, torture of interminable crises that we seem to be constantly enduring.

The latest bout of banking misery comes from the UK, where Barclays, the retail and investment banking giant has fallen foul of regulators for manipulating the interbank interest rate over a number of years during the mid 2000s.  It's a huge scandal that looks set to engulf not just Barclays, but potentially also a slew of other banks, and even maybe the Bank of England and the UK Government.

One of the more interesting facets has been the reaction from Barclays. What a week it has been. First a number of senior executives including the CEO Bob Diamond reacted to the media criticism by announcing they would forgo their bonuses. Then, as the scandal escalated, the Barclays Chairman, Marcus Agius announced his resignation. In a dramatic turnaround, the following day Agius was reinstated and CEO Diamond announced his resignation, along with his right hand man, Jerry del Missier.

So the big question is: who really should go in a scandal like this? The Chairman, the CEO, or someone else? The answer, of course, depends on the type of scandal, the level of knowledge of the activity that the senior leadership had (or should of had) as the events unfolded, the likely best route to reform, and of course the likely reaction of stakeholders. With Barclays it seems right that Agius, the Chairman, has (on second thoughts) decided to stay. The Board is unlikely to know about an activity such as the interest rate rigging, and so cannot be held culpable in their overseeing function. It is different from, say, the role of the Board in something like Enron's accounting fraud, which is directly related to the Board's role, and relates to accounts that they must have seen and approved.

With Barclays, you would expect the Board and its Chairman to take a central role in dealing with the problem once it has been revealed to them, which apparently was only days ago. As one member of the House of Lords scathingly remarked upon Agius's resignation: "The board is so hopeless they've just shot the head of the firing squad and missed the prisoner." By resigning Agius was signalling that the Board was unfit to be a "firing squad" and instigate the kind of change necessary at the bank.

Turning to Diamond, one of the main reasons forwarded for his resignation has been the "lightening rod" argument, as in the UK newspaper, The Guardian's analysis: "Diamond, under pressure from the banking regulator and the governor of the Bank of England, Sir Mervyn King, quit after he decided he would be the lightning rod for the scandal at the hearing".

It's not the first time we have heard this argument about the resignation of a prominent CEO in recent times;  News International made exactly the same claim regarding the departure of CEO Rebekah Brooks in July last year in the wake of the phone hacking scandal.

Why the lightening rod argument? Well, it enables the CEO to continue to proclaim their innocence, despite stepping down. Their resignation is not due to guilt but is to save their firm from excessive media and political criticism. The idea is that it is supposed to diffuse the storm of negative publicity - the brave leader falling on their sword to save the company.

The problem, which we saw with News International, and which is already happening with Barclays, is that it doesn't really work.  For a start, no one really believes the argument. So the media is just as likely to respond by digging even deeper expecting there to be more secrets that the company is trying to hide by jettisoning the CEO.  Secondly, even if you get rid of one lightening rod, the critics will readily find another .... or they will simply continue targeting the same one in the hope of more revelations. Barclays found this to their cost last week after lightening rod no.1, Agius quit, only to be replaced by lightening rod no.2, Diamond. As The Telegraph put it: "Mr Agius is thought to have hoped his departure would serve as a lightning rod to conduct anger away from the bank and Mr Diamond". No chance.

It seems in this instance Diamond was responding primarily to pressure from politicians and to a lesser extent shareholders. Numerous influential voices were calling for the CEOs resignation and it is no coincidence that the Barclays share price rose on the announcement of Diamond's departure, despite him being up until recently strongly supported by investors. In other words, Diamond's resignation was primarily a symbolic act to appease stakeholders.

This is all very well, especially at a time when trust in big banks is at an all time low. But it is not necessarily the best course of action for actually dealing with the root problem. Mind you, the root problem is not 100% clear at the moment. Whilst Diamond was blaming "a small minority", others were were laying the blame at the culture at the bank or even of the entire sector. So although Diamond's proposed solution  - to “get to the bottom of what happened”, punish those involved, enhance internal controls, and change the bank's culture - may on the face of it make sense, this scandal has all the hallmarks of a more deep-seated systemic problem.

One bank and one CEO can't change an entire sector, especially when no one, not even the guy that's resigning, seems willing to take personal responsibility. Did he symbolise a culture that needed changing, Diamond was asked today. "I don't think so at all," he replied. Institutions like the banking industry are based on taken for granted assumptions that are highly resistant to change. Symbolic resignations are not the answer. But maybe they are a start.

Photo by SomeDriftwood. Reproduced under Creative Commons Licence

Has 9/11 changed business ethics?

I can’t believe I just wrote this headline. Looking at today’s punch lines in North American papers or on TV, you can get the impression that 9/11 was the all defining event of the new millennium. And that pretty much nothing in the world has remained the same ever since.

There is a lot of hyperbole out there these days. As shocking as 9/11 appeared at the time the last decade has seen – in terms of loss of life or any other criteria we want to apply – much worse tragedies, injustices and atrocities. This includes a number of ways in which America and its allies have responded to 9/11 (8,500 American soldiers and contractors killed, 103.000 Iraqi civilians killed, according to today’s New York Times).

World politics aside – and there are more gifted minds and eloquent writers out there to address those issues – it’s still worth just engaging in this little thought experiment. So let’s play around with this thought for a second: if 9/11 is the day ‘that changed everything’ – what has its effect been on the niche of the world we are commenting on in this blog? Here are some thoughts off the cuff.

Blurring lines between the public and the private. 9/11 has given many governments new legitimacy in redefing the public and the private in their relation to their citizens. Email, phone conversations, financial records, tax statements are just prominent examples where governments have attempted to intrude the privacy of citizens – all of course in the name of fighting ‘the war on terror’. Conspicuously, many of this information is administered by private companies. Unsurprisingly, we then see that electronic privacy, identity protection and a host of other privacy issues have turned in ethical dilemmas for private business. Arguably, many of the ethical issues here would be on the agenda without 9/11 though, as the main driver of ethical contestation is the mere fact that advances in information technology have made those new ways of information gathering possible in the first place.

New business opportunities. Looking at how America and its allies have approached the wars in Iraq and Afghanistan it is evident that we have seen a surge in business opportunities for private military contractors, mercenary companies and security providers. As the Wall Street Journal investigation ‘Top Secret America’ has highlighted this also pertains to intelligence gathering, counterterrorism or homeland security. This all has propelled private business in a sphere traditionally occupied by governments and other – at least on paper – publicly and democratically accountable societal actors. Again, we can legitimately ask in how far this is really triggered by 9/11. As Naomi Klein has pointed out (‘The Shock Doctrine, Chapter 14), it was exactly on September 10, 2001, when Donald Rumsfeld held a Town Hall Meeting in the Pentagon announcing far flung privatization of military operations leading CNN to the headline on the very eve of 9/11: ‘Defence Secretary Declares War on the Pentagon’s Bureaucracy’! In this sense then 9/11 might have accelerated these developments and provided some much needed legitimacy – but the underlying ideas and intentions were hardly new.

Soaring government deficits. The current debate on government deficits in the US, UK and elsewhere is often directly linked to the so-called financial crisis of 2008/9. This however overlooks the fact that due to the ‘response’ to 9/11 certainly the US and the UK, had already heavily overstretched their budgets. The New York Times today cites a figure of $1.6trillion in costs for just the wars post-9/11. In some ways one could even argue that due to the constant distraction of two wars the looming financial disaster could grow largely unnoticed by governmental scrutiny. And the need to finance those wars made it all too tempting to keep interest rates low - with the widely known effects on cheap credit in America. As a result we now see more or less in all Western democracies an increase slashing of classic welfare state provision. As many commentators have pointed out retreating governmental provision of health, education or other public services has been a key driver in a shifting expectation towards business in engaging in these arenas – the UK probably being the best laboratory to substantiate that thesis.

New issues in diversity and discrimination. Certainly in the US, 9/11 has heightened scepticism towards all things Muslim. This is certainly reflected in tightened immigration laws and the general perception of the public. Conspicuously, there is relatively little case evidence that this has also played out in business. While gender or sexual orientation have been well documented there is only scant evidence of actual discrimination on the basis of being of Muslim faith. This may, however, be more credited to the fairly palpable ‘Teflon’ of political correctness with which those topics have been touched since then in business.

A multipolar world and the rise of China and India. One of the most interesting developments in the US has been its heightened restrictions on immigration of highly educated young people including those graduating from American universities. This has had a number of implications for business both in the US and the rest of the world. Most obvious are changes in those industries where America is still quite advanced, most notably IT, electronics and software. All these industries have in the past and still at present do rely heavily on an influx of foreign-born professionals. While it has become more difficult to hire this talent at home, places such as India have immensely benefited from this. Much of the software development and business process outsourcing of leading US companies is now done in Bangalore, Hyderabad or Mumbai. In this sense, with the US becoming less open to a free movement of people we see that this has benefited other parts of the global economy. This has also been visible in University education. Countries such as the UK, Canada or Australia have seen a surge in international students who found their ambition to study in the US rendered impossible after 9/11.

For business ethics this move towards a world where the US in many fields has lost a pole position is quite interesting. With growing business interests in emerging economies we see, at the same time, an interest in business responsibilities and ethics growing in these parts of the globe. We can certainly argue that the last decade has seen much stronger influence and relevance of other areas of the globe. Business ethics, 30 years ago, was by and large an American subject. This is no longer the case today.

Arguably, much of the changes we discuss here have a fairly tenuous link to 9/11 as such. The events had their most severe impacts on ethics in government, warfare, international relations and how governments have (dis-)respected basic human rights since then. Some of it, as we think, has had a trickle-down effect on business. But maybe the gist of it is still best summarized by commodity trader Carlton Brown in the movie The Corporation: ‘In devastation, there is opportunity!’

Photo by JessyeAnne, reproduced under the Creative Commons licence.

Sex, privacy and media ethics

Sex sells. And sex really sells in the media business. With their profitability in free-fall, newspaper businesses especially are always on the look out for a salacious front page story to help them grab some precious market share. Unfaithful soccer stars "playing away from home", celebrity match-ups and break-ups, trysts with prostitutes, or accusations of sexual assault are all highly newsworthy, especially at the tabloid end of the market. But recent events in the UK and elsewhere have led many to question whether the sex lives of celebrities can be afforded some degree of privacy protection from an intrusive media, or whether in the interests of press freedom, and the growing uncontrollability on online social media "reporting", they are simply fair game.

In the last few weeks the Ryan Giggs super-injunction affair in the UK has brought these issues to a head. Why all the excitement? Well until a few days ago, Giggs, one of the UK's best known soccer players, was the mysterious unnamed figure who had successfully been granted a so-called super-injunction by the English courts. The injunction had been given to protect Giggs' privacy in the wake of an attempted kiss-and-tell story by Imogen Thomas, a former reality TV star, who claimed to have had an affair with the married, and previously squeaky-clean, soccer star. It not only prevented newspapers from reporting the story but also from even referring to the injunction or the claimant.

Super-injunctions like the one granted to Giggs have become the legal instruments of choice for individuals and companies in the UK looking to prevent their activities from being reported in the press. They are granted by the courts to protect privacy under the Human Rights Act. The newspaper industry is predictably waging a war of words against them because they shackle some of the traditional freedoms that they are used to and which they rely on to act as the fourth estate. Super injunctions also raise the hackles of the public because with a price tag that starts at something like US $100,000 they appear to allow special legal treatment for the rich and famous. Moreover, as the Giggs affair and the 2009 pollution case of the oil company Trafigura have shown, the rise of social media platforms such as Twitter through which stories can be circulated outside the remit of the formal TV and newspaper industries, the limits of existing legal protections for privacy are being severely tested. Giggs' name was connected to the injunction through Twitter long before the press could report on it, raising legal questions about the culpability of Twitter and it's tweeters for being in breech of the injunction.

There are all sorts of ethical questions arising out of this, but from our point of view, it largely boils down to the question of when our sex lives should be private and when could or should they also be public knowledge? Let's sort out some of the considerations here:

1. Consent
Obviously the starting point here is consensual sex between adults. Coerced sex or sex crimes fall into an entirely different realm of privacy. The media has a legitimate right to publish in these cases provided legal protections for victims and the accused (which differ between jurisdictions) are respected. But clearly Dominic Strauss Kahn's alleged assault on a hotel chambermaid should be held to a different standard of privacy than his consensual affairs. Affairs with subordinate employees, even when supposedly consensual, might fall somewhere in the middle given the power dynamics involved.

2. Public interest
Where there is a potential public interest at stake the media also has a stronger case for investigating and publishing, such as where politicians campaigning on "family values" are accused of marital infidelities, anti-gay advocates are caught with rent boys, or legal enforcers break the law by paying for sex. A weaker but sometimes defensible case can also be made for leaders in a position of authority and trust whose trustworthiness might be questioned when extra-marital affairs come to light. The sex lives of celebrities rarely have a public interest component .... however much the public may be interested in hearing about them!

3. Privacy vs free speech
In the absence of coercion or public interest, there is much less chance of the press claiming a prima facie right to publish. Privacy (and after all sex is pretty private) will usually trump rights to speech unless free speech can lead to other public benefits. It's a matter of avoiding harm being prioritized over some fairly minimal free speech benefits.  The media may claim that the right to privacy is critically weakened in the case of marital infidelities and other ethical infractions. But even the unjust should be able to expect justice.

4. Harms and benefits
Without public interest, for the equation to fall on the side of publishing, there will often have to be some meaningful moral benefits for one or more of the parties to the "private" act. A spurned lover with an illegitimate love child for instance might be looking to tell their side of the story in the media and thereby gain some kind of apology or recompense from a celebrity. Here the ethical equation between speech and privacy should shift more convincingly towards publishing.

5. Reasonable expectation
Where the waters really get muddied is in the question of reasonable expectation. Privacy is typically attributed when there is a reasonable expectation that something will remain so. A telephone call or a conversation in a private residence should reasonably be expected to remain private, for example. That is why the UK newspaper, the News of the World, is in such hot water for it's illegal phone hacking of celebrities. These conversations took place in a reasonable expectation of privacy and should remain that way unless one of the participants chooses otherwise. But phone hacking is a case of the ethics of media tactics. A newspaper offered a story by a willing kiss-and-tell informant is very different. Here it is one of the participants looking to rewrite the "contract " of privacy established between themselves and their sexual partner. And in this case we have to ask ourselves whether soccer stars and other celebrities really have a reasonable expectation that their affairs with glamour models and reality TV stars will remain private. However much they wish it to be the case, there appears to be a lot of evidence to the contrary. Sure, this may be a case of a highly pragmatic interpretation of rights to privacy, but it's in the real world, a world of privacy for sale that we increasingly find ourselves in. Celebrities should be protected from direct intrusions into their privacy by the media. But maybe they should not be protected from their own decisions about who to be "private" with in the first place.

Photo by AtilaTheHun. Reproduced under creative commons licence

The Opium still works

For those of our readers who don’t live in North America one of the news lines on major media outlets including CNN or The New York Times last weekend will sound rather quaint. Last Saturday (21 May), based on the predictions of the American Radio Broadcaster Harold Camping thousands of people on this side of the Atlantic were expecting the ‘rapture’, i.e. the disappearance of all ‘true’ Christians to heaven and the judgement day for all the rest of us.

The absurdity of what sounds like a weird hallucination of a 89-year old zealot however did not stop a remarkable number of followers to take his, allegedly, biblical calculations dead seriously. People dropped their university education and their jobs in the face of the world’s imminent end, or invested all their retirement savings into alerting the world to this event. As we know by now, it was of course all a big hoax.

Now we refer to this not so much as to dissect the insanity or validity of religious beliefs (though that’s a discussion worth having). The more amazing thing seems to be how powerful and pervasive religious beliefs still are. While Karl Marx’s famous quote of religion being ‘the opium of the people’ insinuated that a more liberated, developed and economically empowered humanity would no longer need this sedatitive we are still living on a planet where at least two thirds of the population confesses adherence to some form of religion. And the numbers are still rising.

It could be interesting to speculate about the reasons. Keith Bauer, a Maryland tractor-trailer driver who last week drove his family cross-country to witness the ‘rapture’ in Camping's California headquarters, told one newspaper: “I was hoping for it because I think heaven would be a lot better than this earth”. This all points to Marx: the ‘sigh of the oppressed’ is still loud and clear because by and large, the enormous social, economic and technological achievements of the last two centuries have still left the majority of people in the world where Marx saw them in the 19th century.

That would be one claim. We are aware that there are of course other contenders for explaining the unbroken popularity of religion. For us the prevailing relevance of religion has been interesting from a professional point of view. Initially, when we started writing the first edition of ‘Business Ethics’ in the early 2000s we were rather curt on the topic. This had to do, among other things, with the fact that the project of ‘ethics’ is in some ways the exact opposite of religion.

The central starting point of ethical reasoning is the assumption that human beings, by dint of experience and rational reflection, are indeed able to delineate morally right and wrong behaviour. Religion, most notably the monotheistic ones, however start from the assumption that human beings are not able to do this - in some religions even are considered intrinsically ‘fallen’ and corrupted. Man rather needs to be told about right and wrong by some ‘celestial dictator’ (as Christopher Hitchens would put it), who incentivizes his rules by the reward of heaven or hell - ultimately.

Consequently, we did not see too much space for religion in a book on ethics. However, it is remarkable how much research there has been on the effect of religious beliefs on business ethics in the last three decades. Just to talk a bit more from the Crane&Matten shopfloor, we are currently working on a four volume anthology on New Directions in Business Ethics – and lo and behold!: articles on religion and business ethics in the academic journals form a chunky part of it.

This reflects of course the fact that for many societies religion is still a major force in questions about the right or wrong of human behaviour. Over the years, we discovered this force of religion also among the readers of our textbook – hence we felt encouraged give it a bit more airtime in the latest edition. We are still, though, kind of puzzled about the conclusion from this research. After all, the imperatives of most of the world religions on business behaviour amount to some form of common sense, which does not necessarily need some superior authority to pull this out of the hat: fairness, honesty, respect of property, long term orientation, concern for the poor, and many other nice things. All these are strikingly similar to what secular ethicists would suggest.

Admittedly, some religions gave rise to specific tools (e.g. Islamic Finance) or elaborate conceptual frames (e.g. Catholic Social Thought) or pretty unique companies (e.g. Zoroastrianism and the TATA companies in India). More interesting is the research on whether religious business people act more ‘ethical’ (in the sense of morally more desirable) than others. Here, it strikes us that the beauty is often in the eye of the beholder (i.e. the person who conducts the research). But that’s probably a subject for yet another blog post.

Photo by Chris Yarzab, reproduced under the Creative Commons License.

Ethical slum tourism

"Money good, working bad." Our guide, Ishaq has no shortage of aphorisms to capture the light and dark of life in Dharavi, one of Asia's largest slums. He points to the clouds of noxious fumes rising from the aluminium recycling unit where battered old containers are melted down and turned back into usable product. There are few if any environmental standards adhered to here, and health and safety is a concept seemingly irrelevant to the wage laborers whose safety boots are flip flops. But although the dangers are many, there is regular paid work. And for Mumbai's slum dwellers, that is what matters most. And besides, who else is going to do the dirty work of recycling the city's discarded junk and refuge, and returning it into productive use?

The life of a business ethics professor takes you to some pretty interesting places. It is not too often though that we find ourselves in the middle of a huge urban slum. Not that we've been short of opportunities having spent time in cities such as Rio, Cape Town, and Mumbai over the last few years. But there is always a profound sense of unease about stepping into the life of the city's poorest residents. Of course, in some cases it's just plain dangerous, such  in the favelas of Rio. But even when it isn't, or when there's a local guide at hand to provide security, there are significant ethical doubts too. Knowing that you can just saunter back into the air conditioned hotel at the end of your trip to the slum means that you're little more than a slum tourist exploring the underbelly of society for your own voyeuristic pleasure. However much you may claim it to be educational to see how other sections of society live, slum tourism can't but help to raise moral uncertainty. This New York Times op ed from last year summarizes these concerns pretty succinctly. As a result, we've stayed away from the dubious attractions of slum tourism. Until now.

On the advice of a colleague, we decided to investigate a so-called 'ethical' slum tour provider. Whilst in Mumbai teaching at our school's MBA program in India we hooked up with Reality Tours and Travel, which offers tours of Dharavi, the city's largest and most well known slum. Dharavi is pretty much slap bang in the middle of modern metropolitan area of Mumbai, and just a short ride away from the 5-star luxury hotel where our school puts up its itinerant professors. The contrast, as with much of modern Mumbai, couldn't be more stark. Air-conditioned comfort is immediately replaced by a sweltering cacophony of noise and dirt. And discreet service is replaced by perilous, unrelenting industry.

It's clear that this is not just any old slum tour. There is a strict 'no cameras' policy, and the focus of the tour is not so much the corrugated iron shacks of the residential quarters of Dharavi, but the remarkable commercial activity that powers the slum's economy. It is said that some 5000 businesses operate in the tightly packed lanes of Dharavi, accounting for an incredible $600m of turnover annually - much of it in the illegal or informal economy. Recycling, leather and pottery make us the largest proportion of this, and so it is these that provide the focus of Reality's slum tour. Ishaq leads us first to a fragrant bakery and then onto a micro plastics recycling business where piles upon piles of multicoloured plastics are dried and then painstakingly sorted on the roof, before being melted down and then formed into pellets for resale in the cramped concrete rooms below. A sink and a few rolled mats is the only evidence that this is also where the workers live and sleep once the days' work is done. After that we move on to other recycling businesses, before passing the leather cutting, tanning and treating area and then onto the more peaceful environs of the potters colony which called Dharavi home since the 1930s. Along the way, we also take in a popadom bakery to see how the cross legged women shape and bake the traditional Indian appetisers, and briefly pass through (but do not stop at) some residential lanes.

According to Reality, the aim of the tour is "to show the positive side of the slums and break down negative stereotypes about its people and residents". Our trusty guide certainly doesn't fail to offer a positive spin on what might otherwise simply turn into a grim picture of India's unrelenting filth and poverty. He engages amiably with local residents, and he shows us a local health centre, an English language middle school, thriving businesses - this is no sob story meant to induce pity but an encouraging (if realistic) glimpse into Dharavi's struggle to sustain and prosper against the odds. As if to reinforce this, the tour finishes at the community centre run by Reality's sister organization (the NGO Reality Gives) which provides English, computing and skills training to disadvantaged young people.

It's a nice touch, but the real kicker is that this is not just some minor charitable add-on to 'put something back'. When Reality talks about changing the image of the slum, it goes beyond simply refocusing the optics. The company is putting its money where its mouth is. Since setting up in 2006, Reality has pledged that a full 80% of the profits from the slum tours would go to local charities. They even publish a summary of their accounts on the web to prove it. The establishment of their sister NGO Reality Gives in 2009 has provided a focus for these efforts, and along with the community centre, has now opened a kindergarden to provide quality education for preschoolers in the slum.

'Ethical' or 'responsible' tourism of all stripes, is a work in progress. Ethical slum tourism, in particular, poses all kinds of moral challenges. In our opinion, Reality is doing a fine job in walking that tightrope. Whilst it doesn't appear to have yet addressed the critical questions of scale - the more it succeeds, the more it risks overwhelming the slum with tourists - it does tackle both the content of its tours, and what it puts back into the community. Training and employing disadvantaged young people as guides, focusing on slum businesses rather than people's private lives, and banning cameras all help remove some of the moral tensions that can give slum tourism a bad name. And making investments that help educate slum residents and give them a chance to improve their lives helps balance the one-sided equation a little. Just ask the Dharavi resident who reveled in taking snaps of our small band of tourists whilst our own cameras stayed firmly in our backpacks.

Photo by Meanest Indian. Reproduced under Creative Commons License.

Can the Canadian oil sands really be an 'ethical' source of energy?

The new year has got off to a bang in Canada with the new Environment Minister Peter Kent coming out of his corner fighting. According to Kent, the Albertan oil sands are not the environmental catastrophe we all thought they were. In fact, as he says, the oil sands are "an ethical source of energy". Yes, that's right. Alberta is the new home of ethical oil.  Oh boy, that's going to need some explaining.

Now, before you slam your head into the computer screen in disbelief, let's take a closer look at this claim and put it in a little bit of context. Kent's basic point is that because the oil sands are in Canada, they are properly and democratically regulated, they do not fall foul of corruption and abuses common in oil rich countries - and the proceeds don't go into funding terrorism. Compare that to the other states in the top 10 countries by proven oil reserves and you can see that he might have a point. Saudi Arabia, Iran, Iraq, Kuwait, Venezuela, UAE, Russia, Libya, and Nigeria - hardly a list of ethical hotspots it has to be said. As Kent puts it, "[Oil sands oil] is a regulated product in an energy superpower democracy... The profits from this oil are not used in undemocratic or unethical ways. The proceeds are used to better society in the great Canadian democracy."

OK, so let's not get into a debate about just how "great" the Canadian democracy is. After all this is a country that, under the current Government, has regularly taken to shutting down Parliament when things get a bit dicey. But against the rest of the countries with big oil reserves, it still comes up looking pretty good by comparison. This is important for potential buyers of oil sands oil, especially the US which is concerned with global energy security, and is looking to wean itself off its dependence on oil imports from countries that it would rather not have to go to war with again. In fact, Kent's ethical makeover of the oil sands is all part of the major charm offensive that the Canadian government is pursuing to bolster its reputation in the US and elsewhere where climate concerns have started making Canadian oil distinctly unpopular in recent years.

In this context Kent is right to promote some of the virtues of the oil sands. All energy sources have their positives and negatives - yet the oil sands has become chiefly known only for its social and environmental downside. So a bit of rebalancing of the ethical equation is not inappropriate. But claiming any source of non-renewable energy is "ethical" and especially one that is fraught with such problems as oil sands oil, is not too helpful in advancing the debate in a meaningful way. Such claims may get media attention but they also infuriate critics and simply serve to entrench existing antagonisms. Climate activists are likely to target the oil sands even harder now that the Canadian government is drawing out the battle lines in this way. Greenpeace Canada for example had already started campaigning on a 'Separate oil from state' platform including an anonymous leak site for inside tip-offs about government efforts to promote the oil sands. This is all part of a concerted NGO response to what  the Climate Action Network regards as, "federal officials ... systematically trying to kill clean energy and climate change policies in other countries in order to promote the interests of oil companies."

Far better it would have been then for Kent to acknowledge the shortcomings of the oil sands along with proclaiming their virtues. Any freshman ethics student knows that a utilitarian cost-benefit analysis of the ethics of different energy sources has to take into account more than just one factor. Country of origin is just one of a whole range of relevant issues. There is no way that the tar sands can be regarded as an ethical source of oil based on one factor alone. But country of origin "benefits" can be traded off with climate change "costs" if you subscribe to a utilitarian mode of thinking. However, a myopic, one-sided piece of government propaganda doesn't help anyone ... especially when it is proclaiming the virtues of "the great Canadian democracy".

Photo copyright Greenpeace. 

Business ethics more culturally significant than CSR ... but not everywhere

'Business ethics' and "corporate social responsibility" are two terms that are often used interchangeably, but at the same time represent somewhat different lenses on business practice. Ethics, of course, is always concerned with norms and values, and is basically about what is right and wrong. CSR on the other hand may be about these things, but doesn't have to be - lots of people take a purely economic or strategic approach to CSR without any real consideration of the normative dimensions. CSR is also, as might be expected, a lot more business-friendly than business ethics. In fact, people often tend to use CSR when they're talking about the good things companies are doing, and business ethics (or a lack of them) when talking about the bad things they do. There are other differences too, but we'll save the definitional niceties for another day.

The point is that the term you use is not always just arbitrary. And the two have a very different heritage even if they have broadly similar concerns. As a professor of business ethics (Crane) and a professor of corporate social responsibility (Matten), and co-authors of textbooks on both subjects, we often get asked which is the most important, which is the most popular subject at university, and why we do we need more than one term to describe the same thing? So we were pleased to discover the new gizmo from Google that lets you easily and quickly do a simple analysis of the cultural significance of different words and phrases. The Ngram viewer from Google Labs plots the incidence of specific terms over the last 200 years in more than 5 million digitally scanned fiction and non-fiction books. It may not let you do anything very sophisticated from a research point of view, but it is incredibly easy and fun to use.

So we plugged "business ethics", "corporate social responsibility" in, and for good measure added "corporate responsibility" and "sustainable business". The results, shown above, relate to books published in English from 1900 to 2008 (the last year provided by the data). As you can see, CSR only really emerged post 1960, whilst business ethics has enjoyed more than a century of cultural dominance, with particular peaks around the crash and depression of 1929-1930, and the financial scandals of 2000. And CR was actually a preferred term to CSR in books until around 2001.

By the looks of things, the dominance of business ethics could be coming to an end though. CSR and corporate responsibility have become increasingly more used - especially in the last decade which has seen an exponential growth in their incidence. Saying that, we'll see if the most recent financial scandals see another resurgence of business ethics post 2008 as the last data points on the graphs might seem to suggest.

An interesting feature of the tool is that you can distinguish between books published in English in the US and books published in English in the UK (as well as books published in non-English languages). And here, we were intrigued to see that in UK publications, CSR has already overtaken business ethics as you can see in the graph below.

In fact, in UK books, business ethics in general has not achieved anything like the cultural significance it appeared to in the first graph. Until the early1980s corporate responsibility was actually the dominant term.

Looking then to US books (see below), we can see that it is here that business ethics particularly stands out - albeit with a mid 1970s blip when corporate responsibility overtook it. Even as late as 2008, business ethics still dominates by quite a gap, although this is clearly narrowing over time.

The US emphasis on individual ethics versus the European focus on system-level responsibilities is something we've discussed at some length in our Business Ethics textbook. Plus the UK has been very much at the vanguard of the CSR movement. So these graphs don't come as a complete surprise. Still, it's interesting to see the data set out so starkly. That said, there are clearly some limitations to the Ngram methodology, as has been widely discussed. Still, there is clearly food for thought in here. And, of course, we're sure there are a whole lot of other corporate responsibility analyses that can be conducted with the tool. Do let us know of any interesting ones you come across.

Client 9: the Rise and Fall of Eliot Spitzer

"All I ask for is an unfair advantage.” Reputedly a favourite line of Hank Greenberg, the former Chair and CEO of AIG, it makes for an apposite tagline for a leader forced to resign by his own board as a result of investigations into financial impropiety. The Greenberg investigations were instigated by then New York Attorney General, Eliot Spitzer, who made a habit of making enemies amongst the city's most powerful  corporate leaders during his uncompromising campaign to prosecute corporate misconduct. And as writer and director Alex Gibney argues in Client 9: the Rise and Fall of Eliot Spitzer it was the foes he created in his day job as much as the night time friends he sought among the high class escort world that ultimately brought him down.

Gibney, the oscar winning documentary maker of Taxi to the Dark Side, Casino Jack, and Enron: the Smartest Guys in the Room, is no stranger to the twilight morality of big business, and the powerplays of American politics. In Client 9 he weaves the two together in a fascinating and surprisingly gripping account of Spitzer's downfall. It's played out like a battle of giants, Spitzer the so-called "Sheriff of Wall Street" fiercely defending the moral purpose of his achievements, and a cast of highly entertaining, and visibly bristling combatants like Greenberg who can hardly contain their pleasure at tough-guy Spitzer's remarkable demise ... and their own part in contributing to it.

There's no shortage of insight here about the ethics of business and politics, and especially in Spitzer's spectacular rise and fall, about the intersection of public virtue and private vice.  He gives a frank and compelling interview to camera, insightful and erudite on his public achievements and then stilted and seemingly at a loss to explain his private problems. The question at the heart of this is how could someone so vigorous in policing the law so knowingly engage in illegality. Spitzer himself doesn't offer too many answers. But one of his aides makes the case in terms of a balance sheet - on the one side cracking down on the financial misdemeanours that led to a worldwide financial crisis that cost billions and billions of dollars - and on the other side having sex a few times with a prostitute. In those terms, Spitzer is on the side of moral good. The good he did far outweighed the bad - at least that is how Gibney couches it in a balanced but ultimately sympathetic portrayal of someone that tends to divide opinions. But Spitzer also admits to hubris, albeit in rather ironically self-important terms. “The only metaphor I can think of" he says at the outset of the movie, "is Icarus. Those whom the gods would destroy, they make all powerful.”

It's not just Spitzer's brittle character though that gives Gibney's movie it's edge. It also features some wonderfully revealing portraits of his enemies and other players in the story. These include: Kenneth Langone, a billionaire American businessman and an outspoken critic of Spitzer; Roger Stone, the infamous lobbyist with a Richard Nixon tatoo on his back; Joseph Bruno, Spitzer’s chief political rival when he became governor of New York; “Angelina” his preferred escort; and audience favourite Cecil Suwal, the disarmingly ditzy CEO of Emperors Club VIP, the escort agency at the heart of the scandal. It's a feast of moral messiness, perhaps best summed up  by the giggling Suwal who admits to getting "confused" about the illegality of high end prostitition given the huge sums of money involved. Gibney doesn't give us any reason to believe that she was the only one.

Baby shopping: ethics, fiction and the marketization of human reproduction

We are big fans of the power of film to illuminate business ethics issues, but we don't often discuss the role of fiction.  But that doesn't mean we're not interested in it. And to prove the point, we thought we'd point out that a short story written by Andy has been short-listed for a writing prize, the AnyBook Award, organized by the American Book Centre in Amsterdam.

The theme of the competition is Redesign Your World, and Andy's entry "Baby Shopping" is all about the marketization of human reproduction. It doesn't offer any ethical answers or certainties, but uses fiction to explore what happens when the emancipatory forces of choice get the better of ethical considerations ... and the very human problems that ensue. It's all focused around personal relationships rather than abstract ethics, which is where fiction has some obvious obvious advantages over our more usual academic writing. It's not to be taken too seriously, but if you've ever cringed about stories of celebrity adoptions, or wondered whether you really could get just anything on the interenet, you might want to take a read. The competition limited entries to 1000 words so it won't take long! 

For the next week, until 22nd Nov 2010, the top 10 shortlist are the subject of a public vote, so if you like Andy's entry, do give it your vote. The other shortlisted pieces (which include art and poetry as well as short stories) are certainly worth a read too, and in keeping with the Redesign Your World theme, some include strong sustainability themes. So stop reading this and step into the creative world with us for a minute.

Photo by ^^TILSIM^^. Reproduced under Creative Commons License