Wally Block is calling for more transparency in the process used by the Ethisphere Institute in putting out their list of the world’s most ethical companies, as recently reported in Forbes. Block’s point is that “ethical” is one of those things like “pregnant” or “dead.” Either you are or you aren’t:
You aren’t “more ethical” or “less ethical.” If your shirt is stained, it’s a stained shirt, no matter if the stain is smaller than the one on your buddy’s shirt. Ethics is like that. You’re ethical or you’re not. Debate the details and the gray areas over coffee, but don’t make it part of your advertising or shareholder relations, even if you do have a neat little graphic to put on your web site.
From reading the the Forbes article, the Ethisphere Institute definitely puts a lot of work into compiling this list, reviewing questionnaires from thousands of applying companies, checking references, and performing numerous other screening steps along the way before deciding on the big winners. Block’s call for a more open sharing of the selection criteria is likely to go unheeded, however, because the Institute apparently views their proprietary ranking system, the “Ethics Quotient,” as something of a secret sauce.
I have no doubt that all 110 of the companies named are, indeed, ethical organizations that hold to the highest standards of good business practice. But Block’s point is well-taken.
There is a scene in the movie Bobby Jones: Stroke of Genius where the brilliant young golfer, engaged in a fiercely competitive match, fears that he may have moved his ball while preparing for his shot. Doing so involves a penalty stroke, which he cannot afford at this point in the match. He asks the officials for a ruling. None of them saw the ball move. He asks his opponent, who also didn’t see anything. The officials tell him that the call is his and his alone to make.
Because he is unsure, Jones applies the penalty to himself. One of the officials, moved by the young man’s integrity and sportsmanship, reaches out to shake his hand and offer his congratulations.
“You might as well congratulate a man for not robbing a bank,” says Jones.
In putting together a list of the most ethical companies, are we congratulating people for not robbing a bank? And what are we saying about the companies that don’t make the list? The Forbes articles points out that companies are screened if they’ve had “significant legal trouble” in the past few years, which makes sense if we’re talking about criminal activity, but what about a company that is subject to multiple nuisance lawsuits? Moreover, companies are screened if they deal in tobacco, alcohol, or firearms.
That screening tells us a good deal about the biases and assumptions of the Ethisphere Institute, but very little about how ethical (or unethical) any of those rejected companies actually are. It seems odd that a firearms manufacturer is inherently unethical while a defense contractor like the Aerospace Corporation is able to make the list. Maybe all tobacco companies are off the list because of the health problems associated with their products as well as the risk, no matter what their internal practices, that children may get a hold of and use them. Meanwhile, General Mills, which very specifically markets products like Lucky Charms to children, is on the list.
No, I’m not suggesting that selling kids on Lucky Charms is the same as selling them on Lucky Strikes. I like Lucky Charms and I always enjoyed the commercials when I was a kid. (Magically Delicious!) But some would argue that in selling products like Häagen-Dazs ice cream and Bugles (another fav of mine), that General Mills is causing its own share of health problems. So how can they be “ethical” if a tobacco company can’t?
The real issue, per Wally Block, is how that term is being defined. Without clarity on that point, the distinction of being named one of the world’s most ethical companies is less meaningful than it might be, in spite of the Ethisphere Institute’s efforts.