More or Less Ethical?

6

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.

I actually got hungry while writing this post.

6 Comments

  1. 2014-07-04 01:03:20

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  2. 2011-03-31 17:58:03

    I would argue that a company that sells Lucky Strikes is more ethical than a company that sells Lucky Charms. Purchasers of cigarettes are adults and know what they are getting into. Companies that sell sugar bombs to kids on Saturday morning television are dooming them to a lifetime of bad habits, obesity and diabetes. Rock on General Mills.

  3. 2011-03-31 12:25:05

    The Biz Plan: Position yourself as The Judge & position others as supplicants. Keep your criteria secret, keep supplicants guessing as to what the criteria are & with good PR, you can own the niche...then mine it for all its financial/social/ego benefits. Name choice is critical. This is classic Trout & Ries.

  4. 2011-03-31 11:27:51

    I guess since GE made the list, having a bunch of your expert lawyers figure out a way to not pay any taxes must be ethical. On the other hand, I'm sure their HR department has spearheaded a new 'Green' initiative which probably counts for a lot more.

  5. 2011-03-31 09:53:16

    "The real issue…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…"
    Exactly the point of such self-congratulatory introspection. Might as well sit around staring at one’s own navel and giving oneself an award on it being “lint-free”. There is a class of people (many of whom run corporations, or sit in the hallowed halls of Congress) that is given to intentionally using ill-defined words and phrases, precisely because they are ill-defined, so as to be able to later claim those words and phrases meant something entirely different from the obvious intention of their use in the earlier instance.

  6. 2011-03-31 08:15:22

    I'd be interested to see some transparency into the stats for companies that applied and the countries they're from. Given that the article reports that applications were received from over 100 countries, it's interesting to see that of the top 110 companies 68 are from the US...

  7. 2011-03-30 21:26:54

    While I generally agree with your sumation regarding the Ethisphere Institute's peculiar and, apparently deliberately, vague standards as they might relate to a given definition of "ethical", Mr. Block's quoted statement is factually wrong as well as misleading. Let us [Fisk]: You aren’t “more ethical” or “less ethical.” You in fact are "more ethical than ..." or "less ethical than ..." some other. It is perfectly acceptable practice to engage in relativistic measures of adherence to some given standard of conduct and judgement, so long as such is applied openly and evenhandedly. 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. Distinguishing between the nature of stains (the moral justification underlying some action/stain) is one of the primary outcomes any ethical standard is intended to supply for its users. Leaving the common example of death/murder as too inappropriate to a business-related forum (one sincerely hopes :)), consider the ethical question, "When is taking another's property ethically permissable?" From the tone of his quote, I expect Mr. Block was interviewed from his cell in the federal prison in which he resides for failing to comply with the "unethical" tax code requirements imposed upon all US citizens and residents (by their apparently equally unethical fellows elected to political office). 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. The existence of debatable "details and grey areas" is the only justification for the existence of any "code of ethical standards and practices" (or whatever alternative title you prefer). Indeed, it is by means of these coffee clatches that we distinguish between potential choices at any level more deliberate than blind chance. Recognising that any source of information derives from the compiler's/presenter's bias, so too do any of the world's numerous examples of "ethical conduct" as pronounced by those who benefit from it's enforcement. [/Fisk] It is, I believe, perfectly obvious that there are differing measures of "ethical" to be applied to a given action/person/company depending upon numerous circumstancial parameters. In more classical strategic terms, the context in which something occurs provides the standard by which it is best measured and judged by those outside that context. This is the purpose of ethical codes; to provide some articulated measure by which to judge impending action from differing viewpoints outside your own. Website graphics strike me as being a perfectly legitimate mechanism whereby to both articulate a given code as well as one's compliance with it. Mr. Block's pronouncement above is the very definition of "parochial".

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