Category: Business Ethics

By Posted on Posted in Abundance and Prosperity, Business Ethics, Politics, Uncategorized

Most American investors think that socially responsible mutual funds contribute to better corporate behavior, according to a new major investor survey conducted by Calvert [https://www.calvert.com]. Knowing that a company is rated higher in terms of their social performance would make 71 percent of Americans more likely to invest in that company and 77 percent would purchase more of their products and services.

Going through email that was not a priority when it arrived, I found the above tidbit in David Batstone’s WAG newsletter (from last April, I confess).

Those are remarkable statistics. Over 2/3 use social responsibility as an investment screen, and over 3/4 as a factor in making a purchase.

So why do we still have so much unresponsive, focused-only-on-financial-bottom-line, and downright nasty corporate behavior? Because people don’t realize that good corporate behavior is a direct path to better profitability. If you’d like to educate a corporate friend on this, I recommend my award-winning sixth book, Principled Profit: Marketing That Puts People First–it outlines exactly how and why companies succeed better by doing the right thing.

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By Posted on Posted in Business Ethics, Marketing Trends/News, Uncategorized

The Word of Mouth Marketing Association (WOMMA) has in the last couple of months taken several steps to build ethics consciousness among its members.

This, of course, is something I applaud. It’s quite necessary, as word-of-mouth marketers include those who have (in the past) paid people to act as shills without disclosing their relationship.

I put a link up to WOMMA’s overall code of ethics some time back. Now, the group has released draft standards for marketers communicating with bloggers. (All of its ethics programs can be accessed from a single link–which, commendably, is a main link from the home page.

This is good. And Dell Computer has already become the first major company to sign on to WOMMA’s Ethics Adoption Toolkit.

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By Posted on Posted in Business Ethics, Uncategorized

From the Christian Science Monitor, regarding Lesotho’s once-moribund, now resurgent clothing industry, and how it shifted toward ethically clean clothing:

But at the same time, an alliance of companies, NGOs, government representatives, and others were trying to find ways to protect the country’s industry. Already, some brands had improved working conditions in Lesotho to answer concerns about sweatshop labor. The group realized that if Lesotho could start aggressively marketing itself as an ethical source of clothing, it could retain and even grow business. “Ethical trading gives you a competitive edge,” says Andy Selm, regional textile and apparel specialist at ComMark Trust. “You can attract a better quality of customer.”

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By Posted on Posted in Arts & Entertainment, Business Ethics, Ethics in Government, Uncategorized

Just saw this movie today. Not only is Williams brilliant as the comedian running for President–and dealing with the ethical dilemma of his life–but the movie makes wonderful points about vulnerability of electronic voting machines, ruthlessness of certain corporations, politicians of both major parties and their all-too-cozy relationships with special interests, and more.

No matter what your politics, it’s a great romp making serious points. Ideally, see it *before* the election. And tell your friends.

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By Posted on Posted in Business Ethics, Media Ethics, Uncategorized

By coincidence, I received two pieces of e-mail today that both deal with the question of how
much disclosure is appropriate when someone takes up a cause and is quietly paid to do it.

First, a ray of hope from the Word of Mouth Marketing Association: a proposed list of 20 questions marketers should ask themselves to determine if their buzz campaign is ethical–and prefaced with these instructions:

  • Ask these questions before launching any word of mouth marketing campaign.
    Get answers from your agencies and vendors, as well as from their subcontractors.
    Think about the risks to your reputation before you cross any ethical lines.

    • Remember: Consumers come first, honesty isn’t optional, and deception is always exposed.

    Just as an example, # 8 of the 20 asks,

    Do we forbid the use of expressly deceptive practices from our employees/advocates, such as impersonating consumers; concealing their true identities; or lying about factors such as age, gender, race, familiarity with or use of product, or other circumstances intended to enhance the credibility of the advocate while deliberately misleading the public?

    This is a draft, and they’re actively soliciting public comment.

    But then the other post was a note from blogger BL Ochman about “flogs”–fake blogs–in support of Wal-Mart, by people who were paid by the retail giant’s PR firm to be in support of Wal-Mart and until recently didn’t disclose this relationship.

    She cites a much more in-depth article about the situation.

    That post says, in part,

    As a result of the new transparency, every entry on the blogs is now credited to one of three contributors: Miranda, Brian or Kate. A click on these single monikers reveals biographies of [the PR firm] Edelman employees Miranda Gill, Brian McNeill and Kate Marshall, whose clients include Working Families for Wal-Mart, the sites say.

    While noting that he was speaking in generalities and not to this specific situation, Dave Balter, president of the Boston word-of-mouth marketing firm BzzAgent, said: “Even if you’re doing the right thing but you know you’re going to deceive people, you have to do everything to make sure it’s completely transparent, and any tactic that crosses that line you’re doing a disservice to the brand [and] the consumer.”

    Now, Edelman has decided, finally, to disclose these relationships. What were they thinking trying to hide them?

    My suggestion to the floggers: go back and read those 20 questions from WOMMA, and try to answer them honestly. Otherwise, people will answer them for you, and it may not be pretty.

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    By Posted on Posted in Business Ethics, Ethics in Government, General Commentary, Politics, Uncategorized

    The four big issues I name in this post’s headline–Ford Motor Company’s massive earnings losses of $5.8 billion in the third quarter of 2006, Enron CEO Jeffrey Skilling sentenced to 24 years, Democratic hopes raised with some 48 House seats in play and at least four of the six Senate seats needed to shift control expected to go Democratic, and the no-confidence vote President George W. Bush has been getting in recent polls–may seem on the surface to have nothing in common–but actually, there’s a strong thread running through all of them.

    This is the common thread: The American people are totally sick of being lied to, manipulated, and stepped on by powerful interests who care only about a narrow agenda of partisanship and greed. To say it another way, the real issue in the psyche of America right now is ethics.

    And as someone who has started an international movement to tilt business toward higher ethics and written an award-winning book, Principled Profit: Marketing That Puts People First, about how ethics is one of the strongest drivers for business success, I see this as a positive trend.

    And it’s clearly time for a change, in both business and politics. In my opinion, the last ethical Presidents–both of them had a strong sense of personal integrity, even as their politics were vastly different–were Jimmy Carter and Ronald Reagan. Now, as regular readers of this blog know, I have no love for the policies of Reagan, or for some of the very creepy people he surrounded himself with (some of whom have prominent places in the GWB administration)–but the man himself always impressed me as someone who honestly believed in the things he was saying, and the numerous ethics scandals of his administration never seemed to enmesh him personally, and seemed far more a matter of a hands-off governance style. As for Carter…could anyone imagine that the man who freely admitted to “lust in my heart” but knew how to control that lust going through the shameful charade that Bill Clinton engaged in? And Carter as an ex-president has been a world statesman for social and economic justice around the world. I daresay he has made more of a difference in the last 26 years than in his four in the Oval Office.

    So how does Ford fit into all of this? It’s simple. Not once but twice, Ford has been caught with its ethical pants down, putting short-term profit above human safety, failing to rework known design flaws that cause fatal accidents, because its actuaries decided that paying the wrongful death lawsuits would be cheaper than fixing the problem. You’d think the company would have learned from the mess it made with the Pinto’s exploding gas tanks in the 1970s, but they were back with the same attitude about the Explorer’s little problem staying upright in hot weather–a problem the company apparently was well aware of before the car even began production. Compare that short-sighted and dangerous attitude with the amazing response of Johnson & Johnson to the Tylenol poisoning scare–and it’s not at all surprising to me that J&J rebounded very quickly after spending a vast sum to warn everybody about the problem and institute a massive recall of all Tylenol products.

    I can tell you that when I went car shopping two years ago, I didn’t even bother checking into Ford. I figured any company that would rather pay death benefits than spend a couple of bucks to fix a known cause of fatal accidents was not a company that I wanted to entrust with my family’s safety for the next five or ten years. And I suspect a lot of other people have done the same. The safety blowback may have even been a factor in Ford’s quiet decision a few years ago to purchase Volvo, a car manufacturer known for its concern with safety.

    I would absolutely love to see Ford start practicing all the groovy, concerned, and earth-friendly messages that Bill Ford says the company stands for–but I have to laugh when we get all these Green talking points from the company that unleashed the massive, gas-hogging Expedition. Sure, Escape hybrids are a step in the right direction, but a small one. My non-hybrid gas-powered small sedans get better mileage than an Escape even with the hybrid boost. So I don’t expect that a lot of people buy Escapes because they want to save gas.

    Skilling, of course, got hit hard in part because he was unlucky enough to have his literal partner in crime Ken Lay drop dead before the sentencing. But as the New York Times points out, the sentence was as strong as it was because people got hurt by his lies:

    The higher sentence, the judge said, was because he found that Mr. Skilling had lied to the Securities and Exchange Commission about the real reasons for his sales of Enron stock before the company’s collapse in December 2001. Mr. Skilling said he sold the stock only because of the impact on the market of the 9/11 terrorist attacks.

    And one very positive aspect of this case is that the government is going after his–and Lay’s–ill-gotten gains. Of course, the lawyers will get a huge chunk, but they are actually discussing restitution to those who were badly burned as the company’s failure sucked the life out of their retirement savings.

    * * *

    Before I close…a quick thank-you for several recent articles encouraging people to help stop future Enron and Ford scandals by joining the Business Ethics Pledge…and especially to blogger Jill Draperand e-zine editor John Forde (sorry, I can’t find a link, but you can subscribe to his newsletter at jackforde.com) for their rousing endorsements.

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    By Posted on Posted in Business Ethics, Uncategorized

    As someone who writes about business ethics, I have, of course, been following the appalling scandal of backdating stock options–rewarding overpaid CEOs and other executives by pretending the option was issued earlier, at a lower price–creating a windfall for the employee, whose stock is immediately worth more than it’s supposed to be. It has tax consequences, too.

    But I’d somehow missed the part about at least one company providing backdated stock options to the estate of its deceased CEO! Paul Krugman writes about this in yesterday’s New York Times:

    The moral of the story is that we still haven’t come to grips with the epidemic of corporate misgovernance revealed four years ago by the Enron and WorldCom scandals, then drowned out as a political issue by the clamor for war with Iraq. Even now, we’re still learning how deep the rot went.

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    By Posted on Posted in Business Ethics, Uncategorized

    On his own ethics blog, Chris MacDonald looks at questions raised by Greenpeace about Apple’s commitment to the environment. He brings a journalist’s healthy skepticism to claims on both sides. Fascinating reading.

    Full disclosures: I have been an Apple user/loyalist since 1984, and I have on occasion given money to Greenpeace.

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    By Posted on Posted in Business Ethics, Marketing Trends/News, Media Ethics, Uncategorized

    I couldn’t agree more with John Ritskowitz’s blog entry criticizing the marketers of a new anti-wrinkle product that was actually Nestle’s Quik powder–yup, the chocolate breakfast drink of your childhood.

    This was a test by NBC’s Dateline, to see if they could find a marketing firm unscrupulous enough to take on the project despite dubious clinical results. And they did.

    His blog includes a link to the Dateline report, which describes informercial scoundrels as “television terrorists.”

    Masquerading as a representative from “Johnston Products,” a Dateline reporter contacted a marketing firm and told them up front that he didn’t think the product would help many people, and that no clinical trials were run to test its effectiveness.

    And what did the marketing firm think? They thought there wouldn’t be a problem, as all that was needed was “somebody in a white coat” to give the impression that the product had been scientifically tested. That and a few paid testimonials.

    The real shame was that the marketing firm then found a real doctor, a well-credentialed doctor, a hospital’s Chef of Dermatology, in fact (Dr. Margaret Olsen, then of Santa Monica’s St. John’s Hospital), who gave a glowing endorsement without ever examining the product. Yuck!

    Ritskowitz goes on to cite several other products that give marketers a bad name, and were eventually pulled off the market under government pressure.

    I totally agree with is analysis that this deceitful crap makes it much harder for us legitimate marketers. And of course, I agree with his call to sign the Business Ethics Pledge, which I founded (big grin). We currently have signatories from 24 countries, and I’d love you to be the next to sign.

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    By Posted on Posted in Business Ethics, Ethics in Government, Uncategorized

    I’ve been following the issue of election fraud ever since the highly questionable 2000 results in Florida–but I learned a few new things from Robert F. Kennedy, Jr.’s latest article in this week’s Rolling Stone:

    * The highly partisan Ohio Secretary of State, Kenneth Blackwell, who wore the two incompatible hats of chairing the Bush 2004 campaign and overseeing the election in his state, bought $10,000 worth of Diebold stock shortly before trying to circumvent the competitive bidding process in favor of a Diebold-only “solution.” Oh, the stink of corruption in the land!

    * RFK found a Diebold whistleblower willing to go public: Chris Hood, who was part of an effort to patch 5000 voting machines in and around Atlanta (the most Demcoratic-leaning part of Georgia), personally patched 56 and directly observed the patching of 1200 others–under the direct supervision of the president of Diebold’s elections division, Bob Urosevich, who flew in from Texas for the occasion. this was the election in which both the Governor and Senate races came out the opposite of everything that was expected, with Republicans winning despite huge leads by Democrats in polls the week before.

    Georgia law mandates that any change made in voting machines be certified by the state. But thanks to [Georgia Secretary of State] Cox’s agreement with Diebold, the company was essentially allowed to certify itself. “It was an unauthorized patch, and they were trying to keep it secret from the state,” Hood told me. “We were told not to talk to county personnel about it. I received instructions directly from Urosevich. It was very unusual that a president of the company would give an order like that and be involved at that level.”

    My fellow Americans–we have the rights in a democracy to know that every eligible voter who tried to vote was able to do so…that every vote is recorded and counted…and that the count reflects the accurate reality of how those votes were actually cast. It is time to insist on these rights. Right now, we don’t even know if we’ve had a coup, in election after election using these troubling machines and similar others from their competitors. We do know that there have been all sorts of irregularities, breakdowns, false totals, and more.

    Senators Barbara Boxer and Chris Dodd have introduced emergency legislation to provide for–and fund–paper ballots in case of machine breakdown, in time for this year’s election. Urge your Senators and Representatives to support this crucial measure.

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