Corporate Ethics

[freeztar]

This is an interesting film for those so inclined to watch. I saw the whole thing and found some of it to be eye opening. Of course there is the usual bias of "corporations are bad", but they at least do a few plugs here and there in support of the genuinely beneficial contributions of corporations. It's worth a view, having such vivid characters such as Noam Chomsky, Michael Moore, Naomi Klein, and Milton Friedman.

 

YouTube - The Corporation http://www.youtube.com/view_play_list?p=FA50FBC214A6CE87

[LaurieAG]

How does one measure ethical behavior? How can we compare ethics of one era to ethics of another? Or one company to another? Or one person to another? To say "many businesses are corrupt" requires a good definition of corruption - does it mean breaking the law? Does it mean using business tactics to harm the consumer? Does it mean using business practices to harm the workers? Does it mean using business practices to harm the owners/stockholders?

 

Hello pgmrdave,

 

If you change 'harm' to 'rip-off' you will probably get a better idea of the Australian perspective. You will get an even better perspective when you realise that under our 'laws', cabinet ministers can virtually do what they like and the 'ministers decision' is law (increasingly with no opportunity to appeal), regardless of the integrity, honesty and truthfullness (or extreme lack of any of these traits of humanity) involved in making the decision.

 

Also, if the ministers don't like the courts releasing people on bail (on trumped up/politically fabricated charges), they can remove their work visas and refuse to reinstate them (like spoilt children throwing a tantrum), even when their own federal Director of Public Prosecution (DPP) throws out the charges.

 

You'll find that ethics and the 'law' (as exercised in Australia) can be synonomous with corruption, and has been so at other times in the past (refer Rum Rebellion).

 

Simplistically, ethics, corporate or otherwise, depends on how people are treated, like serfs or like peasants (i.e peasants have a choice while serfs have a master).

[TheFaithfulStone]

I don't believe that there are many large corporations (over 1,000 employees) that act always in an ethical manner to all their customers, staff, competitors, the society they operate in, the environment, their social responsibility.

 

I don't believe there's any group period that large that is capable of acting ethically.

 

Ethics are for individuals - we have groups so that we can ignore them [ethics] when we think we need to accomplish something.

 

Why is that? Because responsibility is distributed - so nobody feel THAT bad about it, and because ultimately, a corporation can't REALLY be held liable. You can "kill" a corporation by fining it into oblivion, but the trick is that no single person will lose more than they put in. No matter how badly you behave - at worst you gain nothing. You won't ever lose more than you put in.

 

Why is it that "corporate persons" have limited liability, where as real people don't?

 

How you "fix" that, I have no idea. I doubt you could get rid of the LLC, and still have a functioning economy.

 

TFS

[Liutas]

TThe company I work for has some 22,000 employees in 33+ countries around the world. We are a public US corporation, so we are required to comply with SOX. We may have spent $100,000,000 or more on the task of documenting our compliance with this act over the past 3 years. That includes the fees to the auditing firm, hiring consultants to help us with the audit process, updating processes to comply with the audit rules established, updating business systems to be compliant with the business rules established. All hard costs that someone in the company must know. There are also soft costs involved in following the new procedures. Simple tasks in the past have become a trail of red tape for the sake of compliance. And example. In the past I would be installing business systems in a new plant. I would fill out a paper with the names of the employees, and what we wanted their login names for the system to be. I, as the IT project manager could do this on my own authority. Now I need to fill out an entire request form for each user. That requires signature approval from the plant manager and the plant controller, and the employee. Copies are sent to a divisional processing center where the task is done. What I used to take 2 people and a single email (myself and the person doing the work) now takes 4 people plus each employee being processed. Why? Because of defending against hypothetical abuses of the system.

 

Our biggest competitors are foreign and private companies, none of whom were required to spend a dollar on compliance.

 

Well they don't have to spend a dollar on SOX compliance. That doesn't mean they don't have compliance issues of their own. Like you I work for a mulitnational company that, while listed on the UK stock exchange, has the majority of it's assets (and manufacturing) in the USA. We were living under SOX legislaion and ISO9000 legislation. To all intents and purposes we were duplicating the work for compliance under two different systems. We have since managed to get rid of the SOX compliance. However, the ISO is something that has been around for some considerable time and is probably at least as draconian (albeit in different ways). The office i work in turns over approx. $25,000,000 per year and our costs to maintain this accreditation are astronomical (approx $6,000 a year just for the audit and we are one of something in the region of 50 operating units in a $2,000,000,000 business)

 

That is money we didn't spend on R&D, or on capital investment, or on expanding markets. Research that includes making our products more environmentally friendly. Research that includes improving our use of recycled materials. It was money leached from profits for the purpose of generating "peace of mind" that every step is being taken to prevent fraud. Thanks so much for your acknowledgment of that effort (on behalf of the hundreds of millions of people working on this problem who apparently make no difference).

 

I would agree with you there! Have you also suffered under the new European legislations - the Regulation of Hazardous Substances (ROHS) and the Waste Electrical and Electronic Equipment (WEEE - no really!) Acts?

 

Corporations are also taking great strides in becoming more environmentally conscious. Generally speaking waste = inefficiency. Through the simple process of continuous improvement the amount of waste within an industry gets lower over time on a per unit basis. Corporations also do a great deal internally, locally, nationally, and globally to be known as "green" or environmentally friendly. Progress is made every day on every front to lower the environmental impact of industry. The trend is in the favor of clean, and that is not just because of the political correctness and the marketing appeal, but in the very end because it is the most cost effective way of doing business.

 

This is the main thrust behind the two directives mentioned above. It costs us as a manufacturer/supplier a considerable sum to manage. We have outsourced our WEEE compliance to a specialist company at a cost of more that $20,000 per year, none of which is funded from sales and comes straight off the profit margin. ROHS Complaince was a little more difficult require complete redesign of the majority of our equipment and the recertification of the new designs. This cost us serious money in terms of R & D costs and further losses due to lost sales during the process (which naturally over-ran). As an additional note on this, the new models contain parts that are significantly higher in value and as a result we forseee significant drops in sales over the coming financial year.

 

And all of that is why I take exception to your rather flippant comment that ethical standards are at an all time low. You may WANT to see that as just common knowledge, but it is in fact nothing but uninformed BS or political spin.

 

Bill

 

Agreed!

 

L

[Michaelangelica]

Sunday 02 September 2007

 

Listen Now - 02092007 | Download Audio - 02092007

Professor Robert Reich on the essentials for a decent working society in the 21st century.

 

Professor Robert Reich, former US Secretary of Labour under President Clinton, on the essentials for a decent working society in the 21st century. Reich talks about his French designer hips, his Japanese-American car and bottom up economics.

interesting economics talk

Big Ideas

i wonder where the rich people -the top 0.1% -and multinationals decide when and where to pay tax?

If as the speaker says there are no more "national" companies they are all multinational.

[Michaelangelica]

World Business Review

World Business Review

 

ListenListen (26mins 30secs)

 

Last Updated: Thursday, 3 January 2008, 15:50 GMT

 

Date of first transmission: 2008-01-04T15:48:00-00:00

 

*

Find a Programme

 

It's the time of year when skillful investment bankers get huge performance bonuses ... no performance, no bonus, or worse ... but that harsh rule seems to apply less rigorously in the corporate world. Boss bonuses have been huge in recent years; executive officers quitting companies in trouble and walking away with fat payoffs. These payments are often queried by shareholders, but are regularly fobbed off. Now the tide may be turning. A former chief executive in the US has agreed to repay $620m ... start of a welcome trend? Listen to Rodney Smith and his guests; New York lawyer Mark Indelicato; Corporate Governance expert Professor Charles Elson of the University of Delaware; and in London, Andrew Hilton, director of the Centre for the Study of Financial Innovation.

BBC World Service - Find A Programme - World Business Review