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230 The Thirty…Day MBA
contribution to the environment at a much lower cost to its shareholders;
but probably on another continent and in another technology。
Resolving stakeholder conflicts calls for tact and munications
and the recognition that while you can’t please everyone; you can still
be ethical。 About 1 per cent of Shell’s investments are in green projects。
For example; a pany subsidiary; Shell Solar; has played a major role
in the development of first…generation CIS (copper indium diselenide)
thin…film technology。 This it believes to be the most mercially viable
form of photovoltaic solar technology to generate electricity from the
sun’s energy。 Together with its joint venture partner in this project; Saint
Gobain; it has a pilot plant under construction in Saxony; Germany that
will produce sufficient solar panels to save 14;000 tonnes of CO2 per year。
So stakeholders such as the UK government and Denmark’s DONG Energy
in the London Array project had to be weighed up against Saint Gobain;
with the German government being party to both strategies through the
participation of that country’s energy giant; E。ON。 All the while; Shell was
under pressure to match its historic profit growth。 Authenticity Consulting
(authenticityconsulting/misc/long。pdf) has a useful checklist to
help with decisions about resolving stakeholder conflict。
Whistle…blowers – an ethical longstop
Not surprisingly; the people most likely to know about unethical or socially
irresponsible behaviour are those working in the organization itself。 Governments
around the world have adopted measures to encourage a flow of
information on ethical problems and fraud from whistle…blowers – that is;
anyone employed or recently employed by a public body; business organization
or charity who reveals evidence of wrongdoing。 Whistle…blowers
have also been given a measure of legal protection。 In the United States
the Lloyd–La Folle。。e Act of 1912 started the ball rolling; giving federal
employees the right to provide Congress with information; to be followed
by a patchwork of laws covering such fields as water pollution; the environment;
the Sarbanes–Oxley Act (2002) to deal with corporate fraud and the
Whistleblower Protection Enhancement Act (2007)。 In the UK the Public
Interest Disclosure Act (1998) and various laws enacted by the European
Union and other governments provide a framework of legal protection for
individuals who disclose information。
Many firms too have established ways to a。。ract information on frauds
being mi。。ed against them; including 24…hour hotlines and corporate
ethics offices。 For example; Vodafone’s (vodafone/start/
responsibility/supply_chain/whistle…blowing。html) ‘Speak Up’ programme
– launched in 2006/07 – provides suppliers and employees working in its
supply chain with a means of reporting any ethical concerns。 Fewer than 10
Ethics and Social Responsibility 231
incidents were reported in 2006/07。 That low figure may be less to do with
the absence of ethical problems and more to do with the deeply ingrained
biases against whistle…blowing and a distrust of assurances that retribution
will not follow; especially in areas far removed from the watchful eyes of a
corporate ethics office。
These organizations can provide further background on the subject:
。 The National Whistleblowers Centre (whistleblowers):
Focuses on exposing government and corporate misconduct; promoting
ethical standards and protecting the jobs and careers of whistle…blowers。
。 Spinwatch (spinwatch): Monitors the role of public relations
and spin in contemporary society and has worked with whistle…blowers;
anonymously; on some of the most contentious issues: Northern Ireland;
the role of the media; genetic engineering; the oil industry; tobacco
smuggling; food and farming; and the war in Iraq; for example。
。 Whistleblower (whistleblower。uk): Run by journalists and set
up to allow people to sell stories to the media confidentially。 It has had
a measure of success; breaking the story on how the Richard and Judy
Show’s ‘You Say; We Pay’ petition was ripping off viewers。
。 Wikileaks (wikileaks): Its primary interest is in exposing
oppressive regimes but it offers an avenue for anyone who wishes to
reveal unethical behaviour in their governments and corporations; with
a degree of anonymity。
DOES BEING ETHICAL PAY OFF?
There is plenty of anecdotal evidence that ethical and socially responsible
organizations are be。。er places to work。 At the very least; being ethical
provides an organization with an insurance policy limiting its exposure
to a range of legal liabilities for faulty products; misleading advertising;
price fixing and discrimination at work; for example。 But evidence on
whether being ethical helps a business organization to bee and stay
more profitable is less clear。 Corpedia (h。。p://welerpedia);
a pliance and ethics training pany with clients in 60 countries;
including RadioShack; EMC; Xerox and PepsiCo; produces an index
of panies deemed ethical。 panies such as Intel; Starbucks; The
Timberland pany and Whole Foods Market are in its index; which
it claims has outperformed the S&P 500 by more than 370 per cent over
5 years。 The rather more scientific and prehensive FTSE4Good Index
Series (ftse/Indices/FTSE4Good_Index_Series/Performance_
Analysis。jsp) also shows the ethical panies to be ahead; though by a
rather smaller margin。 Over the 5 years to May 2008; the 400 panies in
the FTSE4Good Index were about 15 per cent ahead of the general index。
232 The Thirty…Day MBA
But that still begs the question of what constitutes ‘good’。 The FTSE4Good
Index sets out to measure the performance of panies that meet globally
recognized corporate responsibility standards。 For inclusion a pany
must be:
。 working towards environmental sustainability;
。 developing positive relationships with stakeholders;
。 upholding and supporting universal human rights;
。 ensuring good supply chain labour standards;
。 countering bribery。
It also excludes panies that have been identified as having business
interests in these industries:
。 tobacco producers;
。 panies manufacturing either whole; strategic parts; or platforms
for nuclear weapon systems;
。 panies manufacturing whole weapons systems;
。 owners or operators of nuclear power stations;
。 panies involved in the extraction or processing of uranium。
This only serves to highlight the problem of deciding what is ethical and
what is not。 For example; is mining uranium for nuclear power really
more harmful than; say; switching to biofuels which; aside from probably
releasing between two and nine times more carbon gases over the next
30 years than fossil fuels; will almost certainly cause food prices to stay
high; particularly in the developing world? Or is the motor industry; whose
products kill more people every year than the armaments industry; a more
ethical and socially responsible sector?
However; a small but growing band of business schools believe that
there is enough mileage in social responsibility and ethics to