In the sticky world of corporate ethics, precious little is black and white.
AUBURN – Thursday’s Chamber of Commerce breakfast presented a bit of an ethical dilemma for Ron Lebel.
As an attorney and chairman of the local chamber, his duty was to introduce the morning’s speaker – another attorney – who was going to talk about corporate ethics in a post-Enron environment. Lebel recognized the, um, delicacy of the situation.
In his introduction of George Isaacson, Lebel noted that of all the senior executives you see parading in and out of federal courthouses today, staff attorneys aren’t usually among them.
“Does that mean lawyers have higher ethics than senior executives generally, or does it mean lawyers just know when to leave the room?” he asked.
His question drew laughter from the Hilton Riverwatch audience and framed Isaacson’s presentation well. The senior partner at Brann and Isaacson, as well as a professor of law at Bowdoin College, Isaacson said the existence of a corporate code of ethics is one thing. But more important is the process of ethical decision-making.
“The Enron ethics statement is a lovely piece of work,” said Isaacson. “And it was totally ignored by the people who drafted it.”
Crucial to ethical corporate behavior is the culture and context by which it’s judged. And that’s a gray, gray world.
Isaacson offered L.L. Bean, one of his clients, as an example. He said that company takes ethics seriously, and he discussed its employment practices in overseas manufacturing facilities. Company executives considered whether the foreign companies treated workers well, paid living wages and accorded them basic workers rights. But how do you assess those issues?
“Do you apply American standards? Do you look to standards in the domestic country? Do you join an international trade organization to establish multinational standards?” he asked.
The questions continued. Does the concern extend to environmental considerations? And once standards are established, how do you monitor them and what do you do if they’re breached?
Ethical dilemmas present themselves before businesses every day, on all sorts of levels. Recruitment tactics, advertising and gift exchanges are ripe for ethical abuses. And at some level, misrepresentation is standard operating procedure in today’s corporate world. Isaacson challenged the audience to draw the line between executive posturing/bluffing and bluffing/lying.
“We’re all traveling in the gray zone,” he said.
Isaacson didn’t reveal to listeners Thursday morning the full extent of how L.L. Bean resolved its ethical concerns, although it did decide to join an international organization for trade standards. But he advised listeners to consider his seven guidelines for dealing with ethical dilemmas.
First, pay attention to matters that make you uncomfortable. That’s an early warning sign of an ethical dilemma, which will likely become worse if it isn’t addressed. He encouraged whistle blowing by employees, perhaps through an independent ombudsman and without fear of retribution.
Second, collect all relevant information, with input from all affected parties, and have the best decision-makers in the company involved. Make sure any decision is consistent with the mission statement and values of the organization.
Third, assess whether the decision is consistent with how the company has treated similar situations in the past.
Fourth, consider its consequences.
Fifth, own the decision and prepare to defend it. “Ask, ‘What are critics going to say and do, and how are we going to respond to them?'” Isaacson said.
Sixth, be certain that any decision is consistent with legal standards.
And finally, consider whether the decision is fair in the broader sense; if it is applicable if a similar situation arose in the future.
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