Un-ethical companies and their future 11

[ST111]

So I'm sure we are all aware of big projects and issues that have risen over the years, highlighting certain companies as unethical.
Classic examples such as Bechtel, Shell, Exxon-Mobil (just off the top off my head, not aiming at O&G companies specifically), however they all consistently state their ethical groundings as world class etc.

Is this going to change? Have these companies learned from their mistakes and genuinely working towards ethical work?

Also is it ethical or un-ethical to work for one of these companies? I would be interested in peoples opinions.

 

[zdas04]

MartinLe,
My contention is that by definition you cannot punish a contract or an algorithm. They are abstract concepts that don't have a butt to smack. Fining BP for Macondo ends up fining the United Auto Workers Pension Fund (a huge holder of BP stock) members. Do you think that some retired auto worker in Lansing had any decision-making responsibility regarding that fire and spill? Should the corporation (and therefore that retiree in Lansing) pay for clean-up? Absolutely. Should the corporation pay reparations to people who were actually harmed by the spill? Yes. Should the corporation pay reparations to people who were not allowed (by the government) to work the fisheries for 3 months? I don't think so, but it is probably grayer than the rest. How about $7B in fines that end up going into the general fund? Our guy in Lansing really doesn't need his butt smacked for the decisions that corporate employees made.

"Punishment" is a human activity that really cannot be applied effectively to a contract or algorithm. Did a manager issue specific instructions to someone to shortcut established safety regulations? I have followed this case closely and I don't know, if there was then that butt should be smacked. Did any individual break a law? If so then he or she should be prosecuted.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

 

[allgoodnamestaken]

I think that regardless of whether you consider these companies algorithms,organizations, or whatever, the history of the last 30-40 years shows that big fish eat the little ones, consolidate and grow larger and larger. That gives them more leverage, more power, and more influence.

Without major changes in the legal framework under which corporations run, this will continue unabated. I don't see the political willpower required to force such changes in existence, so I assume that more and more consolidation will happen.

It will be interesting to see if one of these mega giants ever goes under catastrophically. I just hope I'm retired and living on an island without a radio by then.

 

[1gibson]

Martin's point is that making the corporation aware of the fine before it acts, will influence the corporation/algorithm by adjusting the risk/reward in favor of the ethical choice, rather than the unethical choice.

An algorithm wouldn't regularly choose to not put 50 cents in the parking meter if it knew the parking ticket is $500. If the ticket was just a warning, or only $5, and there was a <10% chance of getting caught, then the algorithm would never pay the meter.

 

[zdas04]

I have master service agreements with 56 corporations. EVERY SINGLE ONE of them has language in the contract that the corporation will not tolerate illegal activity and that anyone observing illegal behavior in the company's name and not reporting it will be terminated. In other words not feeding that parking meter is a dismissal offence and observing someone not feeding the parking meter and not reporting them is a dismissal offense. Every single illegal act ever committed in the name of a corporation has been made in direct contradiction of the company's explicit instructions.

I know that 56 corporations (almost all in the same industry) is not a very big sample of a population of hundreds of thousands of corporations, but 100% seems significant.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

 

[MartinLe]

moltenmetal, 1gibson: exactly.

zdas04,
You seem to insist that once the language "corporation will not tolerate illegal activity and that anyone observing illegal behavior in the company's name and not reporting it will be terminated" is there the company is in the clear and all illegal wrongdoing rest firmly on the shoulders of the individuals doing it.

I've seen and heard things that I think where legal but gray area, but since I'm not sure I won't write about them here. Most of the shady stuff was done in the interst of the company
Let me just state that language against illegal activity on the companies behalve alone does not suffice.

some public institutions bar 'misbehaving' companies from contracts for X years, this IMO a good lever to apply but only possibly with companies that work directly for said institutions.

You braught the example of a spill, we were talking about corruption and bribes. A corruption example: German arms firm giving money to a middleman, who bribed greece officials into buying an air defence system. Company paid 37m€ fines but avoided court
In all likelyhood the upper managers got of lightly. Without a fine, what incentive would the company have for anti-corruption measures?

 

[cranky108]

Actually there are laws that bar the company I work for from reporting some illegal activity. It has to do with customer privacy.

We are also bared from refusing to serving them. So if you want to find a gray area, they are there in the laws.

 

[1gibson]

Zdas, that language you mention is equivalent to a sign listing the hours you are supposed to pay the meter, and "vehicles will be towed at owner's expense." Yes it could happen, but it won't unless you are trying to get caught (leave car parked illegally for a few days.)

If you saw people getting towed all the time, and there was someone in a tow truck watching you from across the street, you would nod, smile, and feed the meter.

 

[zdas04]

Most of the shady stuff was done in the interst of the company

If you made that "Perceived interest of the company" I would go along.

I don't know how else to say this, a company can not have morals, ethics, or remorse. Those are human attributes and only people can hold them. If an employee sees the best interests of the company to lie, cheat, steel, and bribe, that is that individual acting wrongly. The company is just an abstract concept. If the CEO of Enron requires his managers to require their supervisors to require their employees to break the law, and they do, then everyone in the company should be punished. Punishing "the company" is simply passing the punishment on to stock holders who did not knowingly participate in the wrongdoing. A company does not have a butt to smack. Do you think that Enron is embarrassed that they were fined for stealing a bunch of money? I don't. If evil things are done in the name of a corporation (and they are), then it is people doing evil things. People who can be punished People who should be punished. This whole thing goes away if employees of a company ever reach the comprehension that they personally will be jailed, fined, punished for the actions they take in the name of the company. If evil managers learn that threatening someone's job if the DON'T break the law is actually extortion and comes with jail time, then many evils of the world go away. The problem is that the law makers are getting too rich off the illegal activities.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

 

[EmmanuelTop]

Something does not fit... Why would an individual (= employee) try to bribe someone in company's interest? That certainly puts "negative ethics" on the company as well, not on the employee only. And certainly it is the company that stands behind the bribery, not just the individual.

Each company has certain culture, created, endorsed and stimulated by the management. So I would not agree completely with the statement that only individuals are responsible. Yes, if you go all the way to the CEO and shareholders etc. But even if you "remove" them the successors will likely continue in the same spirit because this is what has been bringing the extra profit all the time. So...

Dejan IVANOVIC
Process Engineer, MSChE

 

[rotw]

I don't think it is just an "algorithm".

I once worked in a company A (Non US) where I had to handle a client claim for premature product failure. People in the department did not want to recognize and admit there was a failure in the quotation stage (well informed case but bad product selection). I tried to document the problem internally and have this escalated but at some point it was useless and it became beyond my reach to fix this defect. Client (utility) needed to replace the product and had to pay for everything. I found this abusive and non ethical.

Now couple years later, I am in company B (US). The environment is really different. Compliance is enforced with reminders, annual compliance session (with the ombudperson or management being present), attendance is mandatory and with very detailed workflows to fill in and acknowledge, no conflict of interest, no gifts, no disclosure of information, no retaliation, enforce inclusive behavior, no harassment whatsoever, etc. maybe you recognize who this company is...

So are both Companies A and B completely innocent when they conduct their businesses, I really don't think so. Dirty things can happen. But the compliance program in place was so rigorous , the message was hammered again and again and with all that the integrity of a lot of the leaders was real. At the very end it does not fix the problem but it helps A LOT to be in a company which has solid core ethics (not just slogan). I think it boils down to reputation / legacy damage : at what extent this is NOT tolerated by the Leaders. Its a difficult problem and also for leadership succession.

 

[cranky108]

It is true that some companies, divisions, etc. do a poor job of evaluating there management, or do a poor job of finding managers. And if the problem is upper management does a poor job of controlling money, and resources then it is ripe for problems.

This is why many mutual fund companies look into the companies they invest in. So if union retirement plans do a poor job of looking into the companies they invest in, then they do deserve to take loss for not doing there job.

From an self-directed invester point of view, if a company has few mutual funds invested in it, it might be a clue. But other than knowing the insides of a company, there is no way to know the type of management they have, or there business conduct risk.

But you can say that the problems start at the top, because each layer of management must evaluate the levels below them. Also a good training, and employee outreach program goes a long way to a well behaved company.

 

[zdas04]

rotw,
The difference between the two companies is almost certainly the attitude of a single manager in both cases. A person. A stack of paper cannot make a decision. The manager in Company A is looking at avoiding costs (at the expense of future sales, possibly). The manager in Company B is looking at building long-term relationships. Swap those two people between the companies and both managers would likely fire their customer service staff and start over.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

 

[moltenmetal]

All I can say is, beware places that wear their ethics so publicly on their sleeves- chances are, there's a history of malfeasance behind it, and chances are also good that the malfeasance isn't completely gone.

It's like the extremes of safety culture you see in some places. When people start suffering over whether or not you've got a lid on your coffee cup, you know the effort isn't serious any more- it's exaggerated to the point of ridiculousness.

 

[andriver]

Molten,

I couldn't agree with you more. I take safety seriously, if for no other reason then self preservation. I work for a company that has an "extreme safety culture". I am proud of the work we do, but digging through google articles I see a history that I wouldn't be proud of.

Sometimes I feel like some of the observations or procedures specified by our safety group are nothing more than a façade. Recently we had a string of "foreign bodies" in peoples eyes. This was because they say the work area was too dark and people were dropping their safety glasses to their noses to see something when they get something in their eye. Safety group brought in light plants, but due to the congested area, these light plants were set up in areas where natural light was already coming in (well lit areas). These light plants did nothing. When I complained that if they were seriously concerned, they would put the effort in to relocate these light plants to dark areas (crazy idea I know). It would costs us some manhours for sure, but if the concern was genuine this would be seen as a necessity. I had the project manager straight up tell me if I wanted them moved to move them myself (what kind of response is that?) As an engineer I have no authority over craft or any heavy equipment, so he essentially said go screw yourself.

Point being, this was done as a "good faith effort" to show the client we care about safety. I however, see through the BS and know there was not good faith effort whatsoever.

 

[rotw]

zdas,

I see what you try to say. I will think about it.

I think that if you swap managers, I guess it will still take some time for the "non ethical" manager to screw it up all when departing from a healthy and serious environment...(unless the guy is really mad)...I understand that all it takes is one single bad event in the press / front page to jeopardize decades of hard work

So the problem here is the swapping...the swapping should be prevented to occur in practice to a maximum extend.
So the culture of management is key and it is at the very end a human problem not a paperwork thing. Takes decades if not centuries to build this culture and values because it aggregates EVERYTHING.

Yes a stack of paper cannot make a decision, cannot agree more. Thanks for this.

 

[IRstuff]

I wish SCOTUS understood that relative to Citizens United. That decision, and other more plausible ones, have ensconced companies into the level of living, breathing, human beings with "rights." But, with rights come responsibility. Companies cannot demand to to treated as people under contract law, and the expect to get a pass when it comes to criminal behavior.

TTFN
I can do absolutely anything. I'm an expert!
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[hokie66]

Citizens United was only about First Amendment rights. Free speech can not be abridged, and money is necessary to fully exercise free speech, especially in today's world.

 

[IRstuff]

http://www.supremecourt.gov/opinions/09pdf/08-205.pdf[/URL]]Any other course would prolong the substantial, nationwide chilling effect caused by §441b’s corporate expenditure ban.

http://www.supremecourt.gov/opinions/09pdf/08-205.pdf[/URL]]Austin is overruled, and thus provides no basis for allowing the Government to limit corporate independent expenditures.

Yes, free speech for CORPORATIONS of any kind, not just a PAC. Thus, SCOTUS allowed General Motors have the same unlimited right to free speech as we have, except that General Motors isn't a person.

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[zdas04]

The problem I have with Citizens united and all the other nonsense in the name of the first amendment is "who goes to jail?" if the corporation becomes guilty of perjury through their exercise of free speech. In a libel or slander case you can sue the company, but who do you arrest in an extortion case? The First Amendment is a big damn deal. Abridging the right to free speech must be prevented (hear that college campuses?) It can only be applied to people, not to stacks of paper.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

 

[IRstuff]

Wow. We agree on something else as well. MY impression is that usually, when it comes to criminal wrongdoing, the charges can be levied on specific individuals in a company, particularly those who gave the orders or who were operating on their own. Case in point, Bernie Madoff is serving time for 12 federal felonies, Kenneth Lay of Enron would have served up to 30 yrs, had he not died first, while Jeffrey Skilling is serving time for his actions at Enron.

TTFN
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