Corporate ethics: a moral imperative, good financial sense, or both?

There’s a lot of noise these days about ethics, especially as they pertain to the corporate world.

Back in the Noughties, corporations simply functioned as they wished (within the law, or however they could afford to stretch it) but some added an element of Corporate Social Responsibility. Did every corporation that provided these acts of kindness do so out of the goodness of their hearts? Possibly not, after all, there’s no such thing as altruism. But the good deeds were done, so does it matter why?

Maybe, maybe not. There are actually dozens of nuanced arguments on either side. If you want to have a good read of them, check out the CSR Wikipedia page.

But now the conversation had moved on. Pretty much every industry has a perspective on its own ethics, particularly insofar as they relate to climate change, and, latterly, sexual harassment. Are they taking that interest because the public demands it, and it therefore affects the bottom line, or because of some moral aspect that affects the future of the planet?

Generally it’s a mixture of the two, and just like CSR there are vast swathes of grey in between them.

Here are some of the questions that don’t have easy answers:

Many companies have been incorporated with the financial imperative as the most important issue. If they do something that prioritises anything else above the generation of money they can be sued by their shareholders. But what if they were to lose money in the short-term by closing a coal-fired power plant and switching to solar? They might make more money in ten years’ time and beyond, but the immediate losses won’t please shareholders that need to cash out soon, or may not be alive to see the long-term benefits. So does the company risk the litigation to do what is most helpful to its future existence/moral stance, or just go for the money now?

What should the extent or nature of your ethics be? If you’re a person you can be omnivorous, vegetarian, vegan or even fruitarian (only eating fruit that has naturally fallen from trees). Is a vegan ‘better’ than a vegetarian? In terms of resource usage, yes. In moral terms? That’s debatable. In the corporate equivalent you might use your financial resources to treat your staff better by paying them more or giving them more benefits, but what if that compromises your environmental efforts? Such expenditure might mean that you can’t buy energy-saving lightbulbs or insulate your factory. Is one better than the other? That’s an impossible question to answer definitively.

What if there’s a clash between morality and law? Most countries have not codified stringent ethics into legislation. they might provide recycling bins or sign the Paris Accord, but will they treat people of all religions in exactly the same way? Will they ensure a reasonable equality of pay via proper corporate taxation? Will they allow democratic elections on a regular basis? As those of us who follow the news have seen, solid arguments backed by millions can be made on all sides of these questions. And if that’s the case, how will the finer points of subjective corporate morality survive such debates? Clearly it will be impossible to please everyone, so who gets to impose their morality, why and how?

And those are just three questions in an area with thousands. The fact that there isn’t a clear solution makes it obvious that there isn’t such a thing as ethical absolutism, only ethical relativism.

But that shouldn’t lead to paralysis. Within each question is a choice to live up to your own standards. That might mean financial compromises, or a difficult legal fight, but you simply have to decide what you want more: the benefits of the ethical decision, or an easier life in a world that doesn’t work for you (and perhaps millions of others).

Damn, I think I just posed another annoyingly difficult dilemma…