Wow! It appears that several decades of progress in workplace atmosphere, sexual harassment policies and general decency just disappeared. Check out the following snippet from an interview Guy Kawasaki conducted with Penolope Trunk [clarification mine]:

“Question [Kawasaki]: Should I sue a boss who is sexually harassing me?

“Answer [Trunk]: In most cases, you will destroy your career if you report sexual harassment. So unless you are in physical danger, you should not report harassment. The laws governing sexual harassment don’t protect women who report. The law protects companies from being sued by the women who report. Human resource professionals are trained to protect the company, not the woman who reports.

“When you report harassment it is usually the case that you lose your job through retaliation. Retaliation is illegal but nearly impossible to prove in court. And, even if you could prove it in court, you would go through emotional hell, with no salary, and high-profile drama that makes you unable to get another job. All this for a settlement that will almost certainly not enable you to retire.

“This is simply how the legal system works. I am not saying this is okay. But I’m saying that if you care about your career, you’ll do everything possible to not report. Most women are not in the position to sacrifice their career—and their earning power—in the name of trying to bring down one harasser. The legal system needs to step in and take care of this.”

Let’s see here… No, no, no and NO! The above is absolutely terrible advice. If you are sexually harassed, report it — end of story.

I could pontificate for pages on why this is such bad advice and so completely off base, but I guess I feel as if the reasons are self-evident. Quite frankly, I find it baffling that the above mentality even exists today, let alone is verbalized. I think the only statement above that has value is the closing one — indeed, the “legal system [does need] to take care of this.”

Sheesh.

TAGS: sexual harassment | ethics | whistleblower | moral | Penelope Trunk

Wall Street’s relation to the horrible events that have been unfolding in Darfur may not be news to some, but for those of you who are unaware of the connection, or of what might be happening in Darfur, check our the following PDF: The Darfur Imperative:Working to End the Crisis.

If it seems like I have been focusing on Calvert a lot lately, it is because I have been. On the one hand, I find Calvert’s socially responsible investment options appealing and promising. On the other hand, I continually wonder if they are not fleshed out enough. For example, why a rating of 3 and above out of 5 to qualify as a potential investment option? Is that too generous (it does equate to a rating of 60% as the minimum bar)? And further, are the ratings according to an absolute measure (say the ideal company receives a 100% rating) vs. a relative rating in comparison to peer companies?

On the latter question, I have thought quite a bit about a more robust rating system and have also had a few interesting conversations regarding the same with friends and colleagues lately. Regardless of the fantastic rating schemes we may or may not have devised, the simple fact is that Calvert is serving a very important role. Here’s an interesting clip from the PDF linked above:

“On February 5, 2007, Calvert announced a new partnership with the Sudan Divestment Task Force (SDTF) and the Save Darfur Coalition (SDC) to mobilize collective pressure on the Sudanese government to stop the mayhem. Calvert will lend analytical expertise and leverage our advocacy network in support of these two organizations at the forefront of the Sudan divestment movement.”

I was not expecting that level of involvement… Continuing on, you’ll probably reach the content that seemed likely to appear:

“As part of our commitment, Calvert took a close look at our social fund portfolios to be sure we have no current investments in companies that are on the targeted divestment list maintained by SDTF.”

And the result? As expected, but still a result to be celebrated…

“Major multinational corporations are beginning to take notice of the divestment movement. For example, in January 2007, two of the world’s largest multinationals — ABB Ltd. and Siemens — announced their intentions to suspend operations in Sudan, with the exception of those consistent with the human rights and humanitarian objectives of the UN Global Compact.”

Also of note, Calvert has also set up a special report dedicated to the issues in Sudan.

And now the money question: What’s in your 401k? What’s in your IRA, or other investment vehicle? Do the funds or securities in your portfolio fit your values? Do they tie you to a company that is directly or indirectly supporting the atrocities occurring in Sudan? How about elsewhere in the world?

Socially responsible investing is important. It is important to consider your personal values when investing, but also the overall impact your investing choices can have. Here’s to Calvert for making the SRI investing process that much more transparent.

TAGS: Darfur | Sudan | Calvert | SRI

If you are not familiar with Guy Kawasaki, or know of him but have yet to read his blog, be sure to check out his recent post titled, “Lessons for Entrepreneurs: Ignoring Is Bliss and Then Some.” While the post is about lessons learned from listening to or ignoring the opinion of others when pursuing new business ideas, there is a nugget toward the end that really caught my eye (emphasis mine):

“If you believe in something, go for it. This is the only way to really find out. Mathematically, the naysayers are right 95% of the time, but believing you’re in the 5% is what makes entrepreneurs entrepreneurs.”

I’ve highlighted the above for two reasons:

1. In reference to my previous post about why people stay silent about ethical issues at work, I would guess that the above statistical mix may have a lot to do with whether an individual has the confidence to go against the grain or fall in line with it. In fact, after looking at the top four reasons people stay silent (listed in the post), three of the four could be tipped by a firm conviction (the 5%) that what what the individual has to say was important, regardless of the negative pressure (the 95%) to keep it to him/herself.
2. I think it is an excellent principal. I admire Guy Kawasaki a wanted to take an opportunity to point readers to his blog. His message is continually positive and in line with ‘the glass is half full,’ but also on the whole, very useful.

Let’s translate the above into a set of ideals as they pertain to situational ethics:

1. Step 1: Examine your belief about an issue without external input. If after an internal analysis you have formed a firm opinion about whether the issue is ethical or not, go with your gut. Make a note of your opinion and proceed to Step 2.
2. Step 2: If the issue arises at work and you have a Code of Ethics to consult, be sure to vet the opinion you formed in Step 1 against the content of your company’s code. If your company doesn’t have a Code of Ethics, it should get one !
   • If your opinion from Step 1 agrees with your company’s code, fret no more and proceed with conviction.
   • If it disagrees, consider carefully whether the issue is beyond the scope of your company’s code (and therefore not addressed sufficiently) or mishandled. In either case, elevate the issue to the appropriate individual (most likely your company’s ethics officer or an appointed committee).
   • If the issue is not company-specific or you have no Code of Ethics to refer to, perhaps it is time to proceed to Step 3.
3. Step 3: Remind yourself of your decision from Step 1 and reaffirm your commitment to that decision. Then and only then, should you seek the input of others. Weigh their opinions carefully and take them with a grain of salt. In the end, if there is not a consensus with your own opinion, only detract from it if you are absolutely certain that you were wrong.

All of the above hinge on whether you have conviction. Believe in yourself and trust your judgment and analysis.

TAGS: conviction | integrity | ethics | Guy Kawasaki

An interesting ethics-related article in Business Week has been available for a few days (Duke MBAs Fail Ethics Test) though I only just now have had a moment to read it. While the information presented is nothing new (cheating among highly competitive graduate students…really?!) the statistics are shocking nonetheless.

“Fifty-six percent of graduate business students admitted to cheating one or more times in the past academic year, compared to 47% of nonbusiness students, according to a study published in September in the journal of the Academy of Management Learning & Education (see BusinessWeek.com, 10/24/06, ‘A Crooked Path Through B-School‘).”

Okay, sweet. And we wonder why there is a distinct lack of ethics in business… Clearly, if today’s business students are tomorrow’s business leaders, it seems as if the future will get worse, not better, as far as business ethics are concerned.

So if the picture is so bleak, what steps can be taken to move the statistics in the other direction? Two of the primary reasons are easy to spot, and are hopefully, by extension, easy to combat:

1. Culture and general consensus
2. Strength and consistency of ethics initiatives

I have posted on both issues in the past (most recently, see Speak Up and The Validity of Ethics Codes) and feel that the corrective mechanisms are straightforward and attainable. Rather than repeat myself regarding solutions, I would emphasize the importance of tackling ethical issues now — the longer they have to fester and grow, the greater the difficulty in getting rid of the issue in the future.

TAGS: MBA | ethics | cheating | fraud | ethics code

A question that I continually hear following reports of company misconduct, fraud, or other illicit activity, especially when the action was too large to possibly go unnoticed, was how the action went unreported for so long. Why don’t people speak up when they know something improper is going on at their organization? There are a host of possible reasons, but a recent article by Ethical Corporation, Workplace Misconduct – Making ‘Speak Up’ Procedures Effective, shares some interesting statistics as well as some practical advice.

First for a few sobering statistics from the article. Here are the top four reasons why people were likely not to speak up:

• 21% - Possible alienation from colleagues
• 19% - That the issue was ‘none of their business’
• 13% - Fear of their job being jeopardized as a result
• 12% - ‘Everybody is doing it’

While the first and third seem like reasonable initial reactions, I find the second and forth as particularly troubling.

The article continues with excellent advice for organizations looking to increase the percentage of individuals willing to speak up when they become aware of any kind of misconduct. In addition, the suggestions are great building blocks for any company wishing to strengthen ethical conduct among its employees and partners. The article details the follow four principles:

1. Create and support an ethical culture;
2. Take swift action when misconduct is identified;
3. Ensure transparency in all communication (hmmm, I wonder if Dell is listening…); and,
4. Provide ethical training and leadership

I think the above list is a great start. Add in a stipulation for ongoing training to maintain the ethical culture, and to ensure the retention of the training and leadership, and I think it would be a fantastic platform for organizations of any size.

TAGS: ethics | ethical | fraud | misconduct | whistleblower | code of ethics

Dell seems to be continuing on its downward trend lately. The company’s 2-year stock performance has been somewhat dismal (click on the thumbnail to the right for a large chart [from Yahoo! Finance]), and in an article released yesterday, the New York Times reports that Dell has found evidence of accounting misconduct: Dell Reports It Has Found ‘Misconduct’.

Finance-related scandals are nothing new, especially among once high-flying tech companies, and span a wide spectrum ranging from options backdating, to balance sheet massaging, to pulling fake numbers out of thin air. Dell’s findings, though described with remarkably little detail, seem to point to minor misconduct issues. Perhaps that is because the company is keeping a tight lid on the specifics of their findings, and perhaps it is because nothing major was uncovered during the investigation. Either way, there is far too little information available to investors, or the public, in order to make a clear judgment call on the company’s conduct.

The findings come on the heels of a rather sustained down period at the once mighty company:

“It was once the biggest PC maker in the world, but its computer sales are growing more slowly than those of many competitors. Its chief executive, Kevin B. Rollins, resigned at the end of January, and Michael S. Dell, the founder, returned to office.

“Since then, Mr. Dell has tried to focus a company distracted by disappointing financial results and bad news. He shook up senior management ranks, and has concentrated much of its efforts in China, one of the fastest-growing markets, where Dell’s presence is not as strong as that of Hewlett-Packard or Lenovo.”

Rollins had been groomed for the top spot for years prior to taking the helm, and his departure served a considerable blow to the company and to investor’s confidence. If the financial scandal develops into something larger, Dell may take more than a few years to recover.

…Enter the broader issues. Toward the end of the NY Times article, there is a short passage noting the direct impact the scandal will have on the company’s employees. The news is a bit disturbing:

“The accounting problems, meanwhile, are financially damaging to employees. The company said yesterday that it would have to suspend contributions to the Dell stock fund within its 401(k) plan beginning next month because of its failure to make the necessary financial filings. The suspension affects all employees, a company spokesman said.”

The situation was arguably “messy” prior to the above tidbit. But now all Dell employees see a suspension, of an unspecified duration, of the company’s contribution to the Dell stock fund. What responsibility does the company have to include greater disclosure at this point? How long will the suspension last? What is the nature of the misconduct, and have the responsible parties been removed from their positions? What will the company do to ensure that similar misconduct does not recur in the future? How broad was knowledge of the misconduct? Was Rollins aware of the issue? Was the Board? Was Michael Dell?

I think every Dell employee and shareholder would want the preceding questions, and a host of other ones, answered with the utmost transparency.

TAGS: DELL | Fraud | Ethics | SARBOX | GAAP | Accounting | Corporate Governance

SustainAbility, Inc. released an interesting report today which, “[demonstrates the] potential for next-generation partnerships to positively impact socio-economic and environmental challenges.” The report, Growing Opportunity: Entrepreneurial Solutions to Insoluble Problems, is available for download on the firm’s website. Though the report is free, you have to register (painlessly fast) in order to complete the download.

I skimmed the report this morning and will give it a thorough run-through later today. So far, however, it looks like a great read. Here is a high-level snapshot of the main findings of the report:

1. Social entrepreneurship is on a roll
2. The potential for breakthrough solutions is considerable – and growing
3. The field is growing, but still relatively small
4. Money remains the main headache
5. Financial self-sufficiency is seen as a real prospect within five years
6. There is a real appetite to partner with business
7. Beware blind spots (risk of over-focus)
8. For real system change, we must focus on government and public policy

More thoughts on the report later…

TAGS: Sustainability | Entrepreneur | Business | CSR | Social Enterprise | Ethics

Though little time has passed since the closing of 2006, I am just now beginning to reflect on the meaningful and powerful events came to pass during the year. My personal life was certainly packed to the brim with amazing milestones and events including my first full year as a father, an eye-opening trip to China and then another one from one coast of the US to the other, and the completion of my MBA studies.

2006 proved also to be an important year for many of the issues I follow, including the socially responsible investing (SRI) movement. At a time when the public’s knowledge of SRI and related issues such as business ethics, corporate social responsibility (CSR), and renewed concern in corporate governance, seem to be rapidly increasing, so too has its level of related cynicism.

While much progress has been made in bringing greater focus on such issues in the business world and society at large, those critical of the merits of each issue seem to find ample evidence of companies touting their new CSR or ethics programs, yet not practicing what they preach. Nonetheless, along with the inevitable negativity (justifiable and not) comes a host of notable examples of these initiatives actually creating positive change in society.

Social Funds compiled a list of the top five SRI stories of 2006, and all are well worth reviewing. My top pick would be split between the United Nation’s launch of the UN Principles of Responsible Investment (which I blogged about here and here), and Muhammad Yunus being awarded the Nobel Peace Prize.

TAGS: SRI | Socially Responsible Investing | CSR | Ethics

Though it appeared below the fold in the Boston Globe’s business section this morning, I feel the recent news that China has unblocked Wikipedia to be very important. In case you missed the details, here are a few articles that provide relevant background:

• China Allows Full Access to Wikipedia [Boston Globe]
• China “Unblocks” Wikipedia Site [BBC]

The news is significant for a number of reasons. The lowering of information control, in a country where specific politically-charged content is monitored and accordingly suppressed, is certainly a compelling story on its own merits. However, there is something larger that cropped up as a result of this event: validity that holding a firm line on ethics can actually work.

“The news appears to vindicate [Wikipedia founder] Wales’s tough stand against Internet censorship. He has said that Wikipedia will not remove articles about subjects regarded as controversial by the Chinese government, such as the 1989 Tiananmen Square massacre.” [Boston Globe]

While the profit-focused decision makers at Google, Yahoo!, Microsoft, Cisco, and other notable multinationals, chose to bend to the Chinese government’s censorship initiatives, Wikipedia held its ground. Executives from the noted companies that chose to prioritize profits, over aiding the control of information access and personal freedom, frequently made the argument that it would be better to have some presence in China rather than none at all. In other words, at least the citizens can search for information using Google, albeit censored, than not with Google at all.

“But major American Internet companies like Yahoo Inc., Google Inc., and Microsoft Corp. have voluntarily censored the Internet content they offer in China, in exchange for the right to do business there. The censorship has been denounced by politicians and human rights groups. The companies reply that it’s better to provide some Internet services to China’s 1.3 billion people than to be frozen out of China altogether.” [Boston Globe]

Curiously, Wikipedia didn’t seem to come to the same conclusion. Censorship of its content was not an option. Whether from a relaxation in control, changing censorship policies, or perhaps a sinister plot to alter entries in China’s favor (as the Boston Globe article sensationally hypothesizes), the country has decided to allow its citizens unfettered access to the Free Encyclopedia.

Corporate executives and shareholders take note…

TAGS: China | Wikipedia | Censorship | Freedom | Google | Yahoo | Microsoft

B.L. Ochman from EthicsCrisis.com asks a very important and valid question: Are Corporate Ethics Codes Bunk? The short article is an interesting read and points out a few of the major shortcomings of most Ethics Codes:

“Building codes, health codes, fire codes have teeth. Violating them results in legal penalties. But nothing at all seems to happen to those who violate corporate or association codes of ethics, not even a slap on the wrist. If corporate ethics codes are to hold any meaning, they’ll need the force of law behind them. Otherwise. what’s the point?”

I think the statement that ‘nothing at all seems to happen’ is a bit too general, but the point is still quite fair. For Ethics Codes to have any real power or deterrence, clear repercussions must be specified and carried out in the event of a violation.

Often corporations start out with a lot of momentum–they draw up a comprehensive Code of Ethics, issue a press release, and pat themselves on the back. A few weeks go by and though the Code is now posted on the corporate website and available for the whole world to download and peruse, knowledge of its existence within the corporation quickly gets pushed to the side. Perhaps a violation prompts a reference to the Code, but following its corresponding instructions seems like an awful distraction to an already busy workday. Employees start to look the other way, and business as usual returns to business pre-Code.

Critical to the success of implementing an Ethics Code in a corporation is the level and depth of upfront training provided to employees, strength of subsequent and consistent ethics audits, and the extent of support for the initiative from the corporation’s leadership.

TAGS: Code of Ethics | Ethics | Fraud | Corporation