Week That Was in Ethical Systems, 2/17-2/23

The Morning Risk Report: Importance of Internal Ears, in The Wall Street Journal

“A report Target Corp. failed to heed warnings from some of its employees about payment systems two months before they were hacked shows the importance of listening to employees, customers or anyone who raises a legitimate warning flag–and the dangers of what can happen if companies don’t.” Designing ethical systems for a business is not simply about avoiding unethical behavior. It is about aligning a company’s culture and organizational structure to take an ethical view of the needs of all stakeholders. Target’s failure to heed warnings may not have been an ethical breach, but it probably would not have happened in an environment where employees felt encouraged to speak up and leadership felt inclined to listen. Although this is not a “whistle-blowing” case, our page on that subject contains relevant research on the need for open lines of communication within any business.

CEO: Ethics, Profits Are Not Antithetical, in The Pittsburgh Tribune-Review

Todd Peters, CEO of GENCO, said that ethics and profits can coexist in his keynote address last week at the Pittsburgh Business Ethics awards ceremony. One of the winners at the event, law firm Tucker Arensberg, routinely tells its clients that “good ethics is good business,” a sentiment explicitly endorsed here at Ethical Systems. This is only one of many business ethics award ceremonies taking place on a regular basis throughout the country, and we would like to point to it as yet another example of the developing trend toward ethically conscious practices among American enterprises. Please see our page on leadership for research on how the tone at the top can influence ethical culture in an organization.

The Morning Risk Report: The Bieber Rule of Compliance, in The Wall Street Journal

“Companies considering high-risk business opportunities would be well-advised to look at a Justin Bieber gossip-column item for inspiration.” You will have to click through for the details of how the young pop star’s recent negative publicity is linked to sound business judgment, but the gist of it is this: a company concerned with ethics will sometimes have to turn down business that could put it at risk of legal or reputational damage. For research into dealing with others’ risky behavior in a business context, please see our pages on compliance and conflicts of interest.