Corporations, Profit and the Greater Good

In the wake of the recent North Carolina legislation that did not meet the approval of the queer community and its supporters, a number of corporations threatened to essentially place privately imposed sanctions on North Carolina. In the face of what they consider to be a human rights travesty these companies were compelled to act.

What is odd, though, is the human rights records of other nations that these same “value driven” companies continue to do business in.

In North Carolina living transgender means you are forced (for a scant few minutes each day) to use public washrooms consistent with your biology. In other nations, living as a transgender is grounds for imprisonment or execution. Here’s a link that summarizes some of these corporations that have threatened to pull out of North Carolina yet continue to operate in nations with unfathomably worse human rights records. As but one example…

PayPal continues to offer services in Mauritania, Saudi Arabia, Yemen, Somalia, and other countries where homosexuality may be punished with the death penalty, and in Nigeria, where homosexual conduct may be punished with caning, imprisonment, or death by stoning.

If these companies follow through on their threats then jobs will be pulled out of North Carolina, plausibly leading to at least some unemployment, making it more difficult for some families to put food on the table for their kids. All because people are expected to use the washroom consistent with their biology.

Whatever happened to, “this policy bothers us, let’s sit down and talk about it…”? It’s usually a good idea to try diplomacy instead of jumping straight to lobbing tomahawk missiles into your enemy’s capital at the first hint of disagreement. An awkward moment for transgenders is now seen as justification for sending random kids to bed, hungry. Strange moral mathematics, if you ask me.

Though I am convinced these threats against North Carolina are both philosophically misguided and unfathomably disproportionate – almost as extreme as chopping off the hands of thieves – I support the right of these corporations to make such business decisions, including their right to use their corporate clout to impact government policy. I also support the right of these highly principled corporations to continue to conduct business in nations with vastly more horrifying human rights records than anything North Carolina has ever – or would ever – consider.

As utterly misguided as I find this entire bizarre episode, what I did find encouraging is the growing realization that corporations do not exist in a moral or cultural vacuum. Instead, it is incumbent upon corporations, their executives and directors, to make business decisions that not only improve the bottom line – I consider that a moral duty, in fact (that’s a subject for another day) – but also improve the civilization within which they operate. Though I disagree with these threatened actions in retaliation against North Carolina’s law, I can emphatically affirm the underlying principle of corporate ethical responsibility, and I welcome the perspective of ethically minded businesses making a real difference in the world.

History is replete with examples of corporate decisions designed to improve the bottom line without giving due consideration to the impact it would have on others. In some cases the decisions may have been made with full awareness of the negative ripple effects. The Ford Pinto is a classic example. The very short version of that story is that Ford executives decided that the litigation costs associated with the deaths and injuries they knew would result from their vehicle’s sub-standard design were less expensive than correcting the design flaws in the first place. Nike was previously raked over the coals for using sweatshops in developing nations to keep costs down.

There appears to be an increased awareness of corporate responsibility that understands “success” more broadly than just shareholder returns and paychecks for upper management. Society must applaud this! But let us also remember that this is hardly a new phenomenon. John Rockefeller lived and breathed this mindset over a century ago, as the following video describes.

Rockefeller was obviously human too, so I’m sure he had moral failures not covered in this video. Still, his moral successes, and how they were intentionally integrated into his business, show that our present day admiration of ethical business is not new. According to one historian, Rockefeller

was decidedly “more humane toward competitors” than Carnegie; we have the conclusion of another [historian] that his wealth was “the least tainted of all the great fortunes of his day.”

Guinness beer was also started with noble ambitions; ironically, for an alcoholic beverage, to combat the rampant alcoholism of the day. Guinness beer brewed at a lower concentration of alcohol to help reduce the likelihood of inebriation, but more than that, as this article describes

The Guinnesses decided, first, that they could better society by bettering the lives of their employees. They started by paying better wages than any other employer in Ireland. Then they decided they should provide an entire slate of services to improve the lives of their workers. With the passing of decades, they became one of the most generous, life-changing employers the world had ever known.

That ethical responsibility was also quite some time ago; roughly 300 years.

In short, there was a time when business was viewed much more as an integrated part of society, and business owners (not all of them, of course) understood the correlation between the betterment of society and the betterment of their business. If your policies are detrimental to society then you can be sure they will eventually be detrimental to your business as well. If you contribute to the flourishing of society, your business is more likely to flourish.

Besides, it’s the right thing to do; it’s our moral duty.

Corporations are inherently a significant force in society, we must use it as a force for good. It is possible for corporations to benefit society without sacrificing the bottom line. It’s the wisest investment a corporation can make.