Ethics

Is a company's chief allegiance to its shareholders or should it also be held accountable by other stakeholders, including employees, the community, and the environment? Should ethics be defined by the net social value of consequences to actions, fundamental rights of individuals, social contracts, or predefined virtues? How important are values in an organization and, if they are important, how can they be defined and maintained? How "should" a company interact with NGOs that oppose it, especially when they're "right?"

These are the questions we are wrestling with in our Ethics & Social Responsibility class. The discussions, led by professor Michael Yaziji, have been scinitllating and heated--just what you'd expect from a debate in such a diverse environment! My favorite question for contemplation so far has been:

"You are the CEO of a pharma company with the option to save hundreds of thousands of lives. This option will necessarily come at significant, long-term shareholder expense. What do you do?"

After much clarification of the question and the assumptions, it was clear that there was no win-win situation. You either saved lives and lost money or didn't and made money. There was much debate. Obviously everyone wanted to save the lives, but did we have the right? Or were we obliged to run the company in the best interests of the shareholders? Many student responses relied on passing the buck to the owners: put it up for a vote and comply with the result.

I don't buy that, however. To me, this question of whether or not to save lives is similar to a question of whether or not to save money (Hear me out before you condemn me for that statement!). If you choose not to save money you are, effectively, losing money. If you choose not to save lives you are, effectively, killing. When I frame the question that way, my course of action is apparent: I will save the lives.

It distills down to the same question faced by Nazi officers: do I kill because I have been ordered to do so by my shareholders/fuhrer? Or do I adhere first to my own principles? I am a principled human first and a CEO after. I may be fired for my decision but what good is being CEO if you can't live with yourself? My goal would be to communicate upfront the values that would drive my decision-making in such a situation--transparency and honesty with the shareholders. Hopefully that would help ensure that I work for a company with similar values.

It seems like a theoretical, academic question, except that it was part of a case discussion involving a pharma company and its marketing of AIDS drugs in South Africa. What are your thoughts on such a dilemma?

Out-of-Town Visitors

On Sunday I had lunch with Will, a family friend who swung through town during his summer travels. Will is one of the most brilliant, accomplished people I know and it was great to spend some time with him. He is a Jefferson Scholar at UVA, where he just finished his second year. Three of his friends, also Jefferson Scholars, joined us at a little creperie along the lake for a couple of hours of great conversation and food. These kids were bright, worldy, multicultural, and nice, an outstanding example of what America can produce.

Last night I had dinner with Nathalie, a former housemate of mine in Houston. She is Swiss and was in town spending time with her family. Dinner--also on the lake--was very nice (Chantrelles are in season!) and it was great to catch up with Nathalie. Two years ago she helped start up a renewable fuels trading company that is growing and doing very well.

Meanwhile this week's class focus on ethics and social responsibility has been very interesting already. It has been very philosophical so far with background readings on Kantian ethics, rights, and social justice. I'll post a more detailed update later in the week.

I Think I'm Allergic To Accounting

Today's weather was just about perfect: 60-65 degrees F and not a cloud in the sky. It was just the type of day that reminds me of sipping Brunello all afternoon on some beautiful terrazza in Florence. For that matter, it was just the type of day that motivates me to sip wine all afternoon on some beautiful terrazza. Unfortunately I was indoors all day studying Accounting and Finance. Final exams for our first module are next week and those are the two subjects for which A. I have the least background and B. there are definite, non-BSable, right and wrong answers.
The self restraint has taken its toll; my forehead is breaking out. Conclusion: I am allergic to accounting!

I actually tried to begin studying for Accounting on Friday by participating in a review session. Stewart would have none of it, though, and ordered those of us who had decent grades in the class to leave. He didn't have a grades list with him so he didn't know who was technically supposed to be there and who was prohibited. Interestingly, when Stewart asked who had a certain grade or higher, some of the students with decent grades remained silent so they could stay for the session. It will be interesting in August when, as a class representing 44 nationalities, we are tasked with agreeing upon a universal code of ethics. I wonder where disobeying direct orders from professors will come out. For me, it was clear. For others, it clearly was not.

Staying in today wasn't all bad, though; I opened up my windows and was still able to enjoy the day. Once I finished studying for Accounting, I even rewarded myself by heading outside for some exercise--pictures are on FaceBook. Mozart's piano concerti and symphonies kept me company while I was studying but, in honor of his upcoming Houston concert, Jimmy Buffett was the soundtrack to my walk outside.

And speaking of Jimmy Buffett, I'll close with some select lyrics from "If It All Falls Down," off of his 1986 album, Floridays. It seems like an appropriate song for IMD as it addresses his hard studying and struggle to choose the right career:

...
Never wanted to be
A part of history
I have my days in the sun
A beach bum, a man for all sea sides

Guidance counselor said
Your scores are anti-heroic
Computer recommends
Hard-drinking calypso poet

Studied life at sea
Studied life in bars
Never passed my S.A.T.'s
So I thought I'd study extra hard
...
We had plenty of doctors
We had plenty of lawyers
We had people to make us things
We had people to sell us those things
We didn't have enough room for those things
We built lots of self storage
Calypso poet shortage
Calypso poet shortage
...

That last verse even include some supply chain theory--so appropriate! This partial song quote is dedicated to another American IMD student, Matt. He is the captain of IMD's sailing team for the upcoming MBA Tournament and he has taken a very Buffett-esque approach by making it the IMD drinking team. Jimmy would be proud!