Corporate social responsibility is a sham. Business ethics is an oxymoron. Executive integrity is a trick.

In these scandal-blackened days, cynics are all a-blather with such talk. But now we’re hearing it from a disturbing quarter: Business Ethics, a respected 15-year-old magazine widely read by corporate ethics officers.

In the latest issue, editor Marjorie Kelly offers an anguished mea culpa. She ruefully admits the failure of the corporate social responsibility (CSR) movement to prevent the recent corporate scandals. Ending her editorial, she even appears to walk away from ethics itself.

It’s an enticing thesis. But it’s the wrong conclusion.

In a nutshell, here’s her argument:

1. We in the ethics movement focused on CSR — caring for the environment, promoting human rights, taking tough anti-bribery stands — as a way to separate good from bad companies.

2. But Enron and its ilk proved us wrong — talking a great ethics game, winning CSR awards, and then collapsing in a blaze of scandal.

3. Yet unlike prior scandals du jour — frauds concerning defense procurement, Medicare billing, insurance selling, or junk bonds — this is “ethics’ perfect storm,” where “we’re seeing the weakness of the system design itself.”

4. So “all the things CSR has been measuring and fighting for and applauding may be colossally beside the point.”

5. Why? Because CSR cannot compete against greed in the hands of the few powerful elites who benefit from the system, at the expense of the many who get shafted.

6. For that reason, we’re giving up the fight for ethics and turning our attention to systemic reform.

Following her editorial is an italicized note saying that “Business Ethics is laying plans to convert itself into a nonprofit to be called the Economic Democracy Project.”

Engaging though it is, that’s the wrong resolution. The problem lies not with CSR. It lies in the assumption that CSR and ethics are one and the same. They aren’t.

It’s long been true that highly ethical companies — and there are many, especially in the small, privately held arena — sometimes have few resources to spend developing publicly recognized CSR programs. It’s now also obvious that a company with great CSR programs can be fundamentally unethical.

How can that be? Because CSR is but a tiny part of ethics — by my estimates, only about one-tenth. By that I mean that ethics — the practical application of values to decision making — is rooted in the five core moral values of honesty, fairness, responsibility, respect, and compassion. Responsibility is only one-fifth of the mix — and can be further divided into social and individual responsibility. Hence my one-tenth vote for CSR.

Don’t get me wrong: It’s hugely important that corporations practice social responsibility. But if they don’t also inculcate individual responsibility in their executives — not to mention promoting honesty, fairness, and the rest of the core values — there’s no guarantee that they’ll be ethical. These five values are each part of a spectrum: You don’t get the full white light of ethics when any of these components is missing. Do CSR dishonestly, and of course you’ll be unethical.

That’s not to demean Ms. Kelly’s solution. Economic justice is a much-needed antidote. But justice itself (an element of fairness) is only part of the answer. Even when it takes the form of economic democracy — spreading the wealth from the elites to the broader majority — it stumbles over the historical fact that even majorities (as in the Old South, for instance, or in America prior to the environmental movement) can be unethical. Systemic reform and its attendant regulations can encourage ethical behavior. But ethics lies as far beyond regulation as integrity lies beyond mere lawfulness.

And that’s my real concern. I sympathize with the angst at Business Ethics. I applaud Ms. Kelly’s candor in admitting that “Enron fooled us.” But the answer is not to fold up the ethics tent and steal away into the lowlands of economic reform. It lies, instead, in folding up the CSR tent and scaling up into full-blown applications of ethics. That doesn’t happen simply by creating better economic systems — which, however clever, can be outwitted by a slightly more clever villain. It comes by creating ethical executives to run our systems. And since executives, like everyone else, are created by our entire culture (not just by business training or MBA programs), that means seeing ethics as a whole — in schools, communities, governments, families, nonprofits, places of worship.

In the end, there’s no such thing as business ethics. There’s only ethics — applied in special ways to business, yes, but knit seamlessly into the wholeness of the moral consciousness. Which, paradoxically, is why there’s still a need for Business Ethics — a magazine that, Ms. Kelly tells me, her new nonprofit will continue to publish. I’m glad. Try as we might, we can’t avoid the greatest social responsibility of all, which is to focus in the twenty-first century on the ethical mindset that the twentieth century seems to have abandoned.

(c)2002 by the Institute for Global Ethics

“I did not, as a matter of policy, in 1984, ‘85, ‘86, ‘87, ‘88, ‘89, ‘90, ‘91, ‘92, ‘93, ‘94, ‘95, ‘96, ‘97, ‘98, ‘99, 2000, 2001, go to parishes on the occasion of dealing with a priest against whom an allegation of sexual abuse of a child had been made. I see now that that should have been done, but we did not do that.”

– Cardinal Bernard Law of Boston speaking during a deposition over alleged sexual abuse by Rev. Paul Shanley. In videotaped testimony released last week, Law “testified that he had allowed priests accused of sexual abuse — and even those who admitted the abuse — to return to parish ministry without informing parishioners of the accusations or admissions,” according to a report from the New York Times.

WASHINGTON
Relatives of people killed in the September 11 terrorist attacks filed a $100 trillion lawsuit last week against the Sudan government, three Saudi princes, and a host of banks, Islamic foundations, and other defendants accused of bankrolling Osama bin Laden.

The suit, filed by an organization called Families United to Bankrupt Terrorism, targets more than 80 individuals and organizations accused of funding bin Laden’s al Qaeda network, claiming that terrorism’s backers should be held liable for the deaths and destruction they fund.

Terrorists “cannot plan, train, and act on a massive scale without significant financial power, coordination, and backing,” the lawsuit states. “By taking vigorous legal action against the financial sponsors of terror, the plaintiffs will force the sponsors of terror into the light and subject them to the rule of law.”

Lead lawyer Allan Gerson said those sponsors include members of the Saudi royal family, seven banks, and many international charities already under investigation by the U.S. government, reported the Washington Post.

Gerson was instrumental in brokering a tentative $2.7 billion settlement with the Libyan government over the 1998 bombing of Pan Am Flight 103 over Lockerbie, Scotland, notes the Post.

While the plaintiffs acknowledge that they face long odds, they say the lawsuit is their only means of avenging the loss of their loved ones — and the best means of drying up funds for future terrorism.

“It’s not the money. We want to do something to get at these people,” Irene Spina, whose daughter, was killed in the World Trade Center, told reporters. “There’s nothing else we can do.”

Matt Sellitto, whose son also died in the World Trade Center, agreed. “We have to stop the terrorists,” Sellitto told the Post. “And one of the surest ways of stopping them is stopping their access to money.”

NEW YORK
Big Tobacco pressured drug companies to downplay and even drop efforts aimed at helping smokers kick the habit, according to a new report published in the Journal of the American Medical Association.

The research, headed by University of California at San Francisco professor Dr. Lisa Bero, is built on memos made public in the 1998 settlement between the tobacco industry and U.S. states.

Bero’s report spotlights Philip Morris, which she claims used its lucrative contracts with chemical firms’ agricultural departments to pressure the same companies’ drug divisions to tone down their anti-smoking efforts.

According to Bero’s research, Philip Morris used the threat of withdrawing an $8 million annual contract for tobacco humectants to push Dow Chemical into canceling an antismoking newsletter for doctors.

In addition, Bero says Dow bowed to Philip Morris’s pressure and reduced sprawling multi-page ads and flyers for Nicorette to a terse single-line spot: “If you want to quit smoking for good, see your doctor.”

The tobacco giant also pressured CIBA-Geigy, maker of a nicotine skin patch, into curtailing ads for the product, threatening the loss of pesticide contracts, the study claimed.

“Boom, this financial sanction comes, and boom, the advertising changes,” Dr. Bero told the New York Times. “They’re very sequential.”

While such behavior may be reasonable in normal business relations, it becomes ethically suspect when the product being pushed is as dangerous as tobacco, Stephen Gillers, a professor of legal ethics at the New York University School of Law, told the Times.

Not only was Philip Morris at fault, but the drug firms that caved also bear some blame, Gillers said.

Dow and CIBA-Geigy had “an obligation to question the ethics of withdrawing a profitable product that can help smokers stop in order to appease tobacco,” Gillers contended. “The word that occurs to me is ‘cowardly.’ Why didn’t they stand up to Philip Morris?”

HOLLYWOOD
Hollywood screenwriter Joe Eszterhas last week called on the movie industry to curb its use of cigarettes on the silver screen, saying the industry’s glamorization of a deadly, addictive habit was “unconscionable.”

Eszterhas, writer of “Flashdance” and “Basic Instinct,” is recovering from throat cancer diagnosed 18 months ago. A long-time chain smoker, he is now missing part of his larynx, reported the San Francisco Chronicle.

As part of his self-improvement regimen, Eszterhas is walking five miles a day — and repenting for putting cigarettes in the hands of his on-screen characters, saying his attempt to build bad-boy personas by lighting up was a terrible mistake.

In an article published in the New York Times, Eszterhas calls on his Hollywood colleagues to change their ways, writing, “We are the advertising agency and sales force for an industry that kills nearly 10,000 people daily.”

“I say to my colleagues in Hollywood: What we are doing by showing larger-than-life movie stars smoking onscreen is glamorizing smoking. What we are doing by glamorizing smoking is unconscionable,” he wrote.

Eszterhas’s change of heart failed to convert Larry Deutchman of the Entertainment Industries Council, an industry group formed to monitor social issues, according to the Associated Press.

“If he looks at his work and wishes he had done otherwise, I respect that and think it’s terrific,” Deutchman told the AP. “But to blame the industry as if there’s a conspiracy to promote tobacco use, I think, might be a little unfair.”

Director Rob Reiner (”Stand by Me,” “The Princess Bride,” “When Harry Met Sally”) sides with Eszterhas, and has put his view into practice at Castle Rock studios, which recently adopted a no-smoking policy in its films, according to the Chronicle.

“If a director or an actor feels smoking is necessary to the plot line or the character, they can come and meet with Rob and explain themselves,” Chad Griffin, a Castle Rock PR man, told the Chronicle. “Rob is not an absolutist, but he firmly believes (on-screen smoking) is completely irresponsible, with tremendous negative health consequences.”

While tobacco companies used to pay princely sums for product placement in Hollywood films, the industry declared a voluntary moratorium on such fees in 1989, noted the Chronicle.

WASHINGTON
The Bush administration came under sharp criticism last week for threatening to cut off military aid to nations that refuse to exempt the United States from prosecution for alleged human rights abuses.

Last week’s salvo is the latest in the battle over the U.S. relationship to the International Criminal Court (ICC), the first standing body tasked with investigating and prosecuting war crimes around the world.

The Bush administration has fought the ICC from the start, arguing that U.S. involvement around the world is so extensive that its service members will almost certainly be targeted by bogus, politically motivated charges.

After ICC treaty members, including European nations and most U.S. allies, refused to weaken the ICC as Washington wanted, Bush threatened to veto all UN peacekeeping missions around the world.

Last month, the UN Security Council brokered a last-minute deal, giving the United States one year’s exemption from prosecution and a window of time to reconcile its position with that of others nations.

Last week, that reconciliation looked more like strong-arming than sweet-talking, press reports indicated.

In a series of meetings, the U.S. State Department urged foreign ambassadors to exempt the United States from prosecution at the ICC, or face the loss of military aid — a tactic recently approved by Congress.

“You’re well aware of … the potential withholding of military aid,” Secretary of State Colin Powell reminded last week after meeting with Spanish leaders. “But we’re not bludgeoning or threatening any of our friends.”

Several European nations and human-rights groups accused the Bush administration of bullying its allies over the issue.

The European Union has asked its 15 member states as well as EU candidates to hold off on their decisions regarding U.S. immunity until the EU formulates an official position, expected early next month, according to the Reuters news agency.

So far, only Romania and Israel have signed papers exempting the United States from the ICC.

TOKYO
Japan’s plans to launch a nationwide computerized ID system ran into a snag last week when more than 100 municipalities refused to enroll their citizens, citing Big Brother-type fears.

Japan’s so-called “Juki Net” assigns an 11-digit number to each of the nation’s 126 million citizens, a move meant to streamline the cumbersome process of filling out forms and getting government services.

Currently, the 11-digit ID carries only the person’s name, address, birth date, and gender. But expansion of the data is expected, sparking fears of privacy violations, reported the Reuters news agency.

Although lawmakers had promised to enact privacy legislation before unrolling the Juki Net, Parliament seems unlikely to do so until next year at the earliest, according to the Times.

Last week, many Japanese citizens and government leaders protested, tearing up their IDs in irritation and fear that their data could be misused by hackers and government officials.

“A single system connecting tax, social security, pension, and personal data sounds efficient and helpful, but there’s a huge potential for abuse,” Hiroshi Yamada, the protesting mayor of Tokyo’s Suginami ward, told the Los Angeles Times.

“Pretty soon they might be tempted to start collecting information on which videos you’re renting or whether you’ve been reading Karl Marx,” Yamada said.

The Times notes that such concerns have been heightened by a series of recent data leaks, including the revelation in May that Japan’s Defense Agency had begun blacklisting citizens who filed freedom of information requests with the government.

Government officials downplay such concerns, saying the benefits of the system, which costs $165 million annually and is expected to expedite at least 90 government procedures, far outweigh any problems.

TORONTO
A Canadian appeals court last week gave two whistle-blowers the chance to have their case heard in court, ruling that the government’s grievance process, which did not allow for independent adjudication, was biased.

While working for the Department of Foreign Affairs, John Guenette and Joanna Gualtieri allegedly uncovered massive mismanagement of Canadian diplomats’ living quarters abroad — abuse that allegedly cost taxpayers $2 billion from 1986 to 1998.

After bringing their concerns to their superiors, Guenette and Gualtieri were allegedly harassed, threatened, and given dead-end jobs. They sued the federal government and eight senior managers in 1998.

The government convinced a lower court to throw out the case, saying the workers were bound to handle their complaint via an in-house arbitration process, not the courts, reported the Globe & Mail.

Last week, a three-judge panel of the Ontario Court of Appeals overturned that decision, ruling that the government’s arbitration was biased against the whistle-blowers.

Since the workers’ complaints did not center on normal disciplinary issues, the arbitrators in the case were scheduled to be the whistle-blowers’ superiors, according to the National Post.

In other words, the process would direct “their complaints to the very people they were complaining about in the first place,” plaintiffs’ lawyer Andrew Raven told the Post.

The appeals court essential said that “if you don’t have access to an independent adjudicator, you don’t have access to justice,” Raven explained.

The government has 60 days to appeal last week’s ruling to Canada’s Supreme Court.

Special to Newsline from Canadian correspondent Errol P. Mendes

OTTAWA
In the aftermath of several government ethics scandals in the Canadian public service, the head of the newly created federal Office of Public Service Integrity, Edward Keyserlingk, is warning that a new code of ethics being discussed for the federal public service will not be effective without a governance system that encourages whistle-blowers and protects them from reprisals.

According to a report in the Ottawa Citizen, Mr. Keyserlingk wants to make it a public servant’s duty to expose wrongdoing and misuse of public funds.

Pointing out how “tight-lipped” public servants were even when they enjoy relative job security, he argued that rewarding whistle-blowers and protecting them could be the first step to changing bureaucratic culture.

He also pointed out the lack of effective and durable overseers to ensure ethical behavior in the public service. He also argues that the high turnover of senior officials in each department has impeded the development of trust and continuity needed for a new ethical culture to take hold.

LONDON
Britain’s BBC news service last week refused to open up its religious “Thought for the Day” radio segment to atheists, saying that doing so would damage the program’s distinctiveness.

“Thought for the Day,” a two-and-a-half-minute snippet played at 7:50 in the morning, is billed as “a slot for reflections on topical matters from the perspective of a religious faith,” according to the BBC.

The religious segment, begun in 1970, has recently become the center of a growing controversy over fair representation for the nation’s listeners — 30 to 40 percent of whom classify themselves as “nonreligious,” according to a BBC poll in 2000.

With 6.45 million listeners in tow, the BBC program has a responsibility to present varying views — not only of disparate religions, but of disparate views about religion, critics say.

Recently, more than 100 leading U.K. atheists, including members of Parliament, authors, scientists, and public figures, petitioned for access to the “Thought for the Day” slot.

“The BBC is supposed to reflect the diversity of the whole country, so it is unacceptable that the growing number of nonreligious people — well over 10 million — should be subjected to this discrimination,” the petitioner claimed. “The corporation wouldn’t dare do this to any other minority.”

“By resolutely retaining the ban, the BBC is … giving the impression of promoting religion as the one source of ethics,” the petition added.

The BBC rebuffed the request, saying the ban on nonreligious contributors would continue, contending that to do otherwise would “undermine the slot’s very distinctiveness.”

But in a bid to appease the nonreligious, the BBC last week gave Richard Dawkins, Oxford University’s professor for the public understanding of science, a small slot one hour after the day’s “Thought.”

Dawkins appealed to listeners to abandon religion and “come of age,” according to the Associated Press.

WASHINGTON
Most of the nation’s largest companies have adopted workplace protections and policies supporting the rights of their gay employees, according to a new report from the Human Rights Campaign (HRC), a civil rights advocacy group based in Washington.

Of 319 public companies employing at least 500 people, 92 percent had written nondiscrimination policies protecting gay workers. Sixty-nine percent offered health insurance benefits to gay workers’ partners.

The figures are part of the first “Corporate Equality Index,” an annual report designed to chart the treatment of gay employees at the nation’s leading firms.

Thirteen companies, including Aetna, American Airlines, Apple Computer, Eastman Kodak, Intel, J.P. Morgan Chase, Lucent, Nike, and Xerox, scored 100 percent on the analysis, reported the AP.

Cracker Barrel, Emerson Electric, Lockheed Martin, and ExxonMobil, scored near the bottom.

“Taking a stand against discrimination — whether based on race, gender, religion, sexual orientation, or anything else — is not politically correct. It is simply correct, and it is the right thing to do,” Donald Carty, chairman and CEO of American Airlines, told the Washington Post.

“Most successful companies know discrimination is bad for business and that treating all employees fairly returns enormous dividends,” HRC executive director Elizabeth Birch told the Associated Press.

Currently eleven states ban workplace discrimination based on sexual orientation. Congress has not enacted similar legislation because of Republican opposition in the House, where the Employment Non-Discrimination Act (ENDA) was again blocked this year.

LOS ANGELES
As genetic science advances, consumer marketing is keeping pace, with a growing number of companies touting tests designed to give you skin creams, meals, and medications custom-tailored to your genetic make-up.

The problem is, these tests just might be useless and illegal, regulators say, worrying about whether and how they should put the brakes on gene science gone mainstream, according to a report last week from the Los Angeles Times.

The tests in question offer a host of personalized do-it-from-home services — a heads-up on your likelihood to have breast cancer, or an analysis of which antidepressant would work best in your body, for example — that currently lack government oversight.

Some observers say such laxity may not be a problem because the tests often require a doctor’s follow-up to prove useful, according to the Times.

Others worry that the tests, which range in cost from hundreds to thousands of dollars, might be little more than data-rich placebos giving people a false sense of empowerment while weakening their pocketbooks.

From the American Bar Association:

“The American Bar Association today released results of a poll (PowerPoint) that shows public trust and confidence in the judiciary is eroded by skyrocketing costs in judicial election campaigns.

“According to the poll conducted by Harris Interactive, 72 percent of Americans are concerned that the impartiality of judges is compromised by their need to raise campaign money. Thirty-five percent of the respondents said they were ‘extremely’ or ‘very’ concerned.

“‘Today I am announcing the appointment of a blue-ribbon commission whose mission is to identify a better way for states to conduct judicial elections,’ said Alfred P. Carlton Jr. of Raleigh, North Carolina, incoming president of the ABA.

“‘We must defuse the escalating partisan battle over Americas courts. Millions of dollars are being spent to ‘control’ courts in some states much the same way political parties control legislative and executive branches of government.’

“‘American justice is suffering from a bad case of the flu caused by too much money and too much partisanship in judicial elections.’

“Carlton characterized the recent ruling by the Supreme Court of the United States that judicial candidates have the right to express their views on legal and political issues as ‘potentially the most interesting development of the 2002 election cycle.’

“‘It raises the ante for judicial candidates who are now forced to become partisan politicians,’ he said. ‘Is this the beginning of the end of judges being different from partisan politicians?’…

“‘The challenge is to find a way for states that want to continue to elect judges to allow judicial candidates to freely express themselves on political issues in a way that does not compromise their impartiality once they are on the bench,’ he said.

“According to the poll, a majority of people think elected judges are more fair and impartial than appointed judges. However, the survey shows almost three out of four people believe that raising campaign money compromises impartiality of the judiciary….

“Over 80 percent of state judges face election of some sort. Federal judges are appointed….”

RE: “A Vortex of Distrust,” Aug. 19.

Dear Rushworth

I just read your commentary, and I also see the trend you articulate. I would like to add two other ingredients to the mix. One is a cause and one is an effect.

The cause I see is the availability of instant expertise. Suddenly a great number of people, are not dependent upon “experts” to build Web sites, to advise on car purchases, to serve as intermediaries in an incredible number of endeavors. It’s as though universal education has taken a second giant leap forward. Many people simply have less need for experts, and have higher expectations. With this pressure, many individuals in high positions have responded by cheating. CEOs will have an increasingly difficult time justifying seven-figure salaries as their expertise is questioned and transparency is increasingly demanded.

I see these years in which we live as a crisis time — but a time in which the excesses of amoral behavior are brought to light. A time in which great numbers of people start coming to grips with living responsibly.

– Paul Pickering
Slough, Berkshire, England

“The vast majority of persons of our race have a natural tendency to shrink from the responsibility of standing and acting alone.”

– Francis Galton (English scientist, 1822-1911)