Ethics Newsline®

A new survey from the Trades Union Congress gauges the amount of unpaid overtime work being done by U.K. workers. A snapshot of a few sectors follows.

Source: Trades Union Congress press release and data tables for “About Time: A New Agenda for Shaping Working Hours”

According to a new global survey, most companies think they benefit from focusing on values, though they’re hard pressed to say why. They’re clear that values are important to maintaining their reputations and to strengthening relationships to customers and employees. They’re less sure about any direct links between values and financial growth. And while they believe that the tone of the CEO is crucial to reinforcing values, companies are (in the words of the survey’s authors) “surprisingly lax in quantifying” what the study calls their ROV, or “return on values.”

The survey was conducted by the Aspen Institute, a nonprofit organization known for its leadership seminars, and Booz Allen Hamilton, a global management consulting firm. It invited participation from approximately 9,500 senior executives around the world, only 365 of whom returned their surveys. That’s enough to draw some broad conclusions, but not enough to break out into meaningful subsets. It also reflects a perennial problem with values surveys: Those bothering to respond may be especially interested in the topic, while those who think values aren’t important don’t answer.

Nevertheless, this survey produces some important findings:

• Financial leaders care more about values. Companies that identify themselves as leaders in their sector — and whose published financial results put them at least 10 percent ahead of their competitors — approach values more comprehensively, are more successful at linking values to the way they run their companies, and believe their management practices help foster their values.
• Different regions apply values differently. Asian/Pacific firms are much more apt to include social responsibility on their list of values (74 percent) than are North American firms (58 percent). And when asked whether “personal values” or “corporate strategy” is the “primarily enabler for aligning values with decision making,” three quarters of North Americans favor personal values, while only 47 percent of Europeans and 35 percent of Asians agree.
• Topping the list of values is “ethical behavior/integrity.” As the researchers analyzed corporate values statements, they identified 14 broad categories. “Of the 89 percent of companies that have written corporate values statements, 90 percent specify ethical conduct as a principle.”

Readers of Ethics Newsline™ are familiar by now with the Institute’s finding that five ethical values — honesty, responsibility, respect, fairness, and compassion — are universally held in cultures around the world. Ask people what constitutes ethics, and they respond with these five.

The Aspen/Booz Allen Hamilton study, however, reveals a curious linguistic muddle in many corporate codes: They are often a jumble of values. Some of the 14 values identified in the study are clearly ethical, such as “integrity,” “honesty/openness,” and “accountability.” Some are conditions that result from the application of these values, such as “trust” (related to honesty), “environmental responsibility” and “social responsibility/corporate citizenship” (forms of responsibility in general), and “commitment to diversity” (closely related to respect). But the list also includes three other commitments (to “customers,” “employees,” and “shareholders”) that appear more transactional than ethical and frequently are demonstrated by companies having little interest in ethics. Finally, there’s a group of values — including “innovativeness/entrepreneurship,” “drive to succeed,” “initiative,” and “adaptability” — that regularly run counter to ethics. Take each of these latter to its logical extreme, in other words, and you’ve described the culture of Enron just before its fall.

And that’s where the muddle comes. The authors of this survey begin by noting that “corporate scandals … have provoked profound skepticism about business ethics and conduct.” They also quote Xerox CEO Anne Mulcahy saying that corporate values “helped save Xerox during the worst crisis in our history.” But which values? “Honesty” and “accountability” may well help avert crises. “Drive to succeed” and “innovativeness,” though they’re wonderful things, may generate those very crises in the first place.

Little wonder, then, that corporate executives find values confusing. They’re being led astray by their language. Fortunately, there’s a solution, tucked right into this report’s phrase “business ethics and conduct.” Those two terms, often taken together, are profoundly different. Each needs its own code for expression. The truly ethical values — the ones that, if violated, would cause anyone around the world to exclaim, “That’s just plain wrong!” — are the five universals. Philosophers call them “terminal values” — virtues that are in and of themselves good. Beyond that, corporations need codes of conduct. That’s where such words as “drive,” “excellence,” “innovation,” “success,” “commitment,” and “perseverance” can show up. Philosophers call them “instrumental values” — only useful as instruments to getting somewhere else, and only good if the ends they serve are good.

Without such distinctions, pity the poor executives. They’ve been told that if they live by their values, they’ll create good companies. Then they’re presented with this potpourri that, according to this survey, actually inhabit corporate codes. No wonder they turn skeptical. The simple step of separating codes of ethics from codes of conduct, and insisting that the latter never be implemented without the former, would save us from some damaging ambiguities — and some budding Enrons.

©2005 Institute for Global Ethics

“They are the boulder in the middle of the highway to personal savings accounts. We will be the dynamite that removes them.”

– Charlie Jarvis, president of conservative lobbying organization USA Next, discussing plans to attack the AARP (formerly the American Association of Retired Persons), which is opposing President Bush’s push to privatize Social Security. The efforts of USA Next and Jarvis, a former official in the Reagan and first Bush administrations, will be fueled by Creative Response Concepts, the PR firm that helped engineer the Swift Boat Veterans ads attacking Sen. John Kerry’s service in Vietnam with questionable claims. (“A New Target for Advisers to Swift Vets,” New York Times, Feb. 21)

NEW YORK
Setting up a potential battle before the Supreme Court, a federal judge in New York last week broke ranks with colleagues in Washington, ruling that two New York Times reporters do not have to turn over their private phone records to federal prosecutors.

In his ruling, U.S. District Judge Robert Sweet said that in a time of increasing government secrecy, journalists need to be able to offer anonymity to officials willing to leak information in the public interest.

Sweet ruled that under the First Amendment’s protections for the press, prosecutors can force journalists to violate promised anonymity only when doing so serves a higher purpose than the original leak.

In this case, “the government has failed to demonstrate that the balance of the competing interests weighs in its favor,” Sweet concluded.

The ruling rebuffs U.S. Attorney Patrick Fitzgerald, who is trying to force Times journalists Judith Miller and Philip Shenon to surrender weeks of phone records that would expose their networks of confidential sources.

Fitzgerald wants to know who leaked information to the reporters about planned asset seizures and government raids on U.S.-based charities suspected of aiding terrorism. Fitzgerald says the reporters’ attempts to follow up on the leaks sabotaged the government’s actions by tipping off the charities.

Sweet ruled that the reporters’ records can remain secret unless the information is both highly material to the prosecutor’s case and unobtainable by any other avenue — conditions he said the government so far had failed to meet in this case.

Last week’s ruling takes a 180-degree turn from a decision two weeks ago in Washington, where a three-member panel of the circuit court of appeals threatened two reporters with jail if they continue to honor promises of confidentiality to their sources.

In that case, Fitzgerald again is pursuing the Times’ Judith Miller, as well as Time magazine’s Matthew Cooper, for the names of administration officials suspected of leaking the identity of a covert CIA agent.

Both rulings center on the same 1972 U.S. Supreme Court decision — Branzburg v. Hayes — making it likely that the nation’s highest court will intervene to say which determination should be followed, reported the Times.

BOSTON
Spooked by uncertainty over federal “indecency” statutes, public TV stations across the nation were forced last week to choose between a sanitized documentary about U.S. soldiers in Iraq or an unexpurgated version that could cost them steeply.

The documentary series “Frontline,” produced by WGBH in Boston, normally offers to protect public TV stations airing the show from penalties imposed by the Federal Communications Commission (FCC) for content.

But with last week’s episode, which profiled a U.S. Army regiment in the lead-up to January’s Iraqi elections, WGBH broke its normal procedures, saying the FCC’s efforts to skyrocket indecency fines put the station at too great a financial risk.

The “Frontline” episode, “A Company of Soldiers,” included 13 expletives that WGBH believed were helpful to the program’s content, but which also might incur the FCC’s wrath.

Affiliates airing the show were required to either broadcast a bowdlerized version or sign a waiver saying the normal legal protections afforded by WGBH would not apply, reported the New York Times.

Nearly 85 percent of the public stations opted for the sanitized version, with only about 50 choosing to air the full version, most of them bumping the program to a later time slot, reported the Reuters news agency.

Last week’s wave of self-censorship comes as stations struggle to understand the shifting rules of what exactly the FCC considers to be indecent — a confusion amplified by the government’s slow pace in answering questions and resolving complaints, according to press reports.

Last November, nearly a third of ABC affiliates declined to air the network’s Veterans Day broadcast of the lauded World War II drama “Saving Private Ryan,” citing concerns that the FCC would fine them for the show’s profanity and war violence.

The Los Angeles Times last week reported that broadcasters are preparing to sue the FCC over its escalating and unclear indecency penalties, saying the murky situation is impeding content choices and violating their rights to free speech.

WASHINGTON
Important votes on whether to continue selling the potentially dangerous drugs Vioxx and Bextra were decided by panel members who had done consulting for the companies whose products — and profits — hung in the balance, an advocacy group claimed last week.

In a series of votes two week ago, Food and Drug Administration (FDA) advisors recommended that Vioxx could be put back on the market, and that Bextra and Celebrex could stay on the market despite recent reports of their health risks.

Merck stopped sales of Vioxx on September 30 after studies indicated that some users appeared to develop heart problems because of the drug. The FDA established the advisory panel to investigate Vioxx and similar drugs, known as Cox-2 inhibitors, which are powerful painkillers typically prescribed for arthritis.

Ten of the 32 panel members whose votes decided the issue had received funding or support from Merck, which makes Vioxx, and from Pfizer, which makes Bextra, reported the New York Times.

Had those 10 members abstained, the panel would have voted by strong margins to bar both Bextra and Vioxx.

The findings by the Center for Science in the Public Interest, which examined its database of science and industry ties to find the linkages on the FDA panel, reignited the debate over whether corporate money is tainting the drug review process.

The FDA last week denied any undue influence, saying that researchers once in the employ of drug makers sometimes have knowledge or insights that make them pivotal to a well-rounded advisory panel.

Critics say such ties can compromise researchers’ objectivity to the products of their benefactors, endangering public safety in the process, reported the Times.

ATLANTA
ChoicePoint Inc., a firm that markets massive amounts of consumer data to private firms and the government, was named last week in a lawsuit stemming from the company’s recent disclosure that it had been duped into disclosing private information about at least 145,000 people.

ChoicePoint discovered the criminal breach last October, but kept quiet while cooperating with investigators, claiming that public disclosure would have hindered the probe. The company finally disclosed the problem last week, reported the Associated Press.

According to ChoicePoint, bandits posing as legitimate companies were given ChoicePoint accounts and passwords, granting them access to consumers’ names, addresses, Social Security numbers, credit reports, and other information for an estimated five months. One person has been arrested so far.

In a state-by-state breakdown of the estimated 145,000 people whose private data may have been hacked, ChoicePoint identified likely victims in all 50 states, the District of Columbia, and three U.S. territories.

The state with the highest number of possible victims was California, where information on more than 34,000 consumers may have been stolen and where last week’s lawsuit was filed.

The invasive attack on ChoicePoint’s massive database of 19 billion records not only put a dent in the company’s image, but may push federal legislators to improve privacy protection laws, noted the Seattle Post-Intelligencer.

ChoicePoint, whose stock price took a blow after the security failure was announced, last week said it is doing all it can to restore consumers’ trust and make amends, reported the Atlanta Journal-Constitution.

ChoicePoint said it will be revamping its internal security, will re-screen 17,000 business customers to ensure their validity, and will pay for a one-year subscription to a credit-monitoring service for all affected consumers.

WASHINGTON
The U.S. Labor Department’s inspector general last week said he will investigate the terms of a recently disclosed child-labor settlement that critics say is skewed to favor the nation’s largest retailer, Wal-Mart Stores Inc., because it provides for advance notice in the case of future probes.

The settlement, signed in early January but not disclosed until earlier this month, requires Wal-Mart to pay $135,540 to settle federal charges that young workers were operating dangerous machinery like cardboard balers and chainsaws.

Critics who read the deal were quick to condemn a settlement clause requiring the Labor Department to give Wal-Mart 15 days’ notice before investigating any future allegations of child-labor violations.

Opponents say the advance warning would give Wal-Mart an unfair advantage, allowing the firm to obscure evidence of wrongdoing or intimidate vulnerable workers before investigators arrive.

The Labor Department has dismissed such worries, saying the heads-up required by the settlement was designed to help Wal-Mart correct problems more quickly, reported the New York Times.

Continuing criticism of the deal, however, spurred Labor’s inspector general (IG) to announce last week that a review of the settlement would take place.

While critics also disparaged the deal as a reward to Wal-Mart for its strong support of President Bush’s reelection campaign, the Labor Department said such advance-warning clauses were nothing new.

The report notes that 10-day-warning clauses were written into child labor settlement with Sears and Foot Locker during the Clinton administration.

“The department is confident that once the IG looks at the agreement, he will conclude it was a standard agreement, entered into by career professionals, to further the mission of protecting youth employment,” the Labor Department’s top lawyer, Howard Radzely, told the Times.

Wal-Mart, which said it is committed to complying with federal labor laws, has been accused before of violating child labor laws, paying a $206,650 fine by the state of Maine in 2000. A 2004 weeklong internal audit of 128 stores found 1,371 apparent violations, though the company later disputed the findings.

UNITED NATIONS
The head of refugee relief efforts for the United Nations quit his post last week following a renewed flare-up over charges that he sexually harassed and intimidated female staffers.

Just two days after insisting that he would keep his job, Ruud Lubbers reversed course and tendered his resignation, citing a lack of support from his boss, U.N. Secretary-General Kofi Annan.

Last May, Lubbers was accused of sexually harassing a staffer. An internal investigation upheld the woman’s allegations, charging Lubbers with engaging in a “pattern of sexual harassment.”

In their report, U.N. investigators also indicted Lubbers for using “intense, pervasive, and intimidating attempts to influence the outcome of this investigation,” reported the Washington Post.

Despite the findings, Kofi Annan controversially declined to pursue the case last July, saying the allegations were “unsustainable on a legal basis.”

Two weeks ago, Britain’s Independent published leaked portions of the internal U.N. report, reigniting the scandal and prompting a sit-down meeting in which Annan reportedly pushed Lubbers to step down.

“For more than four years I gave all my energy” to the U.N. High Commission for Refugees (UNHCR), Lubbers declared in his resignation letter. “Now in the middle of a series of problems and with ongoing media pressure you apparently view this differently.”

“Despite all my loyalty, insult has now been added to injury and therefore I resign as high commissioner,” he wrote.

Annan’s office last week said Lubbers, a former premier of the Netherlands, had been a “devoted” public servant and that the acceptance of his resignation “should not be interpreted as a finding of guilt.”

Nevertheless, “the Secretary-General is convinced that it is in the best interest of UNHCR, its staff, and the refugees it serves that the page be turned and a new chapter be started,” it concluded.

LAS VEGAS
The Associated Press last week profiled a new proposal by the governor of Nevada, who hopes to earmark $200,000 for treating compulsive gamblers — the first time the state government has anted up to fight the problem.

In Nevada, gambling firms currently pull in nearly $10 billion in annual revenues, contributing about $1 million to problem gambling efforts.

The Nevada state government so far has failed to follow suit — something Gov. Kenny Guinn wants to change, even if his $200,000 proposal received a tempered welcome as a bit stingy and small to effect the needed changes.

MGM Mirage executive Alan Feldman said the Guinn’s proposal was both overdue and underfunded, noting that Nevada expects to rake in $1.83 billion in gambling and live entertainment taxes over the next two years.

While all U.S. states except Hawaii and Utah have some form of legalized gambling, only 17 fund programs to treat pathological or problem gamblers — an estimated 5 percent of the population — according to the report.

Special to Newsline from Canadian correspondent Errol P. Mendes

OTTAWA
Canadian Prime Minister Paul Martin has decided that Canada will not participate in the Bush administration’s continuing efforts to develop a ballistic missile defense system that might protect the United States and Canada from incoming missiles.

The decision was transmitted to U.S. officials by Canadian government representatives at the NATO summit in Brussels last week.

The decision follows strong opposition by many Canadians, especially in the province of Quebec and by opposition parties in the Canadian Parliament, to the so-called Star Wars missile defense shield due to fears that the project would lead to an arms race in space by other major powers such as China and Russia.

Polls indicated that most Canadians opposed the missile defense plan, which already has cost more than $80 billion while failing to meet many of its technological goals, according to Slate.

Frank McKenna, the incoming Canadian ambassador to the United States, sparked confusion last week by telling Parliament that Canada already is effectively a participant in the missile defense system.

McKenna, a former Liberal premier from New Brunswick, noted that Canada agreed seven months ago to share information on incoming missiles using NORAD, the early-warning radar system set up in the United States and Canada during the Cold War.

Trying to curb confusion, the Canadian government last week said that while it would honor its NORAD obligations by sharing data on missiles, it would not contribute funds to Washington’s defense shield.

From the U.K. Trade Unions Congress:

“Teachers and lecturers on average do longer hours of unpaid overtime than any other occupation, according to the Trade Unions Congress’s (TUC) unpaid overtime league table…. The league table shows how the $44.2 billion of unpaid overtime worked in the U.K. last year breaks down between different occupational groups….

“The average length of teachers’ and lecturers’ unpaid overtime a week is 11 hours 36 minutes, almost two hours more than the runners-up in the league table — corporate and senior managers. If teachers and lecturers did all their unpaid overtime at the start of the year, it would mean they did not start to get paid until 22 March.

“But because they are paid so much more, senior managers’ overtime is worth much more than any other groups. Taking the average pay for senior managers, their average unpaid overtime of 9 hours and 48 minutes a week is worth $36,500 a year, while teachers’ longer hours are worth just half this ($19,015).

“The top ranks of the league table are dominated by managers and professionals, but farm workers who do unpaid overtime also put in long unpaid hours, 8 hours 54 minutes a week, worth just over $4,800 a year on average - as do those who work in the arts, who do 8 hours 6 minutes a week, worth $10,760 a year.

“Finance and accounts staff are the biggest group of white-collar staff who rank high in the unpaid overtime league table. Those who do unpaid overtime put in 7 hours 18 minutes a week on average, worth $11,500 a year.

“…On average people’s unpaid overtime is worth $8,900 a year….

“TUC General Secretary Brendan Barber said: ‘Everyone knows we work the longest hours in Europe. Too many workplaces are gripped by a long hours culture, where staff are expected to put in unpaid extra time week after week. We are not saying that we should all become clock-watchers, but it’s about time we called time on bosses who think the longer something takes the better the job is done.’…”

“Charm strikes the sight, but merit wins the soul.”

– Alexander Pope (English poet, 1688-1744)