How Can Global Companies Operate Ethically?
In today's world, we live in close proximity to people from different cultures, and any sizable business operates in dozens of countries. Each...
In today’s world, we live in close proximity to people from different cultures, and any sizable business operates in dozens of countries. Each country has its own set of values. In this context, how can global companies operate ethically? Is there a single definition of human values to which they should subscribe? Is there a core of values that all societies and religions hold, and, on the converse side, are some behaviors universally held to be unethical?
The Swiss theologian Hans Küng made one of the most important efforts to define a global ethic. He teased out five principles from the many different religious and philosophical traditions he studied:
- Every human being must be treated humanely
- Treat others as you would like to be treated
- Have respect for life (no violence)
- Deal honestly and fairly (no cheating or favoritism)
- Respect and love one another
There have also been several initiatives related specifically to global values in business, an international standards movement that attempts to lay out widely shared principles businesses can follow. The movement’s origin was probably the Sullivan Principles of 1977, developed as a way for businesses to exert pressure on the government of South Africa to change its apartheid policies. The principles laid out seven requirements a corporation should demand if it was to do business in a particular country, including non-segregation, equal pay for equal work, and improving the quality of life for blacks and other non-whites outside the workplace.
Although the principles did not effect quick change in South Africa, they inspired a raft of similar efforts culminating in 2000 in the UN Global Compact, whose tagline is “Business as a force for good.” The theory behind this effort is that businesses can model ethical behavior and thereby improve conditions wherever they operate. Followers of the Global Compact are encouraged to align their operations and strategies with 10 principles in the areas of human rights, labor, the environment, and anti-corruption:
- Businesses should support and respect the protection of internationally proclaimed human rights; and
- make sure that they are not complicit in human rights abuses.
- Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
- the elimination of all forms of forced and compulsory labor;
- the effective abolition of child labor; and
- the elimination of discrimination in respect of employment and occupation.
- Businesses should support a precautionary approach to environmental challenges;
- undertake initiatives to promote greater environmental responsibility; and
- encourage the development and diffusion of environmentally friendly technologies.
- Businesses should work against corruption in all its forms, including extortion and bribery.
If all companies abided by these standards, no doubt the world would be a better place, but the Global Compact raises many questions. First, there is no general agreement on the meaning of many important words in the document such as freedom and welfare. Also, who is responsible for spreading these principles, business, or government? Who should enforce them?
I am not a cultural relativist. I don’t believe that morality is totally defined by the society in which we live; there are basic universal values that should guide every individual and every business. But getting businesses to agree on what those values are has proved to be extremely difficult. This is a critical agenda for the years ahead.