The snow is falling and 2008 is wrapping up as one of the toughest years for the economy in recent memory. Ethics has taken a strong hit as well, from banking to home lending to the more recent revelation about Bernard Madoff and his $50-billion Ponzi scheme.
Yet there continue to be bright lights in the world of business ethics. This issue features a discussion with Sally Jewell, the CEO of Recreational Equipment Inc. (REI), the largest co-op in the United States, and one of the largest in the world. As a co-op, REI is free from the pressures of Wall Street and can focus on its employees, taking care of the customer, working with suppliers, and managing costs in order to create a great business. Jewell is able to take the long-term view in building her business, avoiding the many short-term pitfalls. Many of her practices help set the benchmark for what good companies do.
While this might seem like the obvious way to run a business, in fact it is surprisingly countercultural. In a study of 400 executives by the CEO Roundtable, 50 percent said they would delay new projects to achieve quarterly results even if it would lead to the long-term sacrificing of value creation. And 80 percent said they would reduce short-term spending to meet short-term targets. I believe this kind of thinking is at the heart of many of our ethical failures in business.
With this background, it seemed time to pull out the 10 Principles of Ethical Business Leaders. David Gill started working on this before we started Ethix in 1998. In our early partnership, we worked together to create the version that has been on the web. In recent years, both of us have done our own updates. My current version.
A leader in the media business in India, A.P. Parigi offers his perspective on ethics in our Essay in this issue. And in Technology Watch, I raise the question of how technology could help us get a better understanding of the true cost of layoffs.
Next issue, we will include some snapshots of how ethical companies are handling the economic slowdown. We invite readers to contribute their own stories here through our Forum. Do companies act more ethically in a downturn, or do ethics go out the window?
At the beginning of the New Year, we pause to wish all of our readers the best for 2009.
Happy New Year!