Welcome to the Nexus of Ethics, Psychology, Morality, Philosophy and Health Care

Welcome to the nexus of ethics, psychology, morality, technology, health care, and philosophy
Showing posts with label Return on Investment. Show all posts
Showing posts with label Return on Investment. Show all posts

Monday, January 13, 2020

ESG controversies wipe $500bn off value of US companies

Chris Flood
ft.com
Originally posted 14 Dec 19

Quarrels involving environmental, social and governance issues (ESG) have wiped more than $500bn off the value of large US companies over the past five years, according to an analysis by Bank of America.

ESG-related risks are becoming increasingly important considerations for institutional investors and asset managers because of mounting fears about climate change, high-profile scams and damaging corporate governance failures.

Bank of America examined the impact on stock prices of companies in the S&P 500 index, the main US equity market benchmark, of 24 controversies related to accounting scandals, data breaches, sexual harassment cases and other ESG issues.

It found these 24 ESG controversies together resulted in peak to trough market value losses of $534bn as the share prices of the companies involved sank relative to the S&P 500 over the following 12 months.

“The hit to market value of an ESG controversy is significant and the impact is long-lasting. It can take a year for a stock to reach a trough following an ESG controversy,” said Savita Subramanian, head of US equity and quantitative strategy at Bank of America. “Negative headlines stick in investors’ minds.”

Bank of America declined to name any of the companies involved in the controversies.

The info is here.

Wednesday, October 17, 2018

Huge price hikes by drug companies are immoral

Robert Klitzman
CNN.com
Originally posted September 18, 2018

Several pharmaceutical companies have been jacking up the prices of their drugs in unethical ways. Most recently, Nirmal Mulye, founder and president of Nostrum Pharmaceuticals, defended his decision to more than quadruple the price of nitrofurantoin, used to treat bladder infections, from about $500 to more than $2,300 a bottle. He said it was his "moral requirement to sell the product at the highest price."

Mulye argues that his only moral duty is to benefit his investors. As he said in defending Martin Shkreli, who in 2015 raised the price of an anti-parasite drug, daraprim, 5,000% from $13.50 to $750 per tablet, "When he raised the price of his drug he was within his rights because he had to reward his shareholders."

Mulye is wrong for many reasons. Drug companies deserve reasonable return on their investment in research and development, but some of these companies are abusing the system. The development of countless new drugs depends on taxpayer money and sacrifices that patients in studies make in good faith. Excessive price hikes harm many people, threaten public health and deplete huge amounts of taxpayer money that could be better used in other ways.

The US government pays more than 40% of all Americans' prescription costs, and this amount has been growing faster than inflation. In 2015, over 118 million Americans were on some form of government health insurance, including around 52 million on Medicare and 62 million on Medicaid. And these numbers have been increasing. Today, around 59 million Americans are on Medicare and 75 million on Medicaid.

The info is here.

Wednesday, July 5, 2017

Chief executives who lack ethics should be more afraid of public opinion than ever

Emma Koehn
Smart Company
Originally posted June 16, 2017

The age of the internet has made it near impossible for companies to hide when someone in their organisation makes a major blunder, and the research indicates the world is now tougher on bosses who stuff up than ever before.

PriceWaterhouseCoopers partners Kristin Rivera and Per Ola-Karlsson suggest in Harvard Business Review this week that the numbers don’t lie: more chief executives are being fired for “ethical blunders” than ever before, with scrutiny from both customers and shareholders accelerating.

The pair examine the numbers from PwC’s most recent global chief executive success study, which suggests the number of company heads who were dismissed for ethical lapses increased from 3.9% in the four years preceding 2012 to 5.3% at the end of 2016.

“Firstly, the public has become more suspicious, more critical and less forgiving of corporate misbehaviour,” Rivera and Karlsson say.

“Second, governance and regulation in many countries has become both more proactive and more punitive.”

The article is here.

Thursday, April 10, 2014

Yes, business ethics can be measured

By Leanne Hoagland Smith
The Chicago Sun-Times
Originally posted March 22, 2014

Here is an excerpt:

There is documented research from organizations, such as Ethics Resource Center, Gallup and various universities measuring the impact of business ethics or lack thereof on everything from employee morale to the negative impact on workplace productivity. So the reluctance to avoid business ethics as a key metric or key performance indicator (KPI) is illogical.

This begs the question of, “How does one measure ethical behavior within the workplace without being viewed as judgmental or worse yet getting sued?”

The entire article is here.