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 Business Ethics. Show all posts
Showing posts with label Business Ethics. Show all posts

Tuesday, October 10, 2023

The Moral Case for No Longer Engaging With Elon Musk’s X

David Lee
Originally published 5 October 23

Here is an excerpt:

Social networks are molded by the incentives presented to users. In the same way we can encourage people to buy greener cars with subsidies or promote healthy living by giving out smartwatches, so, too, can levers be pulled to improve the health of online life. Online, people can’t be told what to post, but sites can try to nudge them toward behaving in a certain manner, whether through design choices or reward mechanisms.

Under the previous management, Twitter at least paid lip service to this. In 2020, it introduced a feature that encouraged people to actually read articles before retweeting them, for instance, to promote “informed discussion.” Jack Dorsey, the co-founder and former chief executive officer, claimed to be thinking deeply about improving the quality of conversations on the platform — seeking ways to better measure and improve good discourse online. Another experiment was hiding the “likes” count in an attempt to train away our brain’s yearn for the dopamine hit we get from social engagement.

One thing the prior Twitter management didn’t do is actively make things worse. When Musk introduced creator payments in July, he splashed rocket fuel over the darkest elements of the platform. These kinds of posts always existed, in no small number, but are now the despicable main event. There’s money to be made. X’s new incentive structure has turned the site into a hive of so-called engagement farming — posts designed with the sole intent to elicit literally any kind of response: laughter, sadness, fear. Or the best one: hate. Hate is what truly juices the numbers.

The user who shared the video of Carson’s attack wasn’t the only one to do it. But his track record on these kinds of posts, and the inflammatory language, primed it to be boosted by the algorithm. By Tuesday, the user was still at it, making jokes about Carson’s girlfriend. All content monetized by advertising, which X desperately needs. It’s no mistake, and the user’s no fringe figure. In July, he posted that the site had paid him more than $16,000. Musk interacts with him often.

Here's my take: 

Lee pointed out that social networks can shape user behavior through incentives, and the previous management of Twitter had made some efforts to promote healthier online interactions. However, under Elon Musk's management, the platform has taken a different direction, actively encouraging provocative and hateful content to boost engagement.

Lee criticized the new incentive structure on X, where users are financially rewarded for producing controversial content. They argued that as the competition for attention intensifies, the content will likely become more violent and divisive.

Lee also mentioned an incident involving former executive Yoel Roth, who raised concerns about hate speech on the platform, and Musk's dismissive response to those concerns.  Musk is not a business genius and does not understand how to promote a healthy social media site.

Monday, October 2, 2023

Research: How One Bad Employee Can Corrupt a Whole Team

Stephen Dimmock & William Gerken
Harvard Business Review
Originally posted 5 March 2018

Here is an excerpt:

In our research, we wanted to understand just how contagious bad behavior is. To do so, we examined peer effects in misconduct by financial advisors, focusing on mergers between financial advisory firms that each have multiple branches. In these mergers, financial advisors meet new co-workers from one of the branches of the other firm, exposing them to new ideas and behaviors.

We collected an extensive data set using the detailed regulatory filings available for financial advisors. We defined misconduct as customer complaints for which the financial advisor either paid a settlement of at least $10,000 or lost an arbitration decision. We observed when complaints occurred for each financial advisor, as well as for the advisor’s co-workers.

We found that financial advisors are 37% more likely to commit misconduct if they encounter a new co-worker with a history of misconduct. This result implies that misconduct has a social multiplier of 1.59 — meaning that, on average, each case of misconduct results in an additional 0.59 cases of misconduct through peer effects.

However, observing similar behavior among co-workers does not explain why this similarity occurs. Co-workers could behave similarly because of peer effects – in which workers learn behaviors or social norms from each other — but similar behavior could arise because co-workers face the same incentives or because individuals prone to making similar choices naturally choose to work together.

In our research, we wanted to understand how peer effects contribute to the spread of misconduct. We compared financial advisors across different branches of the same firm, because this allowed us to control for the effect of the incentive structure faced by all advisors in the firm. We also focused on changes in co-workers caused by mergers, because this allowed us to remove the effect of advisors choosing their co-workers. As a result, we were able to isolate peer effects.

Here is my summary: 

The article discusses a study that found that even the most honest employees are more likely to commit misconduct if they work alongside a dishonest individual. The study, which was conducted by researchers at the University of California, Irvine, found that financial advisors were 37% more likely to commit misconduct if they encountered a new co-worker with a history of misconduct.

The researchers believe that this is because people are more likely to learn bad behavior than good behavior. When we see someone else getting away with misconduct, it can make us think that it's okay to do the same thing. Additionally, when we're surrounded by people who are behaving badly, it can create a culture of acceptance for misconduct.

Wednesday, August 2, 2023

The dark side of generosity: Employees with a reputation for giving are selectively targeted for exploitation

Stanley, M. L., Neck, C. P., & Neck, C. B. (2023). Journal of Experimental Social Psychology, 108, 104503.


People endorse generosity as a moral virtue worth exemplifying, and those who acquire reputations for generosity are admired and publicly celebrated. In an organizational context, hiring, retaining, and promoting generous employees can make organizations more appealing to customers, suppliers, and top talent. However, using complementary methods and experimental designs with large samples of full-time managers, we find consistent evidence that managers are inclined to take unfair advantage of employees with reputations for generosity, selectively targeting them for exploitation in ways that likely, and ironically, hamper long-term organizational success. This selective targeting of generous employees for exploitation was statistically explained by a problematic assumption: Since they have reputations for generosity, managers assume that, if they had the opportunity, they would have freely volunteered for their own exploitation. We also investigate a possible solution to the targeting of more generous employees for exploitative practices. Merely asking managers to make a judgment about the ethics of an exploitative request eliminates their propensity to target generous employees over other employees for exploitation.

The article is behind a paywall.

Here is a summary:

The research suggests that organizations should be aware of the potential for managers to exploit employees with a reputation for generosity. They also suggest that organizations should implement policies and procedures to protect employees from exploitation.

Here are some of the key takeaways from the study:
  • Employees with a reputation for generosity are more likely to be targeted for exploitation by managers.
  • Managers are more likely to make exploitative requests of employees who they have a personal relationship with.
  • Organizations should be aware of the potential for managers to exploit employees with a reputation for generosity and implement policies and procedures to protect employees from exploitation.
The study also suggests that there are a number of factors that may contribute to the exploitation of generous employees, including:
  • The manager's perception of the employee's willingness to comply with exploitative requests.
  • The manager's personal relationship with the employee.
  • The organization's culture and policies.
It is important to note that the study did not find that all managers exploit generous employees. However, the study does suggest that it is a phenomenon that organizations should be aware of and take steps to prevent.

Tuesday, March 7, 2023

FTC to Ban BetterHelp from Revealing Consumers’ Data, Including Sensitive Mental Health Information, to Facebook and Others for Targeted Advertising

Federal Trade Commission
Press Release
Originally released 2 MAR 23

The Federal Trade Commission has issued a proposed order banning online counseling service BetterHelp, Inc. from sharing consumers’ health data, including sensitive information about mental health challenges, for advertising. The proposed order also requires the company to pay $7.8 million to consumers to settle charges that it revealed consumers’ sensitive data with third parties such as Facebook and Snapchat for advertising after promising to keep such data private.

This is the first Commission action returning funds to consumers whose health data was compromised. In addition, the FTC’s proposed order will ban BetterHelp from sharing consumers’ personal information with certain third parties for re-targeting—the targeting of advertisements to consumers who previously had visited BetterHelp’s website or used its app, including those who had not signed up for the company’s counseling service. The proposed order also will limit the ways in which BetterHelp can share consumer data going forward.

"When a person struggling with mental health issues reaches out for help, they do so in a moment of vulnerability and with an expectation that professional counseling services will protect their privacy,” said Samuel Levine, Director of the FTC's Bureau of Consumer Protection. "Instead, BetterHelp betrayed consumers’ most personal health information for profit. Let this proposed order be a stout reminder that the FTC will prioritize defending Americans’ sensitive data from illegal exploitation."

California-based BetterHelp offers online counseling services under several names, including BetterHelp Counseling. It also markets services aimed at specific groups such as Faithful Counseling focused on Christians, Teen Counseling, which caters to teens and requires parental consent, and Pride Counseling, which is targeted to the LGBTQ community. Consumers interested in BetterHelp’s services must fill out a questionnaire that asks for sensitive mental health information—such as whether they have experienced depression or suicidal thoughts and are on any medications. They also provide their name, email address, birth date and other personal information. Consumers are then matched with a counselor and pay between $60 and $90 per week for counseling.

At several points in the signup process, BetterHelp promised consumers that it would not use or disclose their personal health data except for limited purposes, such as to provide counseling services. Despite these promises, BetterHelp used and revealed consumers’ email addresses, IP addresses, and health questionnaire information to Facebook, Snapchat, Criteo, and Pinterest for advertising purposes, according to the FTC’s complaint. 

For example, the company used consumers’ email addresses and the fact that they had previously been in therapy to instruct Facebook to identify similar consumers and target them with advertisements for BetterHelp’s counseling service, which helped the company bring in tens of thousands of new paying users and millions of dollars in revenue.

According to the complaint, BetterHelp pushed consumers to hand over their health information by repeatedly showing them privacy misrepresentations and nudging them with unavoidable prompts to sign up for its counseling service. Despite collecting such sensitive information, BetterHelp failed to maintain sufficient policies or procedures to protect it and did not obtain consumers’ affirmative express consent before disclosing their health data. BetterHelp also failed to place any limits on how third parties could use consumers’ health information—allowing Facebook and other third parties to use that information for their own internal purposes, including for research and development or to improve advertising.

Thursday, June 30, 2022

Ernst & Young to Pay $100 Million Penalty for Employees Cheating on CPA Ethics Exams and Misleading Investigation

Largest Penalty Ever Imposed by SEC Against an Audit Firm


Washington D.C., June 28, 2022 —

The Securities and Exchange Commission today charged Ernst & Young LLP (EY) for cheating by its audit professionals on exams required to obtain and maintain Certified Public Accountant (CPA) licenses, and for withholding evidence of this misconduct from the SEC’s Enforcement Division during the Division’s investigation of the matter. EY admits the facts underlying the SEC’s charges and agrees to pay a $100 million penalty and undertake extensive remedial measures to fix the firm’s ethical issues.

“This action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our Nation’s public companies. It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things,” said Gurbir S. Grewal, Director of the SEC’s Enforcement Division. “And it’s equally shocking that Ernst & Young hindered our investigation of this misconduct. This action should serve as a clear message that the SEC will not tolerate integrity failures by independent auditors who choose the easier wrong over the harder right.”

EY admits that, over multiple years, a significant number of EY audit professionals cheated on the ethics component of CPA exams and various continuing professional education courses required to maintain CPA licenses, including ones designed to ensure that accountants can properly evaluate whether clients’ financial statements comply with Generally Accepted Accounting Principles.

EY further admits that during the Enforcement Division’s investigation of potential cheating at the firm, EY made a submission conveying to the Division that EY did not have current issues with cheating when, in fact, the firm had been informed of potential cheating on a CPA ethics exam. EY also admits that it did not correct its submission even after it launched an internal investigation into cheating on CPA ethics and other exams and confirmed there had been cheating, and even after its senior lawyers discussed the matter with members of the firm’s senior management. And as the Order finds, EY did not cooperate in the SEC’s investigation regarding its materially misleading submission.

Thursday, November 18, 2021

Ethics Pays: Summary for Businesses

September 2021

Is good ethics good for business? Crime and sleazy behavior sometimes pay off handsomely. People would not do such things if they didn’t think they were more profitable than the alternatives.

But let us make two distinctions right up front. First, let us contrast individual employees with companies. Of course, it can benefit individual employees to lie, cheat, and steal when they can get away with it. But these benefits usually come at the expense of the firm and its shareholders, so leaders and managers should work very hard to design ethical systems that will discourage such self-serving behavior (known as the “principal-agent problem”).

The harder question is whether ethical violations committed by the firm or for the firm’s benefit are profitable. Cheating customers, avoiding taxes, circumventing costly regulations, and undermining competitors can all directly increase shareholder value.

And here we must make the second distinction: short-term vs. long-term. Of course, bad ethics can be extremely profitable in the short run. Business is a complex web of relationships, and it is easy to increase revenues or decrease costs by exploiting some of those relationships. But what happens in the long run?

Customers are happy and confident in knowing they’re dealing with an honest company. Ethical companies retain the bulk of their employees for the long-term, which reduces costs associated with turnover. Investors have peace of mind when they invest in companies that display good ethics because they feel assured that their funds are protected. Good ethics keep share prices high and protect businesses from takeovers.

Culture has a tremendous influence on ethics and its application in a business setting. A corporation’s ability to deliver ethical value is dependent on the state of its culture. The culture of a company influences the moral judgment of employees and stakeholders. Companies that work to create a strong ethical culture motivate everyone to speak and act with honesty and integrity. Companies that portray strong ethics attract customers to their products and services, and are far more likely to manage their negative environmental and social externalities well.

Thursday, May 27, 2021

How Adobe’s Ethics Committee Helps Manage AI Bias

Jared Council
The Wall Street Journal
Originally posted 5 May 21

Review boards can help companies mitigate some of the risks associated with using artificial intelligence, according to Adobe Inc. executive Dana Rao.

Mr. Rao, Adobe’s general counsel, said one of the top risks in using AI systems is that the technology can perpetuate harmful bias against certain demographics, based on what it learns from data. Ethics committees can be one way of managing those risks and putting organizational values into practice.

Adobe’s AI ethics committee, launched two years ago, has been able to review new features for potential bias before those features are deployed, Mr. Rao said Wednesday at The Wall Street Journal’s Risk & Compliance Forum. The committee is made up of employees of various ethnicities and genders from different parts of the company, including legal, government relations and marketing.

“It takes a lot of people across your company to help figure this out,” he said. “Sometimes we might look at it and say there’s not an issue here,” he said, but getting a diverse group of people together can help identify issues product developers might miss.

Tuesday, November 10, 2020

Why Good Ethics Are Now Big Business—And How To Embrace Them

Phil Lewis
Originally published 14 Oct 20

Here is an excerpt:

“I think ethics cascading through the business, through the teams and managers, is very much about cascading the culture, but a culture that everyone understands. It’s about hiring the right people. People who share our values,” he explains. 

“And this wouldn’t work if you were just thinking about today or tomorrow as a business. But if you think about five years, or 10 years, or 50 years, the way Japanese businesses operate, looking after people, giving them a sense of purpose, making sure that the growth path of the business is also thinking about the growth path of the individual… If you really look after people, that intrinsic motivation will follow.”

It’s almost a karmic approach to business, then: do good things and good things will come to you. That’s an approach Pawlik has taken through the pandemic too—and it seems to be proving its worth. 

“When this happened, we were very much, ‘What do you need? Can I help you with strategy? Can I help you reach a new market and diversify? Whatever it is, let's put some time together, and you can ask questions, and I'll just help.’ I offered to do loads of free training to organizations, to support them. The approach was: let's just give them more value and see if we can help people. 

“And that came back tenfold. People were so happy with how we've supported them, that when they got stronger legs, they came back to us and said, ‘You know what? You really helped us through that difficult time period. You didn't need to, you didn't ask for anything back. And now we want to reciprocate.’ It's perfectly logical. Help people, and good things will come back.”

Tuesday, April 28, 2020

What needs to happen before your boss can make you return to work

Mark Kaufman
Originally posted 24 April 20

Here is an excerpt:

But, there is a way for tens of millions of Americans to return to workplaces while significantly limiting how many people infect one another. It will require extraordinary efforts on the part of both employers and governments. This will feel weird, at first: Imagine regularly having your temperature taken at work, routinely getting tested for an infection or immunity, mandatory handwashing breaks, and perhaps even wearing a mask.

Yet, these are exceptional times. So restarting the economy and returning to workplace normalcy will require unparalleled efforts.

"This is truly unprecedented," said Christopher Hayes, a labor historian at the Rutgers School of Management and Labor Relations.

"This is like the 1918 flu and the Great Depression at the same time," Hayes said.

Yet unlike previous recessions and depressions over the last 100 years, most recently the Great Recession of 2008-2009, American workers must now ask themselves an unsettling question: "People now have to worry, ‘Is it safe to go to this job?’" said Hayes.

Right now, many employers aren't nearly prepared to tell workers in the U.S. to return to work and office spaces. To avoid infection, "the only tools you’ve got in your toolbox are the simple but hard-to-sustain public health tools like testing, contact tracing, and social distancing," explained Michael Gusmano, a health policy expert at the Rutgers School of Public Health.

"We’re not anywhere near a situation where you could claim that you can, with any credibility, send people back en masse now," Gusmano said.

The info is here.

Wednesday, April 22, 2020

Your Code of Conduct May Be Sending the Wrong Message

F. Gino, M, Kouchaki, & Y. Feldman
Harvard Business Review
Originally posted 13 March 20

Here is an excerpt:

We examined the relationship between the language used (personal or impersonal) in these codes and corporate illegality. Research assistants blind to our research questions and hypotheses coded each document based on the degree to which it used “we” or “member/employee” language. Next, we searched media sources for any type of illegal acts these firms may have been involved in, such as environmental violations, anticompetitive actions, false claims, and fraudulent actions. Our analysis showed that firms that used personal language in their codes of conduct were more likely to be found guilty of illegal behaviors.

We found this initial evidence to be compelling enough to dig further into the link between personal “we” language and unethical behavior. What would explain such a link? We reasoned that when language communicating ethical standards is personal, employees tend to assume they are part of a community where members are easygoing, helpful, cooperative, and forgiving. By contrast, when the language is impersonal — for example, “organizational members are expected to put customers first” — employees feel they are part of a transactional relationship in which members are more formal and distant.

Here’s the problem: When we view our organization as tolerant and forgiving, we believe we’re less likely to be punished for misconduct. Across nine different studies, using data from lab- and field-based experiments as well as a large dataset of S&P firms, we find that personal language (“we,” “us”) leads to less ethical behavior than impersonal language (“employees,” “members”) does, apparently because people encountering more personal language believe their organization is less serious about punishing wrongdoing.

The info is here.

Thursday, April 16, 2020

How To Move From Data Privacy To Data Ethics

Photo:Thomas Walle
Originally posted 11 March 20

Here is an excerpt:

Data Ethics Is Up To Each And Every Company

Data ethics, however, is more nuanced and complicated. It's up to each company to decide what use cases their collected data should support or not. There are no federal or state laws related to data ethics, and there are no government-owned bodies that will penalize the ones that cross the ethical boundaries of how data should and should not be used.

However, in the growing data industry, which is composed of those helping companies and individuals to make better decisions, there’s a constant influx of new data being generated and collected, such as health data, car driving data and location data, to name a few. These data sets and insights are new to the market, and I believe we will start to see the first wave of forward-looking data companies taking a clear stance and drawing their own ethical guidelines.

These are companies that acknowledge the responsibility they have when holding such information and want to see it be used for the right use cases -- to make people’s lives better, easier and safer. So, if you agree that data ethics is important and want to be ahead of the curve, what is there to do?

Creating A Set Of Ethical Guidelines

My recommendation for any data company is to define a set of core ethical guidelines your company should adhere to. To accomplish this, follow these steps:

1. Define Your Guidelines

The guidelines should be created by inviting different parts of your organization to get a balanced and mixed view of what the company sees as acceptable use cases for its insights and data. In my experience, including different departments, such as commercial and engineering, people from different nationalities and all geographies, if your companies operate in multiple markets, is crucial in getting a nuanced and healthy view of what the company, its employees and stakeholders see as ethically acceptable.

The info is here.

Wednesday, April 15, 2020

How to be a more ethical Amazon shopper during the pandemic

Samantha Murphy Kelly
Updated on 13 April 20

Here is an excerpt:

For customers who may feel uneasy about these workplace issues but are desperate for household goods, there are a range of options to shop more consciously, from avoiding unnecessary purchases on the platform and tipping Amazon's grocery delivery workers handsomely to buying more from local stores online. But there are conflicting views on whether the best way to be an ethical shopper at this moment means not shopping from Amazon at all, especially given its position as one of the biggest hirers during a severe labor market crunch.

"If people choose to work at Amazon, we should respect their decisions," said Peter Singer, an ethics professor at Princeton University and author of "The Most Good You Can Do: How Effective Altruism Is Changing Ideas About Living Ethically."

The US Department of Labor announced Thursday that about 6.6 million people filed for unemployment benefits in the last week alone, bringing the number of lost jobs during the pandemic to nearly 17 million. Singer highlighted how delivery services are one of the few areas in which businesses are hiring.

But Christian Smalls, the former Amazon employee who partially organized a protest calling for senior warehouse officials to close the Staten Island, New York, facility for deep cleaning after multiple cases of the virus emerged there, advises otherwise. (The company later fired Smalls, citing he did not stay in quarantine after exposure to someone who tested positive.)

"If you want to practice real social distancing, stop pressing the buy button," Smalls told CNN Business. "You'll be saving lives. I understand that people need groceries and certain items, depending where you live, are limited. But people are buying things they don't need and it's putting workers' health at risk."

Although the issue is complex, shoppers who decide to continue using Amazon, or any online delivery platform, can keep a few best practices in mind.

The info is here.

Wednesday, March 18, 2020

How Salesforce Makes Decisions on Ethics and Social Issues

Kristin Broughton
The Wall Street Journal
Originally published 17 Feb 20

After facing public backlash in 2018 for doing business with U.S. immigration authorities amid the separation of migrant families at the southern U.S. border, Salesforce.com Inc., a company known for speaking up on social issues, hired a resident ethicist.

Paula Goldman joined the business software company early last year as chief ethical and humane use officer, a new role tasked with developing a framework for making decisions on complicated political issues.

Although the company’s contract with U.S. Customs and Border Protection remains in place, Salesforce has tackled other controversial issues. In her first year on the job, Ms. Goldman supervised the development of a corporate policy that prohibits customers from using Salesforce’s software to sell military-style firearms to private citizens.

She also is responsible for ensuring Salesforce’s products are developed with ethics in mind, particularly those involving artificial intelligence. One way she has done that is by introducing a process known as “consequence scanning,” an exercise that requires employees to document the potential unintended outcomes of releasing a new function, she said.

“We’re in this moment of correction where it’s like, ‘Oh yeah, this is our responsibility to integrate this question into the way we do business,’” Ms. Goldman said.

The info is here.

Wednesday, February 26, 2020

Zombie Ethics: Don’t Keep These Wrong Ideas About Ethical Leadership Alive

Bruce Weinstein
Originally poste 18 Feb 20

Here is an excerpt:

Zombie Myth #1: There are no right and wrong answers in ethics

A simple thought experiment should permanently dispel this myth. Think about a time when you were disciplined or punished for something you firmly believed was unfair. Perhaps you were accused at work of doing something you didn’t do. Your supervisor Mike warned you not to do it again, even though you had plenty of evidence that you were innocent. Even Mike didn’t fire you, your good reputation has been sullied for no good reason.

Suppose you tell your colleague Janice this story, and she responds, “Well, to you Mike’s response was unfair, but from Mike’s point of view, it was absolutely fair.” What would you say to Janice?

A. “You’re right. There are no right or wrong answers in ethics.”

B. “No, Janice. Mike didn’t have a different point of view. He had a mistaken point of view. There are facts at hand, and Mike refused to consider them.”

Perhaps you believed myth #1 before this incident occurred. Now that you’ve been on the receiving end of a true injustice, you see this myth for what it really is: a zombie idea that needs to go to its grave permanently.

Zombie myth #2: Ethics varies from culture to culture and place to place 

It’s tempting to treat this myth as true. For example, bribery is a widely accepted way to do business in many countries. At a speech I gave to commercial pilots, an audience member said that the high-level executives on a recent flight weren’t allowed disembark until someone “took care of” a customs official. Either they could give him some money under the table and gain entry into the country, or they could leave.

But just because a practice is widely accepted doesn’t mean it is acceptable. That’s why smart businesses prohibit engaging in unfair international business practices, even if it means losing clients.

The info is here.

Saturday, February 1, 2020

Bringing Ethics Back To Business

Tamara Pupic
Originally posted 30 Dec 19

In the business world, detecting, preventing, and remedying compliance issues, or a lack thereof, has evolved from academic research, investigative reporting, and businesses applying best practice initiatives, often clumsily, into a niche sector - regtech,  a new sector for ‘treps to develop innovative technologies to address challenges involving regulations.

It is considered the most promising part of the global enterprise governance, risk, and compliance (EGRC) market, whose size has grown rapidly, from US$27.8 billion in 2018 to an expected $64.2 billion by 2025, according to a report by Grand View Research. In the MENA region, transparency and ethical compliance have been at the forefront of shareholder and board of directors’ discussions, especially since non-compliance cases at leading firms have started making headlines just about every other week.


According to the leadership team, Alethia solves several of the main current challenges in compliance. Firstly, it addresses the lack of anonymity in traditional compliance hotlines and emails “People are naturally skeptical when it comes to technology and personal data,” Roets says. “We instill confidence by requiring no personal information when downloading the app, and we don’t track IP addresses. All interactions are protected with SSL encryption using digitally signed tokens to ensure 100% anonymity for the whistleblower to safeguard against any form of retaliation.” Secondly, the app urges organizations to try different reporting channels. “Most still rely on outdated anonymous telephone hotlines, but in a digital world, when we think about workforce demographics, GDPR compliance, cost implications, and the overall decline in telephone usage, hotlines are no longer best practice,” Roets says. “Other channels include intranet solutions, cumbersome online forms, or personal interactions with HR or ombudsmen. Unfortunately, these offer little by way of a follow-up feature, call handlers’ subjectivity can impact the quality of reports, and most importantly, they all present a real or perceived threat of compromising the reporter’s identity.”

The info is here.

Wednesday, January 15, 2020

French Executives Found Responsible for 35 Employees' Deaths by Suicide

Katie Way
Originally posted 20 Dec 19

Today, in a landmark case for worker’s rights and workplace accountability, three former executives of telecommunication company Orange (formerly known as France Télécom) were charged with “collective moral harassment” after creating a work environment which was found to have directly contributed to the death by suicide of 35 employees. This included, according to NPR , 19 employees who died by suicide between 2008 and 2009, many of whom “left notes blaming the company or who killed themselves at work.”

Why would a company lead a terror campaign against its own workers? Money, of course: The plan was enacted as part of a push to get rid of 22,000 employees in order to counterbalance $50 million in debt incurred after the company privatized—it was formerly a piece of the French government’s Ministry of Posts and Telecommunications, meaning its employees were granted special protection as civil servants that prevented their higher-ups from firing them. According to the New York Times, the executives attempted to solve this dilemma by creating an “atmosphere of fear” and purposefully stoked “severe anxiety” in order to drive workers to quit. Former CEO Didier Lombard, sentenced to four months in jail and a $16,000 fine, reportedly called the strategies part of a plan to get rid of unwanted employees “either through the window or through the door.” Way to say the quiet part loud, Monsieur!

Monday, January 13, 2020

ESG controversies wipe $500bn off value of US companies

Chris Flood
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.

Monday, November 18, 2019

Understanding behavioral ethics can strengthen your compliance program

Jeffrey Kaplan
The FCPA Blog
Originally posted October 21, 2019

Behavioral ethics is a well-known field of social science which shows how — due to various cognitive biases — “we are not as ethical as we think.” Behavioral compliance and ethics (which is less well known) attempts to use behavioral ethics insights to develop and maintain effective compliance programs. In this post I explore some of the ways that this can be done.

Behavioral C&E should be viewed on two levels. The first could be called specific behavioral C&E lessons, meaning enhancements to the various discrete C&E program elements — e.g., risk assessment, training — based on behavioral ethics insights.   Several of these are discussed below.

The second — and more general — aspect of behavioral C&E is the above-mentioned overarching finding that we are not as ethical as we think. The importance of this general lesson is based on the notion that the greatest challenges to having effective C&E programs in organizations is often more about the “will” than the “way.”

That is, what is lacking in many business organizations is an understanding that strong C&E is truly necessary. After all, if we are as ethical than we think, then effective risk mitigation would be just a matter of finding the right punishment for an offense and the power of logical thinking would do the rest. Behavioral ethics teaches that that assumption is ill-founded.

The info is here.

Monday, October 7, 2019

Ethics a distant second to profits in Silicon Valley

Gabriel Fairman
Originally published September 9, 2019

Here is an excerpt:

For ethics to become a part of the value system that drives behavior in Silicon Valley, it would have to be incentivized as such. I have a hard time envisioning a world were ethics can offer shareholders huge returns. Ethics is about doing the right thing, and the right thing and the lucrative thing typically don’t necessarily go hand in hand.

Everyone can understand ethics. Basic questions such as “Will this be good for the world in a year, 10 years or 20 years?”, “Would I want this for my kids?” are easy litmus tests to differentiate between ethical and unethical conduct. The challenge is that considerations on ethics slow down development by raising challenges and concerns early on.  Ethics are about amplifying potential problems that can be foreseen down the road.

On the other hand, venture-funded start-ups are about minimizing the ramifications of these problems as they move on quickly. How can ethics compete with billion-dollar exits? It can’t. Ethics are just this thing that we read about in articles or hear about in lectures. It is not driving day-to-day decision-making. You listen to people in boardrooms asking, “How will this impact our valuation?,” or “What is the ROI of this initiative?” but you don’t hear top-level execs brainstorming about how their product or company could be more ethical because there is no compensation tied to that. The way we have built our world, ethics are just fluff.

We are also extraordinary at differentiating private vs. public lives. Many people working at tech companies don’t allow their kids to use electronic devices ubiquitously or would not want their kids bossed around by an algorithm as they let go of full-time employee benefits. But they promote these things and further them because these things are highly profitable, not because they are fundamentally good. This key distinction between private and public behavior allows people to behave in wildly hypocritical ways, by helping advance the very things they do not want in their own homes.

The info is here.

Thursday, September 19, 2019

Do Ethics Really Matter To Today's Consumers?

Anna-Mieke Anderson
Originally posted August 20, 2019

Unlike any other time in history, consumers are truly demanding more from the companies with which they do business. Today’s shoppers are looking for ethical, eco-friendly brands that put people and the planet ahead of profits.  Led by the estimated 83 million millennials in the world, this change shows the need for companies to lead with compassion and authenticity. The spending power of millennials can’t be overlooked. They are projected to spend $1.4 trillion annually by 2020.

Undoubtedly, technology is a major contributing factor to this shift in purchasing. Consumers have endless information about a company’s practices, mission and values at their fingertips. They are also attuned to what’s happening in the world around them and want to help address the pressing issues they are facing while not contributing further to the problems they inherited. Consider this: 81% of millennials want a company to make public commitments to charitable causes and global citizenship, something many corporations are not used to doing.

According to the 2018 Conscious Consumer Spending Index, in 2018, 59% of people bought goods or services from a company they considered socially responsible, and 32% of Americans plan to spend even more this year with companies that align with their social values. What’s equally important to note is that in the same timeframe, 32% of Americans refused to support a company that they felt was not socially responsible.

The info is here.