Corporate Ethics

[Belz...]

It's there for all companies, whatever the ownership model.

You're talking nonsense. You haven't even addressed the core of my argument.

You're the one who seems to be suggesting that publicly traded companies are somehow inherently evil and should be done away with. I have no desire to discuss such a ridiculous notion.

I have no desire to discuss your strawmen, either.

 

[JoeMorgue]

The idea that "I have a certain duty to maximize profits to my shareholders" (which is true more or less) equates to "Therefore I have no moral responsibility to do anything else up to and including basic human rights, the environment, or anything else" is insane.

Here's a question for Don. I'm a CEO of a large business. Do I have a moral obligation to break the law if it makes money for shareholders?

If not, why is that different?

 

[Distracted1]

How strange, I order all the items that I need from a particular supplier for delivery at the same time to minimise shipping costs.

Chacun a son gout I suppose

For example I tend to buy my guitars one at a time, but I will then bundle it with other equipment if I require it. I suppose you and your SO buy half a dozen at a time.



If it is, the businesses following that model will attempt to reduce waste by incentivising people to make as few deliveries as possible.

If we are out "Guitar shopping", we likely also pick up a throw rug, a pair of Jeans, lightbulbs, cat food, a steering wheel cover, and a cheese grater.

Retail establishments tend to either carry many different types of merchandise from different manufacturers, or are clustered close together (like a mall) to make the purchase of unrelated items in a single trip more convenient.

Having those various items brought to my home seems to me to be far, far more wasteful (even before consideration of the excess packaging required) than picking it all up in a single go.

 

[Delphic Oracle]

The whole "going to jail for not maximizing profits" thing is stretched to overbroad proportions.

The intent of that law is to prevent a director/officer from making inside deals to benefit themselves or play favorites when it comes to awarding contracts and such.

Sure, the board can ultimately fire you for raising wages at warehouses, but to make a criminal complaint stick, they would need evidence of the kind of malfeasance mentioned above. The fired director need only state it is their "firm belief that raising wages would address the high turnover rates of personnel and reduce the liabilities created by an unacceptably high number of injury claims."

Case dismissed after a short hearing. In fact, with that statement and sans any other evidence, I doubt a prosecutor would even indict to begin with. That's assuming anyone even went as far as putting charges on the director at all.

 

[The Don]

The idea that "I have a certain duty to maximize profits to my shareholders" (which is true more or less) equates to "Therefore I have no moral responsibility to do anything else up to and including basic human rights, the environment, or anything else" is insane.

They have no obligation to exceed current employment rights or environmental standards for that location, especially if it affects profitability.

If current employment rights or environmental standards are too low, then blame your elected representatives, not CEOs.

Here's a question for Don. I'm a CEO of a large business. Do I have a moral obligation to break the law if it makes money for shareholders?

No, in fact you have an obligation to not break the law on the grounds that it exposes shareholders to risk.

If not, why is that different?

By breaking the law in order to generate more profit, you are working against the shareholders' interest. OTOH doing everything you can within the law to maximise shareholder return, you are working within their interest.

 

[Belz...]

No, in fact you have an obligation to not break the law on the grounds that it exposes shareholders to risk.

Oh, is that all?

I thought breaking the law was bad, in and of itself. I guess it's just all enlightened self-interest.

 

[The Don]

If we are out "Guitar shopping", we likely also pick up a throw rug, a pair of Jeans, lightbulbs, cat food, a steering wheel cover, and a cheese grater.

I guess I must be weird, I buy my guitars from large music shops that tend not to stock any of the other items you mention.

As for the other stuff, I'd probably get the jeans from an online clothes shop and order the rest from a supermarket.

Retail establishments tend to either carry many different types of merchandise from different manufacturers, or are clustered close together (like a mall) to make the purchase of unrelated items in a single trip more convenient.

Strangely enough, online retailers do exactly the same thing.

Having those various items brought to my home seems to me to be far, far more wasteful (even before consideration of the excess packaging required) than picking it all up in a single go.

I suppose it comes down to how often you go out shopping and how far you have to travel. If you're a city dweller living right next door to a Mall and you're getting multiple daily deliveries from online retailers then you probably do need to assess your delivery strategy (you also need your head examining IMO, you're filling your house up with ****).

My supermarket shopping is delivered to my house in crates because I refuse to pay for bags. There is no more packaging than if I went shopping myself and I save myself the 10, 20 or 40 mile round trip (depending on which supermarket I choose).

 

[The Don]

Oh, is that all?

No, I was pointing out that not only would I not be obliged to break the law, I'd be required to adhere to it.

I thought breaking the law was bad, in and of itself. I guess it's just all enlightened self-interest.

Depends on the law.

During the 1950s in parts of the US mixed race couples were illegal, I'd argue that breaking that law wouldn't be bad in and of itself.

 

[Delphic Oracle]

They have no obligation to exceed current employment rights or environmental standards for that location, especially if it affects profitability.

If current employment rights or environmental standards are too low, then blame your elected representatives, not CEOs

There's a whole lot of daylight between "no obligation to..." and "nothing stopping you from..."

No, in fact you have an obligation to not break the law on the grounds that it exposes shareholders to risk.

That's the entire ball game right there. What is or is not risk? What decisions will increase or decrease liabilities?

Especially in post-fact world, one need only articulate a reasonable-sounding belief that their described actions would achieve their predicted outcome.

ETA: Take, for example, the bizzaro-world claim that jacking up your own workforce, reducing their compensation, and engendering growing negative consumer sentiment is in the best interests of the shareholders. These are typical tactics of firms that take over distressed assets with an eye towards sucking it dry of all available liquidity and breaking it up to sell pieces off to the highest bidder for yet more short-term profit.

So what is risk? What kinds of maximum profit do you mean? Instant profit today? Stable, long-term profit going forward?

By breaking the law in order to generate more profit, you are working against the shareholders' interest. OTOH doing everything you can within the law to maximise shareholder return, you are working within their interest.

What will or won't maximise return?

Just on the single example of turnover/retention, there's a cost/liability to maintaining a permanent orientation/training system and constantly having to guide new workers up in their productivity rates. So you've got a chronically under-performing workforce further laden down by the administrative costs of guiding them into your operation. The alternative is a sharp, highly efficient static workforce with minimal administrative drag, perhaps even directly integrated into existing supervisory structure that "trains you on the job" after some minimal online type classes for the most basic regulatory (and often insurance company) requirements.

 

[Belz...]

During the 1950s in parts of the US mixed race couples were illegal, I'd argue that breaking that law wouldn't be bad in and of itself.

Ok at this point you're just playing silly games.

Bye.

 

[Segnosaur]

There are numerous reasons, but many of them were reinforced by a very recent "New Yorker" article. I'm on a tablet and have had no luck with copying and pasting links. One of these days I'll figure it out. If you're curious, you can probably find it pretty easily online.

Tried to find it but had no luck.

But here are a few things:

- Guys who send dick pics do kind of bug me.

I was under the impression that those pics were something that was exchanged with consenting/receptive individuals. (I don't recall any incident of him using those pics in a harassing manner, e.g. sending them to unwilling people.)

Compare that to Trump, who has multiple allegations against him for sexual misconduct, his 'grab em by the pussy' statement, and his sleeping with a porn star shortly after his wife gave birth. Clearly Trump and Bezos are in completely different leagues.

- He wouldn't sign the giving pledge.

You're right, he didn't. And if you were comparing Bezos to Bill Gates or Warren Buffet you might have a point. (I already admitted that he isn't as generous as those people.)

But, the relevant comparison is not Bezos with Gates, but Bezos with Trump. And as I pointed out, Bezos' charity contributions far surpass Trump's.

Bezos gave to support gay rights. Trump paid for newspaper ads to condemn the "Central Park 5". Bezos helped set up education for undocumented immigrants, Trump used his charity to buy paintings of himself. Clearly Bezos and Trump are in completely different leagues. Yet for some reason you consider them somehow similar/equivalent.

- IMO, he treats his warehouse staff poorly.

Not sure how thing are in the United States, but apparently in Canada warehouse workers earn 9% more than workers in similar jobs.

https://ca.indeed.com/salaries/Warehouse-Worker-Salaries-at-Amazon.com

Granted, they may not necessarily get "rich" working there, but these are low-skilled jobs, and it looks like they get more than the average.

And at least they're getting paid. Compare that to Trump, who regularly hires contractors, and then fails to pay them at all.

Yet for some reason you consider Bezos and Trump somehow equivalent.

- He is in some ways a libertarian ideologue.

In what ways? That's a rather vague statement.

Bezos has contributed to both Republican and Democratic causes. Yes, he has fought against things like higher taxes, but as I pointed out, he has also contributed to charities benefiting gay rights and immigrants. Maybe he does lean on the 'libertarian' side, but I don't think he can be compared in any way to Trump, who's current inclination is hard-right.

I hadn't known his net worth was $114 *billion*, which affected my view of the last 3 items. He could afford to pay workers more and improve working conditions. Ideologically, he may be on firm enough ground, but emotionally, it turned me off.

Yes he's worth a lot. But then a lot of his net worth is tied up in capital.

 

[Delphic Oracle]

No, I was pointing out that not only would I not be obliged to break the law, I'd be required to adhere to it.

A law which restricts a specific activity is "adhered to" by not engaging in the restricted activity.

Depends on the law.

During the 1950s in parts of the US mixed race couples were illegal, I'd argue that breaking that law wouldn't be bad in and of itself.

Belz and I have gotten pretty hot at each other lately, but even I can look at this and say you are not engaging his point in good faith.

What you just did is really low.

 

[The Don]

There's a whole lot of daylight between "no obligation to..." and "nothing stopping you from..."

True.

One thing stopping you may be the shareholders.

That's the entire ball game right there. What is or is not risk? What decisions will increase or decrease liabilities?

Especially in post-fact world, one need only articulate a reasonable-sounding belief that their described actions would achieve their predicted outcome.

That may be your view and in the US but for directors in the UK, deliberately breaking the law is still a no-no.

What will or won't maximise return?

Just on the single example of turnover/retention, there's a cost/liability to maintaining a permanent orientation/training system and constantly having to guide new workers up in their productivity rates. So you've got a chronically under-performing workforce further laden down by the administrative costs of guiding them into your operation. The alternative is a sharp, highly efficient static workforce with minimal administrative drag, perhaps even directly integrated into existing supervisory structure that "trains you on the job" after some minimal online type classes for the most basic regulatory (and often insurance company) requirements.

Amazon have clearly taken the view that they have an acceptable level of turnover in lower level positions on the grounds that they have not taken steps to address it. Furthermore, a cost-conscious company like that will have a clear view of the costs of that turnover and the effect of that on the bottom line and have come to the conclusion that paying and treating certain classes of employee poorly in the US is good for business.

At the managerial, technical and executive level they seem to have taken a different view. Pay and conditions for employees whose skills are deemed to be critical are far, far better.

Amazon should have to pay and treat their staff properly. In the EU they are treated far better than in the US because of EU employment laws. If you don't want people to be exploited by employers then do the opposite of what the US (and increasingly the UK) are doing. Instead you should:

• Ensure that laws are passed to ensure a living wage, worker protections and acceptable working conditions
• Encourage individuals to join unions so that it's less easy to exploit individual workers
• Encourage unions and employers to work cooperatively, not antagonistically

 

[The Don]

Belz and I have gotten pretty hot at each other lately, but even I can look at this and say you are not engaging his point in good faith.

What you just did is really low.

Belz.... said that breaking the law was bad in and of itself.

I pointed out one unambiguous example of where that was not the case.

 

[Belz...]

Belz.... said that breaking the law was bad in and of itself.

I pointed out one unambiguous example of where that was not the case.

"I simply took his words out of context and deliberately interpreted it completely literally in order to continue to disagree with him. I don't see what's wrong about that!"



Sure, Don. Sure.

 

[Segnosaur]

Also recall that this whole Bezos tangent stemmed out of a comparison to Trump's record as a businessman.

Well, it stated with a posting about Amazon possibly losing a contract from the Pentagon due to Trump's interference. Then another poster made a comment about how they thought Bezos was "almost as bad" as Trump.

The question is, how is he 'almost as bad'. My opinion is that even if Bezos isn't great, he is still head and shoulders above Trump.

Its like saying the guy who shoplifted is "almost as bad" as a serial killer because "they both did something wrong", while ignoring the details and the impact of the various crimes involved.

On that particular point, I have to say that yes, they both show the same vein towards screwing over the people who helped them get where they are as much as their particular form of business model would allow.

Trump's came in the form of stiffing contractors until they settled for a fraction, Bezos's comes in the form of offering nothing but paltry compensation for unrealistic expectations of productivity to begin with. On this specific point, I find them both to be shrewd, miserly dickbags.

Anyone working for Amazon knows what their compensation will be right up front.... "I will get paid $X for working here". You might complain that they aren't getting paid enough, although here there is no easy way to say it is true or not, because salaries depend on so many different factors.

That is completely different than Trump, who agrees to pay $X to some contractor, then decides after the fact not to pay them/pay them less.

If Amazon was in the habit of unilaterally cutting people's salaries, then perhaps you might consider them somehow equivalent. But since Amazon does seem to stick by its agreed-upon compensation, I don't think you can really compare Bezos with Trump.

 

[Skeptic Ginger]

Devil’s Advocate here, but as head of a publicly traded company, he has a fiduciary responsibility to maximize profits.....

That's a myth made up by millionaires and billionaires to excuse their greedy ethics.

CEOs and other controlling entities like boards are perfectly within their bounds to consider ethics and the stakeholders along with the shareholders.

NYT: Shareholder Value Is No Longer Everything, Top C.E.O.s Say

Breaking with decades of long-held corporate orthodoxy, the Business Roundtable issued a statement on “the purpose of a corporation,” arguing that companies should no longer advance only the interests of shareholders. Instead, the group said, they must also invest in their employees, protect the environment and deal fairly and ethically with their suppliers.

“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders,” the group, a lobbying organization that represents many of America’s largest companies, said in a statement. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

There's been a snowball rolling downhill for decades to get to this. It has a ways to go to change greed-conducive beliefs.

 

[Skeptic Ginger]

Perhaps, but if that runs counter to the fiduciary duty, he could find himself fired, sued and even banned from being a director.

Companies are not run for the benefit of their customers or their employees, they are run solely for the benefit of their shareholders.

No! BS, get with the times. See my post above.

 

[Skeptic Ginger]

Interesting sentiments, but right now a company director could, at worst, find themselves jailed for failing to put shareholders' interest first.

It's a skeptics forum!!!! Come on people, challenge your preexisting beliefs.



Cite the law you think makes it illegal for a CEO (et al) to consider stakeholders and not just shareholder profits.

You won't find it. There's never been such a law in the US anyway. I doubt there is another country with such a law.

 

[Skeptic Ginger]

UK corporate laws, I presume that US laws are similar.

When I became a director of a publicly quoted company (at the time it was AIM, now it's on the main market), my responsibilities to the shareholders and (possible maximum) penalties for failing to deliver were made very clear to me.

So cite the UK law. What penalties? Maybe you were snookered.