Now, I understand the challenges you face [the president said]. I understand that you're under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders. I get it. But as we work with you to make America a better place to do business, ask yourselves what you can do for America. Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation.A blogging friend of mine - a man who automatically opposes or is cynical about anything Mr. Obama says - responded predictably: "Amazing. The president (apparently hearkening back to JFK) tells these CEOs to ask what they can do for their country, as if providing jobs, goods, and services in a very uncertain economy is not enough. What an insult!"
My friend does not really believe that providing jobs, goods, and services is all a business needs to do, of course. He does not support pimps or drug pushers, for example, even though they provide jobs and goods or services; and I suspect that he's not fond of gambling casinos or abortion clinics either, even if they are entirely legal.
His comment, though, got me thinking, and for that I thank him. What, exactly, does an ethical business do beyond providing jobs, goods, and services? Here are some preliminary thoughts - please improve on them.
An ethical business ...
- exists to provide life-sustaining jobs and useful goods and services.
- makes a profit so that it can continue providing jobs, goods, and services; but rather than sitting on excessive earnings or turning them into fat bonuses, creates new products or hires more workers or increases overall employee compensation.
- manages its affairs so that not just executives and shareholders but also rank-and-file employees are adequately compensated.
- keeps honest and transparent accounts so that its directors, contractors, shareholders, and employees can make informed decisions.
- markets its products honestly, not making misleading claims or delivering shoddy merchandise or poor service.
- assures healthy working conditions for all of its employees at home and abroad, refusing to outsource to anyone who uses child labor, sweatshops, toxic working environments, or slave labor.
- makes sure that its methods and materials preserve the environment for future generations at home and abroad, and takes responsibility to clean up any environmental disasters it inadvertently causes.
- does not attempt to profit through taking advantage of consumers' ignorance, addictions, or desperation.
- does not lobby or bribe lawmakers so as to be excused from ethical behavior in any of the above areas, or so as to gain an advantage over other companies.
- gives back to the community not only through creating jobs, goods, and services; but also, whenever possible, by providing funding for community projects, rewarding employees who engage in community service, and supporting legislation that fosters the common good.
When President Kennedy challenged us to ask what we could do for our country, none of us took it as an insult. Rather, his words were an affirmation that we could, with vision and hard work, make the world a better place. I take President Obama's words to the U.S. Chamber of Commerce in the same way. Ethical businesses are a tremendous force for good, and the world needs them now more than ever.
For further reading: Bill George, professor of management practice at Harvard Business School and a director of ExxonMobil and Goldman Sachs, has written an interesting op-ed piece listing over a dozen concrete actions President Obama has recently taken in support of the business community. Check out "President Obama's Challenge to Business: 'It's Time to Invest in America.' "