by Robert Bragaw

Created on: August 16, 2009

Too often we tend to look at the conflict between good and evil in absolute terms. She is good. He is evil. That company is socially responsible. This company is corrupt. The truth is that the conflict between good and evil is played out within each individual and each corporation continuously. There are elements of both the sacred and the profane in every person and every corporation. Corporations are even more complex because they are collections of individuals with varying degrees of influence, within each of whom the battle for the soul is waged every minute of every hour of every day.

In looking at corporations, it is important to realize that corporate existence is value neutral. There are no "good" corporations. There are no "evil" corporations. Good and evil are only useful adjectives when they are used to describe behavior in terms of some common frame of reference. Corporations, or more accurately the officers, employees, directors and agents of a corporation (collectively, the "Members") may behave in a good or evil way, even conduct themselves according to a good or evil pattern of behavior, which is then ascribed to the corporation.

The idea that corporations can develop ethical standards that are unique subsets of overarching societal ethical standards is flawed. Corporations face pressure from the government to promote diversity within their workforce. Large corporations are diverse by the nature of their widespread geographical dispersion. The ethical standards established by a corporate board of directors in New York are unlikely to resonate with the branch office in El Paso, TX, with the foreign subsidiary in Vancouver, B.C., or with a supplier in the Philippines or Indonesia.

Corporate ethics is largely a misnomer applied to corporate legal obligations related to governance, disclosures to the Securities and Exchange Commission, and compliance with various workforce statutes ranging from the OSHA guidelines to the National Labor Relations Act to the Foreign Corrupt Practices Act. Because ethics deals with what is right rather than merely with what is legal, and because what is right is large dependent on the facts of a particular situation, corporate ethics become either meaningless (i.e., easily explained away based on exigent circumstances) or legalistic (i.e., whatever is not illegal is not unethical).

Corporate ethics might have more meaning if it were used to define hiring practices to encourage selection of employees with highly developed, well-reasoned personal philosophies; however, the ability of most recruiters to identify such individuals, while at the same time finding someone with the hard skills or experience required for a given position, make it unlikely that any such practice by a corporation were given more than lip service.

In the end, corporate ethics is a warm, fuzzy concept that exists to support rationalizations against corporate regulation by elected officials. Only people have the ability to act ethically or not. And, only the society in which a person lives is capable of defining the ethical mores to which any individual will be subject. Corporations are merely vessels established to collectively hold assets and collectively incur liabilities. Ascribing an ethical standard to corporations is as meaningful and effective as ascribing an ethical standard to a hammer. The hammer has no ethics. It is wielded in a manner that is ethical or unethical, legal or illegal, by a person.

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