Just like any other global company, Yahoo! must ensure that its local country sites . . . operate within the laws, regulations and customs of the country in which they are based.
Human rights trump doing business. . . .Internet companies must learn when not to hide behind the notion that we are corporations so it is our number one obligation just to do business. It isn’t our number one obligation. Our number one obligation is to be good world citizens.
– Carol Bartz, Yahoo! CEO, Yahoo! Business & Human Rights Summit,May 2009
What a difference media attention, a lawsuit, Congressional hearings, and ousting the CEO makes. Like earlier corporate responsibility poster children under intense pressure from stakeholders (see Nike), Yahoo is transforming itself from a laggard to a leader.
Seven years ago, Yahoo’s local affiliate signed the “Public Pledge on Self-Discipline for the Chinese Internet Industry,” agreeing to censor politically objectionable content on its web sites. Yahoo! China subsequently complied with requests from Chinese law enforcement officials for personally-identifiable user information, leading to the arrests of Internet writers and dissidents, including Shi Tao, a Chinese journalist sentenced to a 10-year prison sentence for “sharing state secrets,” i.e., e-mailing a government notice directing news organizations not to cover the 15th anniversary of the Tiananmen Square crackdown.
Yahoo’s failure to anticipate the human rights impact of cooperating with Chinese government internet censorship and surveillance generated widespread criticism of the company, and focused international attention on the potential complicity of internet companies in government threats to freedom of expression and privacy worldwide. Facing proposed legislation, Yahoo!, Google and Microsoft executives were called to Washington to explain their corporate human rights policies in China.
In November 2007, Congressional critics lambasted Yahoo for its handling of the Shi Tao case, and accused Yahoo’s general counsel of providing false information when he testified that Yahoo had no knowledge of the facts surrounding the Shi Tao case when the company provided his personal information to the Chinese authorities. In fact, Yahoo understood that the government request involved “state secrets,” but made no effort to resist the request. In a stunning instance of hearing theatrics, Chairman of the House Committee on Foreign Affairs, Rep. Tom Lantos, tongue-lashed Yahoo founder and CEO Jerry Yang, urging him to “face the family of the Chinese journalist who, as a result of Yahoo’s actions, has been tossed into a Chinese prison.” Yang stood in the hearing room, turned and bowed in apology to Shi Tao’s mother.
That apology marked the beginning of Yahoo’s human rights turnaround.
A week later, Yahoo agreed to settle a lawsuit Shi Tao had brought under the Alien Tort Statute seeking civil damages for Yahoo’s alleged complicity with the Chinese government in his imprisonment and torture.
In 2008, Yahoo launched a Business and Human Rights program that acknowledges corporate human rights obligations; adopts corporate human rights best practices, such as referencing international standards, engaging stakeholders and conducting human rights impact assessments; and has led to changes to Yahoo’s business practices. As it expands its market in Vietnam, for example, Yahoo is housing user information on servers outside the country so it can resist government requests for information.
Notably, Yahoo has assumed a leadership role in the Global Network Initiative (GNI), a voluntary multi-stakeholder program launched in October 2008. The GNI sets standards and guidelines for internet companies seeking to respect and protect the freedom of expression and privacy of their users. GNI participants Yahoo, Google and Microsoft commit to protect these individual rights when confronted with government action inconsistent with internationally recognized laws and standards, such as the Universal Declaration of Human Rights. The GNI principles also call for companies to implement these principles through Board engagement, human rights impact assessments, and agreements with business partners.
The GNI breaks new ground among voluntary corporate human rights initiatives by 1) providing specific guidance for resisting and narrowly interpreting government requests or demands that violate these rights, and 2) committing its participants to promote government reforms to strengthen human rights protections. Consistent with John Ruggie’s protect, respect and remedy framework, the GNI leverages collective corporate action to promote government human rights protection while helping companies to avoid complicity with government human rights violations. If implemented in good faith, these features of the GNI could have the greatest impact on freedom of expression and privacy for internet users worldwide.
The month after GNI launched, Yahoo founder and CEO Jerry Yang resigned, one year after his public apology. The perception among stakeholders that Yahoo had become a corporate follower in its intensely competitive industry, contributed to Yang’s ouster. On human rights issues, new Yahoo CEO Carol Bartz appears to be positioning her company to demonstrate leadership.
Worth Reading: Harvard Business Review, June, 2009, special section: Rebuilding Trust
I’ve been teaching ethics in graduate business and communication programs at New York University for more than 20 years, and every semester we lament the decline of trust.
But this year seems to be worse than most. Trust in US corporations is at an all-time low, 38 percent, according to the 2009 Edelman Trust Barometer. And most other measures of trust in institutions also point to continuing declines.
The June issue of Harvard Business Review takes on the issue of trust with a 25-page special report, Rebuilding Trust. It’s worth reading. The package includes a forceful critique of business school curricula, a 100-year timeline of highlights and lowlights in the public’s trust of business, and a counter-intuitive piece on how despite recent events people may still be trusting too much.
But the real payoff is the first piece in the package, by James O’Toole and Warren Bennis. O’Toole is the Daniels Distinguished Professor of Business Ethics at the University of Denver’s Daniels College of Business, and Bennis is University Professor at the University of Southern California. The two are co-authors (with Daniel Goleman and Patricia Ward Biederman) of Transparency: How Leaders Create a Culture of Candor (Jossey-Bass, 2008).
The special report opens with O’Toole’s and Bennis’ conclusion:
“We won’t be able to rebuild trust in institutions until leaders learn how to communicate honestly — and create organizations where that’s the norm.”
I think they’re exactly right.
But as simple and forthright as their assessment may be, honest communication is in remarkably short supply. One reason is that honest interpersonal communication in the workplace is hard. It often causes discomfort, offense, or confusion. It exposes vulnerabilities, fears, and ineptitude — our own and others’. And it also forces people and organizations to challenge assumptions. Most people in the workplace have spent a lifetime being socialized to avoid giving offense at work, to mask vulnerabilities, and to get along by going along.
But the main reason honest communication in organizations is hard is that it requires more than individuals being scrupulously honest; it requires cultures that foster and reward such honesty, and that discourage or punish dishonesty. Even at the expense of short-term incremental profit erosion.
O’Toole and Bennis note that current incentives are wrong:
“Until recently, the yardstick used to evaluate the performance of corporate leaders was relatively simple: the extent to which they created wealth for investors…
“Moving forward, it appears that a new metric of corporate leadership will be closer to this: the extent to which executives create organizations that are economically, ethically, and socially sustainable.”
The key word is here is sustainable. Trust is one of the elements that provides long-term sustainable competitive advantage. Building a trustworthy organization is sometimes painful. But the rewards can be significant.
Trust and Reputation
Indeed, the Edelman Trust Barometer says that trustworthiness is tied for fourth (with value for money) as the most significant contributor to corporate reputation. (The top three are quality of products and services, treatment of employees, and frequency and honesty of communication — which is itself an element of trustworthiness). And companies with good reputations tend to enjoy many benefits, including more loyal customers and employees, higher demand for their products and shares of their stock, and greater strategic flexibility.
So how can business enterprises develop cultures that contribute to sustainable trustworthiness and enhanced reputation?
O’Toole and Bennis note that before an organization can be truly honest with its external stakeholders, it needs to foster honesty inside. But that requires breaking old habits and changing cultures. The solution, they say, is for leaders to “make a conscious decision to support transparency and create a culture of candor.” But candor can be painful. It starts with telling the truth up and across the chain of command, not merely down the chain.
O’Tool and Bennis recommend an eight-step approach to creating a culture of candor:
Tell the truth. Avoid the impulse to tell people what you think they want to hear, but use straight talk. In all directions.
Encourage people to speak truth to power. Leaders need to create conditions for people to be courageous.
Reward contrarians. Challenging assumptions is a key to innovation. Promote the best contrarians, but thank them all.
Practice having unpleasant conversations. Straight talk doesn’t have to hurt. But it isn’t easy to deliver bad news kindly so that people don’t get unnecessarily hurt. Practice helps.
Diversify your sources of information. Understanding and overcoming one’s own biases requires having input from many perspectives.
Admit your mistakes. If a leader admits mistakes, others will have permission to do the same.
Build organizations that support transparency. This includes protecting whistleblowers, but also hiring people who have created cultures of transparency elsewhere.
Set information free. Rather than defaulting to the private, default to sharing information unless there’s a clear reason not to.
What is Trust?
What is trust, anyway? Of all the ways to describe trust, the best I’ve encountered is from ethics consultant Frank Navran, published in 1996 by the Ethics Resource Center in Washington, DC: Trust is the natural consequence of promises fulfilled.
In my ethics courses I take Navran’s description and expand it a bit: Trust is the natural consequence of promises fulfilled, of predictions that come true, and of values lived. Promises, predictions, and stated values all establish an expectation. According to Navran, “trust results from having one’s expectations met, of having no unrealized expectations (what we refer to as disappointments).”
By that standard, trust is lost when promises are unfulfilled; when predictions fail to come true; and when one’s behavior is contrary to one’s stated values. But trust can be maintained or restored by making (and keeping) promises — and by pointing out that one has made and fulfilled those promises; by making predictions that come true; and by living according to one’s stated values.
Restoring Trust When It Has Been Lost
Trust restoration was the subject of a 2006 study by three professors at the Wharton School of Business, University of Pennsylvania. Maurice E. Schweitzer, professor of operations and information management, John C. Hershey, professor of operations and information management, and Eric T. Bradlow, professor of marketing, explored how to regain trust when it has been violated.
Professor Schewitzer told the newsletter Knowledge@Whartonwhy trust matters:
“Trust is the social glue that holds things together. It allows us to engage in social and commercial ventures. You can’t contract everything. We develop relationships that are based on trusting that things will work out.”
But what happens when trust is broken? The three professors conducted an experiment to test the hypothesis that once trust is lost it is gone forever. Schweitzer told Knowledge@Wharton that he and his colleagues thought trust was like glass — easy to break and impossible to repair. But they concluded that this isn’t true.
What they found is completely consistent with the Ethics Resource Center’s framework: that you can restore trust, but to do so you need to fulfill promises. Knowledge@Wharton reports:
“Trust harmed by untrustworthy behavior can be effectively restored when individuals observe a consistent series of trustworthy actions,” the researchers conclude. Also, making a promise to change behavior can help speed up the trust recovery process.”
But the experiment found that when a person’s trust is violated through deception it is harder to restore.
“‘It’s okay to screw me over, but don’t deceive me as well,” says Bradlow. “If you screw me over and lie about it, it’s going to take even longer to recover from it.’”
One reason it takes longer to recover from deception-based loss of trust is because of the emotional element of trust. Yale School of Management professor Robert J. Schiller notes that
“Trust is a primordial form of human social cognition. We instinctively seek to surround ourselves with others we trust, and desire a stable situation where we know who we can rely on. Trust has emotional correlates. We do not ’sleep easily’ if we feel a lack of a basic sense of trust in those who relate to us.” (The Wall Street Journal, Thursday, September 25, 2003, Page A18. Free version no longer available online.)
And when we’re afraid, we look for protection.
The 2009 Edelman Trust Barometer notes that one of the consequences of the decline in trust in business is the call for increased government intervention. The Trust Barometer report notes:
“The old order, in which business had the freedom to operate autonomously and without government restraint, is over.”
One of the risks of government intervention is that companies lose their “license to operate”: the ability of management to exercise business judgment unencumbered by government micromanagement. We saw just this loss of business autonomy after the US government bailed out AIG and banks in the fall, and the automotive sector in the spring. When the President of the United States can fire the CEO of General Motors; when the largest banks are forced to accept government money and partial government ownership; when the US Treasury decides who may sit on corporate boards, the license to operate is seriously compromised. And all other companies are at risk of similarly losing their autonomy.
Among the Edelman Trust Barometer’s prescriptions for restoring trust are shared sacrifice — in which pain is evenly spread, and continuous conversations. These are both elements of transparency — very similar to what the authors of the Harvard Business Review article on trust call for. Says the Trust Barometer report:
“If businesses are to regain trust, they will need to adopt a strategy of Public Engagement, by means of a shift in policy and communications. The essence of Public Engagement is the commitment of companies to say—and do as they say. Organizations must be forthright and honest in their actions and communications. In a time of utter distrust, business leaders must make the case for actions and then demonstrate their progress against those goals. When problems arise within companies, stakeholders need to see senior executives take a visible lead in acknowledging errors, correcting mistakes, and working with employees to avoid similar problems going forward.”
Lessons for Leaders
These four unrelated and independent looks at trust — by the Harvard Business Review, the Ethics Resource Center, the Wharton professors, and the Edelman Trust Barometer — point to a number of common approaches and suggest lessons for leaders:
1. Trust is a public phenomenon:
For companies and other complex organizations, trust is lost and restored at the wholesale level. Although individual experiences are meaningful, trust in companies is a reputational challenge, not just an interpersonal one. So any approach to restore trust must be a public approach.
Because trust is tied directly to corporate reputation, trust isn’t just an internal attribute, but can be part of a core competitive advantage.
2. Transparency, direct communication, and accountability are key:
The HBR authors speak of creating a culture of transparency, and note: “We won’t be able to rebuild trust in institutions until leaders learn how to communicate honestly — and create organizations where that’s the norm.”
Ethics Resource Center notes that trust is the result of making and fulfilling promises; the Wharton professors talk about restoring trust by making promises and then engaging in a consistent series of trustworthy actions.
The Edelman Trust Barometer speaks of the need for continuous conversations; a commitment by companies to speak, and then to do do what they say they will do; to make the case for actions and then demonstrate their progress against those goals.
3. Although trust can be restored, it’s more productive to not lose it in the first place. But maintaining trust requires intentionality:
We must be as attentive to meeting expectations before trust is lost as we ultimately would be in attempting to restore trust.
HBR speaks of creating cultures; Edelman Trust Barometer of shifts in policy and communication.
Neither of these is easy. But the payoff can be high. And the downside of not doing these is quite severe.
A public apology is a good way to express remorse and offer reconciliation to an affected party. But the very act of apologizing can be daunting.
If delivered effectively, an apology can mend relationships and restore trust between two or more parties.
If delivered effectively, an apology can help maintain company’s competitive advantage, reduce litigation costs and minimize business disruptions.
If delivered effectively, an apology can create a perception of genuine regret on behalf of the offender and mend his or her reputation.
But here is a question:
Can an effective delivery distract the audience from an insufficient apology?
And,
Can a weak delivery diminish a powerful message of a genuine apology?
I invite you to look at three recent apologies and share your opinion about the effectiveness of each apology is in terms of its message and its presentation.
The KFC Apology
KFC’s initial plan to team up with Oprah to create a free meal giveaway seemed to be the recipe for the perfect promotion. Instead, it became the recipe for the perfect disaster.
The crisis that KFC faced afterwards undermined the company’s reputation and gave an opportunity to its competitors to use KFC‘s turmoil to their advantage.
The company offered up to four coupons for a free meal to its customers, available to download at the company’s website. The company wildly underestimated the response. The supply shortage and mis-steps by the company and its franchisees created a national disaster for the brand.
KFC U.S. president, Roger Eaton issued a video apology.
He said, “…we are really sorry for the inconvenience and we thank you for understanding.” The company posted apology on YouTube where 181,753 people watched it as of mid-May.
What worked:
Mr. Eaton’s performance made the apology seem more like a KFC commercial than an expression of remorse. He was engaging and emotional, he kept eye contact and gestured broadly, he modulated his voice and smiled. KFC deserved credit for taking the initiative to come up with a creative way to apologize.
What didn’t work:
But the apology itself is wanting. Mr. Eaton’s promotional tone may put off viewers. What lies behind his dynamic presentation is lack of a sufficient apology.
Although he expresses an intention to apologize, it’s not clear what Mr. Eaton apologizes for, “The response to our free Kentucky grilled Chicken offer has been overwhelming. We’ve had lines out the door. Everyone wants to get the great taste of our new product. So we can’t redeem your free coupon at this time.”
The link between those thoughts - everyone wants to get the taste of our new product, so we can’t redeem your free coupon - is tenuous at best.
It is also not clear how the reparation offered by the company could solve the existing problem of supply and demand imbalance. And it puts the burden on the customer to jump through hoops to receive the free meal.
In a press release, the company said: “Those customers may visit a participating KFC restaurant to receive a rain check form. They will then receive via mail a rain check coupon for the free two pieces of Kentucky Grilled Chicken (manager’s choice), two individual side items and a biscuit. The rain check coupon, which will be redeemable at a later date for a two week period, will also entitle the holder to a free Pepsi to go with the free meal, as a way of apologizing for the inconvenience.”
And finally, Mr. Eaton chose a wrong tone for delivering his apology. The upbeat tone of his presentation, made him look more gloating than repentant.
The Domino’s Pizza Apology
Patrick Doyle, the CEO of Domino’s Pizza, apparently had no choice but to apologize for a youtube video that showed inappropriate behavior of two employees in one of the Domino’s locations. The video was seen more than 930,000 times on YouTube. Read more about Domino’s Pizza case in Laurel Hart’s blog post.
What worked:
Mr. Doyle’s apology had everything to become a genuine apology: he acknowledged the wrongdoing, thanked the members of the web community for their help to inform he company about the wrongdoing, expressed regret about the incident, said that the company is taking the incident with the utmost seriousness, and talked about the measures that the company would take to investigate the matter and make sure the incident would never happen again. He used strong language, “We sincerely apologize for this incident. …” ,“…. we are taking this incredibly seriously”, “There is nothing more important or sacred to us than our customers’ trust.”
Given the speed, that the company responded to the crisis without having additional time for Mr. Doyle’s rehearsal, his apology deserves more credit.
What didn’t work:
The message of Mr. Doyle’s apology was strong - but unfortunately - his delivery wasn’t. Throughout the video, Mr. Doyle maintained a leaning posture and looked away from the camera. Mr. Doyle’s weak delivery undermined a strong message of the apology. His apology would have been more effective if he had looked straight at the camera addressing the audience, gestured broadly and maintained a better posture.
Watch Domino’s apology here.
Gordon Brown’s Apology over MPs’ expense
The British prime minister’s apology over members of Parliaments’ (MPs’) expenses came across as true and genuine. In a speech to the Royal College of Nursing conference in Harrogate Mr. Brown apologized on behalf of parliamentarians of all parties for the abuse of their expense accounts that became public earlier this month. Members of Parliament (MPs) came under fire for creating the expense system that was poorly policed and corrupted. The scandal came as a culmination of Gordon Brown’s week of unfortunate events.
From The Daily Beast:
“Brown has just gone through what even his close allies acknowledge is the worst week of his premiership. On Wednesday, he lost a key vote in the House of Commons, thanks to defecting MPs from his own Labour Party. The next day, the [he] was forced to retreat on another issue to avert another humiliating bashing. The previous week was in some ways even more damaging. Brown attracted widespread ridicule for a cringe-making political mini-speech on YouTube.Then a day later, his chancellor of the Exchequer, Alistair Darling, unveiled a recession-driven budget that was poorly received and, for many, an admission of Labour missteps and overspending since it came to power in 1997.”
Prime minister’s initiative to issue an apology was noticed by many and praised by some.
What worked:
Mr. Brown delivered his apology in a very effective way: he gestured broadly, had eye contact with the audience, modulated his voice, stressed key words and used pauses.
He admitted mistakes on behalf of all parties, expressed remorse and talked about trust, responsibility: “I want to apologize on behalf of politicians, on behalf of all parties, for what has happened in the events of the last few days.
We must show that, where mistakes have been made and errors have been discovered, where wrongs have to be righted, that that is done so immediately.”
Mostly because of the delivery, his apology came across as authentic and genuine.
What didn’t work:
But if some critics praised the effectiveness of Gordon Brown’s apology, most of them wrote that his apology was too little too late - and in some cases - too transparently tactical.
To me it sounded more like a shallow apology. It had 3 out of 4 key elements of a successful apology (acknowledgment, remorse, promise, restitution). Mr. Brown acknowledged the wrongdoing, expressed regret and promised to remediate the offense.
But what was not clear is how Mr. Brown plans to provide restitution.
The magnitude of the MPs’ expenses crisis in UK already reached its zenith and would need more to restore public trust than just a beautifully delivered apology by the British leader. The British Government will have to demonstrate commitment to fix the existing problem by creating a more transparent system of MPs’ expenses.
One more important detail to pay attention to is how Gordon Brown uses a weaker formula to apologize by saying, “I want to apologize,” which often signals an intention. It would be more powerful for him to say, “I apologize ” or “I’m here to apologize.”
Each of these examples provides its own teachable moment to anyone interested in the subject matter of apology.
As we saw in KFC’s example, putting a hollow apology in an eye-catching package can be disastrous for a brand and can potentially create more reputation damage for a company. An eye-catching delivery can distract customers’ attention from an insufficient apology, but will spark more customers’ anger and disappointment when the faux apology is discovered.
Delivering a well-crafted apology without providing restitution, as in Gordon Brown’s case, can be seen as shallow or transparently tactical. Shallow apologies can question the confessor’s true intentions and diminish credibility. To defuse anger of an affected party and to win trust, a confessor should always deliver a clear explanation of how he/she plans to remediate an offense or fix a problem.
Taking a powerful delivery out of the equation can undermine a true apology. And as we saw in the Domino’s case, an ineffective delivery can diminish a strong message of an apology and make it look weak and distorted. An effective presentation could set up the right tone for the delivery of an apology and help a confessor come across as humane and repentant.
Most often, we can’t control whether our apology will be accepted by an affected party. But what we can control is what we say to apologize and how we say it.
In the message of an apology, a confessor should demonstrate that he/she understands the wrongdoing and will not repeat it in the future. He/she will have to provide some sort of restitution to an affected party that will help repair relationships and restore trust.
In the delivery of an apology, a confessor should demonstrate remorse and repentance; empathy and humility.
An apology is authentic and, therefore, effective only when it has a combination of a strong message and a powerful delivery.
I’ll be happy to know what your reaction was when you saw each of these apologies. Did each speaker come across as genuine and authentic? Were you comfortable with each speaker’s style of delivery? Whose apology message was stronger?
Does Your Corporate Responsibility Program Have a Conscience?
A few years ago, I came across a twenty-five year old article from the Harvard Business Review, “Can a Corporation Have a Conscience?” The 1982 piece, written by HBS Professors Kenneth E. Goodpaster and John B. Mathews, Jr., applies principles of moral philosophy to what was then the relatively new field of corporate responsibility.
I was struck by the relevance of their analysis for business leaders struggling with corporate responsibility today. Since 1982, corporate responsibility programs have proliferated.Professionals seeking to design, implement and evaluate these efforts spend a good deal of time defining corporate responsibility for their organization. Is it compliance? Is it philanthropy? Or is it something more? I subscribe to the “something more” view and encourage my clients and students to go beyond compliance and philanthropy and define corporate responsibility as meeting the expectations of stakeholders.
Goodpaster and Mathews provide another definition, one that could help today’s executives trying to decide which corporate responsibility initiatives merit investment. Their definition suggests executives could measure a corporate responsibility program against two benchmarks: rationality and respect.
The authors distill these principles by looking at corporate activity through the lens of individual moral responsibility. In concluding that yes, a corporation can have a conscience, Goodpaster and Mathews highlight three notions of individual responsibility: 1) responsibility as accountability, that someone is to blame (Exxon was responsible for the Exxon Valdez oil spill.); 2) responsibility as rule-following, that something has to be done (General Motors is responsible for meeting its pension obligations.); and finally, 3) responsibility as decision-making, that trustworthiness can be expected (Google wants to be considered a responsible corporate citizen.) The authors zero in on this last meaning of responsibility as the distinguishing characteristic of moral responsibility.
Goodpaster and Mathews conclude that corporations can indeed demonstrate, or fail to demonstrate, moral responsibility. How? By demonstrating, or failing to demonstrate, rationality and respect, the characteristics of a trustworthy person. Rationality, because a trustworthy individual makes decisions based on some deliberate process. Respect, because a trustworthy individual takes into account the impact of his or her decisions on others.
Translated for practitioners today, acting responsibly means more than just complying with laws and regulations, or companies being held accountable when they break the law. Corporate responsibility means earning the trust of stakeholders.
Focusing on rationality and respect is a concrete way to invest in the corporate responsibility efforts most likely to earn trust from your stakeholders. Consider corporate human rights initiatives.
Companies can demonstrate rationality by adopting human rights policies and procedures, such as codes of conduct, monitoring programs, and formal procedures for handling human rights issues that arise in their operations. Corporate due diligence that seeks to ensure legal compliance while managing the risk of human rights harm, and ideally avoiding human rights issues altogether, is a deliberate and rational approach. Meaningful transparency that allows corporate stakeholders to see and understand a company’s policies and processes is a best practice that reinforces rational corporate efforts.
Companies can demonstrate respect by taking into account the human impact of its operations and policies. In other words, treat people as valuable, not simply means to achieve organizational objectives. Protecting, respecting and promoting human rights, by definition, demonstrates respect for individuals. Corporate human rights programs guided by respect will reference widely accepted international human rights standards, such as the Universal Declaration of Human Rights, feature meaningful stakeholder engagement, incorporate grievance mechanisms, and be designed from the outset taking into account the human rights impact of company activities.
It is important to note that devoting all your resources to only one of these trustworthiness attributes may backfire. Both elements need to be present to earn the trust of stakeholders. A company that has rational procedures in place, but fails to treat individuals as ends in themselves, is not acting responsibly. An apparel company that abruptly terminates a supplier for labor compliance issues with no regard for the fate of that factory’s workers is acting rationally but not respectfully. Conversely, a company that respects human rights but fails to implement them through operations or procedures demonstrates respect but not rationality. An internet search company that supports freedom of expression and privacy in its corporate code of conduct, but fails to establish internal procedures for evaluating government requests for personally-identifiable user information, is not acting responsibly.
The rationality and respect benchmarks are consistent with John Ruggie’s “protect, respect and remedy” framework for business and human rights responsibilities, which emphasizes corporate due diligence (rationality) and effective grievance procedures (respect).
So the next time your company wants to know if it is acting responsibly, ask yourself: Do our actions demonstrate rationality and respect? According to Goodpaster and Mathews, “An organization reveals its character as sure as a person does.” That was true in 1982, and perhaps even more so today, since more stakeholders are watching. No program is immune from criticism, but a thoughtful, transparent process that values individuals can go a long way toward demonstrating that your corporate responsibility program, and your company, does indeed have a conscience.
