Posts tagged with: business ethics

Hobby-Lobby-StoreWhen the Supreme Court ruled on the Hobby Lobby case, the near universal reaction by liberals was that it was a travesty of epic proportion. But as self-professed liberal law professor Brett McDonnell argues, the left should embrace the Hobby Lobby decision since it supports liberal values:

The first question was: Can for-profit corporations invoke religious liberty rights under RFRA? The court answered yes. HBO’s John Oliver nicely expressed the automatic liberal riposte, parodying the idea that corporations are people. It is very funny stuff.

It is not, however, especially thoughtful stuff. The court does not argue that corporations are just like real people. Rather, it argues that people often exercise faith collectively, in organizations. Allowing those organizations to assert religious-liberty rights protects the liberty of the persons acting within them. The obvious example is churches, usually legally organized as nonprofit corporations.

The real issue is not whether corporations of any type can ever claim protection under RFRA — sometimes they can. The issue is whether for-profit corporations can ever have enough of a religious purpose to claim that protection.

To me, as a professor of corporate law, liberal denial of this point sounds very odd. In my world, activists and liberal professors (like me) are constantly asserting that corporations can and should care about more than just shareholder profit. We sing the praises of corporate social responsibility.

Well, Hobby Lobby is a socially responsible corporation, judged by the deep religious beliefs of its owners. The court decisively rejects the notion that the sole purpose of a for-profit corporation is to make money for its shareholders. This fits perfectly with the expansive view of corporate purpose that liberal proponents of social responsibility usually advocate — except, apparently, when talking about this case.

McDonnell is right, of course. Support for religious liberty should transcend partisan political lines. And it used to be an issue that was championed by liberals. The fact that religious liberty is now despised and denigrated reveals a sudden, perhaps irrevocable shift in the nature of progressivism in America.

(Via: Rod Dreher)

Radio Free ActonWhat is the end – the goal – of business anyway? Is it to merely maximize a profit or to do good, or some balance between the two? And what exactly does it mean for a business to “do good”? And if I happen to be a person of deep religious faith, do I have to check my faith at the boardroom door? What influence should my faith have on the exchanges I engage in day to day, and what are the practical implications of ethics on how I conduct myself in business relationships? Andrew Abela is the 2009 recipient of Acton’s Novak Award. He has just co-authored a very important book on the subject of the intersection of ethics and morality with business: A Catechism for Business: Tough Ethical Questions & Insights From Catholic Teaching (The Catholic University of America Press). He speaks with Acton’s Paul Edwards on this edition of Radio Free Acton.

burritoBusiness, we are told, is supposed to have a conscience to survive. For instance, Chad Brooks at Fox Business says that businesses have to be “socially conscience” in order to attract customers:

Young consumers consider social responsibility most when shelling out big bucks for products such as automobiles, computers, consumer electronics and jewelry, the study found. Specifically, more than 40 percent of consumers under 30 consider social issues when buying a big-ticket item, compared to just 34 percent who factor in those issues when buying everyday items, like gasoline and food.

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Mary Ann Glendon makes an excellent point about the outcry for more corporate responsibility while government is simultaneously stripping away the rights of religious conscience of businesses. In The Boston Globe, Glendon notes,

The simple truth is that if we want businesses, incorporated or not, to be responsible for their actions, they must be treated as having some moral agency. And with moral agency and accountability must go the freedom to act in accordance with conscience.

The push to ghettoize freedom of religion solely into the houses of worship is of course a disturbing trend. When the religious rights of civil society are pushed aside and made subservient to the state, we get not the church serving as conscience, but the state ruling tyrannically over man. “Once religion is reduced to nothing more than privatized conscience, the public square has only two actors in it—the state and the individual,” says Richard John Neuhaus.

Read the entire article.

Readers following my series of blog posts on shareholder proxy resolutions submitted by religious groups such as As You Sow and the Interfaith Council of Corporate Responsibility already know these resolutions have little to do with issues of faith. In fact, an overwhelming majority of these resolutions concern corporate speech and attempts to stifle it.

Your shareholders want to know more about your political spending. Really.

Your shareholders want to know more about your political spending. Really.

AYS and ICCR – as well as a host of other religious shareholders – submit proposals drafted by Bruce Freed, head of the Center for Political Accountability. Freed’s CPA and the Wharton Business School’s Zicklin Center, readers will recall, issued its annual index late last month. My last post detailed in part the wrongheadedness of shareholders pushing a political agenda at the expense of their fellow shareholders. However, I anticipate most readers require a bit more than your lowly scribe’s word that the CPA-Zicklin Index not only inflates the results of its shareholder resolutions but as well operates on behalf of groups more interested in shutting down corporate political speech.

The Center for Competitive Politics, a First Amendment nonprofit think tank located in Alexandria, Va., brings more firepower to arguments I’ve already made regarding the efforts of CPA and the proxy shareholders for whom Mr. Freed drafts resolutions. Regarding the CPA-Zicklin Index, CCP issued a statement by CCP Chairman Brad Smith, former Federal Election Commission Chairman:

To look at the CPA-Zicklin Index as a measure of ‘best corporate practices’ is like asking a wolf to describe ‘best practices’ for sheep … Corporations have an obligation to do what is in the best interest of their shareholders, not comply with the demands of a non- profit that opposes speech by the business community. (more…)

The 2013 “CPA-Zicklin Index of Corporate Policy Accountability and Disclosure” was issued Tuesday by the allegedly “nonpartisan” Center for Corporate Political Accountability – the “CPA” of the report’s title lest readers mistakenly read it as the objective analysis of a certified public accountant. The CPA referenced here is the organization operated by Bruce Freed, which shepherds proxy shareholder resolutions by left leaning “religious” shareholder activist groups as As You Sow and the Interfaith Council on Corporate Responsibility.

I haven’t taken the time for a deep-dive analysis of the report, but will do so most assuredly in the next few days. However, an initial reading of the Index’s Executive Summary must suffice for the moment. In short … poppycock. And piffle. Even preposterous.

Allow me to set the record straight. Ten years ago, CPA “began engaging corporations to voluntarily provide disclosure and oversight of political spending,” asserts Mr. Freed – if by “voluntarily” Mr. Freed means mounting a campaign of deceit against corporate political spending employing all means necessary to embarrass or otherwise shame companies to bend to the will of leftist, post-Citizens United, “corporations/bad. unions/good” ideology.

Mr. Freed and the faith-based shareholders for whom he writes proxy resolutions remain in a tizzy regarding those companies that spend lobbying or other political cash on causes and campaigns with which the left disapproves. In an environment of growing Leviathan and concomitant increase in regulatory restrictions emanating from government agencies, companies have little choice to ensure their own and employees’ survival as well as the profitability of shareholders than to engage in the political process. Indeed, to voluntarily withdraw from these policy debates would be nothing less than reckless disregard for political reality today.

So let’s break this down further: Unions spend members’ dues on political causes that tilt left whereas corporations spend company proceeds on causes that tilt right. Union spending rarely is called into question as it’s a given they’ll spend it on liberal candidates and agendas. Woe be unto those corporations, however, which endeavor to engage politically – even  privately – in the interest of their companies, employees, customers and shareholders. (more…)

Café con leche - Milchkaffee (CC)“Who could be against fairness?” Victor Claar asked this question at Acton University last month. He and Travis Hester gave a talk titled, “Fair Trade Versus Free Trade” with their focus on the coffee industry. They explained what the fair trade movement is, evaluated its effectiveness, and explored ways for caring people to help coffee growers overcome poverty.

Before looking at the fair trade movement, it is important to note that coffee is what economists call an inelastic good. That means that if the price of coffee increases, the quantity demanded will not decrease by a lot. Claar puts it simply: “If coffee prices rise, coffee drinkers will probably buy less coffee, but probably not much less.” Spikes occur frequently in coffee prices due to bad weather and the delicacy of Arabica coffee plants. The price of coffee is volatile and is, according to fair trade advocates, too low. (more…)

In a May 28, Huffington Post article, Rev. Seamus P. Finn, OMI, exhibits a woeful lack of economic knowledge. In most cases members of the clergy can be forgiven somewhat for getting it so utterly and completely wrong. After all, few people go into the ministry because they’re fascinated with things like lean manufacturing techniques or monetary policy. But in this instance Finn must be taken to the proverbial woodshed for a lesson in what truly benefits the world’s poor.

Why Finn and why now, you ask? Most important, because he represents the Missionary Oblates of Mary Immaculate, and represents the Oblates as a board member at the Interfaith Center on Corporate Responsibility. He also serves on the executive committee of the International Interfaith Investment Group (IIIG). From this resume, one might gather that he is influential with the faithful on financial and business matters.

PowerBlog readers who have been following my series of posts on religious-based shareholder activism these past few months may recall my coverage of several ICCR proxy resolutions submitted to a host of companies this spring. I called attention to these resolutions because they draw more from leftist ideology than they do from centuries of deeper Christian thinking on social problems.

Now comes Finn with a HuffPo piece linking ICCR and IIIG initiatives with recent statements made by Pope Francis. While the current pope is no fan of capitalism – read about his views of the market economy here and here on the PowerBlog – Finn apparently despises it outright. (more…)

catholic-university-bschoolEarlier this year, the Catholic University of America announced the creation of a School of Business and Economics that will be “distinctively Catholic.” The new school offers a model based on Catholic social doctrine and the natural law that is unlike theories prevalent at most leading business schools. “Business schools focus on teaching commercial skills and rules of ethics, but they neglect the importance of character,” says Andrew Abela, the school’s dean and Acton’s 2009 Novak Award Recipient. “Our distinctive idea is to bring the rich resources of the Catholic intellectual tradition and the natural law to bear upon business and economics.

I recently spoke with Dr. Abela about the new program, what makes a Catholic approach different, and what it means for business and economics to be “people-centered”:

Why is it so rare for Catholic colleges and universities to take a “distinctively Catholic” approach on subjects like business and economics?

I think there are several possible reasons for this. First, the business and economics education at many Catholic universities tends to mirror that of non-religious universities in that it focuses on knowledge, not on will. But this is not enough. We have to cultivate our students in virtue, which needs the formation of both the intellect and the will. It’s not enough for students to know the good, they have to do the good, and even to love the good. Second, as you know much of higher education suffers from political correctness, and faculty are thus reluctant to commit to any one approach to ethics. Students end up being taught several (frequently conflicting) theories of ethics, with the result that they graduate as sophisticated relativists. Finally, faculty are committed to existing business and economics theories, and it is hard to reconcile these theories, which claim to be morally neutral, with the Catholic intellectual tradition, which holds that all human action has a moral dimension.

Why are you creating a new School of Business & Economics now – does the world really need another business school? And why a School of Business and Economics?
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Solidarity designed by Thibault Geoffroy, from The Noun Project

Solidarity designed by Thibault Geoffroy, from The Noun Project

When I moved to west Michigan, one of the things that struck me the most were distinct cultural differences between the different sides of the state. While I was pursuing a master’s degree at Calvin Theological Seminary, I worked for a while in the receiving department at Bissell, Inc. I remember being surprised, nay, shocked, that a manufacturer like Bissell was not a union shop. (All those jobs are somewhere else now, in any case.)

Before attending Michigan State as an undergrad, I had lived in Detroit, and although I never had a union job myself, the cultural expectations of organized labor were (and still are) deeply ingrained on the east side of the state. My dad is a longtime editor at a suburban newspaper, and one of the reasons he still has a job amid the economic downturn and the upheavals facing that industry is his membership in the guild.

But things really are different on this side of the state. That’s one reason why the protests taking place today in Lansing, the centrally-located state capital, are symbolic of two sides of the state, in many ways divided by culture, economy, and politics. As to the latter, consider some statewide candidates for public office in recent memory that haven’t done so well when trying to move beyond west Michigan, including Pete Hoekstra, Dick DeVos, Dick Posthumus. The fight over Right to Work legislation in Michigan is, in this way, a tale of two Michigans.

It is also a tale about two paths forward for Michigan, though. On the one side is the state’s historic identification with Big Labor and the Big Three. On the other side is a Michigan that embraces enterprising innovation and entrepreneurial competition.

The Wall Street Journal editorialized yesterday on this topic (HT: Ross Emmett), and captures the essence of the choice facing Michigan: “Unions loathe right to work because they know that many workers would rather not join a union.”

I think that the right to organize and therefore unions are fundamental to flourishing societies. But what concerns me is that the argument against Right to Work is not about this fundamental right to organize, but rather about protecting the entrenched and embedded political interests of a particular kind of union.

There is a world of difference between voluntary union membership and mandatory, government-enforced, union membership. If the former is akin to something like the freedom of religion, then the latter is more like the government establishment of a particular religion or church. What we need is the separation of Union and State in the way that we have historically had free churches. We need to disestablish labor in the same way that we have disestablished religion in America, while simultaneously protecting the right to organize and join a union as well as the right to worship and express our religious convictions.
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