1. Anderson, L.V. (2016, May 19). Ethics compliance training is a waste of time. Slate Magazine.
This article, despite the cynical title, provides good research concerning the process by which companies implement ethics compliance training programs, including what incentive they have and how the external legal environment influences them to do this. The article begins by stating that the predominant form of ethics compliance training that all onboarded employees typically take in corporate organizations in the United States are in the form of eLearning courses. The article describes the typical mandatory basic ethics, harassment and discrimination training that are accepted parts of starting work or maintaining work in an organization. The article also points out the lack of depth and seemingly black and white nature of these courses, which often involve multiple choice question and answer formats. For most people, the assumption is that these trainings provide some legal safeguard for executives in case regulatory powers do an external audit (Anderson 2016).
In the United States, ethics trainings are not legally mandated (except for the state of California, where managers are bigger companies are required to take an anti-sexual harassment training course (Anderson 2016). Yet, two specific legal measures effectively make ethics compliance training a necessity for large companies: Sarbanes-Oxley Act of 2002 which made anti-corruption laws specifically for publicly traded firms more stringent, as well as Federal Sentencing Guidelines for Organizations, which states that an effective ethics compliance training program can “mitigate the ultimate punishment of an organization” if they get sued (Anderson 2016). Ethics compliance training is also often part of the settlement for companies which do get investigated and found of wrongdoing. Recent research in the field of Organizational Behavior has found that employees are less likely to respond to ethics compliance training programs when they feel “an ethics/compliance program that employees believe exists only to protect top management from blame.”(Anderson 2016). The authors of this particular study warned executives that a quick-fix ethics program that may have off-the-shelf power points or a one-size-fits-all hour long ethics seminar may actually be more harmful towards engaging a workforce and motivating them towards ethical practices. (Anderson 20160. This suggests that company executives should implement more active and ongoing conversations with employees, as well as have managers train their teams themselves (instead of outsourcing this job to lawyers) in order to promote an ethically engaged business climate.
2. Associated Press (2016, April 22). Volkswagon to take $18.2 billion-dollar hit on emissions scandal. Los Angeles Times.
In 2015 the United States Environmental Protection Agency brought suit against German carmaker Volkswagen in the United States District Court of San Francisco after finding that the
that many cars from VW had a software device purposefully installed to cheat emissions tests. This “defeat device” enabled the car to auto-detect when it was being tested for emissions and allowed it to skew results. The EPA discovered this ethical production breach in an investigation opened in October 2015. VW representatives have since admitted to cheating on emissions tests in the United States. The EPA found that 482,000 cars in the United States have the device implanted. But outside the United States the number is as high as 1.1 million cars. The EPA has also accused VW of implanting this device in their other car brands, including Audi and Porsche which may total an additional 10,000 vehicles. In December of 2015, VW announced further that 800,000 cars in Europe may have irregularities in their carbon emissions tests, suggesting a more expansive problem worldwide.
The device that VW implanted is, according to the article,quite sophisticated. The software was able to sense when an engine was being tested on auto safety rig, and would place the engine in a type of safety mode which made it run slower than normal. Under normal conditions, the EPA found that VW's engines emit nitrous oxide pollutants up to 40 times what is normally allowed in the United States by regulatory standards.
As a result of this embarrassing and serious ethical violation, Martin Winterkorn, then company's CEO (who has since resigned) said his company had "broken the trust of our customers and the public". (Associated Press 2016).
3. Cohn, Meredith (2016, May 18). John's Hopkins medical students will no longer training using live pigs. Baltimore Sun.
This article reports that the preeminent United States medical school at Johns Hopkins University in Baltimore, Maryland has announced it would cease using live pigs to train medical students. All other medical colleges in the United States and Canada now ban the use of pigs and other animals to train medical students except for University of Tennessee's Health Science Center’s College of Medicine in Chattanooga.
Up until about 10 years ago, most medical colleges used live pigs in medical training. As technology has grown more sophisticated, animal rights groups continued their fight against this practice across the United States and Canada. The most important activist group in this campaign is the Physicians Committee for Responsible Medicine who seek to band the use of animals in training as one of their central issues.
This article represents the way outside stakeholders can influence organizations to reform their own internal ethics policies. The practice of animals in medical school training is not illegal in United States and Canadian jurisprudence. Relevant statutory laws regarding animal use in training apply only to cases where animal cruelty can be found. The physicians committee sought multiple avenues over the years to force Johns Hopkins university administrators to band this practice from their curriculum. They waged public protests with lines of picketers and petitions signed by doctors and medical professionals. The article mentions also that the group sought legal recourse as well by attempting (unsuccessfully) to have Baltimore City prosecutors open an investigation into the medical college on the grounds that the practice was in violation of state animal cruelty laws.
4. Shatter, Raphael (2016, May 24). French raid Google over 'Tax Fraud' allegations. Associated Press
This article reports on a French government investigation into Google for suspected tax fraud violations. The financial prosecutor in France administered raids in cooperation with police anti-corruption units as well as 25 experts of Information Technology in the third week of May 2016. News reports indicate the raid involved over 100 investigators entering Google offices at dawn in a dramatic scene.
Google is accused of committing tax fraud and money laundering schemes on French soil. In particular, investigators believe that Google has violation nation state laws by permanently establishing its Ireland subsidiary, Google Ireland Ltd in France. When doing this, the French government suspects that Google has not declared the business activity of Google Ireland's operations to French authorities, even though it has operated the business on French soil. This allegedly has allowed Google to under-report its tax obligations, specifically with regard to the corporation tax as well as the value added tax. (Associated Press 2016). Google and other technology companies from America routinely seek strategic ways to avoid taxes while doing busines in Europe. The Associated Press reports that Ireland or Luxembourg ( low-tax jurisdictions is often chosen as the place to set up shop and do business on the Continent. This is a technique termed as 'profit-shifting' (Associated Press 2016). Regulators in the European Union have made increased efforts to pressure multinationals to pay the taxes in the jurisdictions where their firms operate.
The alleged accusations against Google highlights the issue of tax avoidance with respect to the ethical responsibilities of organizations. On the one hand, companies should seek to minimize their tax liability as a part of good governance. This may involve using whatever tools and instruments made available by the government. Tax planning overlaps with a legally and ethically questionable area of tax avoidance, however. Tax avoidance may involve aggressive bending of the rules of the system to get the best tax deal possible but it is still legal. Tax evasion is unlawfully avoiding taxes. Google has been investigated by French authorities for tax evasion. However, there is a strong case to make that tax avoidance is equally unethical when considering the issue of corporate social responsibility. Companies profiting from a nation or community are ethically required to pay all legitimate taxes in order support the funding of public programs for that community like healthcare, education. Tax avoidance (as well as evasion) can also pose long term damages to the reputation of a company, making it seem as greedy and selfish which in fact can hurt profitability in the long run.
5. Shear, Michael D. (2016, May 19). Federal Judge in Texas Demands Justice Dept. Lawyers Take Ethics Class. New York Times.
This is a recent news piece which concerns a Federal Judge publicly condemning Justice Department attorneys in the United States during a court case in Texas concerning a federally implemented immigration program. Judge Hanen, from the bench of a federal courtroom , I Brownsville, Texas, accused Justice Department attorneys of lying to him during the case and banned them from his courtroom. His 28-page ruling also ordered the attorneys to attend a 3 hour ethics class every year for the next five years. This condemnation came in the aftermath of the executive branch illegal implementation of an immigration program which Judge Hanen had issued a temporary hold on in February 2015.
In an organizational context, the United States Justice Department is a part of the federal executive branch of the government of the United States and is responsible for enforcing federal laws. In a court of law, Justice Department attorneys, thereby represent the interests of the federal government and federal judges are appointed to varying levels of the federal court system. The federal government and in particular attorneys by nature are held to an extremely high code of conduct for their profession in order to attain and maintain a professional license. It is atypical for a Federal Judge Hanen to publicly chastise Justice Department attorneys for what he cited was egregious conduct is a case of internal ethical policing within the organization. Organizations such as the federal government have arguably the highest requirements for ethical conduct as they are ones upholding the integrity of the legal framework as an institution.
References
Associated Press (2016, April 22). Volkswagon to take $18.2 billion-dollar hit on emissions scandal. Los Angeles Times. Retrieved from http://www.latimes.com/business/autos/la- fi-volkswagen-emissions-20160422-story.html
Anderson, L.V. (2016, May 19). Ethics compliance training is a waste of time. Slate Magazine. Retrieved from http://www.slate.com/articles/business/the_ladder/2016/05/ethics_compliance
Cohn, Meredith (2016, May 18). John's Hopkins medical students will no longer training using live pigs. Baltimore Sun. http://www.baltimoresun.com/health/blog/bal-johns-hopkins- stops-training-with-animals-story.html
Shatter, Raphael (2016, May 24). French raid Google over 'Tax Fraud' allegations. Associated Press. Retrieved from http://www.courthousenews.com/2016/05/24/french-raid- google-over-tax-fraud-allegations.htm Shear, Michael D. (2016, May 19). Federal Judge in Texas Demands Justice Dept. Lawyers Take Ethics Class. New York Times. Retrieved from http://www.nytimes.com/2016/05/20/us/andrew-hanen-immigration-texas-court.html_r=0
