2020: A Year of Ethical Challenges
If ever there was a year that challenged corporate leaders on their commitment to business ethics, 2020 was the year. The number of difficult issues facing corporate leaders were challenging and ran the gamut – from health and safety concerns, to business continuity, and to economic disruptions and lay-offs or reductions in force.
Even outside the organization, social concerns, supply chain management and community needs were larger considerations for many companies facing the impact of COVID-19. If you add to this mix, the social and political context with a struggling political system and racial justice issues, and the year looks more than challenging for business leaders.
Ethical business decisions require a broad focus — much more than bottom line profitability concerns. Business leaders were forced to address serious organizational concerns surrounding the safety of the workplace and potential working from home solutions.
Depending on the business, the disruption from moving to a remote, home-based workforce was significant. Manufacturing companies, as one example, faced serious challenges in relying on a workforce that may be exposed to serious virus and safety concerns. Companies wanted to continue operating, if possible, in response to continuing or increasing demand, but real workplace safety concerns may have restricted production capabilities.
Companies had to develop safety protocols, assess the risk of these protocols and then determine the economic impact on their operations. This, in turn, had a real and dramatic impact on workforce levels.
CEOs faced a real challenge – how to communicate honestly about the imp[act on the company and the workforce? Airbnb’s CEO demonstrated an open and honest approach with a letter to the workforce and continuing communications. This approach is a great example of real leadership.
Businesses that were labeled as “essential” (e.g. food stores) faced significant challenges. On the one hand, the public depended on continuing food supply but companies had to ensure the safety of their workers and their supply and distribution partners. The potential impact of economic disruption surrounding essential businesses was real.
Again, the ethical business decision framework was helpful in focusing analysis. A stakeholder view of the issues has to include a business’ community, public need, worker protection and reputational concerns. Food stores navigated these issues with delicate balances and appear to have done so with a positive result. In many cases, food store employees were thanked for their continuing commitment to the public in maintaining food supplies.
In some cases, business (such as restaurants) faced real challenges in protecting their workforce from economic dislocation. We have all observed many small businesses forced to close. Some, on the other hand, which had access to insurance may have been able to continue to pay employees during the most difficult times of the pandemic. In those cases, employees may return to work without suffering significant economic harm with a renewed loyalty and appreciation of their business owners.
These are all optimistic and positive occurrences. Of course, this is not the entire story. Many businesses were forced to close, and a large number of employees have lost their jobs, resulting in real harm. The fact that 1 in 6 families in the United States are suffering food challenges is untenable for our country. While companies can do the best they can under these difficult times, federal and state governments have to fill in the need in these situations.
Unfortunately, we have witnessed a major failure in our government response. The impact of this failure is not yet fully understood and hopefully measures can be taken to remediate this continuing problem. Whatever safety net may have existed before, it is clear that there are serious problems with the current operation from the COVID-19 impact and a failure of our political leaders to respond in a meaningful way.
Business leaders have to recognize the new reality – we have suffered and are continuing to suffer from a global pandemic that had devastating impact on our economy and our national spirit. It is important for businesses to take this new reality into account as we dig out from the pandemic’s impact and roll out the vaccine. Ethical business decisions are still required but the factors and balancing of considerations, stakeholders’ needs, and societal influences are always changing. Hopefully, business leaders will respond to this new reality.
[…] 2020 was a year of ethical challenges. Mike Volkov explains in Corruption Crime and Compliance. […]