Business-Ethics Stories Prominent In Global Coverage

Dec 10th, 2012 ? Posted in: News

British employees say they are feeling pressure to cut ethical corners during recession; Wall Street Journal looks at ethics of granting pay raises to execs of companies headed for bankruptcy; many U.K. investors protest that ?ethical? investment funds often are ethical in name only

LONDON and NEW YORK

Developments at the intersection of business and morality were the subject of several headlines last week. Among them:

• The recession is apparently prompting U.K. employees to take ethical shortcuts, reports the London-based Guardian. A report from the Institute of Business Ethics says 84 percent of British employees indicate that they work honestly ?always or frequently,? but 9 percent say they have been pressured to compromise their ethical standards. Eighteen percent say there is an ?unethical culture? prevalent within their organization. A fifth of British employees say they have witnessed unethical acts, but of them only half say they reported it, notes the Guardian.
• Relationships between management and workers at the troubled Hostess Brands, Inc., began to sour months ago after workers learned executives received pay raises shortly before seeking bankruptcy protection, reports the Wall Street Journal. The Journal reports that such practices are common and often stir emotions, but are not entirely clear-cut in terms of ethics. On one hand, ?financially ailing companies often pay bonuses and other compensation to executives, directors, and private-equity owners in the months before filing for bankruptcy protection. Federal law restricts ?retention? bonuses paid to such ?insiders? after a bankruptcy case is filed but not before,? notes the Journal. ?Companies often say they are using their best business judgment when paying bonuses to executives who are working overtime to keep operations afloat. A firm?s fate often isn?t known when bonuses are paid, and companies argue they must motivate some executives to stay lest they suffer exoduses that further destabilize troubled situations.?
• Angry investors are dumping some ?ethical? funds after concluding that not all funds so labeled are really that good, according to a report from Investors Chronicle, a publication of the Financial Times group. The Chronicle writes: ?Independent financial advisers claim the ethical investment market, which has almost trebled in size over the last decade, is clogged with a growing number of ?disillusioned? investors who have bought the funds while under the impression they are more ethical than they are in reality.? Morley reports that a recent study by FairPensions, a charity that promotes responsible investment by pension funds, claimed that almost half of ethical funds fail to fully disclose their investments.

Sources: Investors Chronicle, Dec. 8 ? Guardian, Dec. 7 ? Wall Street Journal, Dec. 3.

For more information, see: Related Newsline story, Dec. 3 ? Related Newsline story, Nov. 26 ? Related Newsline story, Nov. 19 ? Related Newsline story, Nov. 19 ? Related Newsline story, Nov. 12.

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Source: http://www.globalethics.org/newsline/2012/12/10/business-ethics-48/

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