Thinking Ethics

Green house - too cool!

It's about growing instead of building your home - this is like sooooo cool! Researchers at MIT call the house the Fab Tree Hab and believe it will take a minimum of five years to grow a 2-storey water-recycling, energy-efficient abode. They plant seedlings and then shape the trunks and branches as they grow to create the exterior walls and roof. It is powered by solar energy and wind turbines. The ultimate organic tree house! More from the MIT's Spectrum here, and good article in the Calgary Herald.

Ethical guidelines for word of mouth marketing

A few years ago I subscribed to a rather amusing, and sometimes useful newsletter called gaspedal written by Andy Sernovitz. It covers "unusually useful ideas for smart marketers" under the caption "Damn! I Wish I'd Thought of That!" He fell off the radar screen for a while, but I was pleased to see that he is back. The latest newsletter tells us that he has just written a book, Word of Mouth Marketing", has opened his blog, will be teaching a Summer course on integrated marketing at Northwestern University, and has helped launch the Word of Mouth Martketing Association. They have an incredibly useful site that can be used as a ressource for ethics in marketing. It is split up into four parts: The WOMMA ethics code, the ethics assessment tool, ethical blogger contact and ethics adoption guidelines toolkit. Links here

More Say on Executive Pay

Another shareholder meeting voted to give shareholders a say (advisory) on executive compensation. Verizon is the latest of about 20 US quoted companies that has seen their shareholders demand a vote on executive pay. Now called "Say on Pay Proposals", these initiatives are gaining ground,and the House of Representatives has already passed a bill in this direction. Great Britain, Australia and Norway (only for companies where the government owns a big stake) already have this type of legislation in place. Other countries are talking about it.

I don't believe shareholders actually want to take the setting of executive compensation away from the board of directors. But they want more explanations. Usually, while setting the pay of the top executives, the compensation committee of the board asks for a benchmark of the compensation of the other companies in the same market segment or/and of the same size. These benchmark studies are provided by executive search companies who have every interest in the compensation rising, as they are paid a percentatge of the salary of the new hires. Most people thought that added transparency would rein in the pay rises. What it does sometimes is created a demand from executives that they be aligned with the top of the market. And so a rising tide raises all boats. The idea of Say on Pay Proposals, is that if the shareholders believe the pay packages are excessive, they can show they displeasure in a vote - which gives a strong signal to the compensation committee. And when really unhappy, they chose to vote against the reelection of the directors on this committee (as in the case of Novartis this year).

I don't know where all this is going to end, but there are 24h in a day and although people are not interchangeable, they are also not irreplacable. I think some self-restraint on the part of the CEOs might be a welcome trend. New editorial in the New York Times here.

Green building

The Eawag, the Swiss-based aquatic research intitute, inaugurated in the Fall of 2006 their new building - the Forum Chriesbach. The building consumes 4 times less energy than a minimal specification building and functions without conventional heating and cooling systems. They also have developed and are doing research on an innovative sanitary system - the NoMix toilet - which has urine separation and rainwater flush. More

A call for more whistle-blower protection

It is common knowledge that the current Bush administration has been hard on whistle-blowers, going against the law by pretexting security or something. Nothing should excuse bad behavior, and regardless of where you are working, the law should apply to all. Apparently, 4 inspector generals are under investigation for persecuting/punishing/re-assigning whistle-blowers. A call for action and a description of a case in the Department of Commerce where Mr Johnnie Frazier is one of the inspector generals under investication in this New York Times editorial.

Politics as usual

The democrats got power in Congress during the last elections on the basis of their position on the war in Irak, and their stance on ethics - particularly on reforming the rules on lobbying. It seems that now that they are looking at becoming the beneficiaries of the system, they are somewhat less keen on changing the rules. The watering down of their intentions is described in this editorial from the New York Times entitled "The Hollow Promise Reform Act".

Limits to free speech ?

The Open Net Initiative has announced an increase of government online surveillance. From only 2 governments filtering content in 2002, they have found evidence of state-mandated net filterning in 25 countries out of 41 surveyed. The reasons cited in the BBC article are politics and power, security concerns and social norms.

I agree that there is a lot of dubious material on the net, some of it in bad taste, some of it maybe even dangerous. But I object to somebody else telling me what I can and cannot read. The worrying part of this expanding government control of cyberspace is that this is just a step away from limiting freedom of speech.

The greening of the UN

The UN Headquarters in New York, built in 1949-1950 is going to be renovated in the period 2008-2014 for a cost of 1.9 billion dollars following a capital master plan, and the buildings will then meet or exceed the "green standards". That is, if they do not move the goal post by 2014...

Full article in the New York Times under "UN Headquarters Refurbishment Aims to Meet "Green Standards"."

New Director of UN Ethics Office

Robert F. Benson, a Candadian lawyer with extensive experience in governmental ethics, has been appointed Director of the UN Ethics Office as of May 1, 2007. The post was created by the previous Secretary General to administer financial disclosure and whistleblower policies. Press release here.

Fourth sector

In an article entitled "Businesses try to make money and save the world" published in the New York Times, Stephanie Strom makes the point that some organizations are trying to mix social purpose and financial promise, and gives several examples of traditional companies going the responsible investment route, and several charities being more aggressive in their investments - and calls this the fourth sector.  She asks the question - are these still for-profit businesses and nonprofit fund-raising machines? I think she is on to something - we are seeing more and more of these hybrid organizations. You can't simply classify institution under government, business and non-profit anymore - there seems to be convergence with companies trying to be socially responsible and acting for the common good (companies are at different stages along this path), and non-profit institutions concentrating on efficiency and good use of funds. Pretty soon we will be seeing all kinds of rankings on both sides to measure how good they are, and how much progress they are making. So I would argue that in very short order this will no longer be the fourth sector, but the mainstream.