Tough Decisions Made By Uber, Starbucks, Microsoft, Etc. Foretell Of Future Risk And Compliance Challenges

In the past two weeks, we’ve seen Uber’s CEO respond to public criticism by stepping down from President Trump’s advisory council; Starbucks garner public support and condemnation after promising to hire 10,000 refugees; and tech giants including Google, Apple, Facebook, and Microsoft rally together to oppose the President’s recent immigration ban. In the past month, we also saw SeaWorld finally curtail its killer whale shows in California after prolonged public pressure, and artificial intelligence experts continue the contentious debate on driverless car morality.  

Executives are making very complicated moral decisions in the face of increasingly difficult situations in order to protect themselves, their stakeholders, and their brands. For anyone involved in business ethics, corporate behavior, risk management, and compliance, the world is getting more challenging and more fascinating all the time.

In our latest governance, risk, and compliance report, GRC Vision 2017-2022: Customer Demands Escalate As Regulators Falter, we examine the most critical trends that will transform risk and compliance roles over the next five years, many of which are playing out in the public eye every day:

1) Regulators have always been playing catch-up, but now they're not even running the same race (lacking legal schemes and expertise to oversee new technology and business models.)

2) Customers are putting more pressure on companies to change than regulators (whether your company sells to consumers, businesses, government, or institutions, the questions are getting tougher).

3) With nearly 90% of S&P 500 corporate value tied up in intangible assets, the costs of damaging reputation is usually far more than the cost of regulatory fines or other losses. (e.g. Yahoo, Chipotle, Samsung, Wells Fargo)
 

Bottom line, executives are finding themselves having to take a stand on extremely difficult issues, without (or even in violation of) a legal framework for such decisions. Risk management and compliance pros are well-positioned to foresee these ethical dilemmas before they arise and help prepare their companies to whether the storm, and this report offers practical recommendations to do just that. It won’t be easy, but the idea that political, legislative, and moral questions require painstakingly careful consideration is not a new concept.

Truths that form the basis of political and moral science are not to be discovered but by investigations as severe as mathematical ones… They are not to be forced into detached and general propositions, unencumbered with explanations and exceptions. They will not compress themselves into epigrams… Labor, the inevitable lot of humanity, is in no track more inevitable than here.” 

Jeremy Bentham, An Introduction To The Principles of Morals and Legislation, 1789

 

As always, I welcome your comments and questions.

Comments

Bentham quote

Love the closing quote from Jeremy Bentham.

Great post, pointing out incredibly difficult challenges.

I think this ties well into the fact that brands are now aligning themselves more closely with social and political values, as discussed by Jim Nail here:

http://blogs.forrester.com/jim_nail/17-02-06-super_bowl_li_lackluster_br...

Not really moral or ethical

Great post sir with some very pertinent points, well made. My only slight issue is with the view that executives are making moral, or ethical, decisions. I fear that the decisions are purely commercial- even if cloaked in genuine concern.

I look forward to seeing more discussion/analysis through the lens of ethics.

Thanks for weighing in. I

Thanks for weighing in. I agree that these decisions are commercially-driven. Investors demand as much. My aim was not to evaluate whether these decisions represent "good" or "bad" moral judgement but instead to point out that the issues companies are facing have increasingly significant and more complex moral implications (and are decreasingly likely to have established legal guidance or precedent).

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