Diversity in diversity management

You may remember that in one of our posts last month we asked what exactly made women different in a business ethics context. One of the big issues here is the "glass ceiling"that hinders women from getting to the top of the corporate ladder. Discrimination is often invisible but incontrovertible to those that encounter it.

To be sure, this is a problem faced by women everywhere, but at the same time, such institutional discrimination also varies quite significantly between countries. In our business ethics book, we reported on evidence of female held directorships in Europe - where female representation in the boardroom ranged from 0% in Portugal to 29% in Norway. So it was with some interest that we read in the Financial Times last week about evidence emerging of female board memberships in the Gulf region - an area not traditionally known as a leader in diversity management.

The picture painted by the report is of a region that, in terms of diversity management, demonstrates much like Europe quite a bit of, well ...diversity. Some Gulf countries are actually emerging as leaders in the region, with women making up 2.7 per cent of boards in Kuwait, and 3% in Oman. This not only compares favourably to other Gulf states, such as Abu Dhabi (0.6%) and Saudi Arabia (0.1%), but also stacks up pretty well against other ostensibly less conservative countries such as Italy (2%) and Japan (0.4%).

Of course, board memberships do not tell the whole story about gender discrimination in business, but it certainly gives a good flavour of the types of challenges facing women looking to secure advancement to the executive suite. So it's good to see some progress being made in the Gulf, and hopefully will act as a further spur for laggard countries in Europe and elsewhere. Who knows, perhaps even Italy's womanizing PM, Silvio Berlusconi will be able to prompt a greater attention to gender among Italy's boardrooms, especially having appointed the former model and (as the media puts it "ex-showgirl") Mara Carfagna, as Equal Opportunities Minister (pictured right).

But whatever progress is made in Italy or Kuwait, though, such countries will still remain far, far behind the leaders in female board membership. Right now, the place to go for high flying women is Norway, where women now make up 40% of board positions. But we're not talking voluntary social responsibility here; Norway's female friendly pattern is a result of good old fashioned regulation. As the International Herald Tribune reported a couple of months ago, it's not been a easy transition for Norway, but with appropriate mentoring, training schemes, support mechanisms and enforcement, a genuine change in attitudes seems to have accompanied the 2003 law that forced Norwegian companies to fill 40% of board seats with women. Such positive discrimination isn't always popular, but as the chart from the IHT shows, it certainly makes a difference.

Getting an ethics fix

This week’s blog is a bit late. Sorry, but there is an excuse: Crane and Matten have recently been introduced to the TV series ‘The Wire’ and, though we are somewhat behind the rest of the civilized world in this, have been avidly watching the third season on DVD. This stuff is so addictive that one of us even managed to watch all 12 episodes in 2 ½ days. Well, sometimes you need to stop writing, and just starting watching…

The Wire is set in Baltimore and introduces us to the world of drugs, smuggling, crime, dodgy police and sleazy backroom local politics. As far as we’re concerned it’s probably one of the best TV serials ever made. The storylines are gripping, the plot credible and the acting is just superb. Each series operates between two ‘camps’. ‘The Law’ is basically the police, prosecutors, lawyers and local politicians. On the other side, there is the ‘The Street’: the local drug trade, constituted by various rivaling gangs.

There are many reasons for the popularity of the show, one of which is the apparent amorality with which the two camps are displayed. Unlike in many standard cop shows, the ‘good guys’ are actually not quite that good. And the ‘bad guys’ are even at times fairly decent: despite the drug dealing and murdering, there are strict rules, very clear notions of fairness and an honor code among the gangsters. Most of all, nearly all characters are so likeable. If bad things happen, they are mostly the result of ‘the system’ – be it the police bureaucracy, politics or the power relations within and between gangs.

Now – some of you might be wondering by now what all this has to do with business ethics – or if it does, why Crane and Matten can’t even have the least bit of fun without bringing their ethics perspective into everything. Fair enough, so let us just say this much: ‘The Wire’ is absolutely superb if you want a lively laboratory of what we call ‘context related factors’ in ethical decision making (Chapter 4 of our business ethics book). The show gives a pretty vivid account of why it is that normal people end up doing some pretty bad things. This is what the Stanford University psychology professor Philip Zimbardo (of the infamous Stanford Prison Experiment) calls the ‘Lucifer Effect’ in his latest book: how personal morality is fundamentally shaped by social context.

And, besides, the link to business here is by no means artificial either. Stringer Bell, one of the gang leaders in the Wire, is actually doing a business degree part-time in the show, and he brings to bear some of the lessons from the classroom to his business on the street. Mind you, we doubt that he’ll have spent much time in any ethics classes. But that’s a shame. Not only could he have learnt more about why ‘The Street’ and ‘The Law’ behave the way they do, but he could also have provided us with some knowledge in the other direction. As some of our European colleagues have discussed recently, we can learn a thing or two about CSR from the way that organized crime outfits like the Sicilian mafia offer very instrumentalized forms of philanthropy to survive and flourish in governance vacuums. Oh, yes, but that was another show…

Time for multinationals to step up to the mark in Burma

The debate about the role of multinational corporations propping up Burma's oppressive regime has been a long and fractious one. It's something that we in have discussed in our business ethics book, and which has been widely documented elsewhere. But with the country suddenly in the midst of a huge natural disaster that has already claimed some 22,000 lives, now is clearly the time to go beyond debate and for any companies still doing business there to start rolling up their sleeves.

Many commentators have claimed that Wal-Mart's major ethical turning point came when it launched a massive aid operation in the face of the Hurricane Katrina disaster in 2005. So is Cyclone Nargis going to be the catalyst for any of the hundreds of multinations doing business with Burma to demonstrate some concrete proof that their business links can bring positive social benefits to the Burmese people? After all, the common argument used by companies involved in Burma is that they can benefit ordinary people more by investing there than divesting. So this is a real opportunity to finally show the world that this whole argument is more than just a lame excuse for profiting from human rights abuses.

The International Trade Union Confederation (ITUC) latest list of companies doing business with Burma includes Caterpillar (USA), China National Petroleum Corp. (CNPC), Daewoo International Corporation (Korea), Siemens (Germany), Gas Authority of India (GAIL), GlaxoSmithKline (UK), Hyundai (Korea), and Total (France). If anyone is going to be having a Wal-Mart moment in response to Cyclone Nargis, surely it should be one of these. For once, a bit of "disaster capitalism" could actually do some good.

Good news from China

We have been talking about China quite a bit recently. Not only on this blog, but also in numerous discussions and emails with our current and former students, various issues around the Olympics have come up. One of the sentiments voiced particularly by our Chinese readers was that it is quite hard to be Chinese these days. With all these critical questions asked about the politics of the country the debate can all too easily sound as if it is about bringing an entire country and its people wholesale into discredit.

Believe us, with one of the authors of this blog coming from a country with quite a notorious legacy in the 20th century, we can empathize with that feeling. Therefore, the more we are happy to report some interesting news on China and business ethics this week.

On Thursday, it was front page news in the New York Times that Chinese authorities successfully broke up a child labor ring in southern China’s Guangdong Province. More than 100 children between 13 and 15, often kidnapped from other parts of the country, were liberated from ‘captive, almost slavelike conditions and minimal pay’.

The article demonstrates a growing concern for human rights among Chinese authorities. It also provides an interesting perspective on the ethical issues involved. One factor is the sheer size of the country, which makes it tricky to enforce even the best intentions of the central government. Furthermore, it highlights that despite China’s economic boom, considerable parts of the population are still living in relative poverty and that cheap labour from rural China is in much demand from coastal regions feeling the pinch of rising costs.

These things take time, as we in the west should know all too well. In our business ethics book (p.298) we discuss Tom Donaldson’s argument that in applying human rights to a situation, the general context of economic development has to be taken into account. One or two centuries ago, European or North American children indeed played a key role in contributing to the family income, just think of Charles Dickens’ novel ‘Oliver Twist’.

The article also puts this governmental crack down in the context of the Olympics. As unpleasant as all this international criticism might be – it obviously has an effect. And as predicted earlier in our blog, businesses are in the front line if it comes to the locus of change. Perhaps most heartening of all though is that details of the child labour ring were uncovered by the Chinese media, not the usual suspects from overseas.

During the cold war, progressive political leaders such as the famous Willy Brandt were vilified for their ‘change through rapprochement’ politics between West and East. Arguably, by hindsight this was a key element in bringing down the Iron Curtain. It seems that with China, the same strategy might work. That’s why hosting the Olympics, maintaing close economic ties, and encouraging media freedoms, could be key for the journey ahead.

On a more personal note, Crane and Matten had other good news from China this week. Brokered by one of our students, a leading Chinese University Press has taken up discussions with our publisher to prepare a Chinese translation of ‘Business Ethics’! We keep you posted on these developments. But no promise yet that we will ever master a Chinese blog for that one…