Top 10 Corporate Responsibility Stories of 2012

This year may have lacked the huge catastrophes that have dominated the corporate responsibility headlines of the last couple of years (such as BP's oil spill in 2010 or TEPCO's nuclear disaster at Fukushima in 2011), but 2012 has probably been more packed with serious incidents than any of the previous years. We had real trouble putting these in any kind of order and even getting down to just a top 10 of big stories was tough  - and meant we had to jettison a few favoured good news stories about corporate responsibility just to be able to capture all of the bad news. So it nearly became the Top 15 Corporate Irresponsibility Stories of 2012. But in keeping with tradition, here's our view of the top 10 of the highlights and lowlights of a jam-packed year of corporate responsibility stories. And if you think we've got it wrong, or want to change up the order a bit, do add your comments below.

1. Apple's supply chain odyssey
If there is one thing that seems to be guaranteed now, it's that the tech giants will be at the forefront of the corporate responsibility agenda for the forseeable future. If nothing else, it's simply a function of their size, power and ubiquity. In 2010 we had Google facing human rights issues in China; last year was Facebook's privacy battles. And this year, Apple's ongoing supply chain issues really exploded into the public consciousness, thanks in part to the New York Times stories that kicked off the year. Worker suicides, factory fires, poor labour conditions - none of this was exactly new, but one way or another 2012 saw Apple take over from Nike (and tech take over apparel) as the poster child of inhumane supply chains. Apple reacted fast once the tide had turned, but for many it was too little, too late. Even their own internal audits provided evidence of widespread breaches of their policy. As the bad news rolled in, the company that so-often seemed immune to criticism started to show signs of serious reform. Instead of secrecy, it started moving towards greater transparency, joined the Fair Labor Association and initiated third party inspections, and now reports monthly on the working hours of over a million workers. In what may turn out to be the most significant move yet, the company has begun manufacturing some of its Macs not in China, but in the US.

2. The LIBOR scandal
2012 was a bad year for a finance sector that seems increasingly incapable of holding onto whatever public trust is left after the financial crisis and its aftermath. Whilst the US regulators' continued clampdown on insider trading gained yet more scalps, most prominently former McKinsey head Rajat Gupta, it was the arcane field of inter-bank lending rates that dominated the financial front pages. Most of us probably didn't even know what a LIBOR was until this year, but revelations of deliberate fixing of interest rates among major banks in Europe during the late 2000s means that we all now know more than we want to. First, the CEO of Barclays was forced to resign in the wake of investigations by UK regulators. Now, the Swiss bank UBS has agreed to pay $1.5bn in fines to the Swiss, UK, and US regulators for manipulation of interest rates that according to Britain’s Financial Service Authority, was so “routine and widespread” that “every LIBOR and EURIBOR submission, in currencies and tenors in which UBS traded during the relevant period, was at risk of having been improperly influenced to benefit derivatives trading positions.” Investigations continue, and it is clear that other banks and possibly brokerages will be drawn into the fray. Perhaps the major legacy of the scandal though will be the startling picture it has provided us of the "horribly rotten, comically stupid" alternate moral universe that traders inhabit.

3. HSBC's money laundering fine
If the LIBOR scandal wasn't enough, HSBC's record breaking $1.9bn settlement with US regulators for money laundering in Mexico really capped a year that demonstrated how readily financial services companies could deliberately flout the rule of law, and bypass their own control systems with impunity. The HSBC settlement followed similar (though smaller) money laundering settlements against foreign banks including ING and Credit Suisse. What was particularly remarkable with HSBC was the fact that despite having strong evidence the authorities elected not to indict the bank out of fears of possible financial collapse.  The message? Four years on from the financial meltdown, some financial institutions are still too big to fail ... but their licence to operate looks increasingly at risk.

4. Bangladesh factory fire
The death of 112 workers in the Tazreen fashions factory fire of November marked probably the saddest moment for corporate responsibility in 2012. It also provided a powerful reminder that the global apparel industry still had not got its house in order regarding working conditions in the product supply chain, despite two decades  of codes of conduct and factory audits. Tazreen was making clothes for global brands such as Wal-Mart and Sears, who remarkably did not even know that their products were being manufactured there. All in all, a devastating wake-up call for the world of supply chain monitoring.

5. Lonmin mine shootings
Described by the BBC as the bleakest moment faced by South Africa since the end of Apartheid, the shooting of 34 striking miners by police at the Lonmin Marikana platinum mine demonstrated the escalating difficulties of doing business in the global mining industry and in an increasingly fractious South Africa in particular. Lonmin tried to remain above the security crisis, which in total claimed some 44 lives, but a company that not so long ago had the highest CEO:average worker pay gap on the FT 100, operating in one of the most unequal countries on the planet was bound to breed resentment.  Unfortunately the more fundamental reform required to significantly ease the tensions at Marikana looks unlikely.

6. Wal-Mart's Mexican corruption scandal
Wal-Mart wasn't the only company put under the corruption microscope in 2012. Canadian engineering firm SNC Lavalin, among others, was another high profile casualty of increased vigilance among national prosecutors. But the Wal-Mart de Mexico story makes it into our top ten a) because it marked such a sudden reversal of fortune for the company after its much vaunted CSR makeover of the past few years; b) because retail, unlike construction, is rarely a site for major bribery.  Many of the facts are still to come out, but a devastating investigation by the New York Times points to Wal-Mart's Mexican business being a "an aggressive and creative corrupter", systematically using bribery to obtain store permits for its rapid expansion and subverting democratic processes and regulatory safeguards in the process. Critically, the company was also found to have deliberately hushed-up the problem to protect its burgeoning reputation, closing down an internal investigation in 2006, and failing to report any of the illicit payments to the authorities. Suddenly all those nice sustainability initiatives don't look quite so pretty.

7. The BBC's Newsnight sex abuse fiasco
With the fallout of the News International phone hacking scandal still very much a part of the UK media landscape, the last thing the sector needed was a scandal at the most trusted media organization of them all, the BBC. But when the 2011 decision to terminate a Newsnight investigation into sex abuse claims against the recently deceased, former BBC presenter Jimmy Saville came to light this year, it because clear that something was wrong at the redoubtable British media organization. It was left to a rival broadcaster to finally break a story that has since become probably the largest serial sex abuse case in UK history. The BBC then spiraled further into disaster when Newsnight broadcast sex abuse claims against an unnamed senior establishment figure that were very quickly discovered to be untrue. The Director General of the BBC resigned amid the panic and confusion whilst a subsequent report into the BBCs handling of the Saville investigation labelled the organization "incapable and chaotic" with a culture of distrust. It's better than "immoral and deceitful", but hardly a ringing endorsement of responsible management.

8. Starbucks' "voluntary" tax payment.
After bubbling away for a few years, 2012 was really the year that tax justice broke into the mainstream consciousness. Campaigners have targeted various companies over the years, but when the spotlight fell on Starbucks, along with Amazon and Google, for their failure to pay tax on millions of dollars of profits in the UK, activists, politicians and consumers called for change. Not that any one suggested that any of the companies had broken the law, merely that such aggressive tax avoidance didn't align with many people's conceptions of fair play. Starbucks' offer to make a "voluntary" payment of $30m to make up for the shortfall suggested that they could read the message in the coffee grinds about where the debate was headed - towards greater expectations placed on companies to be "good citizens". But clearly the onus is also on politicians to beef up the rules ... rather than just criticize companies who are able to take advantage of their shortcomings.

9.  The Super PAC election
The US election was one of the big news stories of the year, and one of the main corporate responsibility issues swirling around the election was about the role of corporate money in politics. This was the first US national election since the 2010 Citizens United legislation which effectively removed any cap on political donations by companies. No surprise then that the election was the most expensive in history with corporate money aggressively channelled to candidates through super PACs (political action committees). Even though this was expected to benefit former hedge fund boss Mitt Romney, Obama came out ahead, perhaps demonstrating that money can't always buy elections. But when even the Harvard Business Review blog starts carping on about getting corporate money out of politics, you know that a tipping point could be fast approaching.

10. BP oil spill aftershocks
Just because it was our no.1 story two years ago, that doesn't mean the BP oil spill isn't still telling us something new about corporate responsibility. This year, we saw the company slapped with a record $4.5bn fine from the US Justice Department after it admitted to criminal responsibility for the explosion that led to 11 deaths on the Deepwater Horizon well. The company could still face a bigger fine following a civil suit for the damages caused by environmental pollution. But maybe the most significant aftershock of the spill was the decision by the US Environmental Protection Agency to suspend BP from bidding for federal contracts over their "lack of business integrity". Although it's still unclear how long the suspension will last, this suggests a potentially significant shift in the government's strategy for dealing with irresponsible companies. Or maybe it just means that BP didn't get its lobbying strategy right!


Photo copyright meteo. Reproduced under Creative Commons Licence

Four reasons why we're so hard on our leaders' ethical lapses

The list of prominent leaders being turfed out of office for ethics violations seems to be growing at an exponential rate. Here in Canada, Toronto mayor Rob Ford's ouster this week for breaking conflict of interest rules is no less than the third Canadian city major to bite the dust this month due to questions of integrity (the others, Gerald Tremblay of Montreal and Gilles Vaillancourt of Laval both resigned without admitting any guilt in face of corruption investigations).

 In the last month we've also seen the Director of the CIA in the US, David Patreus resign due to an admission of "extremely poor judgement" in conducting an extramarital affair. The same week, the incoming CEO of the multinational defense company Lockheed Martin resigned over "a close personal relationship" with a subordinate. Even Hurricane Sandy took its toll with the resignation of the CEO of the Long Island Power Authority after thousands of its customers were left without electricity. And over in the UK, the Director General of the BBC resigned this month due to the organization's botched child abuse investigations.

But its not just a sudden blip. Earlier in the year, Bob Diamond, the CEO of Barclays Bank, resigned in the wake of the Libor scandal, adding to a CEO head count that already included the CEO of Yahoo (falsified CV), Best Buy (inappropriate relationship with a subordinate), Nomura (insider trading), Restoration Hardware (relationship with a subordinate), Stryker (extramarital affair with subordinate), and Lotus cars (expenses irregularities). And just to stoke the fires even more, the former CEO of SNC Lavalin who resigned in March (corruption scandal), has just been arrested on fraud charges.

Depending on how you look at it, these various resignations, firings, and now arrests could be seen as a sign that leaders' ethical standards are tumbling fast .... or that our standards are tightening and that tolerance for any kind of ethical violations is shrinking. Regardless, it is always a big decision to terminate the boss, especially given the huge costs involved in terms of severance packages, the loss of valued experience, skills, and continuity - and in the context of public officials, the costs of going through another expensive election. To give a sense of what we're talking about here: Mayor Ford's removal may force a new by-election which will cost the city, and therefore Toronto taxpayers, some $7m. The termination of HP CEO Mark Hurd in 2010 for minor financial irregularities cost the firm a huge $37m pay-off, saw the share price tumble by 9%, and led to a period of significant decline for the firm after Hurd's successors failed to match his winning formula.

So why do we do it, especially when the "crimes" don't always seem to be that big: a fabricated qualification here, a few thousand in dodgy expenses there, a little bit of infidelity with a colleague when you should be home with the family. Are these really worth the trouble and expense of ousting the most important person in the organization? Here's four reasons why they might be.

1. Leaders are the chief ethics officers.
Leaders are ultimately responsible for the success or otherwise of their organizations. And that goes for ethics too. Leaders need to be the guardians of the organization's ethics. So if things go wrong, the logic goes, it is the leader that should be held accountable, regardless even of whether they knew what was going on further down their organization. And if its the leader who's actually breaking the rules, then they are putting their organization at risk ... of scandal, of fines, or of ethical culture problems further down the line.

2. Leaders set the tone.
You can't build an ethical culture if the boss breaks the rules with impunity. Many will argue that termination is too strong for relatively minor indiscretions, but they often overlook the knock-on effect of being seen to be too lenient. Employees throughout the organization can get the message that ethics isn't really taken too seriously and that although you may get your wrist slapped, the rewards in terms of bending the rules may outweigh the costs. Termination makes that risk-reward calculation crystal clear.

3. Leaders personify problems
Many ethics problems, especially when they break into the public domain, get associated with the organization's leader who becomes the public face of the scandal - and often the target of approbation. So any strategy for dealing with the problem has to tackle the issue of the leader. That's why organizations sometimes fire their leaders in the face of ethics scandals - its an attempt to demonstrate that the problem has been dealt with. The reality is rarely so simple, but the optics matter.

4. Leaders already have disproportionate power
Even minor indiscretions can gain a greater significance when its the boss who is involved. We all make mistakes from time to time, but when the leader crosses the ethical line, the stakes are immediately raised because he or she is already in a position of such power. Fiddling the expenses or having an affair with a subordinate are not just breaking the rules; when its the boss whose doing it, its an abuse of power - or even worse, its sending a message that leaders are above the rules that govern everyone else.

Of course, individual cases will also bring up unique reasons specific to that case, but the message here is simple. Terminating the leader may not make sense economically, and it may not even solve the problem ... but it still can make sense if you're looking to build a truly ethical organization.

Image by cali.org. Reproduced under Creative Commons Licence.

Film Review 'The City Below'

Among the spate of movies inspired by the ongoing financial crisis, ‘The City Below’ (German: ‘Unter dir die Stadt’) is definitely one exceptional voice. While many of those – think ‘Too big to fail’ or ‘Margin Call’ - provide us with a tension filled account of the inner workings of events that led to the crash of banks and markets in 2008 this movie is anything but a thriller. Technically it is a romance, but it is essentially a portrait of the ‘sociotop’ which is the world of the ‘one percent’, the top echelons of a global bank in Germany’s banking capital Frankfurt.

As such the movie – rather than adding to feelings of anger, rage and disgust about greedy bankers – provides us, as it were, with a clinical diagnosis of the de-humanized, de-emotionalized and fake rational world which steers our contemporary version of capitalism. We enter a world actually devoid of glamour or anything to aspire to – and the film leaves us wondering whether the working life of the ‘one percent’ after all is, if anything, worth our pity rather than our envy. The synopsis of the plot runs like this:

A man and a woman at an art exhibition share a fleeting moment of attraction, which neither can act upon. Days later, a chance second meeting leads to an innocent coffee and the two strangers - both married - toy with their unexplainable fascination for each other. Svenja is curious and finds herself in a hotel room with Roland, but she does not consummate an affair. A powerful executive at the large bank where Svenja's husband works, Roland is used to getting what he wants. He manipulates the transfer of her husband to Indonesia to replace a recently murdered bank manager. Unaware of Roland's actions, Svenja now ceases to resist...

Watching the movie I could not help being reminded of Marx’s point in ‘Das Kapital’ where he differentiates between ‘dead labor’ (as in machines and assets) and ‘living labor’ (as in human workers). Marx made the point that capitalism ultimately results in the subjugation of living labor under dead labor, the ultimate de-humanization and alienation of 'human resources' (as we are called in today's business world)  through a rationale of maximal value extraction. In his fascinating book ‘Dead Men Working’, our colleague Peter Fleming argues based on studies of call centre workers and other low skilled labor jobs, that we increasingly witness an army of all but physically dead men and women roped into the relentless pursuit of productivity and efficiency. Mind you, in today’s movie, death is quite physically part of the business: Svenja’s husband Oliver only finds out after being transferred to run the bank’s operations in Indonesia that his predecessor there had actually been brutally butchered while doing his job. ‘Necrocapitalism’ – as as onother of our colleagues, Bobby Banerjee, has coined the current system of global capitalism – though is not just hitting the disenfranchised, under skilled and exploited working masses (such as those killed South African miners in their attempt to resist exploitation and abuse this summer). ‘The city below’ shows us the life of those at the top – the ‘dead men working’ in the power houses of capitalism - and how their capacity for true human interaction, emotion, and passion has been extinguished, channeled and crowed out.

What better backdrop for exposing this than the realm of romantic endeavors? When Svenja’s husband, as she puts it, is ‘annoyingly’ friendly to her she immediately knows there must be an agenda: she smells that he ‘invests’ some niceties into their relations for a ‘return’: her putting up with him relocating for two years to Indonesia. The grammar of their relationship is the one of business relations: they had some sort of contract, ‘a deal’ that they would stay for some time in Frankfurt and we witness Oliver’s skills - brilliant but utterly dismal for a lover – to re-negotiate.

Svenja’s affair with Roland (a board member at the bank where Oliver works) takes this even further. For Roland, who is used to being obeyed and not questioned, the ‘execution’ of his desire follows a strictly transactional pattern, hoping that his status and clout will open him the doors. Even after their first sexual encounters he occasionally lapses back into addressing Svenja in the third person – the polite German level of addressing business partners. Roland has lost any sense of a human, emotional touch: when they make love the first time Svenja has to remind him that she is not ‘made of glass’ – unlike the soulless, deceivingly transparent furniture of ‘dead capital’, which surrounds most of his living days. One time she asks him to extinguish their ritual post-coital cigarette on her arm. But this movie is not ‘Fight Club’, where at least the sensation of pain allows the heroes to feel human again in an otherwise commoditized and instrumentalized word. In 'The City Below' Roland just manages a hapless Freudian ‘Übersprungshandlung’ (Displacement Activity), he can all but inflict this pain on her purse. The movie is modeled on the biblical story of King David who sends the husband of his lover out to be killed in battle. But unlike the ancient romance, Roland and Svenja’s relationship goes nowhere – and even that is part of their negotiated arrangements.

Smoking, by the way, has an unmissably symbolic presence in this movie. Currently in most Western countries banned from all spaces of capitalist work, travel and relaxation as a pleasure ultimately leading to death, in the movie it becomes the great one thing where rules can be broken and intimacy is still possible. The affair between Roland and Svenja starts over the inadvertently shared cigarette in a museum. His first line ever to her is in fact ‘Smoking is forbidden here’, and arguably it is this moment when his passion is ignited. There is not a single of the love scenes in the film which is not – I am not sure what – clouded or mystified by cigarette smoke. In a world of those dead alive the forbidden is the sensual; and an arguably dangerous pleasure is the niche in where whatever is left of human passion and emotion can be fleetingly enjoyed.

Roland and Svenja’s affair shows that humans, of course, cannot totally survive in a world where every decision, every relation is governed by an instrumental, self-interest driven rationale for maximizing one’s own or the company’s returns and economic success. Roland carves out spaces where he tries to escape. Once a day his driver takes him to some dump where he watches Junkies injecting their drugs. In essence the affair with Svenja is a similar attempt, and towards her he tries to reconstruct himself as a human being by taking her to what he pretends to be his modest working class childhood home (which in fact is the home of the murdered employee). These are not just kinky distractions in the movie, these are common patterns among top executives. We should not be surprised, for instance,  that Ex-Goldman Sachs Boss and US Treasury Secretary Hank Paulson for all his life has been an avid environmentalist and nature conservancy wonk in his free time – a contrast to his day job which could not be more gasping and irrational.

Having worked as a consultant for three month at Germany’s largest Bank in Frankfurt 13 years ago the entire movie struck a strange déjà vu for me. It's silent pace, the sterile, nearly theatrical acting of the main protagonists, the architecture and interior design, the language ridden with Anglicisms - all this resonates very well with my memories from that time. Despite unearthing a rather dire reality the movie is a very watchable, even humerous experience leading us into an otherwise hard to be experienced space – the world of global finance taking place far above ‘the city below’...

DM

The movie 'The City Below' plays at the GOETHE FILMS@TIFF Bell Lightbox in Toronto, October 30, 6.30pm

Looking for positive outcomes from plagiarism in the Margaret Wente affair

Following on from the earlier guest post from our York colleague Dawn Bazely regarding the Globe and Mail plagiarism case, we asked Dawn to tie up the loose ends by identifying some of the positives that have emerged from the whole affair. This is what she has to say....

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There was a lot of learning to be had from following the Margaret Wente story last week. All in all, last week was important if you have ever written an assignment (e.g. essay or laboratory report), or have taught any form of writing or have read a newspapers or magazine. This covers pretty much most of the Canadian population!

Questions were raised by mainstream journalists, bloggers and hundreds of the readers of online stories, about whether Wente was guilty of plagiarism, and the behaviour of a number of Globe and Mail staff in responding to this allegation. These stories came out in publications that included Macleans, the Toronto Star, the National Post, and Toronto Life, and even the Guardian. Those asking questions included John Miller, a former dean of journalism at Ryerson, Elizabeth James with Vancouver’s North Shore News and the blogger at the Sixth Estate who wrote about How media should handle a plagiarism scandal

Why were the Globe and Mail’s ethics and standards being called into question? In a nutshell, several columns by Globe and Mail columnist Margaret Wente had been scrutinized by an Ottawa artist and professor, Carol Wainio in her Media Culpa blog. Over several years, Media Culpa posted comparisons of older text by other authors to the text in some of Wente’s columns. Wainio made several of these comparisons. Wente’s columns made no attributions or reference to this other work, and strings of words were identical.

What made it possible for everyone to weigh in with an opinion, was that the Media Culpa’s blogs provided similar comparisons if text to those produced by plagiarism software, such as Turnitin.com. With Turnitin output reports, side-by-side text comparisons are made. Every course director and teaching assistant must make a judgment about these Turnitin text reports, and decide what to tolerate in terms of the cutting and pasting of text. There will be a process for taking this up with students whose work is identified in this way.

The response that unfolded to Media Culpa’s posts, which Wainio had conveyed on several occasions to the Globe and Mail, was that various editors and columnists (including Wente herself) defended a position on plagiarism in which a certain amount cutting and pasting of text written by someone else is to be expected and accepted. Reasons for downplaying Wainio’s text comparisons included the pressures of meeting deadlines. A number of well known writers in “old media”, aka the mainstream press defended Wente. Some of them expressed the opinion that upholding the standards and principles of “academic” plagiarism, or the standards taught in university and high school, was just too difficult. The Wente apologists included Terence Corcoran and Dan Delmar at the National Post. Back at the Globe and Mail, the editor, John Stackhouse and the public editor, Sylvia Stead provided very muted and restrained responses, only after torrents of internet chatter ensured that the story did not die down.

Is cutting and pasting so unavoidable, so that we are we all guilty of using other peoples’ phrases and sentences?

Some members of the reading public seem to think so. Jack, commented at the crux of the matter blog: “So she quoted without naming sources. I rarely do. Does that make me a plagiarist? “Sloppy journalism”? Disagree. If that were true we would all be guilty but we aren’t are we?”

The title of Dan Delmar’s column at the National Post was: Are we all “self-righteous” sinners cast(ing) the first stone at Margaret Wente? My answer to this is a definite “no”. Biology laboratory reports provide a good case study for evaluating just how prevalent cutting and pasting actually is. Hundreds of student do the same experiments every year, and write up their results. Up to to now, thousands of these reports have been run through plagiarism software such as Turnitin. This software checks for patterns in words, and compares one person’s text against that from other sources: the internet, other student papers, journals, and whatever other text is available and accessible.

The Turnitin reports shows that it IS possible for thousands of students to write up the same experiment with relatively little overlap in sentence structure. The one exception is the methods section, in which students often quote directly from the laboratory manual, and it has been easy to put guidelines into place for quoting them.

Nevertheless, IS the academic integrity project in jeopardy?

There may be a very real case for arguing that different kinds of writers should be held to different standards, but there is no doubt in my mind that if Margaret Wente had submitted the columns in which Wainio detected unattributed text as undergraduate assignments, that she would have been called in for a chat with the teaching assistant and course director. Not surprisingly, a US Gallup poll found that journalists aren’t high on the public’s honesty list.

While the entire affair raised serious questions about the ethical behavior of powerful members of “old media”, in general, I tend to agree with the Back of the Book blog, that there has been an upside to the Wente case.

Good pedagogy includes raising awareness about the rules of academic integrity and plagiarism. Academic integrity is not primarily about punishment but about learning how not to plagiarize, and give credit appropriately. Many of the frontline workers, such as grad student blogger, gradstudentdrone, in the war on cut and paste have stepped forward during l’affaire Wente, to acknowledge the challenges, and the grey areas of confronting plagiarism.

The reader responses have shown that these principles and ethical codes relating to academic integrity are taken very seriously by many outside of academia and the media. Being able to view the text comparisons directly, was no doubt a contributing factor to the outrage at the behavior of senior editors, and the picture that their actions paint of the corporate culture. Carol Wainio wrote several responses on her blog and in the mainstream media that were calm, measured and logical. This all served to reinforce the impression that a section of the media establishment has been making judgment calls that put them out of line with teachers, readers and members of the mainstream media who are more apt to look at the evidence without blinking. Kathy English, the Toronto Star’s public editor described the Wente case as a test of accountability.

Perhaps the most positive outcome is the broad discussion that the Wente story generated. A very cool example is the discussion thread about this on the Vancouver Canucks Hockey team forum. Thank goodness the fans have something to distract them. This incident also gave many people cause for reflection and rememberance, such as David Climenhaga’s raising the tragic case of Toronto Star journalist Ken Adachi, who committed suicide after being found plagiarizing. 

Dawn Bazeley

Image by Jobadge. Reproduced under Creative Commons Licence

IKEAs flatpack approach to diversity

After our recent discussion of IKEA's role as a public institution  it was interesting to see this week that the company has been in hot water over the last few days after revelations that it removed images of women in its Saudi Arabia catalogue. The evidence, on the face of it, is pretty damning. As you can see in the pictures here, it really is a case of disappearing women. No doubt about it.

There is a feel of something ethically troubling here, with critics arguing that   IKEA should be upholding its values of equality. The Swedish trade ministerhas kicked in by criticising the company while IKEA itself has offered an apology, saying that the practice is "in conflict with company values".

The question we have to ask though is whether IKEA really is doing anything much wrong here? After all, isn't it up to them what pictures they want to put in their own catalogues? And don't they have a responsibility to meet local cultural norms as long as no ones fundamental rights are being infringed? Its not like any women were directly disadvantaged by their actions, we're they?

As far as we can see, though, IKEA hasn't been very smart or subtle in appearing to airbrush its women from Saudi. As far as cultural sensitivity goes, its a pretty basic effort to fit in with cultural norms in the country. But first, let's remember that IKEAs catalogues are increasingly just computer generated anyway, so maybe the women were never actually "there" in the first place. And second, let's not pretend that IKEA catalogues are a glowing example of diversity to begin with. Show us the rich ethnic mix in the catalogue. Or for that matter, the representations of women in hijab that constitute a large part of the female population in many parts of the world where the firm operates.

A global company it may be, but a globally diverse catalogue it is not. IKEA markets a homogenous global product for a global audience with less tailoring to local tastes even than other global giants such as McDonald's or Wall-Mart attempt.  So what are we complaining about here? That IKEA hasn't been 100% homogenous after all and we don't like it? Is homogeneity really the best solution to equality and diversity problems?

That's not to say it doesn't matter what pictures companies use in their marketing campaigns, because in our view, it certainly does. This is especially so for big companies like IKEA because they have such a major impact on the visual world around us. But demanding that they present a unified image across the globe just seems to be missing the point.  Shouldn't we be demanding that they present a genuinely diverse representation of their customers, maybe even one tailored to the societies in which they operate? Disappearing white women from your catalogues in Saudi Arabia certainly doesn't look good, but it's hardly the biggest problem here.

Regular readers of our academic research will know that we have a long standing interest in the role of companies in shaping people's citizenship opportunitiesand experience. IKEA here is clearly failing to promote the cause of women's equality in Saudi, insofar as equality is measured in terms of representation. This is one part of the picture (in the same way that failing to represent ethnic minorities or those with different sexual orientations in advertising presents and reinforces a skewed image of society). But it's not the only important one.

A critical role is also played by the company in its hiring and promotion policies, and in its other efforts to promote (or not) equality in Saudi. If the company isn't doing a good job on these fronts (and this is a question that demands further investigation) then presenting a pretty diversity picture in its catalogues would be little more than window dressing anyway. Let's hope the latest scandal presages some deeper consideration of how to deal with diversity at the company given its increasing global spread. Saudi women, if not the curiously disappearing catalogue models, deserve no less. 

Photo: IKEA
Thanks to Jeremy Sandler for alerting us to the story

Plagiarism, journalistic ethics ... and climate change?

One of the big ethics stories blowing up in Canada right now concerns plagiarism and journalistic ethics. Namely, criticisms of a journalist at one of the big national papers here, The Globe and Mail, have gone viral leaving the paper, and the journalist concerned, Margaret Wente, with a serious case to answer. Many, ourselves included, have been underwhelmed by the response of the paper to what is an extremely serious threat to their legitimacy. As regular readers will know, we are pretty serious about plagiarism, as are most academics.In fact, one of our colleagues here at York, Dawn Bazely, who heads up the Institute for Research and Innovation in Sustainability, was so riled by the case that yesterday she posted a blog piece on the scandal. With her agreement, we're re-posting it here, since we think it makes an interesting contribution to the debate from an academic perspective. 

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 SCENE: Kitchen, writing student references for medical schools, while CBC’s As It Happens plays on the radio.

JEFF DOUGLAS (As It Happens radio broadcoaster):

“”Media Culpa.” That’s the name of a blog maintained by Ottawa artist Carol Wainio. As the name suggests, the blog exposes what Ms. Wainio believes to be substandard journalism. Lately, her spotlight has been focusing on one Canadian journalist in particular: Globe and Mail columnist Margaret Wente.

On Friday, the Globe’s Public Editor, Sylvia Stead, responded to some of the issues raised by Ms Wainio. Ms. Stead included an explanation from Ms. Wente. But Carol Wainio isn’t satisfied, and neither is John Miller.

He’s the founding Chair of Ryerson University’s Journalism Department and professor emeritus. We reached Mr. Miller in Port Hope, Ontario.” (from The Monday Edition of As It Happens, duration 7 mins 49 secs)

DAWN BAZELY: “What the heck?” To my family hanging around doing homework and reading the Globe and Mail: ”Did you hear that?”

Yes, we heard it and after the interview with Prof. Miller (starting at minute 13:25 of the podcast), I read many of the blogs and the Globe and Mail articles about the plagiarism. The Globe and Mail admitted to some of what Carol Wainio has been documenting, though did not call it plagiarism. It culminated, this morning, in my sending a Letter to the Editor of the Globe and Mail explaining that until a transparent and public investigation takes place to restore my faith in their journalistic standards and practices, that I would be cancelling my online and print subscriptions. Too bad, because I am a huge fan of Lucy Waverman’s recipes, and my lobbying to get her back to the Saturday Life section from the mid-week section appeared to have borne fruit.

What does this debacle at the Globe and Mail have to do with Climate Change? A lot, actually (more on that in a moment).

It also has to do with how universities deal with ethics and academic integrity, including plagiarism. York University students are required to read the Academic Integrity webpages and do the tutorial about it. At York, I was one of the first professors to use Turnitin plagiarism software, because I brought in a lot of written work into BIOL 2050 (Ecology). Course instructors and teaching assistants spend a huge amount of their time educating about and policing academic honesty and making sure that plagiarism is not happening and if something is flagged as being potential plagiarism, filing complaints, holding meetings with associate deans and students involved, and then doing any follow up remedial work. There are large chunks of my life spent with tearful, upset students, that I will never ever get back.

So to read that a very public and polarizing columnist who has been given many board-feet of column space in what Chris Selley of the National Post describes in an online post as Canada’s “self-styled paper of record” is not only being questioned about possible plagiarism and that several instances of this have been raised in the past by Carol Wainio (you can read the comparisons of the text – they are all over the internet), but then to see the muted responses from the Globe’s Public Editor, and the Editor, made me feel utterly dismayed. THIS IS SERIOUS! In our courses, this would get students called into meetings, and if it continued (as appears to be have been happening), there would be a ramped up response and penalties imposed – severe penalties. Chris Selley quite rightly went on to observe that the Globe’s response “is completely out of keeping with the global journalism mainstream“.

I have written about the challenges of consistent blogging about sustainability, because of the time that I feel ethically obliged to spend checking sources, referencing and inserting links into posts, so as to maintain the standards that I am supposed to uphold as an academic. I get freaked out about accuracy and attribution. Apparently the Globe and Mail doesn’t see this as such a big issue.

And finally, climate change… It’s simply that Margaret Wente’s many columns on climate change, sustainability, energy, etc. indicate that she is happy to give a big shout out to skeptics and denialists and generally is not interested in considering the boring old scientific community in a respectful, (even semi-) balanced and informed dialogue. Furthermore, a number of her columns about about the environment have contained errors through omission – exactly one of the reasons for academic dishonesty charges being levelled against Bjorn Lomborg, himself a controversial climate skeptic – then believer – nowunfunded. I gave up reading Wente a long time ago after realizing that any time spent analyzing and responding was a total waste. The people now defending Wente in the comments section of the Globe and Mail appear to be supporting her because she speaks to their cultural beliefs and for them, uncomfortable facts are really not going to be that important (aka cognitive dissonance). A couple of years ago, the Globe and Mail actually did publish a response by Gerald Butts of WWF Canada to one of Wente’s anti-climate change screeds.

So, here I go – a bit of analysis and observation of a couple of Wente columns:

From a December 1st 2011 column, “Suppression of climate debate is a disaster for science”

“Instead of distancing themselves from the shenanigans, the broader climate-science community has treated the central figures in Climategate like persecuted heroes. That is a terrible mistake, because it erodes the credibility of the entire field. The suppression of legitimate debate is a catastrophe for climate science. It’s also a catastrophe for science, period.” (M. Wente)

Sorry – but the climate scientists at the University of East Anglia’s Climate Research Unit were cleared ofmalpractice allegations, as reported by the Guardian on April 14 2010 in an inquiry headed by Lord Oxburgh. More of the same hacked emails were put out there after the inquiry had finished, by the denialists – but Wente doesn’t mention the Oxburgh inquiry results anywhere, as far as I can tell – though she does consistently say that the science of climate change is not settled. NOT TRUE! Surely the Globe could have afforded to send her to any one of the International Polar Year conferences held in Quebec.

And  in the same column, Wente cites an economics professor on the topic of climate science: “Ross McKitrick… at the University of Guelph who is a leading climate-science critic” A quick check of McKitrick’s publications on Google Scholar, indicates that he publishes papers about the lack of evidence for climate change with a co-author Patrick J. Michaels of the libertarian think tank, the Cato Institute, Washington, D. C. Hmm – wonder who funds them? – oh, that billionaire, Koch.

Previously, Wente had covered Climategate in a column, ”Climate science’s PR disaster“ in which someone called Steve McIntyre a skeptic and “anarchist” was heavily referenced. He has recently published a journal paper confirming  climate change in Antarctica, but this is his only peer-reviewed paper – his other writing is on his blog page.

The problem with these two columns is that Wente is conflating peer-reviewed and non-peer reviewed writing. There is a whole field that considers academic and funder bias (but it’s not really ever mentioned by Wente).

I could go on picking Wente’s biased writing apart, but it’s pointless. She has sold many papers with this approach, and gets a lot of clicks on the internet. Except, that I cannot resist pointing out the irony of a June 14 column supporting fracking in which she’s actually calling for science: “I’m no expert on fracking technology, and I’m in no position to evaluate the risks. I have to rely on experts for that.” She fails to point out that there is research ongoing into this issue and a lot of concern about fracking. Yes, the research investigating the downsides of fracking is in its infancy, and there’s not much published on it, but Wente has never shied away from featuring the opinions of poorly-published people.

It really is time for the “legacy media“, as I have learned it is called, to step up to the plate and deal substantively with the allegations against Margaret Wente. This would at the very least, include running all of her writing through Turnitin or some other plagiarism software.

Dawn Bazely

Photo by smallestbones. Reproduced under Creative Commons licence

Lunch at IKEA

Copyright Kai Hendry

Shopping on an empty stomach is not fun. Especially if its shopping for something a little more sophisticated, such as furniture. No wonder than IKEA, the Swedish budget furniture chain, runs restaurants in all its locations. I had a chance to check one out last Saturday. Well, that is, in the end I didn’t.

Copyright Kai Hendry

I have never eaten at IKEA but as my 11-month old baby daughter needed her food anyway, and we were just about to enter the store, we thought we might as well check it out. Nothing had prepared us though for what was going on there. There were two massive lines the size of a check in line for a intercontinental flight and I would estimate that there were at least 500 people in the restaurant. Families with kids, grandmother and dog were queuing up next to young couples or groups of teenagers, old single men as well as people in wheelchairs. It was an amazing mix.

Copyright rayb777

Given the size of the lines and the prospective waiting time we quickly folded the idea of lunch and just fed the baby with what we had with us. The IKEA lunch line though was an exciting spectacle to watch for a few minutes. The food looked actually quite good, though it was rather simple. Meat-and-two-veg seemed to be the general structure. And generous portions. It was cheap: none of the items is more than $7.99 with the legendary Meatball staple at $5.99. It also looked relatively healthy. Only two of the seven main dishes on offer contained fries or deep fried stuff; most had vegetables or salad as sides; and the pasta and crepes were even organic! No junk food this.

It is kind of funny when sitting in the restaurant of a multinational chain you suddenly get the feeling of being more in a public institution – the place looked like the hospital or school canteens of my youth or the university ‘mensa’ of my student days. The entire place had more something of an institutional air around it rather than a ‘restaurant’. Underlined by the demographics of the dining public this appeared more like a social institution than a privately run for-profit restaurant. It even reminded me a little bit of a public soup kitchen or red cross food outlets which I saw when visiting refugee camps in the aftermath of the Yugoslavian wars in the mid 1990s.

Now the peculiar thing here is that all this was not only provided by an otherwise known as a ruthless, efficient and profit driven multinational corporation. Even more, it was just because IKEA has this ultimate modern perfection of a Fordist business model with globally standardized sourcing, products, and processes that the company is able to offer this affordable food supply. I was reminded of investigations in the mid 2000s in Germany which found that IKEA had become the food supplier of choice for people on welfare and low incomes. At the time, the company already made 10% of its revenue in Germany just by food!

Matten jr. enjoyed herself at IKEA

It leaves one wondering about the status and nature of global capitalism. In some ways, IKEA represents this approach like few others. Some scholars have argued that IKEA though, shaped by the social-democratic climate of his home country Sweden represents a somewhat softer or human form of a global corporation. But just skimming the IKEA page on Wikipedia shows that the company is anything but a saint. I well remember that, when the wall came down in 1989 in Germany, some former dissidents had a funny déjà-vu when visiting their relatives in the West for the first time: they could recognize some of their friends’ IKEA furniture as items they had to assemble while being imprisoned by the regime in Eastern Germany which supplied IKEA with some of their phenomenally cheap products...

For me, the company just represents, first of all, the ascent and the degree to which private corporations shape the public and private sphere of ordinary people these days. After all, one out of ten Europeans these days is said to having been conceived in an IKEA bed. It also shows, secondly, that at least from a consumer perspective in the Global North a multinational such as IKEA contributes significantly to enhancing the standard of living and providing affordable access to basic necessities of life. But most of all, it raises some growing and unresolved questions about the status of the social sphere in a world where markets and capitalism seem to colonize every last corner of our lives. No student at my current university has access to cheap food at IKEA prices; and many of the ‘common’ folks I saw last Saturday at IKEA certainly know that taking the family out for a meal anywhere else would probably be beyond their budget. The last time I saw a meal service in a Toronto hospital it was just outright revolting junk served in a public institution. But why is it only a ruthless, self-interested multinational which provides a better alternative at that level today?

I have not doubts about the motivations of IKEA in running such a restaurant operation. I am just puzzled by the fact that the result resembles so much what traditionally looked like the public provision of these goods. This said, I am not even sure if I want to add: this should still be available for common folks, be it in schools, universities, hospitals or even worker’s canteens in companies. But I also know why IKEA can and these other players cannot provide this any more...

DM

Top three fotos reproduced under the Creative Commons License

Mitt is on the money

It is final now: Mitt Romney is the official presidential candidate of the Republican Party for 2012.  This is in itself a little miracle. To begin with, given the strength of Christian fundamentalists in the GOP – from Evangelicals to Catholics – it is still remarkable that a Mormon has finally made it to the top of the ticket. Given the history of Mormonism in the US and its longstanding antagonism from ‘mainstream’ Christian groups this is probably the clearest indicator of the magnitude of resentment towards Obama. To Tea Party fundamentalists, even an apostate is more acceptable than – I guess – a black person in the White House. Those two delegates who threw nuts at a black CNN camerawoman with the comment "this is how we feed the animals" are probably – despite the political correctness of the official reaction - just an indicator of the Republican Zeitgeist.

There is though another reason why this is even more interesting. After all, this is the first election where private corporations (or rich business owners through their companies) are able to basically fund the campaigns of their preferred candidates without any limits. We saw this clearly in the primaries, where candidates such as Herman Cain, Newt Gingrich or Rick Santorum were all able to stay in the race far beyond what their paltry successes in the primaries would traditionally suggest. It was ironic, that the Citizens United ruling by a Republican-leaning Supreme Court in 2010 reared its predictably ugly head first to the detriment of the Republican frontrunner Mitt Romney himself. Newt Gingrich was probably the best example: not only did his philandering past made him unpalatable for even the most ideological GOP supporters at the base, but also his success in the primaries was dismal –he could not even win his home state Georgia. He stayed in the race though because his ‘sugardaddy’ Sheldon Adelson poured limitless amounts of cash into his campaign. Adelson, the owner of a global Casino empire, is currently investigated for breach of the Foreign- and Corrupt Practices Act by the US Justice Authorities and has good reasons to make sure whoever ends up in the White House has some loyalties to him.

The Republican primaries have shown that rich individuals, after the Citizens United ruling, basically can buy elections. It will be exciting to watch how this will now impact the presidential campaigns in the fall in the US. Mind you, four years ago it was Obama who had the biggest coffers. And still today, if one just analyzes the funds of the actual campaigns of Obama and Romney, where donations are capped at $5,000, Obama is still leading Romney (according to a recent report in The New Yorker). However, what the Citizen United ruling has allowed is the creation of so called ‘Super PACs’ (as in political action committee), which can advertise on behalf and in the interest of a candidate and can accept unlimited amounts of donations.

The effect is fairly impressive. Already now, if we look at the Super PACs around both candidates, Romney with $120m in donations leads Obama by factor four. Adelson alone has pledged $100m to get rid of Obama and other rich republican donors such as the Koch brothers are willing to donate whatever it takes. Estimates suggest that Romney (and his entourage) by November may have been able to spent some mindboggling $1.2bn dollars!

The interesting thing here then is that for some reasons, the Obama campaign is not playing the same game. This not so much due to a lack of potential donors (according to the cited article); there are enough rich business people who are leaning towards the Democrats. It appears that Obama himself is not too keen on becoming too close and dependant from wealthy individuals and interests. Another factor appears also to be that some of the individuals who potentially could play the game of the Koch’s and Adelsons’ on the other side feel that this trend in politics is not desirable: “I don’t want to see democracy go in that direction”, Warren Buffett (a longstanding Obama supporter) is quoted in The New Yorker.

There are many people among the Democrats who are worried about this. After all, come fall it may well be possible that most advertising time on TV and radio has already been bought by Republican Super-PACs. And indeed, as we have frequently discussed here on this blog, the current situation in the US lifts the entire debate of corporate influence on the political process to a truly new level. There is now only a little and mostly cosmetic difference between how ‘third world’ dictators can buy elections and the way the sheer financial backing of a candidate and his capacity to spend on his campaign will decide the US Presidential election.

The Republican primaries though have left us with a glimmer of hope – albeit in a somewhat twisted way. After all, despite the corporate backers of several candidates, in the end the Republican base by persistently not voting, for instance for Gingrich, finally got to speak the last word. The assumption that money can buy an election then rests on a simple assumption: that the majority of the electorate, in fact: the few millions of swing voters in some ten states of the US who effectively have decided elections in the last decades are stupid enough to fall for a bombardment of advertising (for which most of the funds are used these days) and just succumb to these formidable means of manipulation. Or is it still also true, as the Republican base has shown, that voters still have some minimal set of convictions and the ability to see through all the veneer of a political campaign – and decide for themselves. One way or the other, these specific circumstances have added an ingredient to this presidential campaign which might actually make it a slightly more interesting spectacle to watch.

Artwork from DonkeyHotey, reproduced under the Creative Commons License.

Are Americans working too much?

With many people currently enjoying or looking forward to their summer holidays it is sobering to consider some of the differences in expectation that workers in different countries will have about how much paid time off they can enjoy. Statutory minimum leave varies enormously by country, from zero days in the US, through to 5 working days in China, 10 working days in Canada, and all the way up to 25 working days plus public holidays in countries like Denmark and Norway. Of course, variations in legislated minimums give plenty of scope for more explicit CSR type policies in low-regulation countries such as the US, but even looking at the average leave taken across countries, Scandinavia and most of Europe far outpace North America. Sure, a lot of the talk now is about Americans not having enough jobs, but another way of looking at it is maybe some Americans are simply working too much.

We have been interested in debates about working hours, flexible work arrangements, forced overtime and the like for some time. In the first two editions of our Business Ethics textbook we included cases on young professionals and excessive working hours.  In the most recent 3rd edition, this changed to a case about forced labor, which is a related but quite different issue. These are complicated problems, especially when much of the excessive hours worked by professionals is, in principle, voluntary. Even in sweatshops, some argue that workers choose to work long hours for low pay, because it is better than the alternative - which is no job and no pay.

Anyway, arriving in the inbox today was a nice infographic from onlinemba.com, the fruits of whose labors we've featured before in our survey of the best and worst corporate responsibility infographics. It tells an interesting, and well documented, story of the problems of excessive working hours in the US. We're not sure the call for a return of a 40 hour week will be heeded in the current climate, but it certainly helps start an important conversation. And with many in the CSR world apparently uninterested in working hours in the developed world as a relevant topic, it provides a decent business case for changing that perspective.




Infographic source: OnlineMBA.com
Photo by LaPrimaDonna. Reproduced under Creative Commons Licence

Who really should resign for the Barclays interest rate scandal?

The banking sector needs another scandal like a hole in the head. Or maybe that's the wrong metaphor. Because a quick death from a headshot might be more preferable to the excruciating, but likely never fatal, torture of interminable crises that we seem to be constantly enduring.

The latest bout of banking misery comes from the UK, where Barclays, the retail and investment banking giant has fallen foul of regulators for manipulating the interbank interest rate over a number of years during the mid 2000s.  It's a huge scandal that looks set to engulf not just Barclays, but potentially also a slew of other banks, and even maybe the Bank of England and the UK Government.

One of the more interesting facets has been the reaction from Barclays. What a week it has been. First a number of senior executives including the CEO Bob Diamond reacted to the media criticism by announcing they would forgo their bonuses. Then, as the scandal escalated, the Barclays Chairman, Marcus Agius announced his resignation. In a dramatic turnaround, the following day Agius was reinstated and CEO Diamond announced his resignation, along with his right hand man, Jerry del Missier.

So the big question is: who really should go in a scandal like this? The Chairman, the CEO, or someone else? The answer, of course, depends on the type of scandal, the level of knowledge of the activity that the senior leadership had (or should of had) as the events unfolded, the likely best route to reform, and of course the likely reaction of stakeholders. With Barclays it seems right that Agius, the Chairman, has (on second thoughts) decided to stay. The Board is unlikely to know about an activity such as the interest rate rigging, and so cannot be held culpable in their overseeing function. It is different from, say, the role of the Board in something like Enron's accounting fraud, which is directly related to the Board's role, and relates to accounts that they must have seen and approved.

With Barclays, you would expect the Board and its Chairman to take a central role in dealing with the problem once it has been revealed to them, which apparently was only days ago. As one member of the House of Lords scathingly remarked upon Agius's resignation: "The board is so hopeless they've just shot the head of the firing squad and missed the prisoner." By resigning Agius was signalling that the Board was unfit to be a "firing squad" and instigate the kind of change necessary at the bank.

Turning to Diamond, one of the main reasons forwarded for his resignation has been the "lightening rod" argument, as in the UK newspaper, The Guardian's analysis: "Diamond, under pressure from the banking regulator and the governor of the Bank of England, Sir Mervyn King, quit after he decided he would be the lightning rod for the scandal at the hearing".

It's not the first time we have heard this argument about the resignation of a prominent CEO in recent times;  News International made exactly the same claim regarding the departure of CEO Rebekah Brooks in July last year in the wake of the phone hacking scandal.

Why the lightening rod argument? Well, it enables the CEO to continue to proclaim their innocence, despite stepping down. Their resignation is not due to guilt but is to save their firm from excessive media and political criticism. The idea is that it is supposed to diffuse the storm of negative publicity - the brave leader falling on their sword to save the company.

The problem, which we saw with News International, and which is already happening with Barclays, is that it doesn't really work.  For a start, no one really believes the argument. So the media is just as likely to respond by digging even deeper expecting there to be more secrets that the company is trying to hide by jettisoning the CEO.  Secondly, even if you get rid of one lightening rod, the critics will readily find another .... or they will simply continue targeting the same one in the hope of more revelations. Barclays found this to their cost last week after lightening rod no.1, Agius quit, only to be replaced by lightening rod no.2, Diamond. As The Telegraph put it: "Mr Agius is thought to have hoped his departure would serve as a lightning rod to conduct anger away from the bank and Mr Diamond". No chance.

It seems in this instance Diamond was responding primarily to pressure from politicians and to a lesser extent shareholders. Numerous influential voices were calling for the CEOs resignation and it is no coincidence that the Barclays share price rose on the announcement of Diamond's departure, despite him being up until recently strongly supported by investors. In other words, Diamond's resignation was primarily a symbolic act to appease stakeholders.

This is all very well, especially at a time when trust in big banks is at an all time low. But it is not necessarily the best course of action for actually dealing with the root problem. Mind you, the root problem is not 100% clear at the moment. Whilst Diamond was blaming "a small minority", others were were laying the blame at the culture at the bank or even of the entire sector. So although Diamond's proposed solution  - to “get to the bottom of what happened”, punish those involved, enhance internal controls, and change the bank's culture - may on the face of it make sense, this scandal has all the hallmarks of a more deep-seated systemic problem.

One bank and one CEO can't change an entire sector, especially when no one, not even the guy that's resigning, seems willing to take personal responsibility. Did he symbolise a culture that needed changing, Diamond was asked today. "I don't think so at all," he replied. Institutions like the banking industry are based on taken for granted assumptions that are highly resistant to change. Symbolic resignations are not the answer. But maybe they are a start.

Photo by SomeDriftwood. Reproduced under Creative Commons Licence