7-3b Ethics Codes at Selected Companies

same choice. For example, if one believes that copying software rather than purchasing it is ethical, examine the implications of every consumer copying the software.

To apply the principle of respect, one would make the choice that treats people with the greatest respect. This implies that one would act toward others in the same way it would be hoped they would act in return. This principle is referred to as the “Golden Rule”: Do unto others as you would have them do unto you. This was the guiding principle followed by Mr. J. C. Penney when he started his company. The J. C. Penney company partners with the Points of Light Foundation each year to bestow upon exceptional people the Golden Rule Award that recognizes excellence in volunteer commitment. Awards are given in four categories: Adult, Youth, Group Volunteer, and Education Volunteer. Winners receive crystal trophies, with cash prizes awarded to the nonprofit agency that was the recipient of the volunteer hours.

Many companies have established a corporate ethics code. In ExxonMobil’s Standards of Business Conduct, company guidelines state that “No one in the ExxonMobil organization has the authority to make exceptions to these policies [on business conduct]. Regardless of how much difficulty we encounter or pressures we face in performing our jobs, no situation can justify their willful violation.”8 Businesspeople need formal standards upon which to base decisions regarding ethical issues, such as information security, personal privacy, use of company resources, care for the environment, and professional behavior. Further steps taken by ExxonMobil to ensure integrity are listed in Exhibit 7.4.

Founded in 1919, Halliburton is one of the world’s largest providers of products and services to the oil and gas industries. In just two operating groups, Halliburton employs nearly 70,000 people in 80 countries. Components of Halliburton’s Code of Business Conduct, although not limited to, include expectations that all directors and employees:

• observe the highest form of personal ethics in all business transactions; • aspire to fairness in dealings with shareholders and stakeholders alike; and • never allow company loyalty or drive for profit to result in illegal behavior.

Well-designed corporate ethics codes, which are monitored and enforced by top management personnel, will help employees to do the right thing in difficult circumstances. Ethics codes cannot guarantee that people will always make the correct choice. Yet, ethics codes and ethics training will help minimize unethical behavior. Further, ethical dilemmas

Exhibit 7.4 stEps to EnsurE intEGrity at ExxonMoBil

• A substantial majority of the Board of Directors are nonemployees. • The Board Audit Committee is empowered to investigate any matters brought to its attention and has 100 percent nonemployee membership. • An independent internal audit staff assesses compliance with policies and procedures and evaluates control effectiveness in about 300 audits conducted annually around all business units. • Steps are taken to assure the independence of both internal and external auditors. • Employees regularly review and discuss expectations and are encouraged to raise questions or concerns.

• Violations are promptly reviewed, communicated upward, and acted upon.

EConoMiC pErspECtiVEs Walmart Canada’s Environmental Stewardship

By exercising good corporate social responsibility (CSR), also called corporate citizenship, a company can engender high regard from its customers, who in turn want to give their business to the company. CSR operates as a type of corporate self-regulation incorporated into business operations. Economic activity flourishes in a business environment where businesses responsibly operate and have good relations with their customers and other constituents.

In the spring of 2010, Walmart Canada received the CSR Award for the Environment from the Retail Council of Canada. Headquartered in Mississauga, Ontario, Walmart Canada operates more than 300 retail stores throughout Canada and serves more than one million customers daily. Walmart Canada’s goals include providing environmental leadership by reducing the ecological impact of its operations via corporate-wide programs focused upon waste, energy, and products, as well as outreach programs that protect and enhance local environments. The corporation’s global goal is to produce zero waste, to be powered 100 percent by renewable energy, and to provide customers with products that sustain people and the environment.

Walmart Canada was selected to receive the CSR Award for the Environment as a result of its environmental demonstration store in Burlington, Ontario. The Burlington store features a first-of-its-kind application of geothermal technology and energyconserving lighting innovations in a large Canadian retail operation.

In a press release, Walmart Canada described its new supercenters as 60 percent more energy efficient as previously existing store structures, with roughly 85 percent of its waste being diverted from typical waste locations, such as landfills. The company stores modeled after the supercenter prototype aim to improve existing energy efficiencies by 30 percent.

David Cheesewright, CEO and president of Walmart Canada, in his acceptance of the award, stated that his company is committed to contributing to the community and to making the shopping experience easier and more affordable.

The Retail Council of Canada (RCC) started in 1963. RCC is a not-for-profit, industry-funded association representing more than 40,000 store fronts of all retail types across Canada, including department, specialty, discount, independent stores, and online merchants.

Questi O ns:

1) Is Walmart Canada taking care of the environment? Do you think Walmart’s customers care if the company is a good corporate citizen? 2) Do you think it is appropriate for industry organizations, such as the Retail Council of Canada, to give awards for corporate social responsibility? Do you think awards like these motivate companies to act more responsibly?

Source: Karin Campbell, “Walmart Canada Awarded Two Excellence in Retailing Awards,” CNW, www.newswire.ca/en/releases/archive /June2010/01/c8808.html, June 1, 2010.

occur in all functional areas of the firm, including accounting, finance, human resources, marketing, and production. Everyone occasionally faces decisions and situations requiring ethical judgment.

Reality Che C k lO-3

Do corporate stockholders have a right to expect that the companies in which they invest will act in the best interests of people within and outside the business, the communities where the business operates, and the environment? Or should these concerns be bypassed if the corporation finds it necessary to do so to achieve a reasonable return on investment?