When ethics takes away from your bottom line

11 March 1999

Textbooks and "ra-ra" workshops on business ethics all carry the popular byline that good old-fashioned self-interest, rather than altruism, is all the motivation you need. Practicing ethics in the workplace pays off! Or does it? And even if it does, is the most ethical choice always obvious?

SA's apartheid legacy is a classic, if controversial case in point. Didn't numerous companies, local and international, profit handsomely for many years by maintaining the racist status quo? And even when the calls for sanctions and boycotts mounted, who was the greater villain? The companies like Shell who stuck it out in SA and tried to change the system from within (if you can believe that)? Or those who pulled out like Bata and Barclays Bank and faced the retributive voices of those who claimed that sanctions hurt the poor populace more than those in power?

For many (mainly USA) companies, with moral pressure being applied by the Sullivan Code, ethical funds and demonstrative anti-apartheid activists, the clear ethical choice was to disinvest from SA. On the face of it, a clear-cut loss-making exercise. But maybe boycotts of their stores and products elsewhere would have cost them more in time?

And once apartheid had been dismantled, what were the ethical choices for business then? Surely, for the multinationals who withdrew, large scale reinvestment was the obvious and urgent thing to do? The right thing to do? And yet the reverse flow of the promised billions have simply not materialised?

Is it not the simple, sad fact that many of these corporate ethical heroes of yesteryear cannot justify their reinvestment financially. The escalating crime, industrial unrest, unstable currency, high interest rates … name your version of the economically rational reason. Doing the ethical thing won't pay off right now! The timing is not quite right.

Then we have the inspiring and tragic stories surrounding companies like the Body Shop (which, interestingly, has yet to set foot in SA). Here is a company which was arguably built from corner shop to international giant by speaking out on social and environmental justice issues. Only for the media and others to delight in knocking them down at first opportunity, as some will recall the "scandal" a few years ago. No such damaging attention reaches those who quietly conduct business as usual, going with the tide of popular opinion, rather than take any stand on ethical issues. For whom does ethics pay in this case?

Or let us talk specifics - a real case in point. A company