Ethics Risks Companies Face in 2021
In my last blogpost of 2020, I identified the eight worst incidents of corporate misconduct of 2020, and promised to identify ethics risks that threatened to spawn incidents of misconduct in 2021. As the chaos of the first week of the year demonstrated, predictions can be easily disrupted, but let me identify several of the ethics risks that ought to be upfront in corporate thinking this year.
Social media tolerance for false and inflammatory speech: I knew this one was ripe but I did not expect it to erupt the first week. The actions of social media platforms to close accounts associated with President Trump and to promise to do the same with any account that repeats false claims of stolen elections or threatens violent action is laudable. But these extreme cases will lead to a broader expectation and debate over the ethical responsibility of social media platforms for harms perpetrated on those platforms. Tighten your seatbelts.
Concentration in internet services and monopolistic practices: The antitrust law suits against Facebook and Google will focus a debate and critique of particular data and privacy practices, and of competitive initiatives which have enabled these companies to achieve their dominance. As these specific practices are called out, every company using that practice will be questioned.
Fairness in vaccine rollouts: Already the vaccine distribution practices of several companies, governmental bodies, and nonprofit medical centers have been challenged. Are the vaccine manufacturers acting ethically in agreements with governments and private parties for supply? Are local governments acting ethically to prioritize one type of essential worker over another, or over the elderly? Even within a single medical institution, who gets first access to vaccines—the front line staff dealing with patients, or the executives in their private offices?
Concentration in hospitals and medical services: These lead to inflated cost of medical treatment and excessive salaries for health care executives. The nonprofit Sutter Health of Northern California, has acquired so many hospitals and medical practices in its region that some argue it can dictate prices to insurance companies and patients. How medical systems, their strategies and practices, influence the cost of medical care will be a hot button ethical question.
The continued resistance of oil and other fossil fuel companies to addressing climate change: As public policy gets serious about the threat of climate change, oil companies’ behavior will be scrutinized as never before. They will suffer the blows tobacco companies did a generation ago. General Motors recent “switch” from supporting President Trump’s looser goals on fuel economy to support the state of California’s tighter standard will be presented as evidence that most businesses don’t really care about climate, but follow the political winds.
The complicity of financial firms in scandals: Goldman Sachs’ premier role as the enabler of the 1MDB scandal last year (see my 2020 review) will highlight the role financial institutions of all kinds play in enabling and even promoting questionable practices by other companies, governments, and individuals world wide. Similarly, accountants’ behavior will be part of this scrutiny. Ernst and Young has been tied to a string of recent company implosions and will be particularly watched.