Just because it’s legal doesn’t make it right

Posted on December 12, 2012

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Two events struck me as incredibly important in the last week. The first of these was the response to the tragic death of Jacintha Saldanha after the now much-publicise royal prank call. The second was a well-known coffee chain agreeing to pay £20million in tax after “listening to their customers.” These two events couldn’t be more different, yet the actions and response of the two corporations involved – 2DayFM and Starbucks – demonstrates a lack of internal process and judgement.

At the time, both organisations claimed that no law had been broken – prank calls and tax loopholes exist everywhere – and yet after the events both organisations were left with egg on their face, and in the case of 2DayFM a heavy suggestion that they contributed towards an individual’s suicide. Last Saturday, days after Starbucks had agreed to make a tax contribution, my local branch had been shut due to protests. The rumblings are continuing.

Now prank calls have happened since time immemorial – and will continue to happen in the years to come – and tax loopholes will always be found, but what do the actions of these corporations suggest? The law is not enough.

In the last week, Starbuck’s UK head Kris Engskov admitted that they underestimated the strength of feeling their customers would have on this issue. Waiting to find out how happy or not customers might be with decisions like tax is proving to be a bit of a nightmare for them. What’s extraordinary is the judgement paid by individuals inside Starbucks when it came to making decisions about tax. After all, on Starbuck’s website there’s the following statement, “In addition to being good neighbours we can use our size and our brand for good, by bringing people together, inspiring change and making a difference.” The question is, where’s the moral backbone in the decisions that have been made around tax. They clearly do a lot in the community, but their DNA needs to spread to all decision making. Their policy on tax may have been legal, but was it the right thing to do?

In the case of 2DayFM, it’s becoming apparent that the radio station sought permission from the hospital to broadcast the prank call on a number of occasions and no permission was forthcoming. One assumes that this suggests that permission was not being given. And yet, someone somewhere made the call to broadcast. Legal were suggesting that no law was being broken. But, was it the right thing to do?

Somewhere behind the scenes individual judgement calls have failed: A disconnect between values and behaviours, and the actions of employees. This is why a strong code of conduct and organising set of principles is needed. Of course, if 2DayFM and Starbuck’s values sets did state that it is ok to be duplicitous, to ignore feedback and to use ill-gotten content then there internal principles are working fine – I imagine this isn’t part of there stated values or in their respective codes.

Operating within the letter of the law isn’t really enough is it? Companies need to stop just “listening to customers” and reacting and start to represent and push for what they see to be ethical behaviour. Customers haven’t got time to be telling the organisations that they use what they should be doing, nor are the necessarily the right people to be doing so. One hopes that more than just paying £20million in tax, that Starbucks will start to build trust with customers by starting to actively explore what fair tax is – and be seen to be doing so.

With more and more employees wanting to join organisation that do have a set robust principles and ethical standards, this is going to become more important, not less. The question for the like of Starbucks and 2DayFM is how damaging events have been and how long it will take to recover. And, at the end of all this, we still live with the knowledge that there is a family coming to terms with the loss of their mother. That brings everything into perspective.

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