The moral responsibilities of business: a philosophical perspective
60 Minnesotan CEOs have signed an open letter condemning US Immigration and Customs Enforcement (ICE) activity. What are the ethics when businesses take a stand? Asks Athol Williams
As ICE agents violently rip through communities, the turmoil has impacted every sphere of life in the city of Minneapolis and the state of Minnesota more broadly and sent anxious ripples around the world — including the business world.
Business leaders in the US are currently facing an increasingly common industry question: Should we speak up about social or political harm caused by others. While over 60 Minnesotan CEOs signed on to an open letter calling for ‘immediate deescalation of tensions’ and cooperation among state, federal and local officials, it stops short of condemning ICE action — in fact, it does not even explicitly refer to ICE.
Along with this letter, many companies have been criticised for their relative inaction and silence. Is this silence justified? Or are critics right to pressure business leaders to act?
Business leaders in the UK are not excluded from considering these thorny issues. They too, must make decisions about when to speak out on issues like climate change, Trump tariffs and inclusion.
As a lecturer in management at the University of Oxford with 15 years of executive experience and an applied philosopher, I think it’s important to view these questions through both a business and philosophical lens.
Is this a matter of return-risk analysis?
Ordinarily, the logic that guides business decisions is straightforward. Will this action generate a return? Will this return justify any risk incurred?
In the case of business leaders speaking out against ICE activity, the risk and associated cost to businesses — which could include backlash from consumers, business stakeholders or even directly from the president of the US — are very likely to exceed any benefit they can expect to gain from speaking up. Using this logic, the inaction of business leaders would be justified.
An obligation to act?
But business decisions require broader considerations than these. A more robust approach is to ask whether the company bears an obligation to speak up.
There are two distinct types of obligation to consider. First, companies bear an obligation to their stakeholders to pursue value-creating opportunities. Second, companies may also bear an obligation to perform actions on moral grounds, derived from their social contract with society or their status as social institutions.
This is where significant complexity arises that tangles executives into confusion and inaction.
These leaders could meet their companies’ moral obligation by speaking up but renege on their obligation to business stakeholders to preserve and create value. Or they could remain silent and uphold obligations to the business but fail to meet moral obligation. So what are business leaders to do?
Can moral obligation supersede business obligation?
To address this, we should consider when a moral obligation supersedes a business obligation. When would it be justified for business leaders to act for an extra-commercial good where there are likely costs and no or limited benefit to the business?
It’s generally argued that if a company has participated in the generation or perpetuation of a social harm, they bear a moral obligation to act to rectify that harm. For example, if your company contaminates neighbourhoods with asbestos dust, it should pay for the resulting losses due to cancer.
In the Minnesota case, businesses are not perpetrating the harms and no one is accusing them of doing so. Some companies are benefiting from federal contracts with ICE but these seem to be exceptions, with the dominant view that ICE’s actions will have dire economic consequences.
At worst, you could argue that businesses are acting as bystanders. But bystanders are parties who could have acted to prevent or alleviate a social harm but chose not to, and it’s not at all clear businesses actually have that power. Speaking out may do nothing to stop the turmoil, even if it does offer psychological support to those suffering at the hands of ICE.
Therefore, because most businesses aren’t creating or furthering the harm created by ICE, they are not morally obligated to address the harm.
Where does that leave us?
When things go wrong, it’s understandable to want someone, often anyone, to make things right. In cases like Minnesota, we look to companies that we believe can make a difference because of the resources and power they possess. But as I’ve argued, criticizing these companies for their silence is unfair. It downplays their very real obligations to their stakeholders and overstates their ability to stop the harm.
However, I believe there is a way for businesses to speak out against harmful acts while honouring both their business and moral interests: Businesses can seek the endorsement of a moral action from their stakeholders, who will bear the burden of any subsequent fallout.
This is not unheard of; look at the 98 per cent of Costco shareholders who voted in favour of the company’s diversity, equity and inclusion (DEI) policies after President Trump directly attacked DEI programmes via an executive order. Investors at Apple, Goldman Sachs and Levi’s also voted in support of their companies’ DEI efforts.
So even without a moral obligation, leaders can choose to pursue risky public action for social good or long-term business benefits — but should first actively seek the endorsement of their employees, suppliers, customers, investors, creditors and other stakeholders.