What can the differing reactions to recent corporate wrong-doing teach us about new approaches to inclusive business, asks Corporate Citizenship founding director, Mike Tuffrey
Much in the headlines these last couple of months has been the continuing woes of British banks. Barclays is the most spectacular, with both chairman and chief executive falling on their proverbial swords having admitted misconduct over setting LIBOR. Almost as shocking was previous poster child, Standard Chartered, after breaking American money-laundering rules for Iranian customers.
Along with damaged reputations, the immediate penalty was hundred million dollar fines from US regulatory authorities: $160 million in June for Barclays and $340 million in August for Standard Chartered.
Little noticed, meanwhile, was another battle between a British-based company, GlaxoSmithKline, and US regulators, which resulted in fines 10 and 20 times as much, for wrong doing lasting two or three times as long. In July GSK coughed up fully £3 billion, after pleading guilty to mis-selling anti-depressant drugs, and settling claims about overcharging US health programme Medicaid and kickbacks to doctors to prescribe their medicines. GSK CEO, Andrew Witty – recently knighted rather than fired – expressed “regret” and reaffirmed his determination to change the culture to “put patients first”.
Any fair reading would say the banks’ behaviour pales in comparison with such systematic wrong doing for so long on something so sensitive as patients’ health. Yet the public outcry around GSK has been muted, to say the least. Why is that?
One might say it’s because the banks are forming a pattern in the media. But actually, fellow pharmaceutical company, Pfizer, was massively fined in 2009 and Abbott Laboratories likewise, only months before Glaxo. These stories were also poorly reported.
One reason, I believe, is that banks have done a bad job in explaining the essential role they play in keeping our savings safe and the wheels of the world economy moving. Bankers are seen as greedy and self-serving, not paragons of prudent virtue.
Contrast that with pharmaceutical companies: intuitively we know they are the ‘good guys’, inventing miracle drugs, helping eradicate appalling diseases and keeping us healthy. We tend to overlook their huge profitability and occasional lapses in conduct.
It’s only a theory, but it links to the theme running through our analysis this month around ‘inclusive business’. Our writers describe how some companies are examining their business models to find ways of including poor and marginalised people. In so doing, they renew and reinvigorate their corporate purpose and remind audiences of their inherently beneficial contribution. As Miriam Turner from Interface says, it’s about moving from ‘stop doing harm’ to ‘start doing good’.
If my hunch is right, the key to good headlines is a ready understanding of why your company is a good thing, really. And inclusive business can help.