Bath Business and Society

Research, analysis and comment on the role of business in society from Bath's School of Management

Top 10 Responsible Business Stories: 2017

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📥  Business and society

 

As the year draws to a close, it is time to reflect on the big responsible business stories and scandals of 2017. Be it politics, products or pay, 2017 has raised new questions about the role of business in society. Here Sarah Glozer and Andy Crane talk us through their Top 10 stories of the year. If you have others you want to add, then join the conversation in the comments.

 

1. #MeToo

In October 2017, the news broke that one of Hollywood’s most notorious film producers, Harvey Weinstein, was being investigated for sexual abuse. Within a matter of days, the scale of Weinsten’s alleged abuse came to light, and he was fired from his company and expelled from industry associations. Yet the Weinstein accusations presented just the tip of the iceberg. Soon it became apparent that sexual misconduct was not just about Weinstein, but was, in fact, prevalent across the media industry and had been for decades. As high-profile celebrities such as Kevin Spacey and Louis CK were implicated, many wondered how such behaviour had been widespread for so long.

Social media then became a cathartic voice box for a generation of women – and men – from all over the world who had been subjected to sexual assault and harassment. Within 24 hours, the #Metoo social movement attracted nearly 5 million people, resulting in over 12 million posts, comments and reactions. While these personal stories were met with responses of #WeHearYou and #WeCanChange, this story went beyond the fundamentally sexist system of film production and the casting couch  to encompass virtually any workplace in any industry. #Metoo might just be the wake-up call that global business needed to address sexual harassment and abuse in the workplace.

 

2. Corporate America vs. Trump

“The president stole your land”: these were the words that greeted visitors to the website of Patagonia, the American clothing manufacturer, in December 2017. Patagonia called out the Trump administration’s decision to reduce the size of the Bears Ears national monument in Utah and voiced its intent to sue the President via its online channels. While this was one of the most provocative corporate campaigns against Trump, the initiative was not alone in its condemnation of the 45th President of the United States and his controversial policies. Earlier in the year a whole host of CEOs spoke out against Trump’s response to the Charlottesville violence.

As members of the President’s manufacturing council stepped down, CEOs from Intel, Apple and JP Morgan responded to Trump’s lack of condemnation for racist behaviour with Doug McMillion, CEO of Walmart, commenting, “As we watched the events and the response from President Trump over the weekend, we too felt that he missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists.” Trump’s reversal of policy on climate change in March was also met with corporate critique. Amid claims that "Climate change is real!", Mars Inc, Staples and The Gap publicly challenged the President’s decision to dismantle Obama’s stretching clean power plan. Corporate America vs Trump has shown that, for better or worse, business leaders no longer believe that their economic position precludes explicit political activism.

 

3. Another day in paradise?

Tax avoidance and offshore havens hit the headlines in November this year when the Paradise Papers exposed the dubious financial activities of multinational organisations and billionaires across the globe. Described as the “biggest tax scandal of this generation”, leaked papers and investigative journalism raised questions about the investment activities of everyone from the Queen to Formula One world champion Lewis Hamilton, as well as companies including Apple and Nike.

Whether it be a fictitious offshore company, extortionate tax refunds or secretive loan schemes, the paradise papers uncovered the complex yet commonplace activities of the rich and the famous through locations such as Bermuda and the British Virgin Islands. Amid calls to legislate for greater transparency of financial activities through public registers in overseas territories, commentators have suggested that tax havens perpetuate global inequality, raising big questions for the financial activities of corporations in 2017 and hidden corporate wealth, even in the wake of the 2016 Panama Papers.

 

4. Uber’s tipping point for the gig economy

Ride-hailing service Uber was dealt a "potentially mortal blow" this year when it was deemed "not fit and proper" to operate in London by Transport for London (TfL). In a move which sparked debate throughout the capital and beyond, Uber was stripped of its licence in September. While the move was welcomed by London’s mayor, employment rights campaigners and the trade body for the capital’s black-cab drivers, Uber is not giving up without a fight. The firm is currently challenging the ruling, which sees Uber services discontinued in Spring 2018, although the appeal process is due to take months.

What led to this catastrophic ruling for what was often dubbed as the poster child of the gig economy? TfL stated, “Uber’s approach and conduct demonstrate a lack of corporate responsibility” in relation to claims of worker exploitation, consumer safety concerns amid larger governance and regulatory issues surrounding the business. It seems that in not appropriately addressing its broader social responsibilities, Uber is facing a more uncertain future, creating new questions for the gig economy.

 

5. Net neutrality

Back in 2015, a landmark ruling, buoyed by activists and the Obama administration, ensured that the Internet would be kept free. What this meant was that broadband Internet was to be regulated as a public utility in the spirit of ‘net neutrality’, the idea that all information and services should have equal access online. In 2017, we saw a potential dismantling of net neutrality with the US Federal Communications Commission (FCC), arguing that Internet regulation is "too onerous on cable companies and stifle[s] innovation". Indeed, internet service providers and telecommunications companies such as Comcast, AT&T or Verizon are keen to move towards self-regulation, providing the opportunity to govern which data is transferred quicker, which sites get blocked, and which content providers pay a premium.

As large companies including Amazon, Google and Facebook have joined forces with smaller companies such as Reddit, Netflix, Vimeo and Etsy, and a whole of host of vocal activists, the FCC are due to vote on a potential repeal to net neutrality on December 14th. Without a clear mandate, net neutrality could be dealt a detrimental blow with serious implications for digital freedom of speech.

 

6. Aviation misery

2017 was the year of a whole host of calamities in the aviation industry. First, and perhaps most shocking, was the film of the physical assault of a passenger on a United Airlines flight that did the rounds on social media in April. In trying to make room for employees of a partner airline, security staff boarded United Flight 3411 and forcibly removed Dr David Dao from his seat, dragging the bloodied and screaming man through the plane by his arms. While it is reported that the passenger and United Airlines reached a settlement, the incident proved to be a PR disaster for the company, with many turning to social media to vent their own United Airlines frustrations.

Next up was Ryanair which is facing legal action for "persistently misleading passengers" amid announcements that it would cancel up to 50 flights a day in September and a further 18,000 flights between November 2017 and March 2018. Blaming a "mess up" in scheduling, the cancellations have impacted hundreds of thousands of passengers, often at short notice, and the misery is due to continue over Christmas as Ryanair pilots have vowed to strike for better conditions. In sum, the United Airlines and Ryanair stories among others are showing that the aviation industry is fast becoming the internet’s most hated industry.

 

7. Election meddling

In November, technology executives from Facebook, Twitter and Google testified before US congress regarding suspected efforts to interfere with the 2016 US election. A range of politically divisive posts on topics as diverse as immigration and gun control were spread across the world’s largest social media channels during and after the 2016 US election from Russian-backed pages. It is estimated that the posts were seen by approximately 150 million Americans, roughly half of all Americans eligible to vote. While Facebook closed the offending accounts, and reported the malicious actors, many are now questioning how quickly the response was from the tech giants and their role as "trusted" distributors of media content.

Indeed, as both Google and Facebook blamed the algorithms that sit behind their advertising activities for undesirable activity, perhaps bigger reform of the industry is needed to ensure that the science that sits behind social media marketing activities is more heavily regulated. The algorithms used to detect bad content operate as “black boxes”, off-limits to public scrutiny. When the fate of a country is at stake, perhaps we need to focus on unpacking these black boxes further and instilling greater transparency from the tech giants.

 

8. Pay and discrimination

How much more money do men earn than women? Between 10-50% more if you work at the BBC. This startling gender pay gap was revealed in salary figures released from the BBC in the summer, which identified that just a third of the top earners were female. Providing clear disparities across sports, news, TV and radio, the BBC became the subject of sex discrimination claims, with some calling for the BBC to stop using public money to discriminate against women. A pay audit that took place in October, in which it was found that there is "no evidence of systemic gender discrimination" was met with anger and further calls for reform to encourage fairness of pay.

While the BBC has vowed to make its pay processes more transparent, across the pond Google also came under fire in the summer for sexism and a gender pay gap. The furore was sparked with a leaked memo from a male software engineer’s 10-page manifesto criticising diversity initiatives and arguing that men may occupy more leadership roles than women in tech due to “biological” differences. While Google fired the employee and vehemently denies the accusations, the case further reveals the scale of gender discrimination in the technology and entertainment industries, with a clear need for urgent reform.

 

9. Consumer safety

Johnson & Johnson, the American pharmaceutical and consumer goods company that prides itself on ethical values, became the subject of criticism in the summer of this year when a woman was awarded $57 million in damages. In internal emails revealed as part of the court case, it came to light that a vaginal mesh product, used to treat urinary incontinence, was brought to market without a clinical trial and marketed for five years despite the company knowing that the product had a high failure rate. At least one in five women who have had vaginal mesh treatments have later had to have full or partial removal of the product. Aside from deceiving consumers, the recipient of the damages was left with serious injuries having used the product. Indeed, during the six years that the product was on the market, many users were left with debilitating complications, including severe pelvic pain, the mesh eroding through the vaginal wall or perforating organs.

What was most shocking about this story was that Johnson and Johnson, a company often held up as a role model of ethical business, deliberately tried to cover up the risks of these products, with senior executives even considering suppressing unfavourable data that “could compromise the future” of the device. With over 700 women claiming that the mesh has ruined their lives, Johnson and Johnson are facing further lawsuits amid claims that the company aggressively marketed to doctors and pitched the vaginal mesh devices as a fast and cheap option that would boost their profits. Ethics experts will clearly need to look for a new role model.

 

10. A new campaign for Jigsaw

"Love Immigration": these were the words plastered across a new Jigsaw advertising campaign that appeared in key London underground stations in October. With immigration being the hot button political issue of the year, it was a bold move from the somewhat unassuming British brand more usually associated with premium fashion and Kate Middleton than political statements. Yet, the brand hit out against critics of immigration as compromising British values, stating, “British Style is not 100 per cent British. In fact, there’s no such thing as 100 per cent British.”

The campaign, which also saw the company teaming up with ancestry.co.uk to allow staff to check their genealogy, was met with mixed response in Brexit Britain. But given recent critique of the fashion industry and its fast fashion focus on materialism and waste, perhaps this campaign can show how fashion can become at least a conversation starter, and at most, maybe even a force for political change.

Header image by Duncan C under licence CC BY-NC 2.0

 

4 Responses to “Top 10 Responsible Business Stories: 2017”

  1. Gordon McGlone on

    And where are the University Vice Principal pay scandals on your spectrum? Bath headlined twice in the UK national press but you have not mentioned it.

    Reply
    • Amy Lunt on

      Thanks for your comment Gordon. This is definitely something we thought about including, especially as it's now becoming a national issue, but we were keen to have an international focus for this post

      Reply
  2. Deborah Lewis on

    A sobering list! How do "the regulators" stay on top of this? It is obvious that we cannot rely on individual ethics. So sad to see Johnson & Johnson, usually one of the "good guys" on the list.

    Reply
  3. Rob Tyrrell on

    I really liked this list, a great blog post and a great summary of this year. However, this was posted on the 18th and the FCC already repealed Net Neutrality on the 14th, as mentioned. The outlook seems dim for the United States of America...
    Thanks for the really informative updates!

    Reply

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