ethikos: Examining ethical issues in business since 1987

From our September/October 2009 issue:

Retailer’s Ethics Blog: 'A Remarkable Exercise In Transparency’

In their quest to communicate the ethics and compliance message, a few companies have gone so far as to publicize their own employees’ missteps and transgressions.

DuPont was a pioneer in this area, publishing one-page ethics ‘bulletins’ of compliance violations from the company’s own files (see “DuPont’s Daring Communications Formula,”Ethikos, January/February 2004). Others have followed, including Boeing with its “Ethics Report”that detailed code of conduct violations–and the corrective actions taken (see “Boeing Company’s Ethics Improvements Take Flight,”Ethikos, July/August 2006). Cisco, too, has recently embraced this concept (see “Cisco Transmits Ethics To A ‘Wired’ Work Force, Ethikos, November/December 2008).1

The number of companies that have gone this route likely remains small, however. In-house attorneys and sometimes human resources officers often advise against it, fearing defamation lawsuits or worse.

Moreover, even the intrepid few have generally kept their reports or bulletins within the company–publishing the cases in internal newsletters or posting them on their intranet sites. They have been reluctant to trumpet their miscues to the outside world.

Until now. Earlier this year, Kathleen Edmond, Chief Ethics Officer at Best Buy, Inc. (Minneapolis), began a blog (www.kathleenedmond.com) that discussed transgressions and penalties at the giant electronics retailer.

As far as can be determined, this enterprise–“a remarkable exercise in transparency,”one ethics practitioner called it–is the first of its kind to be conducted externally. It is posted publicly, on the Internet, in other words, not on the company’s private network, and comments are welcomed from the general public.

“I keep waiting for it to blow up,”commented Edmond, when contacted by this publication. But it hasn’t happened yet, and she has been at it for six months.

Employee terminated for returning vendor-supplied merchandise

The first significant peak in business ethics occurred in 1905 (0.0000162%), during the so-called Progressive Era in U.S. business. There were no books with business ethics in their titles published at this time, but there were references in periodicals, such as in the Atlantic Monthly and the Yale Review.

The first posting, March 27, 2009, discusses the case of a Best Buy employee who was terminated after trying to return vendor-supplied merchandise to a Best Buy store. “At the time of the return and when later questioned by a manager, the employee stated emphatically that the items were gifts from a close relative and denied that any of the items were vendor gifts from a recent Road Show event.” Moreover, the employee had signed a waiver at the Road Show “stating that vendor gifts cannot be sold or returned."

At the bottom of the case report Edmond added a series of questions for discussion, including:

Other postings deal with a store employee terminated for submitting multiple manual check requests for absence/vacation time on behalf of his peer (April 28, 2009); a store manager terminated for falsifying inventory documents (June 19, 2009); and a supervisor-level Best Buy employee terminated for “violating the ‘street date’ on a new product by purchasing the item two days prior to the product’s intended release to the marketplace”(August 19, 2009).

Honesty cafes in Indonesia

Not all cases deal with employee firings. Readers were asked to comment, for instance, on a new tactic to teach honesty in Indonesian schools and government buildings–“honesty cafes,”in which patrons use the honor system to leave money for snacks and drinks (July 6, 2009).

Edmond generally posts one case a week, and she has two main criteria for the cases she selects: 1) The transgressor can not be identifiable, and 2) there has to be a lesson in the story.

“We’re trying to take transparency to another level,”says Edmond, who admits there was some angst attached to the project.

Edmond hasn’t been quite as diligent as she would like, she says, posting just a couple of items a month. The cases require some vetting. She’ll go to people close to the incident. Are these the facts? Could ‘so and so’ be identified from this?

The first story was rewritten four times. Was it too strong? She watered it down. Then she was warned, “If you water it down too much, people won’t read it.”

Edmond, who was also interviewed by this publication several years back (see “Retailer Best Buy Resolved To Do Better With PS3 ‘Launch,’”Ethikos, January/February 2007), was asked about the origins of the blog.

One spur was a Best Buy audit committee meeting that Edmond attended. The audit committee was emphatic: “We have to be more vigorous in telling our people what they’ll get fired for.”

There’s potential liability (e.g., defamation) in such blogs, of course, but if a company doesn’t communicate such critical information about penalties and potential disciplinary matters there can be liability as well.

Moreover, the “internal folks”at Best Buy, particularly those in the human resources area, have been doing a lot of work on employment engagement. They were insistent: The way to communicate today is through the social media. Best Buy has 150,000 employees across the globe, including employees in Turkey and China, and all their communications can’t come in the form of memos from Minnesota headquarters. Blackberries, phone texting, Twitter, blogs–“you got to put it out there,”they told her.

Some of Edmond’s colleagues have been surprised, though. They asked her: Why would you want to put this outside? Why air dirty laundry?

Her answer: “There is no inside/outside anymore.”When Best Buy dropped the ball ethically a few years ago, and emails were sent back and forth discussing how the organization would respond, “Those emails ended up on a website in the United Kingdom in four hours,”Edmond recalls.

If a story was going to get ‘out there’ anyway, she at least wanted to take control of it.

Someone else told her, “You get more grace for being the first,”rather than the second or third, so she might as well go for it.

Other companies’ ethics officers have looked at the site and a few have asked about such and such a case–“tell me if this blows up,”i.e., if there is a strong reaction to the posting.

A Best Buy vice president called. He had heard from the supervisor of a character identified in one of her blogs as ‘Chad’ -- one of the individuals who actually ‘did good.’ Chad had recognized himself in the posting. “You don’t now how important it was to Chad to be recognized,”the vice president told Edmond

“Maybe what I do is not invisible,”she thought.

The ‘Michael and Chad’ story (“DTV Install Contract Provides Ethics Lesson,”July 30, 2009) was, in fact, the first posting where the characters “did something right,”where “someone prevented us from going off the road.”

The pair, part of Best Buy’s Geek Squad, received a request from field leadership to provide some special in-store promotional signage related to the nationwide digital TV conversion. Before complying, however, they stopped “to ponder some very important questions:

At the bottom of this posting, Edmond asks, “Do you have other examples of Best Buy employees putting life into our values of respect, humility and integrity? I would love to hear them–and share them with others.”

The lesson in this instance, she notes, is that “you can lead from any chair.”

Edmond was asked how she selected material for the blog. Best Buy has a Peer Review Process. Employees can demand a hearing before they are terminated. Edmond often draws on material from these hearings, particularly when there is a ‘message’ involved.

Is there anything she won’t post? “Only something that could be identifiable.”But it must teach a lesson, too.

How much of her time does this all take? “It should take more time than it does.”Even though there are “just two of us”in the ethics office, she has “lots of willing hands to help”when it comes to finding material.

At present the blog requires about 30 minutes a week of her time. It probably should take about 90 minutes, she says. One posting a week would appear to be the minimum. Less than that and readers may stop visiting the site. Some regularity is required.

Have there been increased calls to the ethics office as a result of the blog? “Nothing significant.”Edmond thought there would be more conversation online, too, about the cases. On the other hand, she doesn’t really want Best Buy employees ‘calling out’ each other by name on the blog site.

Does she think other ethics officers will seek to create similar blogs? “Yes, I do, but we’ll wait and see.”Others might be more cautious. They may want first to see if the whole business ‘blows up,’ as Edmond puts it.

“What my muses are telling me is that ‘people want to feel as comfortable with you as an individual.’”

She isn’t entirely comfortable with this notion. Some personal ‘boundaries’ might still be in order.

Her feeling about the blog after six months? “It’s the right thing to do. I just need to be better at it.”

Edmond has the sense that people are reading the stories. One employee responding to a posting told her: “Gosh, I knew about that seven years ago. I tried to talk to my boss about it, but I got shot down.”That in itself offers a good reason to keep the communications channel “warm.”

Overall, the key challenge, says Edmond, is to keep looking at “fresh ways to stay connected and understand who our audience is.”Just because something worked five years ago, doesn’t mean it works today. One must keep asking: Does it still work?

— Andrew Singer


1Bell Atlantic did something similar, too, 15 years ago, according to ethikos co-editor Joe Murphy, and its experience was reported in Corporate Conduct Quarterly.