Axes and New York City just don’t seem to mix. If you decided to chop down something in Central Park, I imagine that one of those police on a horse would slap a big juicy fine on you. Yet the Best Made Company located in New York City makes axes.
This is one of those rare companies who have found their story and know how to build their company around it. They do a much better job at telling their story then I do, so I suggest you make a visit to their about page to see how it’s done.
You gotta like a company that names their axes: compassion, fortitude, courage, and grace. You also gotta like a company with pithy statements like: “The notion of ‘mastering a tool’ is a bit of fallacy: master your desire, and then the perfect tool will present itself.” The Best Made Company knows how to stand out and inspire.
The recent ACC Docket has an article entitled Fencing the Herd about confidentiality agreements. It generally has some good advice. But then it says the following:
“As a first line of defense in protecting your company’s confidential information, you must first identify what information is confidential and/or proprietary.” OK, we’ll get this done tomorrow. This is almost impossible to do. Think of all the hundreds of thousands of documents a typical large company produces. Plus for every document you review, there will be four or five new ones created.
Then the article says, “identify the population of employees, independent contractors and/or vendors who have access to the information …” OK, we’ll get this done right away. Do you interview every employee? Do you review their job descriptions which typically are out of synch with what employees really do. Do you look at every contract you have with independent contractors?
But there’s more, “identify what steps will be required to support the claim that the information deserves confidential treatment.” Huh? Then the authors say, “once this is done” as if it’s so easy to do, you can generate standard agreements for each population and a process for obtaining executed agreements from each. Yes, this is so easy to do.
This is the type of advice that gives lawyers a bad name. This is unreasonable and over-lawyering. There are easier ways of protecting confidential information.
The Ethics Resource Center recently came out with their 2009 National Business Ethics Survey. Their findings? We’re in an ethics bubble because of the recession. According to their research, ethics improve when times are tough; they lapse when times are good. This is an interesting conclusion.
Do ethics have a cycle, just like the stock market? Is there really a correlation between ethics and the stock market? I’m having a hard time seeing how the cycles of the stock market coincide with ethics. If this is the case, then we can predict stock market cycles through ethics surveys. There must be another explanation for the rise in ethical conduct. Perhaps in good economic times there are more opportunities to be unethical. Perhaps employees are more judgmental in good economic times because of a feeling that they’re not getting their fair share. It just seems that there must be more to the story.
The other conclusion in the survey seems pretty obvious: work on creating an ethical culture and misconduct goes down. I’m glad to hear this. If the opposite were true, then we should just throw our hands up in the air and call it quits.
The advice in the survey: create an ethics committee on the board, recruit ethics professionals for the board, establish financial incentives for ethical leadership, encourage disclosures about corporate ethical culture, emphasize culture and principles. These are good suggestions, but I wonder how much these solutions will help.
Most boards are already full of committees. I don’t know how much an ethics professional will contribute to a board. Money is the wrong incentive for ethical leadership. I like the idea of disclosures. It creates accountability. Which brings me to the last one – emphasize culture and principles.
This is where the difference can be made. I’m not talking about more manuals and policies. I’m talking about innovation in communication. There must be better ways of communicating these principles that inspire and are memorable. I don’t see these in the industry right now.
On November 13, 2009 the FAR council proposed new regulations about personal conflicts of interest. If you help a Federal agency plan acquisitions, develop statements of work, evaluate contract proposals, award contracts, administer contracts, terminate contracts, or determine whether costs are reasonable, allocable, and allowable, then you’ll have some work to do.
You’ll be required to screen your employees for personal conflicts of interest, get financial disclosure forms from them, get updates on the disclosures, get non-disclosure agreements, implement controls for non-public government information, and instruct employees of their obligations. The biggest requirement is to avoid even the appearance of a personal conflicts of interest.
If the contractor discovers a conflict, they’re required to report it to the contracting officer who will decide whether to develop a mitigation plan, provide a waiver, or suspend the contract, terminate the contract for default, or debar the contractor.
Proposed Regulation – FAR Case 2008-025 Preventing Personal Conflicts of Interest for Contractor Employees Performing Acquisition Functions
This is the question that Clifford Owen asks in his recent article in the Globe and Mail. His answer: No. Not in a university setting. He says:
Students indifferent to justice just aren’t going to be won over to it by anything that I could say. Or that anyone else could say. A university course is not a revival meeting. I don’t cure palsies and I don’t plead with students to come forward to declare themselves for ethics. And if I did – and if they did – it wouldn’t mean a thing. Talk is cheap. Talk consisting of high-minded oaths and declarations of one’s moral seriousness is even cheaper.
If I’m understanding him correctly, he’s saying that one’s character is shaped long before they arrive in college. There’s nothing a professor could teach a Bernie Madoff that could have stopped him from his shenanigans.
There might some truth to this. I’ve worked with youth in youth groups and they seem malleable and teachable. I’ve worked with adults and they seem set in their ways. But we don’t give up. Mr. Owen’s thesis is hopeless. He seems to look at adults and conclude that they are who they are.
I don’t buy his argument. All it leads to is a conclusion that people are generally bad and need to be governed by heavy regulations and oversight. It’s an argument for more government.
I reject Mr. Owen’s argument and think people can be taught and inspired to be good. I’m convinced that we all have a moral sense as James Q. Wilson eloquently and thoroughly argues in his book The Moral Sense. We are born with it, but it can be demeaned, rationalized away, and weakened. This is what’s happened over many decades. As a result we have lost confidence in the values that are derived from our moral sense. And we find ourselves in our current situation.
Mr. Wilson says, “Maintaining limits is a way of asserting community. If the limits are asserted weakly, uncertainly, or apologetically, their effects must surely be weaker than if they are asserted boldly, confidently, and persuasively.” So we don’t throw up our hands and say we are who we are. Instead, we assert ethics boldly, confidently, and persuasively at home, at church, in schools, in college, and in business until we are at a higher level of self governance. Otherwise we diminish ourselves to the lowest common denominator.
Here’s a quick take on the Small Business Administration’s proposed changes to its regulations as they pertain to Alaska Native Corporations, Native Hawaiian Organizations, and Indian Tribes. The primary NAICS takes more significance. Joint ventures get tighter. The mentor/protege program gets a lot of little changes. And there’s some more reporting requirements.
- The most important statement: “SBA believes that the 8(a) BD program is a much-needed and beneficial program, and that the tribal and ANC component of the program serves a valuable economic and community development purpose in addition to its business development purpose. It is not SBA’s intent to shut down any component of the 8(a) program that truly assists the development of any small disadvantaged business.”
- The biggest proposed change is to NAICS code requirements. If an 8(a) exceeds its primary NAICS size for two consecutive years, it will be kicked out of the program. The 8(a) can’t get a contract in the primary NAICS code of a sister company for the first two years of its life.
- The 8(a) must perform 40% of the work in a joint venture and report to the SBA that it has met this requirement. The joint venture can only get three contracts in a two year period. If the joint venture is a separate legal entity, the legal entity must have its own employees. The SBA must receive an addendum to the joint venture with each consecutive contract. The mentor cannot be a subcontractor under the joint venture.
- There’s a bunch of changes to the mentor/protege rules, but nothing earth-shattering.
- The SBA’s Office of Inspector General may ask for a formal size determination.
- The SBA is looking for advice on how to determine that Indian Tribes are economically disadvantaged. Their solution will probably make it easier for Indian Tribes to certify 8(a) companies.
- More reporting requirements. ANCs must annually submit information to the SBA relating to funding cultural programs, employment assistance, jobs, scholarships, internships, subsistence activities, and other services to the affected community.
- The San Francisco office will process all ANC 8(a) applications.
- The SBA made a statement that ANCs, NHOs, and Indian Tribes must be treated consistently.
- NHOs have been exempt from the dollar threshold requirement for DOD contracts. The proposed regulations make this explicit.
Conventional wisdom holds that insider trading laws are good. These laws are meant to protect the little guy and are supposed to make trading fair. But according to an article in the Wall Street Journal (Donald Boudreaux) insider trading is impossible to police and helpful to markets and investors. Does this argument have any merit? I don’t know. I do know that this is not the first time this argument has been made. Economists such as Henry Manne, Milton Friedman, Thomas Sowell, Daniel Fishel, and Frank Easterbrook have all argued against insider trading laws (Wikipedia).
There’s no need to rehash the arguments against insider trading. The main point I want to make is how to approach arguments that question conventional wisdom. I found this article from tweet from a respectable ethics expert. My question is “why is it moronic?” Before dismissing the argument, tell me how the current law accomplishes its goal of making the market more fair. Does the law really protect the little guy? Or does it allow corporations to manipulate bad information. Tell me why government regulation does a better job than corporate self-governance on the matter. Are insider trading laws outdated in this day of immediate information on the Internet?
My point is that arguments surrounding ethical issues need to have a good dialogue rather than ad hominen attacks against someone as “moronic.” I don’t think people like Milton Friedman are moronic. Let’s discuss the issue and see if there are better ways of handling difficult matters. Dialogue on ethical issues need to stay on a higher plane.
I’ve read lots of policies intended for people who probably never read them. Why don’t they read them? Because of the dreaded legalese disease. I’ve never seen a policy written in a conversational tone – a tone that speaks like a human. Until today.
Thank you Linda Skrock – the Senior Engineering Program Manager/Owner of Sun Microsystems who writes about corporate social media policies. She takes a very common sense approach. For example, she says: “Is it really worth sacrificing hundreds of thousands of fruitful conversations because we’re afraid of a possible nasty conversation?”
Good question. How many companies have missed out on the benefits of social media because they think it’s too risky. When the reality is that all the benefits of social media far outweigh the few times where an employee will abuse the privilege. So look to Sun as an example of how to do things and take a look at their social media policy.
What should happen to David Letterman? He’s apologized twice on air. Is that enough. Should we just move on with things. What sort of message does that send to viewers. What would have happened if he wasn’t a celebrity generating large revenues for the station. Is there a double standard here.
CBS’ 2008 Business Conduct Statement says: “If a consenting romantic or sexual relationship between a supervisor and a direct or indirect subordinate should develop, CBS requires the supervisor to disclose this information to his or her Company’s Human Resources Department to ensure that there are no issues of actual or apparent favoritism, conflict of interest, sexual harassment, or any other negative impact on others in the work environment.” It appears that David Letterman violated this policy. If so, how should he be disciplined.
I also assume that CBS has investigation procedures. If so, then the right thing to do is treat Mr. Letterman just like any other employee or contractor and follow their procedures. An investigation should take place and the matter delivered to the body that decides the disciplinary action. Then, since this is a very public matter, the discipline should be publicized.
It does more harm to do nothing because all that says is that there is a double standard. One for the rich and famous and another for the rest of us.
On Septemer 22, 2009 the GAO released its report on the compliance and ethics programs of 57 government contractors each with yearly contracts over $500 million. The report didn’t find any startling conclusions. It found that all of these large contractors had programs in place – a code of conduct, ethics awareness programs, and internal controls. It would be interesting to see how many contractors below this amount have programs in place.
The challenges for government contractors that were discovered in this study are determining whether mandatory disclosure is required, expanding the program to meet the growth of the company, checking whether subcontractors have their programs in place, and utilizing subcontractors in foreign countries with different standards.
The report ends with four recommendations.
- Implement new DFARS giving DCMA and other contracting officials responsibility to verify the implementation of contractor ethics programs.
- DOD IG’s office should determine the need for displaying the DOD fraud hotline posters.
- DOD IG’s office should determine the content of the poster including revising the poster to inform contractor employees of their federal whistleblower protections.
- If there is a need for the posters, amend DFARS to require display posters regardless of whether contractor has its own posters.
It appears that these changes wont affect the large contractors. They have the resources to adapt to the changes in the law. The biggest challenges are more than likely with smaller contractors. Once the DCMA starts reviewing contractors, they will more than likely find that many contractors either don’t have programs or that their programs are inadequate.
