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Hundreds of companies are boycotting Russia. How does it end?

Companies’ exit from Russia might be more effective if it were clear under what conditions they’d return. 

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  • Walter Frick
By Walter Frick

Executive editor


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More than 400 companies have stopped doing business in Russia in response to its invasion of Ukraine. Some are legitimately trying to do the right thing; others are no doubt worried about “reputational risk.” But when we asked Nien-hê Hsieh, acting director of the Safra Center for Ethics at Harvard and a professor at Harvard Business School, to explain how the corporate boycotts might end, he didn’t have an answer.

“That actually is the one thing that I don’t know if companies have thought enough about,” Hsieh told Quartz. “If Boeing and Airbus are no longer supplying planes and parts to Russia, when does that stop? When do we resume financial services in Russia?”

This lack of clarity is worrisome, for three reasons. First, companies’ vagueness reeks of moral opportunism. They may be signaling that their actions are temporary in order to hedge their bets. If public pressure lessens, they might reconsider—even if the war in Ukraine is still ongoing.

Second, to the extent that companies hope to put pressure on Russia and influence its behavior, their exit would be more effective if it were clear under what conditions they’d return.

Third, it speaks to how far most companies still have to go in determining what they stand for. Corporate statements on Russia have tended to be extremely light on moral reasoning: McDonald’s, for example, said its core value has always been to “Do the right thing,” which raises more questions than it answers.

Meanwhile, both Shell and Goldman Sachs withdrew but claimed it was really the job of governments to make these decisions. That’s not a total abdication—if the goal is to influence the war, corporate withdrawals might be most effective if they’re reversed when sanctions are. But deference to government is not a fully satisfying answer. Companies will need to stop being reactive and think more about what they truly value.

6 ways of thinking about corporate ethics

In our interview, Hsieh described six values that he uses to teach students business ethics—five for individuals and a sixth that’s specific to companies:

📜  Rights. “Are there certain basic rights that either impose constraints on what we are permitted to do to others, or are there basic rights that entitle people to certain claims on us?”

🌼  Well-being. “What is your responsibility to help promote well-being in certain cases? For example, with customers. What is your responsibility to make sure that you’re not harming their well-being with your products or services?”

⚖️  Fairness. “How do we try to manage trade-offs across people when it involves their well-being and interests? For example, in the workplace, what is it fair to pay people? When is it fair to treat people in different ways?”

🤝  Trust. “We ask [students] to consider two conceptions of trust. One idea is trust as reliance: You trust me or we trust the company because it’s reliable, or it says what it will do. Then there’s a deeper kind of trust that’s fundamental to business. You see this in the idea of fiduciary duties, which is the idea that I trust you, for example, if you’re an investment manager, because you have my interests in mind as well.”

🕴️ Autonomy. “To what extent are you promoting or enhancing people’s autonomy?”

👊  Power. “Corporations have a kind of power and impact on society that individuals don’t. And so that adds another level of thinking about the legitimacy of corporate action and the ideal role of business in society.”

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Conflict and complicity

“If you look back at the question of whether to divest from South Africa or not in the 1980s, there was reasonable disagreement on which was the right approach. Nobody was disagreeing that apartheid was wrong or unjust. The question was what would be the best way to actually try to ameliorate the situation. Some people argued that you could try to minimize the complicity and…the best way to ameliorate the situation was to stay in the country. Other people argued that staying in the country and paying taxes was a kind of complicity. So I think that’s where these things come into contention.” —Nien-hê Hsieh 

3 questions for company leaders

So your company is committed to “doing the right thing”—what now? We talked to Johnny Taylor, CEO of the Society for Human Resource Management, about the kinds of questions his organization is getting from company leaders dealing with the Russia-Ukraine conflict. Taylor says there are three important categories of inquiry:

  1. Should you respond? “We’re a global society, so everything impacts you, whether you know it or not. But the question is, where should a company respond to issues that aren’t arguably directly connected to your business?”
  2. What should you say and what’s the focus? “Are you taking a position about war generally? Are you taking a position about how it might be impacting your employees? Or do you go externally and get into the fray and decide to take sides?”
  3. What about employees? “The employers I’ve spoken with have tried to be very careful with this, because an employer who takes a position runs the risk of offending employees. In my shop, I have people who were born in Russia, and then there are people who are married to Russian-Americans. While you may want to take a position about Russia, that comes with risk as well.”

Taylor says “there is no question” companies’ stances on Ukraine will open them up to questions in the future. “I’m not suggesting that a company should not take a position, because I do think this is incredibly egregious,” he says. “That being said, we all should acknowledge that we’re playing with a slippery slope. We’re already beginning to see this in the workplace. There is a question amongst the employee population, why now? Why this one and why not when other atrocities have occurred? It’s a fair question.”

Sound-off interlude

That’s what the experts say, but we want to know what you think. When should a company take a stand, and how?

Quartz stories to spark conversation

🇺🇦  Hiring is a form of direct assistance to Ukrainians

🇨🇳  Chinese scholars are warning against Russia “neutrality”

🛢️  The global economy has never needed less oil

💸  America’s investor visa will soon cost $300,000 more

📈  The Fed’s tools weren’t meant for this inflation

🥽  How a Microsoft alum saved Magic Leap

😷  China abandoned its foreign students over covid zero

🙅‍♀️  Can you refuse to return to the office?

5 great stories from elsewhere

💪  Putin’s miscalculation. “The West is a series of institutions and values… not a geographical place,” Russia scholar Stephen Kotkin says in a thought-provoking New Yorker Q&A. “All the nonsense about how the West is decadent, the West is over, the West is in decline… All of that turned out to be bunk.”

📚  Succession drama at Scholastic. When the patriarch of the family-run publisher died suddenly last year, he left control of Scholastic with an employee who also happened to be his ex-girlfriend. “It’s worse than a normal death because of the sense of betrayal that everybody’s feeling,” one former staffer tells Vanity Fair. “A big mistake is what it was.”

📱  The ByteDance boom. The Chinese startup behind TikTok has 1.9 billion users and $58 billion in annual revenue. How!? Harvard Business Review argues it has to do with ByteDance’s “shared-service platform” approach, which lets the company focus on new products, rapid iteration, selective focus, and cross-pollination.

💱  El Salvador’s bitcoin experiment is flailing. Six months after the country made bitcoin legal tender to bolster its economy, things aren’t going smoothly. Rest of World visited “Bitcoin Beach”—an HQ of sorts for El Salvador’s crypto disciples—where multiple vendors have already reverted to accepting only cash.

🌊  Staging a managed retreat. Groups from as far away as Japan and Australia are visiting the Illinois town of Valmeyer to better understand how its 900 residents relocated their entire community after a series of 1993 floods. BBC Future looks at how such “planned relocations” of cities could become more common with climate change.

Sponsor content by Deloitte
Sponsor content by  Deloitte
Organizations are placing a greater emphasis on trust as a key performance indicator. But what is trust, and how can it be managed? Deloitte research proposes that trust should be seen as a tangible, strategic, and critical asset, given the real, quantifiable value that it can bring to an organization. Learn how trust can be measured.
Learn more

Thanks for reading! And don’t hesitate to reach out with comments, questions, or topics you want to know more about.

Best wishes for an ethical weekend,

—Walter Frick, executive editor
—Lila MacLellan, senior reporter

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