Ethics in Business
Q&A with Professor Robert Phillips

Robert Phillips is George R. Gardiner Professor in Business Ethics and Professor of Sustainability at the York University’s Schulich School of Business in Canada. Prior to Schulich he held positions at the University of Richmond, University of San Diego, The Wharton School, and Georgetown University.

He will be joining us for the Gourlay Ethics in Business Week from 22–27 May 2022.

When and how did your interest in business ethics start?

In college I was a business major and a philosophy minor. I've always enjoyed reading and writing philosophy, but as I read deeper, I realised that I prefer thinking about life's practicalities more so than some of the esoteric minutiae of academic philosophy.

I realised during my MBA program (where I was also allowed to ‘jump the fence’ and take a seminar on John Rawls and justice in the philosophy department) that the ubiquity of ‘business’ in the modern world meant that I could study almost anything I wanted through the lens of commerce.

Business ethics feeds my interests in deep and critical thinking while maintaining touch with the relevance and practicality of the world as we find it.

How does a business ensure ethical practices?

The only way society functions is if most people follow generally recognised rules and norms most of the time. This means that most people in most businesses most of the time are good people doing the best they can in sometimes challenging circumstances to lead moral lives.

With this in mind, there are two main things business can do to embed ethical practices.

The first is to stop pretending that business somehow stands apart from ethics. ‘That's a business decision, not an ethics decision’ is most pernicious.

We are told that business is – and should be – cold, competitive, and calculating and that your ethics should be checked at the door. This regrettably popular belief is bad leadership, but also impossible.

A business's stakeholders are people and people are moral creatures. One can no more check their ethics at the door than their kidneys.

Once we acknowledge that business is people, and people are unavoidably driven and restrained by moral norms, we must then work on how to actively and cooperatively engage with stakeholders as moral actors.

What are currently the most important business ethics issues?

Inequity. Rapidly evolving social norms, e.g. gay marriage, cannabis, attitudes towards work, opinions of capitalism, etc.

What role do regulators play in business ethics?

Regulation is at its most valuable when used to overcome collective action problems such as corruption and climate change.

In situations where an action is individually rational, but collectively harmful, regulation can bring the individual and collective calculations closer together.

For example, Australia has laws against foreign bribery, and the UK Bribery Act, US Foreign Corrupt Practices Act all create individual penalties for bribery and corruption in other countries.

Similarly, carbon trading schemes attempt to internalise environmental externalities in ways that reconcile individual and community interests. Often, however, recourse to regulators represents a failure of business ethics. It is a costly failure to find common norms and values on which to base collective efforts. It is also where the most powerful can seek favourable treatment for themselves through lobbying and other means.

How do business ethics differ by industry and by region?

I find it more interesting to think about how wildly different places can reconcile apparently diverging cultural values at least far enough that they are able to conduct commerce together.

The idea of business and human rights is gaining traction in the scholarly discourse not least because the ‘moral minimums’ evoked by talk of human rights provides a set of rules that all reasonable cultures already agreed to from within their own cultures – what John Rawls calls an ‘overlapping consensus’.  Consider, for example, the UN Declaration of Human Rights as a basis for agreement upon which further progress can be built across cultures.