Pinpointing Where Corporate Immaturity Becomes Immorality (Part 2)

“Sadly, it looks like the continued unethical practices of irresponsible business. Why have so many organizations given up their integrity in the search of profit? They should be publicly shamed. This is NOT responsible capitalism but demonstrates everything that is wrong with how business is currently being conducted.” Nick Shepherd, 2023

Despite the advent of ESG, stakeholder capitalism, and the promotion of purpose-driven firms, corporate appetites to exploit people and planet remain voracious.

Nick Shepherd ’s comment above was made in response to our recent post that highlighted how a toxic, ecosystem of inauthentic and spurious Maturity solutions developed after Oracle used our work to help sell its own products (without our knowledge, permission or input).

Society now hopes that boards and C-suites (especially CEOs) will put the interests of humankind, and our environment, first. This means constantly moving their firms towards a higher level of Maturity, where societal [or Total Stakeholder] Value can be both pursued and maximised. Unfortunately, objective measurement of Organisational Maturity, reveals just how many firms still consciously embrace a business model founded on a principle of exploitation.

From 2016, Oracle Cloud HCM 's team was only too willing to exploit our own work (helping firms transition to a Total Stakeholder Value paradigm) to help them sell their products and services. Others soon followed, and continue to do so today.

Such a corporate mentality is a danger to us all. We have seen many examples of it acting as a gateway to behaviours and actions that create highly damaging outcomes.

In immature firms, unseen human risk can develop over time and only later manifest itself as organisational disease. It is well known that in the 1970s, Ford deliberately failed to resolve the problem with its life-threatening Pinto car. Tobacco firms hid the dangers of carcinogens for decades. Pharma firms have been found out, many times, after masking the potentially harmful side effects of their drugs.

We have witnessed how VW deliberately designed a corrupt system to hide the true extent of the polluting emissions from its diesel cars. Further evidence shows how major oil companies were aware of the likely climate change risks from fossil fuels. At the time of this publication, UK banks will be questioned in parliament about allegations that they have been price-gouging customers after recent interest rate hikes (putting up mortgage and loan charges much higher than savings rates).

All of these are shocking cases, with damaging consequences, but they are not isolated or disconnected. We see them as symptoms of whole system failure, requiring a whole system solution. As UK MP Frank Field said in the wake of the collapse of construction firm Carillion:

“We imagined that regulators regulate, and auditors audit. I suppose the employees, suppliers and pensioners of Carillion, and the public, did likewise. We were told this morning, however, that these highly paid individuals are mere spectators-commentators at best, certainly not referees- at the mercy of reckless and self-interested directors. I fear it is not only Carillion that is built on sand: it is our whole system of corporate accountability." Frank Field MP, former Chair of the UK Work and Pensions Committee (22 February 2018)

So, where will it all end?

In each case of corporate failure or scandal, we usually find that ordinary human beings were either willing, incentivised, or coerced into decisions or actions that put profit before people. Organisations have been found to encourage, allow, facilitate and, in some cases, direct the actions and behaviours of their people to enable and engender harm. In other words, corrupting the capitalist system. This is a very inconvenient truth about how human behaviour can be shaped.

Behaviours can be corrupted to the extent that people do things in organisations that run counter to what they would consider to be their own values. Such firms also usually remain unchallenged e.g. by their auditors, regulators, or their investors. Due to the absence of an objective, scientific measurement system of corporate integrity, constructive challenge is almost impossible. Our own work seeks to ensure that this omission can finally be resolved.

Since 2015 companies, like Oracle, have been rated on OMINDEX? (Organizational Maturity Index); measuring and assessing the totality of their impact - financial, societal, and environmental (their Total Stakeholder Value). The image shown above illustrates how this translates into our Organizational Maturity Scale. It offers a narrative of how people are managed across all types of organisation; from the immorality of slavery to the holistic management of all of us, as equal stakeholders.

On this Scale, a usual assumption is that the majority of organisations are at least achieving a ‘pass’ rate of 40% (BB-), following basic ethical standards and legislation. From this baseline, OMINDEX? can also work as a system that shows firms a path towards exemplar scores (80%, A+ or above). If enough corporations reach this goal, we can envisage the creation of a global system where all of humankind can achieve their optimum value without risking our future on this planet.

However, when organisations regress below BB-, corporate capitalism rapidly deteriorates. Below this grade, the corporation becomes unsure what, if any, attitude it should adopt to managing people. Between CCC and D, firms lose any social or human conscience. Once below D, morality has disappeared, with no compunction in running business as an exploitative enterprise; encouraging and facilitating illegal and corrupt practices in relation to workers, suppliers and society at large. Immorality renders the organisation illegitimate and uninvestable.

Is it now time to call out those already at D or below, and those on a possible path to immorality?

Unless we can hold up such an objective measure, we lose the chance for accountability; to help these firms rectify their own situation, and prevent outcomes that can damage us all. Surely, we have seen too many scandals and failures over previous decades for the status quo to prevail?

Click here for Pinpointing Where Corporate Immaturity Becomes Immorality (Part 1)