Do CSR and Sustainability get seats at the Business Ethics table?

Image by: Chris Devers

I caught a great question from @ethicsblogger, Professor Chris McDonald, on Twitter this afternoon and needed a little more than 140 characters to respond.  Chris asked whether insider trading should be considered a csr/sustainability issue.  (I should warn you this is a can of worms I’ve looked forward to opening for a while, so I may get a bit feisty with this one…)  Please read Chris’ question and my response, then join the discussion in the comments section below.

(Professor McDonald wrote an accompanying blog post which I recommend checking out:

Here’s the post in question:

A quick stop by the trusty Wikipedia site was in order as I needed a couple of definitions to form the base of my response.  By the way, this will be a bit of an exercise in semantics, but I think it’s an important one.  You’ll be the judge…


  • Moral principles that govern a person’s or group’s behavior.
Let’s set aside the moral principles for a minute and think about the rest of the definition, “that govern a person’s or group’s behavior.”  I find that people typically speak of ethics as if they were a set of immutable laws which are universally applicable.  Au contraire mon frere! In general, most groups will have a degree of overlap in their systems of ethics, but certainly there must be differences.  I believe these differences are the basis for much of the strife experienced in society.  Knowing this, I think it is important to define the group in question when discussing business ethics.  Unfortunately, the razor sharp focus on the short-term, necessitated by the tyranny of the market, forces the majority into blinders when it comes to ethics.   Therefore, the group we identify with when determining which ethics to apply tends to be those at the company level, or even a subset of the company.  Decisions are then made with the lens of “What’s the right thing for the company or division I represent?”  So, many pollute the stream to squeeze a few dollars out of their costs and the company ends up a little bit better off financially.  Meanwhile, society as a whole ends up a little worse off as this becomes a less-than-zero sum game.  Others choose to take a global perspective by looking at the overall impacts of a decision, internalizing the externalities which they could ignore.  This produces a very different set of decisions than the former perspective.
Now let’s get back to the part we left off by looking at the definition of the word moral.


  • Adjective: Concerned with the principles of right and wrong behavior and the goodness or badness of human character.
  • Noun: A lesson, esp. one concerning what is right or prudent, that can be derived from a story, a piece of information, or an experience.
In business, we seldom think in terms of right or wrong.  Instead we think in terms of profit and loss.  Will the decision make or lose money?  In recent years, the focus has rarely been on whether or not something was the right thing to do for society as that question was pushed aside by questions about earnings and stock prices.  One might have argued that focus was okay up until the latest recession, but the past three years have shown us our folly.  Wall Street may not have changed its ways, but Main Street has awakened.  So, in the terms of morals I’d say business is slowing turning the corner.


  • 1. A fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.
  • 2. A rule or belief governing one’s personal behavior.
The definition of principles is a tough to reconcile for one who shies away from absolutes, but I’ll take a crack at it.  From my perspective, there are few fundamental truths, but instead a large expanse of grays along a continuum upon which one’s take is dependent on your position relative to others.  That being said, there are plenty of things that most would agree on towards either end of any spectrum. (Have I gone too far off the reservation here?
Sidebar: If you’ve stayed with me this far you may be thinking I just defined ethics for an expert on the subject.  I assure you I would do no such thing.  (I may be a bit aloof, but I try really hard not to be intentionally rude.)  What I was hoping to do with this was to share my take on ethics to frame the discussion for my readers, so that they might consider their own “ethics filter.”
Back to the purpose of this post.  Do I think that insider trading is a csr/sustainability issue?  To quote Pride and Prejudice, “Yes! Yes! A thousand times yes!”  My question is, how could anyone think it is not?  Insider trading is an unethical, illegal, zero-sum appropriation of wealth.  Prof McDonald seems to agree with my assessment and begs a tougher question in the closing paragraph of his post.
But it’s also worth pointing out that there’s more than just a binary distinction to be made here. Somewhere between benign information-gathering, on one hand, and criminal insider trading, on the other, is a category of ethically-suspect behaviour that involves asking corporate insiders to provide ‘perspective’ or an ‘overview’ of, for example, the financial health of their firms. Such behaviour can be unethical for the same reason actual insider trading is illegal. Corporate insiders have fiduciary duties — duties rooted in trust — and providing information to outsiders so that they can have a trading advantage is a betrayal of that trust. And Rajaratnam’s methods played on his accomplices’ uncertainty about where to draw the relevant lines. The slope from benign to unethical to illegal is, it seems, quite slippery, especially when that slope is greased with flattery and a few hundred thousand dollars.
I couldn’t agree more with this statement and wonder if it wasn’t meant to suggest a corollary of all that isn’t sustainable might be thought of as unethical.  (I’d second that motion.)  Your thoughts on that postulation likely depend on where you stand.
I hope I didn’t get to preachy on this one, but if I did you can let me have it in the comments.  As Bluto Blutarsky might say, might as well, “don’t cost nothin.”

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