Two court cases struck the news in recent weeks. First, this one:
Category: Case Studies
‘George Serafeim, an Accounting professor at HBS, has been leading a very interesting and impressive project, called the Impact-Weighted Accounts (IWA) Project:
The mission of the Impact-Weighted Accounts Project is to drive the creation of financial accounts that reflect a company’s financial, social, and environmental performance. Our ambition is to create accounting statements that transparently capture external impacts in a way that drives investor and managerial decision making.
In this post, I’ll give some basics of their approach, and highlight how it relates to moral accounting. The upshot is that the impact accounting project proposes a particular improvement to reporting on how businesses affect the world; moral accounting provides a framework for resolving disagreements about what impacts matter, and how to integrate their reports into accountability systems. There will be a lot of such disagreements, and they are going to be distinctly moral disputes.
Categories
Speech, Consequences and The MAP
It’s not easy to limit speech wisely–you need a LAAP that fits your venue and goals. But it’s even harder to impose consequences for “crebit” (speech that violates the LAAP), while still doing so in a moral way (as laid out in The MAP), because while we limit speech, we punish people. Today’s example in the news:
Facebook and Trump are at a turning point in their long, tortured relationship
On Jan. 6, as an angry mob stormed the U.S. Capitol, President Donald Trump posted on Facebook that his supporters should “remember this day forever.”
“These are the things and events that happen when a sacred landslide election victory is so unceremoniously & viciously stripped away from great patriots who have been badly & unfairly treated for so long,” he said in a post.
In response, Facebook did something it had resisted for years: banned Trump’s account indefinitely for inciting violence. Twitter, YouTube and others followed suit.The ban is that culmination of a long-running and tortured relationship between the politician and the social media company, one that will hit a new inflection point on Wednesday. That’s when a Facebook-funded panel of experts will announce whether Facebook must reinstate Trump’s account. The impending decision by the Oversight Board, a less than one-year-old body that describes itself as an “experiment” in the regulation of online speech, could be the most consequential decision ever regarding free speech on social media, according to experts. It could also alter the way that social media companies treat public figures going forward.
Basecamp implodes as employees flee company, including senior staff
After a controversial blog post in which CEO Jason Fried outlined Basecamp’s new philosophy that prohibited, among other things, “societal and political discussions” on internal forums, company co-founder David Heinemeier Hansson said the company would offer generous severance packages to anyone who disagreed with the new stance. On Friday, it appears a large number of Basecamp employees are taking Hansson up on his offer: according to The Verge contributing editor Casey Newton’s sources, roughly a third of the company’s 57 employees accepted buyouts today. As of Friday afternoon, 18 people had tweeted they were planning to leave.
As I wrote in a prior post, speech is rarely free. It costs time, so when time is short, people impose limits on what can be said: speakers need to comply with a LAAP. Just like GAAP restricts what you can say in financial statements, a LAAP restricts what you can say in some particular venue (the L is for Local).
When should businesses get involved in politics, or other social matters? Case in point: what do you think of this?
Business Coalitions to Speak Out Against Voting Restrictions in Texas
Two broad coalitions of companies and executives plan to release letters on Tuesday calling for expanded voting access in Texas, wading into the contentious debate over Republican legislators’ proposed new restrictions on balloting after weeks of relative silence from the business community in the state.
One letter comes from a group of large corporations, including Hewlett-Packard, Microsoft, Unilever, Salesforce, Patagonia and Sodexo, as well as local companies and chambers of commerce, and represents the first major coordinated effort among businesses in Texas to take action against the voting proposals.
The letter, under the banner of a new group called Fair Elections Texas, stops short of criticizing the two voting bills that are now advancing through the state’s Republican-controlled Legislature, but opposes “any changes that would restrict eligible voters’ access to the ballot.”
A separate letter, also expected to be released on Tuesday and signed by more than 100 Houston executives, goes further. It directly criticizes the proposed legislation and equates the efforts with “voter suppression.”
Business leaders often look to warfare for business strategy. Sun Tsu’s The Art of War is a business classic, quoted by everyone from The Drucker Institute to Tony Soprano. So I’ve been thinking about how this war-business connection fits into both traditional managerial reporting and moral accounting.
I came across a useful case study on this question as part of my preparation for the Cambridge Disinformation Summit. (I’m on the advisory board and editor of the Journal that will publish papers coming out of it). From an article on the Russian theory and practice of Reflexive Control:
‘…allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step.’
The quote above comes from the founding document of China’s Social Credit System (CSCS), which was written in 2014, and set out plans for comprehensive rollout by 2020. China is way behind schedule, but the progress they’ve made shows the importance of moral accounting’s twin aspirations for accountability systems: to improve moral performance (not just any performance), and to do so in a moral way.
This post will serve as the foundation for a case discussion in my Executive MBA course on managerial reporting. Discussion questions are in this font.
The US Federal Trade Commission just issued guidance on “Aiming for truth, fairness, and equity in your company’s use of AI“. The title of this post comes from the kicker at the end of their announcement:
New York Magazine interviewed 33 people who have worked for Scott Rudin, entertainment producer long famous for being one of the few to win an Emmy, Grammy, Oscar & Tony, and newly infamous for being a jerk. And I use that word in its technical sense, defined by philosopher Eric Schwitzgebel as follows:
In this post, which uses a highly critical take on college admissions as a case study in moral accounting, I ask:
- Is college admissions an accountability system? Why or why not?
Let me start with an emphatic YES, and explain a few more subtle points, all expanding on my monograph.