Amgen, the world’s largest biotechnology firm, recently pled guilty to fraud agreeing to pay $762 million in criminal and civil penalties. On its web site, Amgen displays its mission and values, which includes “be ethical.” I think it’s fair to say that Amgen’s board believes that breaking the law is clearly unethical, but how high do they set the bar?
Is boosting profits and shareholder value by externalizing costs to society ethical as long as no laws are broken in the process? How about a company using its financial capital for the purpose of shaping laws to its benefit through strategically targeted campaign contributions and hiring congressional staffers to lobby their powerful former bosses in the Senate?
Well that’s exactly what Amgen has been doing. The New York Times recently reported that Amgen was the primary beneficiary of a clause that was slipped into the fiscal cliff bill that will end up costing taxpayers $500 million over the next two years. U. S. Representative Peter Welch (D- VT) in an interview with Bill Moyers said that he is planning to introduce a bill to repeal this clause. He goes on to talk about how this example is symptomatic of a much deeper systemic problem with corporate influence in our democracy, where the public good is sacrificed for private gain.
Amgen’s code of conduct policy for dealing with the government states “Amgen has a strict policy against any attempt to unlawfully influence government officials.” So since Amgen’s political investments and activities are legal and even common practice, does Amgen’s board consider these practices ethical? Do you?
Check out this video by M.I.T. behavioral economist Dan Ariely on “The Truth About Dishonesty.” His research shows that while very few people cheat big, greater overall harm is done by the many people who cheat just a little bit while rationalizing it in such a way that they can still feel like they are “good people” or staying true to their values. Amgen is certainly no Enron – their actions didn’t result in thousands of people losing their life savings. Maybe Amgen is able to rationalize their actions while still claiming to live up to their “be ethical” values since:
- What they did is legal and common practice.
- Their shareholders benefited.
- And besides, $500 million dollars is not that much in the overall scheme of things, right?
And yet this type of corporate activity helps to perpetuate and amplify what has become an ongoing systemic undermining of democratic institutions and processes that increasingly place the interests of concentrated wealth and power over those of ordinary citizens.
Many years ago after moving as a newcomer to a mid-size town, a long-time resident told me “in this town you can pretty much do whatever you’re big enough to get away with.” Maybe Amgen’s board would add the qualification “as long as it’s legal” and still feel like they are meeting their standards for ethical behavior.
How high does your company set its ethics bar? Does your board or senior management regularly engage in honest reflection on whether the company’s practices, both big and small, clear that bar? And for those practices that fall short, what then?