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Sunday, January 28, 2007

SOUND OFF: APPLE OPTIONS

Federal authorities are investigating 7.5 million stock options that were granted to Steve Jobs, chief executive of the computer company Apple. It appears that, while the granting of these options was finalized in December 2001, they were dated October 2001, when the per-share stock price was $3 lower.

Stock options give you the opportunity to buy a stock at its price on the day the options are issued, regardless of what the price is on the day you purchase the stock, so the backdating increased the value of Jobs' options by about $22.5 million. Once the backdating was revealed, however, a committee of Apple board members exonerated Jobs from any wrongdoing.

"If Mr. Jobs participated in backdating, he should be punished," Alan Murray wrote in The Wall Street Journal. Even so, he continued, "any punishment that hampers his ability to continue running the company would be a mistake. That is punishing the victim, and only compounds the crime."

Who is the victim? Apple shareholders, Murray argues, who have benefited from Apple's stock-price increase under Jobs' leadership, and who were the victims of any backdating. Jobs' departure from the helm would hurt the value of their Apple stock, Murray believes, and thus his job should not be put in jeopardy. What do you think? If Jobs is found to have participated in backdating stock options, should he be allowed to continue to run Apple because he has served the shareholders so well?

Send your thoughts to rightthing@nytimes.com or post them here by clicking on "comments" or "post a comment" below. Please include your name, your hometown and the name of the newspaper in which you read this column. Readers' comments may appear in an upcoming column.

A NPR radio interview about Apple's back-dating appears at http://www.here-now.org/shows/2007/01/20070112_9.asp

Jeffrey L. Seglin, author of "The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business" (Smith Kerr, 2006), is an associate professor at Emerson College in Boston, where he teaches writing and ethics. He is also the administrator of http://www.jeffreyseglin.com, a Web log focused on ethical issues.

Do you have ethical questions that you need answered? Send them to rightthing@nytimes.com or to "The Right Thing," New York Times Syndicate, 609 Greenwich St., 6th floor, New York, N.Y. 10014-3610.

PULLING THE RUG OUT FROM UNDER THE STORE

One challenge of buying things online is that you don't get to handle the goods. You rely on an image on your screen, along with a description, to judge what the seller is offering for sale. You're at a disadvantage if you want to know the look or feel of an object before you buy it.

That's one reason that a reader from North Carolina and his wife drove 30 miles from their home to shop for an area rug at a store.

"We found one we liked the other day," he writes, "but my wife wasn't sure that it was just right for the designated spot."

No problem, the salesman told them: They could buy it, take it home and, if it turned out not to suit them, return it for a full refund.

Since it was a rainy day and the rug would have stuck out from their trunk, my reader and his wife wrote down the rug's dimensions and the name of its manufacturer, and told the salesman that they'd think about it.

After they got home, however, his wife discovered that the manufacturer offered the same rug online for $100 less than the store's price.

Their son and his wife were also in the market for an area rug, so my reader called his son and told him about the rug and about the price discrepancy.

"The thought occurred to us that we could get it from the store, try it out and, if we liked it, return it to the store, get our money back and then order it online," he reports. "I didn't think it was worth the effort, plus I thought that it would be taking inappropriate advantage of the store and the salesman."

His son, however, felt that "a hundred bucks is a hundred bucks" and was worth any inconvenience to himself or disappointment to the salesman.

My reader asks: "Is it wrong to look out for No. 1, as long as the consumer is not breaking any laws?"

The salesman's offer to refund the full purchase price of the rug is generous, but does this generosity mean that my reader is obligated to pay more for a rug that can be purchased for significantly less online?

No, it doesn't. Walking through the door of a store implies no commitment not to buy elsewhere, regardless of how accommodating the sales staff may be. Comparison-shopping between a store and an online outlet is no more unethical than comparison-shopping between two stores next door to one another.

That doesn't mean, though, that my reader should go to the store and buy a rug that he has no intention of keeping, simply to see how it looks on his floor. If he knows in advance that he will either return the rug to buy its duplicate online or, if not satisfied, return it and buy another rug elsewhere, he's essentially lying to the salesman.

What the salesman has offered my reader is the implied deal that, if my reader is satisfied with the rug as it looks in his home, he will keep it and buy it from the salesman. If there is absolutely no scenario in which my reader will buy the rug from the store, then he should not accept the deal, and should not subject the store's rug to wear and tear for which he has no intention of paying.

If he wants to proceed with the clearest conscience, the right thing for my reader to do involves a somewhat riskier course: When he returns to the store, he should tell the salesman that he'd like to take him up on his trial offer, but that in the interim he's found the same rug online for $100 less. Can the salesman match the online price?

Sure, there's some risk in this course: The salesman may say no and withdraw the try-it-out-on-your-floor-and-return-it offer. If that happens, my reader and his wife will have to decide whether or not to buy the rug online without benefit of the free trial.

But in that scenario the salesman will lose the sale altogether. Ideally he and my reader can agree on a price that will get the rug out of the store and onto my reader's floor to the satisfaction of everyone involved.

Sunday, January 21, 2007

GIVE TO CHARITY ... OR ELSE

Ever since his manager announced that every employee "will donate to the company's charitable foundation, period," my reader from the Southeast has worried that he'll be fired for not contributing.

"I absolutely hate being told that I must give," he writes.

He resents the expectation that he should give any of his hourly wage to a cause deemed appropriate by his bosses. What's more, some of the past recipients of funds from the foundation are groups whose causes my reader opposes.

The problem my reader faces is one regularly faced by many employees: How do you respond to a companywide edict to give to a specific charity, if you choose not to participate, without appearing to be uncharitable and/or risking your job?

Ever since the announcement, my reader has been Googling to see if he can find instances of people being fired for not contributing to a charitable drive. He hasn't. Nor have I heard of any. I've heard from readers who have been assigned to head annual charity drives and had the results reflected in their annual performance reviews, but to date I've never heard from anyone who claims to have been fired for not giving to a company-supported charity.

Don't get me wrong. I believe that company support for charitable efforts is admirable. An annual company effort to raise money or food is a smart way of gathering resources from people willing to give where they congregate most -- in the workplace. Teams of workers who band together to work with groups such as Habitat for Humanity to help construct much-needed low-cost housing in a community should be applauded.

But companywide efforts should not have the glint of coercion. For a boss to stand in front of his employees and demand 100-percent participation in giving to a charitable fund is wrong, regardless of whether that fund goes against their personal beliefs. That wrong-headedness may well drive away even those employees who would have been willing to contribute had the effort been presented as voluntary.

Too often a manager is driven to such behavior because he or she has been put in charge of running that year's charitable drive with some participation incentive attached. Such an arrangement may be well-intended, but may unintentionally result in the type of behavior my reader witnessed.

Better to avoid giving incentives to individuals running such programs, and better yet to assign some central department -- human resources, for example -- to organize the companywide effort. This will avoid giving employees any sense that their job security rests on whether they contribute and/or whether they get others to contribute.

The right thing for companies to do is to choose a charity or a group of charities that they want to help, but to give employees the opportunity to decide whether they would like to participate. If none of the charities the company chooses matches up with those that a given employee prefers to help, then that employee should feel absolutely no guilt or fear about saying no. They can contribute to their own causes on their own time.

SOUND OFF: RSVP-ING TO CHARITY PARTIES

My readers were of mixed opinion about the best way to respond to the growing trend among holiday-party givers of requesting attendees to make a donation to a specific charity, rather than bringing wine, food or gifts to the party.

"I lose no sleep over this issue," writes Thomas A. Bausch of Milwaukee. "I receive about 100 invitations to charity luncheons and dinners each year, and a charity party is the same thing. If the cause is not one I support, I toss the invitation."

"Consider that most party givers will choose Christian charities," writes Annette Forrest of Lake Forest, Calif. "There is a certain arrogance in assuming that most others are also Christian, or are nonaffiliated but will support your religion."

"I would not attend a party if the stated charity was one that I would ordinarily not support," writes Phil Clutts of Harrisburg, N.C. "I would ask if I could contribute to another neutral charity instead, giving a choice of several. If so, I would be happy to attend."

"Demanding that guests at a holiday party donate to a charity of the host's choice amounts to a cover charge," writes Lori Flores of Riverside, Calif.

Check out other opinions at http://jeffreyseglin.blogspot.com/2006/12/sound-off-charity-parties.html or post your own by clicking on "comments" or "post a comment" below.

Jeffrey L. Seglin, author of "The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business" (Smith Kerr, 2006), is an associate professor at Emerson College in Boston, where he teaches writing and ethics. He is also the administrator of http://www.jeffreyseglin.com, a Web log focused on ethical issues.

Do you have ethical questions that you need answered? Send them to rightthing@nytimes.com or to "The Right Thing," New York Times Syndicate, 609 Greenwich St., 6th floor, New York, N.Y. 10014-3610.

Friday, January 19, 2007

TAINTED NAMES REDUX

On Friday, January 19, Congressman Bob Ney of Ohio, was sentenced to 30 months in prison for accepting bribes. (You can read details of the story at http://dispatch.com/news-story.php?story=241072.) Late last year, Ohio University officials decided to remove Congressman Ney's name from the school's gynasium that had been named after him.

The university's decision flies in stark contrast to the inn on the campus of Ohio State University that continues to carry the name of its convicted former marketing professor, Roger D. Blackwell.

This morning, Sunday, January 21, I appeared on a CBS Sunday Morning segment, "What's In a Name?" to talk about the issue of naming buildings after people whose reputations later become tarnished. You can find a transcript of that segment at http://www.cbsnews.com/stories/2007/01/21/sunday/main2381300.shtml

You might remember that back in July 2006, readers responded to a question I asked about the Roger D. Blackwell Inn at Ohio State University in Columbus that is named after a former marketing professor who pledged $7 million to fund the building. As I wrote in my post at http://jeffreyseglin.blogspot.com/2006/07/sound-off-tainted-name.html, Blackwell was subsequently convicted of insider trading and other financial crimes.

But according to The Columbus Dispatch university officials "appear uninterested" in renaming the inn. The paper noted that so far Blackwell had given only about $1.4 million and that, given the cost of his appeal, little more likely would be forthcoming.

I asked readers if given that Blackwell had been convicted of actions that the university would hardly encourage among its students, whether his name should be taken off the building.

You can read their responses at http://jeffreyseglin.blogspot.com/2006/07/sound-off-tainted-name.html.

You can add your own thoughts on the Congressman Ney and Professor Blackwell affairs, whether given the circumstances their names should be removed from the buildings on campus, or your general thoughts about naming buildings after people who later turn out to do something that gets them into trouble.

Sunday, January 14, 2007

SOUND OFF: FULL-SPEED AHEAD

Here's a question that Professor Laura Hartman, who teaches business ethics at DePaul University in Chicago, often asks her students, according to a recent article in The Chicago Tribune: A train is speeding along the tracks. If it continues on its current route it will hit and kill five people. If the engineer hits a button, however, the train will switch tracks and hit only one person -- who will die as a direct result of the engineer's action.

If you were the engineer, would you continue on your course or hit the button?

Send your thoughts to rightthing@nytimes.com or post them by clicking on "comments" below. Please include your name, your hometown as well as where you read this column. Readers' comments may appear in an upcoming column.

Jeffrey L. Seglin, author of "The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business" (Smith Kerr, 2006), is an associate professor at Emerson College in Boston, where he teaches writing and ethics. He is also the administrator of http://www.jeffreyseglin.com, a Web log focused on ethical issues.

Do you have ethical questions that you need answered? Send them to rightthing@nytimes.com or to "The Right Thing," New York Times Syndicate, 609 Greenwich St., 6th floor, New York, N.Y. 10014-3610.

BEING HIS OWN NEIGHBOR

Five years ago a reader of mine bought a house in California. Before the purchase he did a title search to make sure that the seller had full, unrestricted title. The search came up clear and the purchase went through without complication.

Two years later, with interest rates dropping, my reader decided to refinance his mortgage. For that purpose he more carefully examined his title papers and found, much to his surprise, that he and his wife owned not only the lot on which their house stands, but also one-half of the lot next door ... on which their neighbor's house stands.

"I was stunned to learn this," my reader writes.

The house next door is a rental, owned by a woman who lives about 250 miles away. On the rare occasion when she stops by to check on her property, she complains to my reader about the difficulty of maintaining a rental from such a long distance. When he asks why she doesn't sell her place, however, she responds, "Oh, it's too complicated to explain."

Now that my reader realizes that he owns half the land on which her house sits, that complication suddenly seems clearer. What's not so clear is how a previous owner ended up with title to half the property next door, or what my reader should do about it now that he knows how things stand.

"It seems to me that we should offer our neighbor her property back," he writes, "perhaps for the cost of the paperwork, since we didn't know we bought it in the first place."

His lawyer advises him, however, that he'd be a fool not to extract some money from the owner of the neighboring property. The neighbor gave it up for some consideration she received, the lawyer reasons, and my reader simply got lucky when he purchased the property.

"If he found $250,000 buried in his back yard," his lawyer asks, "would he give it back to someone who claimed they had buried it there?"

My reader's lawyer makes a good point. If he's legally entitled to charge the neighbor for the half-lot he owns, upon which her house happens to sit, why not get what he can for it?

The simple answer is that simply being legally entitled to do something doesn't make it the right thing to do. The buried-treasure parallel is hardly persuasive, since he has known for certain who his neighbor is since he purchased his house. Even if he follows his lawyer's advice, his neighbor may refuse or be unable to buy the property back at any price, creating an awkward situation in which his neighbor can never sell a property she doesn't entirely own.

Even so, the neighbor has been collecting rent on a property not entirely hers. There would be nothing wrong with my reader offering to sell the property back to her at a reasonable price plus legal costs, the money to be paid as a portion of the rent she collects over time or, should she decide to sell, as a portion of the sales price.

But if my reader and his wife truly believe that they got their home for a fair price, regardless of whatever consideration the neighbor may have received from a previous owner, and if they want to offer the property back to their neighbor in exchange for nothing more than whatever legal costs may be involved, it's a gesture that any neighbor should appreciate as generous.

Given how they feel, the right thing for them to do is to sit down with their neighbor, explain the situation, extend the offer and then go about getting it done.

Saturday, January 13, 2007

MALDEN MILLS, HEWLETT PACKARD UPDATES

As I mentioned in yesterday's post, Bryan Wagner, the private investigator hired by Hewlett-Packard as part of its efforts to stem the information leaks about the company, pleaded guilty yesterday. He has agreed to cooperate with the government and its investigation. Chairwoman Patricia Dunn and four others (including Wagner) were charged in the case. (Go to http://www.here-now.org/shows/2007/01/20070112_9.asp for an interview about this on yesterday's Here and Now program. A Bloomberg.com story appears at http://www.bloomberg.com/apps/news?pid=email_en&refer=news&sid=a.Tlk_S0xU3w with full details on the case.)

Also in yesterday's news, a federal judge ordered Malden Mills, the makers of Polater Fleece based in Lawrence, Massachusetts, to move its bankruptcy proceedings to Masschusetts, according to a story by Ross Kerber in today's Boston Globe. (http://www.boston.com/business/globe/articles/2007/01/13/creditors_get_malden_mills_win/).

This is viewed as a victory for the company's creditors who hold a minority stake in the company.

One of those owed is former CEO Aaron Feuerstein who tried unsuccessfully to retain control of the company when it emerged from bankruptcy in 2003. According to the Globe, Feuerstein owns 5 percent of the company.

Long-time readers of The Right Thing column may recall that Feuerstein has appeared in the column in the past, including one that appeared on January 20, 2002. In that column I asked the question of whether workers owed Feuerstein anything as he was struggling to emerge from bankruptcy since he had decided to keep them on payroll after the company nearly burned to the ground on December 11, 1995, even though he didn't have to.

Feuerstein told me that he didn't "expect anything of people" in response to what he did in 1995. "You're supposed to do what's right because it's right, not because there's a payoff," he said. So neither employees nor members of the community nor customers nor vendors owed him anything. I asked readers if regardless of the fact that they didn't, whether they thought they should.

Ultimately, I concluded it was an individual choice where without obligation his various constituencies should decide the right thing to do. Unfortunately, it was not enough to enable Feuerstein to hold on to his company or for the company to keep from going into bankruptcy again.

The New York Times charges to view past articles, but if you're interested in seeing the entire column from January 2002, it's available for a fee at: http://www.nytimes.com/2002/01/20/business/yourmoney/20ETHI.html. It is also included as chapter 17 in the collection The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business (Smith Kerr, 2006) which is available at http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?z=y&EAN=9780978689902&itm=1 and http://www.amazon.com/Right-Thing-Conscience-Personal-Responsibility/dp/0978689909/themaxletterA.

Friday, January 12, 2007

HEWLETT-PACKARD REDUX AND APPLE BACKDATING

As one of the investigators in the Hewlett-Packard pre-texting scandal pleaded guilty and is awaiting sentencing, WBUR's Here and Now ran an update today. The interview with me is on Here and Now’s website at http://www.here-now.org/shows/2007/01/20070112_9.asp.

In addition to talk with me about Hewlett-Packard's investigation into leaks by board members, journalists and employees, host Deborah Becker of Here and Now also spoke with me about the back dating of stock options and the trouble that Apple CEO Steve Jobs may now be in.

The original Here and Now piece about Hewlett Packard ran in September and is on its site at http://www.here-now.org/shows/2006/09/20060921.asp.

My original blog post is at http://jeffreyseglin.blogspot.com/2006/09/hewlett-packards-leaks.html)

Sunday, January 07, 2007

TRUTH AMONG FRIENDS

In the heat of a moment, the urge to establish rapport can prompt any of us to say something we don't really mean. Often such comments seem benign: Claiming to share a taste in musicians, authors, designers or sports teams, for example, rarely results in a flat-out battle if it's later discovered that in fact your tastes lie elsewhere.

Too many people simply don't know when to stop stretching the truth, though. It's one thing to say that you're crazy about Justin Timberlake when in reality you'd rather be home listening to the latest CD by acoustical guitarists Rodrigo y Gabriela (with Bonus DVD), but quite another to claim that you've worked some place you haven't or graduated from some school you didn't in order to win favor with someone.

All too often, even when we're not sure that others are stretching the truth to engage us, we find ourselves suspecting that they are.

"I have a friend who says that she is a graduate of the same community college I graduated from," one of my readers writes. "I was going to ask her if she would be interested in opening a small business with me until someone told me that she lied."

According to a mutual acquaintance, my reader's friend never graduated from the community college, having dropped out after completing only two classes.

At present it's one person's word against another's, but my reader is torn, unsure whether her friend lied but unwilling to go forward without knowing. She wants to know if it would be unethical for her to ask the school if her friend really did complete a degree there, and whether she could do this anonymously.

There is no ethical reason why she shouldn't look into the question, as long as her methods of inquiry are legitimate. Many colleges publish lists of their alumni, often online, for reference by their graduates. My reader could start by checking to see if such a list is available on line and, if it is, find out from it what she wants to know.

If such a list isn't available, it's equally acceptable for my reader to call the college for a reference check on her friend. Most institutions will readily confirm the dates that a given graduate attended and the degree he or she received.

She should, however, identify herself if she makes such inquiries. There are occasions when withholding your name is ethically acceptable -- when reporting a crime, for example -- but this isn't one of them.

It wouldn't be necessary to go into detail about why she wants to know, but to place the call anonymously would not only call into question her motives -- which, since she is considering going into business with her friend, are entirely reasonable -- but also might prevent her from getting access to the information she wants, since without identifying herself she couldn't prove that she herself is a graduate.

What complicates matters, however, is that my reader's idea for a new business doesn't require a college degree or anything of that nature.

"I don't care about my friend's degree," she writes. "It is the lying that bothers me."

That being the case, the ethics of checking up on her friend's background aren't really the point. If what really bothers my reader is the suspicion that her friend may have lied, going behind her back to sniff out the facts won't really solve anything. She may not be able to find the information she wants and, even if she can confirm that her friend didn't graduate, she won't know what may be behind the lie.

If my reader really wants to know if her friend has lied about receiving a degree, the right thing for her to do is to ask the friend directly. If she wants to check up on her friend's credentials at the community college, she should tell her friend that she is going to do so.

Either her friend was telling the truth or she was not. In either case, there is absolutely no reason for my reader to let her fear of the truth get in the way of her honesty.

SOUND OFF: BUSH'S DEFENSE DECISION

President George W. Bush waited until the day after the November elections to announce the resignation of Donald Rumsfeld, his secretary of defense. I asked readers if they considered it ethical for Bush to have said prior to the elections that he planned no change, when he now admits that he was in fact planning a change even then. Most of my readers took a cynical -- or is that realistic? -- perspective.

"Pray tell, when is `ethical' applied to a politician?" asks Kathleen Parker of Huntington Beach, Calif.

"I do not see any ethical question involved," writes Dunbar Jewell of Charlotte, N.C. "One is not required to govern for benefit of the media, and is required to use one's best judgment before elections."

"This kind of tactic is unethical," writes Wendy Hagmaier of Fullerton, Calif., "and I would not do business with someone who employs these kinds of schemes."

"When politics is considered, ethics is the last thing that either party considers -- getting elected is all that is important," writes Charlie Seng of Lancaster, S.C.

"A lie by any other name still stinks," writes Jane Scharankov of East Marion, N.Y.

Check out other opinions or post your own by clicking on "comments" below or at: http://jeffreyseglin.blogspot.com/2006/11/sound-off-influencing-elections.html.

Jeffrey L. Seglin, author of "The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business" (Smith Kerr, 2006), is an associate professor at Emerson College in Boston, where he teaches writing and ethics. He is also the administrator of http://www.jeffreyseglin.com, a Web log focused on ethical issues.

Do you have ethical questions that you need answered? Send them to rightthing@nytimes.com or to "The Right Thing," New York Times Syndicate, 609 Greenwich St., 6th floor, New York, N.Y. 10014-3610.