These articles have been written by the latest cohort of the Practice Makes Unperfect programme – a course that helps women find and finesse their public voices.
By Aphrodite Brinsmead, Senior Product Marketing Manager at Permutive
The pandemic brought overdue attention to problematic areas of business culture, from diversity and inclusion efforts to flexibility over workplace structure and support for mental health. As a result, businesses have rightly started to rethink some of their practices around the way they treat staff. But a major area of business remains unchallenged: their ethics.
Many businesses receive minimal scrutiny over how they make decisions or manage their finances. Regulatory bodies, such as the Federal Trade Commission (FTC) or the Food and Drug Administration (FDA) in the US, do exist to enforce laws and ensure businesses act ethically. But what they’re doing doesn’t always work. Regulators are unable to act fast enough, can be influenced by the wrong factors and fines rarely make a difference.
Getting away with murder
People frequently get away with business fraud or malpractice. Instead of being punished, they are rewarded with continued success.
Over the course of 10 years, Elizabeth Holmes raised more than $700m in venture capital for Theranos. Her startup claimed to produce devices that could carry out blood tests for a range of health issues using tiny amounts of blood.
You can see why people wanted to invest; she had the potential to revolutionize healthcare. But her products didn’t work. Instead of admitting that they needed further development, she did everything she could to cover up the flawed devices. She blackmailed former employees, used machines from another supplier and claimed internet issues were delaying the results. Those incorrect test results could have caused serious health consequences for misdiagnosed patients.
Elizabeth Holmes is certainly not the only leader who’s acted immorally. Some other high profile business baddies include:
- Robert Moses, an American public official, displaced 250,000 people to build highways.
- Rupert Murdoch used his media empire to influence politics and was sued for publishing false information.
- Elon Musk wrote tweets about Tesla’s financials which influenced its stock prices.
- Martin Shrekli increased the price of a lifesaving HIV drug by 5000% overnight.
- British Airways tried to put Virgin out of business by illegally accessing passenger information and pretending flights were cancelled.
And these are only examples of publicized misconduct.
Crime and punishment
The role of regulatory bodies is to make sure businesses behave in an ethical manner. Theranos’ devices had to undergo investigation by the FDA. In 2015 one of the tests was given clearance. But there was a lack of trial results and the FDA also found faults with the devices. Despite this, the company was able to use a loophole to continue. Elizabeth Holmes’ eventual punishment? A $500,000 fine and being barred from service as a director of a public company for 10 years. She’s been indicted for wire fraud but her trial won’t take place until August 2021, six years after the original investigative journalism articles were published.
According to Tim Ferriss in his book, “The 4-Hour Body”, many nutrition companies actually budget for regulatory fines in anticipation of lawsuits. They weigh the risks and rewards of and decide it’s worth breaking the law, despite ethical issues or repercussions. It seems like few industries are immune to this type of behavior.
We need an uprising
It took several murders and global protests to draw adequate attention to the injustice among BIPOC communities and for businesses to reconsider how they approach D&I. And we need a similar focus on ethical business issues for people to even take notice. Employee activism has already led to some positive change.
Investigative journalism can also help uncover wrongdoings. But back to that murder. According to the Committee to Protect Journalists’s database of attacks on the press, almost 900 journalists have been murdered globally in the last 20 years as they seek out the truth. The journalist that originally uncovered the fraud at Theranos, John Carreyou, received intimidation and threats of legal action. So did former employees who talked to him as part of his investigation. It’s a challenging job and journalists need support and protection when researching corporations.
According to a TED talk on, what really motivates people to be honest in business, hiring people with good ethical standards is vital. But what happens when the trouble starts at the top? In those cases we need transparency and faster regulatory checks. Leaders pride themselves on their image and success. Damaging their public reputation could have more of an impact than a lawsuit they can cover up or fines that don’t dent profits.
Everyone has a role to play in driving positive change in their workplace, whether it’s to improve diversity and inclusion efforts or to stop unethical activities. We need to step forward when we have the choice about which companies to work at, where we spend our money or the ability to share knowledge. And while red tape can hurt business progress, threats to public health, anticompetitive behavior and fraud need to be counteracted quickly.
Businesses that act justly when it comes to public safety, employee health, as well as allowing for choice and competition in their markets should be rewarded.
