The Corporate Magician

Cosying up to NGOs is just one of the corporate tricks used by big business to distract from problems.

The Washington Capitals recently faced off in a National Hockey League contest against the New York Rangers. Amidst the fanfare of a stadium packed with more than 20,000 fans, during breaks in the action the jumbotron hanging above centre ice flashed season highlights. Curiously, the highlights included not just slick passing and scoring plays but fights. Why was this curious? Well, the National Hockey League at least hints that it is trying to crack down on fighting. But how serious is the NHL when team highlight reels tout fighting? It turns out that the League’s rules outline various penalties for fighting, but nowhere – at least I cannot find it – do the rules say that the league does not condone fighting or that fighting is not part of hockey. The truth is that while the NHL packs its arenas with people who want to see fights, it struggles from a public relations perspective to guard against criticism that hockey is a violent sport; hence the purported rules that create the illusion of addressing these concerns. Remember the old joke, “I went to a fight and a hockey game broke out.” As an aside, this is a shame because ice hockey – without the fights – is quite glorious.

Masters of illusion

The point is that professional hockey is a business. These days big business is the master of illusion; focusing attention on benevolent activity as a distraction from conduct that is problematic from a legal or public relations vantage point. Take the case of Wal-Mart and the Walton family which created the company and owns the majority of its shares. The Walton Family Foundation has given millions to the Environmental Defense Fund, a US based environmental NGO, which in turn has praised Wal-Mart for being a “green company.” At the same time Wal-Mart is winning accolades for its greenness, it is being pursued by the United States Department of Justice and various State Attorneys Generals for violations of the US Clean Water Act. Embracing NGOs that perhaps were at one time corporate critics is just one facet of the illusion game.

What about companies that tout job safety but continue to place workers at peril? Do they really favour safe workplaces or do they just want to focus attention away from that which is problematic? Or what about the big pharmaceutical companies which have, in recent years, pleaded guilty to violations of the US Food Drug and Cosmetics Act for marketing derelictions? No doubt each of these companies had internal compliance programmes and explicit rules proscribing that which lead to guilty pleas. In almost all cases employees were made to sit through training sessions where the rules were purportedly taught. Yet, at the end of the day, were these programmes really meant to deter wrongful conduct or were they really designed to focus attention away from wrongful activity? Were they just a clever means of convincing employees that scrutiny of corporate conduct is pointless because wrongdoing is not possible for a company with rules that proscribe bad acts?

The illusion game is big business and no doubt there are consultants who have given serious thought to that which I write about here. Cozying up to NGO’s, touting compliance programmes, ethics rules, and training seem to be tricks of the trade. All of this presents a challenge to regulators. Think of the safety and health investigator questioning employees about a mining disaster:

Mr. Smith, have there been safety issues in the workplace?
Oh, no; our employer has workplace signs that say “safety first.”

The tragedy of the illusion game is that at the end of the day there is a price to be paid. Remember Enron, Tyco, and Worldcom? They could do no wrong because they all had internal compliance programmes. As I watched the hockey game my mind drifted to Reggie Flemming, a one-time New Yorker Ranger forward who passed on a few years back. As a player, Flemming was known as an enforcer because of his fighting prowess. Flemming once joked that he spent so much time in the penalty box that he had his mail delivered there. Unfortunately Flemming’s final years were spent in a nursing home. After his death at age 73 doctors at Boston University studied his brain and found that he had Chronic Traumatic Encephalopathy; a brain disease associated with boxers.

Of course, the NHL has rules about fighting, so I suppose that if players fight they do so at their own peril. No doubt like other corporate masters of illusion, the NHL likes it this way.