Ethics Debate Booted About

Timberland CEO Jeff
Swartz believes corporations more than governments have to take the lead on
social responsibility.

He’s the third
generation of the Swartz family to run the outdoor clothing and footwear firm
established in 1973. As CEO he is to reposition it as the leading voice in a
new debate on social responsibility in corporate America according to a report in yesterday’s Sunday Times.

“I want people to
believe in the power of the marketplace to make things better,” he said. Companies
have a duty to do what they can and be open about it, said Swartz. But they
also have a duty to do the best they can for their shareholders.

This year Swartz
has not been holding up his end of that deal. Timberland’s shares have fallen
as the stock market has soared. The company expects full-year earnings per
share to decline 30% this year. Unlike most chief
executives, Swartz can afford to ride out the storm thanks to his family’s
support because they control 70% of voting shares.

Part of his
problem he acknowledges, many of his customers may not care how or where his
products are made but believes they will and sees it as his responsibility to
start that debate. But, here too he
has one big problem: China. Some 40% of Timberland’s goods are made in China, where workers have no political freedom and
conditions can be appalling. Having said that he
is open about the problem and trying to deal with it.

On the subject of being
in China he says, “Financially, Timberland has to be in China” but adds, “I could not manufacture in China, I wouldn’t. If you ask me to justify being in China, I cannot.” He says, “I buy
the argument that 20 to 50 years from now China will be a free and open market. Come right this
minute and see some of the working experience that some of these people have
and it is indefensible.” And he adds, “In China you can exploit all day long. China is interested in one thing — foreign currency.”

So how does he
deal with this dilemma? Timberland has a code of conduct its factories must
adhere to. Last year it pulled out of one factory after repeated infractions.
It has also imposed a maximum 60-hour week on workers at its Chinese factories.

Whilst accepting
that he is uncomfortable about the ethics of producing in china, on other
fronts he is adopting policies he can feel happier about. He already runs a
variety of eco-friendly projects and his workers are given 40 hours’ paid leave
a year for volunteer work and can take six-month sabbaticals to non-profit
organisations.

Perhaps his most interesting
‘green’ initiative will be next years introduction of a “Green Index”. It will
tell shoppers how eco-friendly Timberland’s shoes are and the answer will not
always be good. Graded from naught (the best) to 10 (worst).

For the Full Article see The Times

Article contributed by Ethical Design Lab