Opinions - 23.11.2012 - 00:00
26 November 2012. In early November 2012, the British oil conglomerate BP was sentenced to pay a fine in the amount of USD 4.5bn as a consequence of the Deepwater Horizon oil rig explosion in the Gulf of Mexico in 2010. The CEO who was newly installed after the disaster, Bob Dudley, apologized after the ruling: “We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.”
Eleven people died in the disaster. An oil spill of nearly 800 million litres caused an environmental disaster on the Gulf coast. BP made provisions of USD 38bn for the costs arising from this; however, this amount will probably not be sufficient since claims are also being asserted under civil law. The enterprise stands accused of gross negligence.
Values must keep their word
On BP’s homepage, we can read about the values to which the enterprise is committed: “Safety, Respect, Excellence, Courage, One Team”. Under “Safety” it says: “Safety is good business. Everything we do relies upon the safety of our workforce and the communities around us. We care about the safe management of the environment.”
Nowadays, a majority of major companies have such statements about the values for which the enterprise stands. These are easily written down, but events such as the one mentioned above can quickly lead to a moment of truth or the “proof of the pudding”: Are these proclamations of corporate values only “paper tigers” or are they really adhered to, i.e. are employees held responsible if they fail to comply with these values?
Effect is more important than intention
In ethical terms, it is only individual executives who are capable of assuming responsibility in such cases. They are the company’s decision-makers who are able to decide freely. They cannot share their moral responsibility with others, nor can they transfer it to a collective, since the latter can only be pronounced guilty, and thus brought to justice, in a legal sense.
This would be the case, for instance, if the executive board were refused approval. The moral value of an individual’s decisions and actions can be established against the yardstick of how carefully and free from particular interests (including their own interests) they have weighed up their obligations and options and whether they also took into appropriate account the consequences for those involved and affected. What counts here, then, are the effects experienced by the stakeholders rather than the decision-makers’ intentions.
Take personal responsibility
Responsible leadership therefore requires executives who take personal responsibility for their stakeholders’ concerns. However, they must also have distinctive moral values and act with moral awareness. They do not delegate this task to some body or other in an abstract sort of way but actually have to nail their colours to the mast.
With this in mind, an enterprise that aims for long-term success requires an executive team whose members are characterised by a relationship with stakeholders that is based on values and ethical principles. Such executives should not consider profit to be an end in itself but a means of getting closer to the benefit promised to their respective stakeholders. This means that such executives are united by a shared understanding of the company’s purpose, which should result in sustainable and balanced value being created for stakeholders.
What makes responsible leadership often very challenging, however, is the dilemmatic character of many decisions. In BP’s case, such a dilemma might have been the question, for example, as to how much safety they wanted to afford in view of their shareholders’ financial expectations. In retrospect, taking into account the losses incurred by the accident, they could have been able to afford significantly more safety.
Photo: Photocase / Fiebke
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