Liability changing at a brisk pace

Two years ago, the British-based international consultancy SustainAbility issued a study introducing us to a new term: corporate "moral liability."

Two years ago, the British-based international consultancy SustainAbility issued a study introducing us to a new term: corporate "moral liability."

Chances are, you haven't heard much about the concept. Coverage in the business and PR press has been spotty at best. We'll fill you in, and we'll introduce you to "political moral liability." You'll note that there's a big R factor in both liabilities. It's short for Reputation.

Here's the background on a developing trend you may wish to discuss with clients and colleagues:

In the SustainAbility study, authors Geoff Lye and Francesca Muller caution that "companies are operating in a new and more challenging environment where risks of legal action against them are greater than ever. Even if companies avoid trial and prosecution in real courts, society could put companies on trial in the court of public opinion."

In a later aside, Lye notes: "More is at stake than reputation. Moral liability often morphs into legal liability, sometimes very quickly. Laws are a lagging indicator. We're seeing very rapid shifts in society's expectations of business."

Philip Rudolph, a partner with the law firm Foley Hoag in Washington, DC, helped sponsor the SustainAbility study. He sees "the bounds of liability beginning to stretch in ways that traditional lawyering does not address. You see companies being sued by their own customers over the lawful use of a legal product." (Case in point: the infamous obesity lawsuits brought against McDonald's.)

Marc Gunther, senior editor of Fortune, chimes in that companies are being held to account not only for their own behavior, but also for that of their partners and the host countries where they do business. "And all this is happening at blinding speed," he notes.

Now you can understand why we believe there's a parallel world for political moral liability, where offenders for minor misdeeds, such as misspeak, can sometimes wind up tried and convicted in the court of unforgiving public opinion in a single day with no hope of redemption. (Remember Joe Biden, for example?)

There's one major difference: Companies and business executives accused of violating the public's faith and laws can be - and, these days, are being - tried in court and, if found guilty, perp-walked into cells to serve real time with hoods whose favorite meal is fresh pigeon.

Political figures are far less likely than business leaders to serve time in prison if exposed as morally liable for decisions that result in major catastrophes. Their punishment for major moral offenses is as likely as not to be re-election.

Political PR experts are working 24/7 defending candidates and officeholders deemed morally at fault for reasons major and minor. Corporate PR specialists are doing the same for companies faulted by anti-business activists or headline-hungry senators.

Go down your mental lists, and check out the number of political and business incidents that come to mind. It will be different from those I might have offered you as this went to press. Things in politics - and business - really are changing at blinding speed.

Wes Pedersen is principal of Wes Pedersen Communications and Public Affairs in Washington, DC.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in