If It's Legal, It's Ethical…Right?

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In fact, simply by being an observer, you are ethically accountable for what happens on your watch. To be a member of the human race is to care for what transpires in the world around us. It is hard to imagine how any law could demand that we care for strangers or require punishment if we don't. This is the proper role, however, of ethics. The penalty for violating an ethical requirement may not involve a prison term, but it can involve scorn or ridicule from others, or feelings of guilt or shame for having let ourselves down or disappointed our family and friends. All of these are forms of punishment just the same.

In 1965, Hebrew National playfully seized upon the split between our legal and ethical responsibilities when it coined the slogan, "We answer to a higher authority." They were on to something. Whether it's cold cuts for lunch, a reliable computer for work, or a safe toy for your child, don't you want the companies with which you do business to go beyond merely what the law requires of them and be the very best they can be?

From the Pages of History

Let's delve more deeply into the schism between ethics and the law. Consider the following facts from U.S. history:

•Slavery was perfectly legal until the 13th Amendment to the Constitution abolished it in 1865.

•Children were allowed to work in mines, glass factories, and textile and other industries instead of going to school until the Fair Labor Standards Act was passed in 1938.

•Women didn't have the right to vote until 1920.

•On Dec. 1, 1955, in Montgomery, Ala., Rosa Parks broke the law when she refused to give up her bus seat to a white passenger.

How is it possible that a practice that was legal in the past is now against the law? Is it the case that slavery, for example, used to be ethical, but now it isn't? Of course not. Ethics hasn't changed. The law just took awhile to become aligned with what is right.

Although business as an institution has been getting a bad rap in the mainstream media for the wrongful conduct committed at Enron, Adelphia, WorldCom, Tyco (TYC), and other companies, let's not forget those organizations that took the high road, went beyond what the law required of them, and ultimately reaped many rewards. For example, in 1982, seven people in the Chicago area died of cyanide poisoning after unwittingly consuming tainted Tylenol capsules. Within a matter of days, Johnson & Johnson (JNJ) responded aggressively by withdrawing all 31 million bottles of the drug (with a retail value of over $100 million), creating a new, triple-sealed package, and offering consumers deep discounts.

Effectively and Ethically Managing Crisis

The law did not require Johnson & Johnson to take such measures, but by doing so, the company earned the respect of consumers and the media alike, and this case is now widely taught in business schools as an example of how to manage a crisis effectively—and continue to prosper. Those seven who died can never be brought back, but J&J took extraordinary steps to ensure that no one else would be in jeopardy. Here we are, 25 years after the fact, still talking about how the company conducted itself admirably. (Disclosure: Several years ago, I gave a few speeches that were sponsored by Vistakon, a subsidiary of Johnson & Johnson.)

For many more examples of companies that took the high road, even when they had no legal obligation to do so, see the latest issue of Ethisphere magazine.

For any law, we can and should ask: Is it right? Is it fair? Is it just?

The ultimate standards for deciding what we ought to do are ethical, not legal, ones. As the Intervention example shows, sometimes we are not legally obligated to do what we ought to do. Our history of failing to recognize the inherent dignity of women, children, and African-Americans shows that the law sometimes gets it all wrong. And the Tylenol case suggests that companies that value doing the right thing rather than what is merely legally required of them may not only endure, but prevail. As this column has endeavored to show over and over, the reason to do the right thing is simply because it is the right thing to do. Businesses that take ethics seriously, however, often find themselves winning over consumers and a skeptical media alike.

We are a nation of laws, and our society would quickly devolve into anarchy without the rule of law as a binding, motivating force for all of us. Nevertheless, the ethical principles of Do No Harm (BusinessWeek, 1/10/07), Make Things Better (BusinessWeek, 1/18/07), Respect Others (BusinessWeek, 1/25/07), Be Fair (BusinessWeek, 2/8/07), and Be Loving (BusinessWeek, 2/22/07) are the true basis of our society, and it is to those principles we ought to return every day when we ask ourselves: "What should I do? What kind of person should I be? How can I bring out the best in myself and others?"

Yes, laws are important. But all of us, and not just the employees of a certain manufacturer of hot dogs and salami, should answer to a higher authority.

Weinstein is the corporate consultant, author, and public speaker known as The Ethics Guy. He has appeared on numerous national TV shows and is the author of several books on ethics. His Ask the Ethics Guy! column appears every other week on BusinessWeek.com's Managing channel.