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Non-compete agreements: How fiduciary duty and covenants not to compete restrict managers' mobility
Companies spend time and money training employees; in the case of a merger or acquisition, they spend resources such as cash, stock, and debt. It makes sense, then, that they do not want an employee to take the expertise the company underwrote to a competitor. Thus, employment contracts will often include noncompete clauses--sometimes known as covenants not to compete--which state that the employee cannot move to a competitor for a certain period of time. Though not all employees have the heightened fiduciary duty of board members and officers, they frequently have signed agreements that, at least on paper, restrict their employment mobility. Not only have officers and board members often signed such agreements as well, but they also have fiduciary duties further restricting their new employment plans. In decades of teaching courses in the legal environment of business as well as in business ethics, no topic flummoxes students more than this one. After all, in a free country, a person should be able to work where they wish, right? How can such restrictions be fair? Legally and ethically, this is a complicated area and one in which the old lawyer's answer--it depends--is true. This article provides some parameters for employees and employers to know when fiduciary duty precludes certain employees from moving to a new company, including when those are legal in what ways they are fair. -
Finding the Fit: Why Compliance and Ethics Programs Should Seek to Match Individual and Corporate Values
Job seekers would like guidance on how to find a job with a firm whose values reinforce their own, a place that would be a good personal fit. At the same time, because of legal compliance requirements, it is crucial that employers find employees that fit the company's value system so that the company can maintain an effective ethics and compliance program. This article looks at the legal, regulatory structure in both the U.S. and E.U. with an emphasis on reflexive corporate governance. It also reports the findings of a survey of E.U. and U.S. executives with a reputation for nurturing ethical business culture to discover what virtues and factors are most important and, thus, something a job seeker might look for in finding a strong, ethical company. Finally, the article raises the cognitive issues of the importance for job seekers to examine their own psychological biases so they are evaluating a position based on what really fits their values. -
Leadership in the Promotion of Peace: Interviews with the 2015 Business for Peace Honorees
Ethical leadership can lead to many positive organizational outcomes. Previous studies have shown a correlation between ethical conduct and profitability; in addition, firms that have high ethical standards have fewer legal issues. The existing ethical leadership literature assumes a stable external environment. The business and peace literature, on the other hand, assumes instability but has thus far largely ignored the role of leadership within companies as a possible driver of peacebuilding activities. The practitioner community has already begun to recognize that leaders of organizations are the key drivers of change in the peacebuilding context. The Business for Peace Foundation, the foremost organization in the practitioner community, gives its annual award to business leaders who promote peace within their organizations and communities. These Business for Peace honorees represent the 'ethical leadership' qualities of peace promotion, without reference to academic theories in either area. We conducted semi-structured interviews with the 2015 Business for Peace honorees and combined those with their public speeches at the Business for Peace events to examine what role these business and peace leaders saw between ethical leadership and peace promotion. Unlike the academic research that suggests only a theoretical and sometimes a direct but tangential connection to peacebuilding, the honorees highlight the direct and visible connection of ethical leadership to peace in unstable environments. We begin by describing the relevant business for peace and ethical leadership literatures. Then we highlight the significant aspects of the interviews and speeches and relate these to the prevailing theories of both business and peace and ethical leadership. -
The PACO Index
Given the growth and maturity of the field of business and peace, the authors of this article call for the creation of an index that would present a scorecard of company behaviors. The authors call this the PACO index, which is an acronym for Peaceful Attributes of Companies and is the word for peace in Esperanto. The authors provide a set of principles and drivers that would be necessary for the creation of such an index. -
The Paradox of Pharmaceutical CSR: The Sincerity Nexus
Whether characterized as corporate social responsibility (CSR), business ethics, or some other name, best practices in a given industry often fall short, thus causing efforts of companies seeking to improve their own CSR practices to fall short as well. A typical CSR model uses philanthropic donations to demonstrate the company's commitment to social welfare. Even a strategic version of CSR falls short of what it could achieve. To be sure, these can be important efforts worth celebrating, but we seek to raise the bar higher. Our case study focuses on the pharmaceutical industry because of our experience working in and studying that industry. In Section 2, we identify the typical CSR efforts of pharmaceutical companies. Dissatisfied with the scope of current efforts, Section 3 switches from an inductive approach to a deductive one in which we rely on scholarly literature and some exemplary benchmarks to propose a stronger model of corporate ethics. At the heart of this model is the claim that optimum instrumental benefits accrue to corporate CSR actions when they are undertaken for sincere aims rather than for instrumental ones. Section 4 then explains how this framework provides a way for pharmaceutical companies to embrace a more robust model of corporate responsibility that could be extended to other industries as well.