Muriel Dunbar is a semi-retired senior executive with a long career in investment management. She sits on a number of corporate boards in the Boston area, including the board of the Boston Press, Inc. a multifaceted firm with sales and operations in journalism, book publishing and brick and mortar retail book sales. She is a book lover herself and also sits on the advisory board of the non-profit New England Association of Independent Book Sellers (NEAIBS) – a trade association of small independent book stores throughout the six state area. She has consistently reported this affiliation of the disclosure documents filed with Boston Press and the other firms on whose boards she sits. Because she is an unpaid, advisory-only member with no voting power on the non-profit board, the various compliance departments including that of Boston Press have not identified this affiliation as problematic. The brick and mortar books stores of the Boston Press have been feeling the pressure from on-line sellers such as Amazon. At the June Board meeting, senior management and the head of sales float the idea of entering the fray of on-line sales. The plan consists of keeping only the most successful of their retail outlets as full service book stores. The others would be closed or pared back to essentially storefronts offering only pick-up for books ordered on line. Since Boston Press does not have the logistic capacity of an Amazon, they are considering in addition opening up a number of un-manned, automated pick-up locations throughout the region. Studying the plan, Muriel sees that the marketing folks at Boston Press has done their job well and the communities targeted for these low-cost automated pick-up facilities are largely identical to the locations of the most vibrant and successful of the small, independent shops represented by NEAIBS. As a board member of Boston Press, Muriel argues against the new plan, insisting that if Boston Press wishes to compete with the Amazons of the world, they should do so directly by developing the logistical capabilities of delivering product directly using existing delivery options like FedEx and UPS. She argues persuasively that this is a far more economical approach. She convinces the board to ask management to study this option and come back at the September meeting with a comparative analysis. Meanwhile, at the next meeting of the NEAIBS advisory board, Muriel discloses the potential for direct competition with many members’ shops and advises them to review their options in terms of blocking this strategy – such as involving local officials and book clubs to protest and delay the establishment of the automated store-fronts.
1. Identify the principal actors
2. Identify the stakeholders
3. Determine if there have been ethical or regulatory breaches and what principles have been violated.
4. Determine if there has been material harm to any stakeholder and what steps are required to mitigate or correct it.
5. Discuss any other issues of ethics, compliance or good governance that extend beyond the immediate details of this case.
a. Reviewing Muriel’s actions at the June board meeting as described in the next to last paragraph, should her motivations be a factor in making an ethical judgement? That is, if she sincerely believes that the direct competition model is economically superior to the one employing automated pick-up sites?
b. If you believe that Muriel has engaged in any unethical behavior, what should she have done?