When companies have a responsibility to speak out on politics: Earlier this year, Christian Sewing, CEO of Deutsche Bank, chose the bank’s annual reception in Berlin to speak out about the threat right-wing extremism poses for the bank’s investors. Sewing is not a lone voice on this. Numerous companies and their CEOs have recently stepped forward to raise their concerns about growing right-wing extremism coordinated by the activities of the Alternative for Germany (AfD) party. They see the negative impacts that AfD’s proposed policies, relating to migration, the European Union and man-made climate change, could have for the German economy. The bigger question may not be whether right-wing politics really is bad for business, but rather if Deutsche Bank and other firms should be getting involved in politics at all.

Business ethics can be regarded as a field dealing with corporate self-regulation as it relates to the treatment of stakeholders. However, a concern for corporate stakeholders need not take a corporate-centric perspective, as shown by recent efforts (especially Singer in Bus Ethics Q 25(1):65–92, 2015) to situate corporate conduct within Rawls’ political theory. Although Rawls was largely mute on the subject himself, his theory has implications for business ethics and corporate governance more specifically. Given an understanding of a “Rawlsian society” as a whole - where corporations as associations are a part - this paper addresses how a Rawlsian perspective would safeguard against corporate harms in society. The authors argue that a Rawlsian society would primarily regulate corporate conduct through exogenous constraints in the form of legislation. To the extent that business ethics is concerned with endogenous constraints in the form of corporate-centric self-regulation regarding stakeholders, to adopt a Rawlsian perspective is to assume instead a society-centric perspective and to impose exogenous constraints on corporate conduct in the form of legislation for the benefit of citizens. In the context of Rawls’ political liberalism, normative concerns in business are accounted for through legislation and the system of background justice. In a clear departure from Singer (Bus Ethics Q 25(1):65–92, 2015, Bus Ethics J Rev 6(3):11–17, 2018a), the authors further develop their argument to propose that Rawls' theory can be interpreted as providing a rule for corporate governance. The rule - which is imposed exogenously for the good of society - states: after choosing the corporate constraint mechanism (exogenous vs. endogenous) that best promotes the Liberty Principle, choose the corporate control regime (shareholder vs. stakeholder) that maximizes economic efficiency.

This short case study is a snapshot of the ethical challenges faced by members of a supply chain as they work on an apparently fictional high-rise renovation project. Although the story is set in the construction sector, it is relevant to any supply chain in any industry or any set of individuals working on a business project with real-world consequences. Case A starts with Bruce, the architect’s project manager, who adopts a fake-it-till-you-make-it approach and agrees to phase payments in such a way that his firm avoids the standard tender process. The narrative then moves to Simon, the contract manager for the “favoured” contractor, as he tries to drive down costs to meet the quoted price while maintaining profitability. Next we encounter Ben, a recently graduated project manager for his father’s specialist building-facade firm. Like Simon, his technical knowledge is insufficient, and he fails to follow up on crucial questions, instead relying on others in the supply chain to ensure compliance with regulations. We then encounter two suppliers of the materials for the facade and internal insulation. Deborah, a sales manager with minimal technical knowledge, supplies misleading information and oversells, partly due to pressure and poor communication from her bosses overseas. Jonathan, a young product manager, does the unthinkable by participating in a faked fire-safety test. He, too, is under pressure, both from experienced colleagues who present this as normal procedure, and from the cost-conscious private equity firm that owns the company. Case B reveals that these characters are real people who worked on the renovation of Grenfell Tower in London, where in 2017 a fire resulted in the death of 72 residents. Their stories and quotes are part of a vast and complex “supply chain” of failures revealed in the subsequent public inquiry.INSEAD has made this case study free for anyone to read or use, as the writers believe that the story deserves wider international attention and should not be a source of revenue.