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Imagine a neighborhood soccer game. Your neighbor's child makes
a try on goal and the ball slams into the goalkeepers' face,
bloodying his nose. After play resumes, your own child substitutes
for the child who kicked the offending goal attempt. When you
meet the goalkeeper's mother later in the day and she berates
you for her son's bloody nose. What is your child's responsibility
for his teammate's action?
When Dow chemical bought Union Carbide, we had to ask ourselves
a question not unlike this one. We believe corporate responsibility
must walk hand in hand with profitability, and the two need
to work together - like teammates. So when we consider what
Dow's responsibility is for the liabilities of Union Carbide,
we try to apply the standard of good sportsmanship, fair play,
and being a good neighbor - while never losing sight of the
object of the game, or undermining our competitive edge. That
can mean some difficult questions.
For instance, when it came to a lawsuit over asbestos exposure
in Texas, we settled a Union Carbide liability with a substantial
sum. After all, this was America - the home of our corporate
headquarters, our family if you will; our moral responsibility
to settle for Union Carbide's missed kick was clear. The victims
were articulate spokespersons with access to the media, and
a negative court decision could have had major impacts on other
liability and asbestos related cases around the world. The principle
of good stockholder stewardship demanded that we act, and that
we act generously.
Dow Investor Relations was actively engaged in discussions
with investors and financial analysts regarding asbestos-related
litigation and the potential impact on Union Carbide and The
Dow Chemical Company. It is important to note that in the course
of these discussions many analysts and investors reaffirmed
their belief that Dow's value could be negatively impacted by
a failure to do the right thing. In cases such as this, where
profitability will suffer unless we take our corporate responsibility
seriously, it's not hard to be guided by our moral compass.
But what about Bhopal? It was an accident that occurred far
away, one whose victims have few resources to ensure Dow is
held responsible for Union Carbide's mistakes. Do we have a
moral responsibility to make sure the site of the disaster is
cleaned up and its victims compensated fairly? Of course we
do. Would we be likely to do so if we faced consumer pressure,
a major stockholder resolution, or a significant brand attack
on Dow's good name? Of course we would. Once profitability is
on the line, our moral responsibility becomes clear. But like
good teammates, corporate responsibility and profitability need
to have common goals. They need to be careful not to play against
each other. Cleaning up Bhopal could open up Dow to greater
liability than the moral weight of this issue can justify from
a profitability standpoint. As we look at the situation today,
few people outside of India really remember Bhopal, or that
Union Carbide was at fault for the accident. Even fewer realize
that Dow bought Union Carbide. And even fewer would say that
Dow, like the little soccer player in our example, bears responsibility
for his teammate's previous mistake. So that leaves corporate
responsibility all alone on the playing field.
At Dow, we'd be ready to undertake a cleanup of Bhopal the
minute we believed that our good name and our profitability
required us to act. That's what makes Dow a good neighbor, a
good team player, and a corporate winner: moral clarity, corporate
responsibility, and a commitment to Living - improved daily.
At Dow we welcome your comments and suggestions about our mission to
improve life, daily. Please contact us at info@dow-chemical.com.
*Trademark of The Dow Company
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