The guilty pleasure of having a candy bar just got a little guiltier. “The odds are substantial that a chocolate bar bought in the U.S. is the product of child labor,” the Washington Post reports, based on an 11-day reporting tour through the Ivory Coast’s cocoa farms by a reporter and photographer.
The journalists interviewed 12 boys who gave their ages ranging from 13 to 18. “The boys were working on farms harvesting cocoa, clearing brush with machetes and doing other work associated with cocoa production,” their account said.
This has been going on awhile, but the big chocolate makers including Mars, Nestlé and Hershey pledged nearly two decades ago to stop using cocoa harvested by children. Yet it continues. In the Ivory Coast, “hundreds of thousands of small farms have been carved out of the forest,” the Post reports, “the setting for an epidemic of child labor.”
About two-thirds of the world’s cocoa supply comes from the region, where more than 2 million children are employed in the industry, according to a 2015 U.S. Labor Department report. The big chocolate makers have missed several deadlines for halting the practice. One reason is the murkiness of the supply chain. Chocolate companies can’t identify where much of their cocoa comes from, “let alone whether child labor was used in producing it,” the Post said.
If that gives you second thoughts about your chocolate craving, don’t seek refuge in your favorite hazelnut spread. That crop carries a similar taint. Syrian refugees have been toiling on Turkey’s hazelnut farms with little to show for it, according to the New York Times.
Turkey produces about 70% of the world’s hazelnut crop on about 600,000 small farms. The harvest supplies the key ingredient for products like Nutella spread made by Ferrero, as well as candy bars from Nestlé and Godiva. “Few consumers know that behind each of these treats is a crop that has long been notorious for its hazards and hardships, as well as the prevalence of child labor,” the Times reported. “Now, a growing number of seasonal hazelnut workers are Syrian refugees, a cohort with a unique set of vulnerabilities. Few have work permits, meaning they lack legal protections.”
“In six years of monitoring, we have never found a single hazelnut farm in Turkey in which all decent work principle standards are met,” said Richa Mittal, the director of innovation and research for the Fair Labor Association, which has done fieldwork on Turkey’s hazelnut crop. “Across the board. Not one.” According to the Times, “No buyer is bigger or more secretive than Ferrero. It won’t name a single farm that its suppliers buy from, although simple arithmetic suggests that the answer is ‘most of them.’”
While child labor in agriculture is common in the developing world, the U.S. is no exception.
“More than half of work-related deaths among children in the U.S. occur in agriculture, according to a new US government report,” Human Rights Watch reported. “This happens despite the fact that farms employ less than 6% of child workers, highlighting the devastating consequences of weak laws and regulations that don’t properly protect child farmworkers.”
What gets a CEO fired? Traditionally, poor financial performance has been the leading cause of corporate boards dumping their chief executive.
But last year was different: 39% of CEOs were dismissed for ethical lapses, vs. 35% for financial reasons, according to a study of the 2,500 largest global public companies by Strategy&, a consulting arm of PwC. It was the first time in the 19-year history of the study that unethical conduct doomed more CEOs than any other reason.
“There’s a new call for transparency and accountability, especially with issues regarding the #MeToo movement and other indiscretions for which there is increasingly zero tolerance,” said Martha Turner, a partner with Strategy&.
Has CEO behavior gotten worse? More likely, the reason behind the trend is that standards have been raised, wrote Robert Prentice, a professor of business law and ethics at the McCombs School of Business at the University of Texas. “Formerly, corporate boards were too often inclined to hunker down and ride out a storm of controversy over a misbehaving CEO who was, nonetheless, getting the financial results that the board desired,” notes Prentice. “Today, thanks to the #MeToo movement, that is not a viable strategy for corporate boards. The heat from the headlines is too intense.”
The most notorious case in 2018, when the study counted 89 forced CEO departures, was that of CBS chief executive Leslie Moonves, who resigned over sexual-misconduct allegations and didn’t go away quietly. Other CEOs departed from Lululemon, WPP, Intel and Barnes & Noble following charges of sexual misconduct or other ethical lapses.
“Boards feel they have to hold their CEOs accountable to the code of conduct in the same way they would with [other] employees,” Bill George, a senior fellow at Harvard Business School and former CEO of Medtronic, told the Washington Post. “There’s a strong feeling from boards they have to do it.” Another factor is increased pressure from employees reacting to misconduct at the top, he added. “That’s a very important factor today that didn’t exist 10 years ago.”
The new climate probably will claim quite a few more CEOs, management experts predict. “The first wave of #MeToo took out some of the most high-profile figures,” John Paul Rollert, a professor at the University of Chicago who studies the ethics of leadership, told NPR. “What we’re beginning to see in this second and now third wave is Corporate America taking responsibility for itself,” he said. “There are clearly a lot of bad actors who are still hiding in the shadows that need to be swept out.”
Is there something about chief executives that makes them step over the line? Well, yes, in many cases. “The population of psychopaths is still overrepresented in the C-Suite,” wrote Prentice, the University of Texas professor. “The professional success corporate CEOs have enjoyed often leads them to be particularly vulnerable to the overconfidence bias and the self-serving bias. They will continue to tend toward having an unrealistic view of how moral they are and how important they are to their firm’s success,” he wrote, adding: “They will continue to be more likely than others to mistakenly believe that others agree with them. And, the science shows, they will be particularly adept at rationalizing their wrongdoing.”
“It’s undeniable that our use of technology has outstripped our infrastructure” of legal, ethical and social standards, observed Cathy Bessant, chief operations and technology officer for Bank of America. “We’re using it before we know how to manage it.”
Her remarks in an onstage interview aptly captured the sentiment last week at Techonomy NYC 19, a conference that explored bright and dark sides of technology, which right now seem almost as polarized as America’s politics. The organizers titled their conference “Collaborating for Responsible Growth,” they explained, “because unless we get better at working together for society’s benefit, we’re all in trouble.”
With an eclectic array of speakers, Techonomy explored such wide-ranging issues as social media’s crisis, women in technology, hackers, Amazon, the internet of things, China, food and podcasts. Several highlights from the first day of the two-day conference:
Technologies of Togetherness
“We are in the cave-man era of bringing people together,” declared Scott Heiferman, the chairman of Meetup, the community-building startup he co-founded in 2003. In saying that, Heiferman was being optimistic. He believes the current crisis in social media, plagued by propaganda and privacy issues, could be worked out by innovation and public debate.
Heiferman, in an interview with Techonomy founder David Kirkpatrick, said he thinks the business model of advertising-driven platforms like Facebook and Google will have to evolve, bemoaning “the fact that the greatest minds of our generation are focused on getting people to click on ads.”
Yet he recognized that moving to a new business model, like paid subscriptions, would require an epic change for those companies. “Should the whole world be paying cash money to Facebook? The reality is that if your core business is to get people to stare at a screen, you’re going to get people to stare at a screen,” he said.
Digital platforms like Uber, however, which has been accused of exploiting its drivers, could be rivaled in the gig economy by the emergence of so-called platform cooperatives, Heiferman noted. In those organizations, the administrative layer is thinner and more revenue goes to the workers.
Meetup, which was bought in 2017 by WeWork, makes money by charging a fee to organizers of groups. The company decided early on to avoid going to an ad-driven model, which made Heiferman nervous at the time about how customers would judge the service, he said. “If we go to a pay model, their expectations are going to be really high,” he told one of his investors, Pierre Omidyar, the founder of eBay. Responded Omidyar: “Exactly!”
Creating an Inclusive Tech Industry
“Having diversity at the table when solutions are proposed leads to different solutions,” said Kimberly Bryant, founder and CEO of Black Girls Code, a nonprofit that provides young and pre-teen girls of color opportunities to learn skills in tech and computer-programming.
Bryant, a technologist with experience at Genentech, Pfizer and Merck, launched Black Girls Code as a pilot project in 2011. It now has programs in 15 cities, partnering with school districts and corporations.
Bryant observed that with technology as a tool, girls can address issues that “young women of color face in the community.” Safety, for example. Her daughter, at age 13, worked with her peers at a hackathon to develop a wearable device, called Ohana, that could act as an alarm if they were to feel unsafe in a particular area. A push of a button would notify their key contacts or the authorities.
Participants in Black Girls Code can start early and stick with the program for several years, with year-round workshops. While Bryant’s daughter is now studying computer science in college, other participants have used the program as a springboard to other careers. One of them is getting “a full ride” at the University of California, Berkeley, where she’s studying to become a doctor, Bryant said.
But does Black Girls Code exclude people by its nature?, a member of the audience asked. “Black Girl’s Code is a term of affirmation, not of segregation,” Bryant said. “It’s OK for these girls to be their full selves.”
Partnering for Good
When corporations launch programs to have a positive social impact, they’re well-advised to leverage their strengths by finding a partner like MedShare. The humanitarian aid organization delivers surplus medical supplies and equipment to communities in need around the world.
The group has delivered $220 million worth of gear so far, “things that would have wound up in a landfill,” having outlived their use in the developed world, said Charles Redding, the group’s CEO.
One of MedShare’s partners is Philips, the Dutch electronics giant. The company currently focuses heavily on health-care technology, “everything from MRI machines to the Sonicare toothbrush,” said Rob Stevens, the company’s general manager of health-system services.
Medical equipment typically becomes surplus when a hospital or other health-care provider upgrades to more modern gear, at which point a company like Philips can find a new home for the still-functional devices. “We don’t just donate the gear, we also provide all the manuals so they can have another useful life,” said Stevens. “It’s important that that the local team knows how to service the product and use it to its full potential.”
The second-hand gear can be life-saving in parts of the world where modern health facilities are scarce. “The ultrasounds are literally a godsend for us,” said Redding, referring to the use of the devices for pre-natal monitoring. He told of a situation in Nicaragua where an expectant mother was in physical distress. An ultrasound exam showed the mother to be “very low on amniotic fluid,” a hazardous condition. The mother was rushed to surgery for a C-section, which saved both the mother and child, he said.
MedShare is a major logistical operation, having moved 13.5 million lbs. of equipment and supplies, operating three warehouses to handle it all, and coordinating 20,000 volunteers a year to get the job done, Redding said.
Hacking a More Secure Society
Everyone from credit-card holders to Pentagon generals worries about digital mayhem, with new episodes making headlines constantly. Two weeks ago, hackers seized parts of the computer systems that run Baltimore’s government, demanding ransom.
“Here’s the bad news: Nobody wants to be hacked, but everybody gets hacked,” said Mårten Mickos, CEO of the cybersecurity company HackerOne. The good news, he added, is that “the younger generation is fixing it for us.” HackerOne has an unusual business model in the $120 billion cyber-security industry. HackerOne encourages its army of 400,000 freelance hackers to try to infiltrate the systems of its customers, then pays a bounty when the hackers find a bug. “If the good guys can break in, the bad guys can break in too.”
HackerOne’s workforce ranges from students to corporate professionals, with half of the hackers age 24 or younger. While some hackers might earn only small amounts, several stars have emerged. One is 19-year-old Santiago Lopez of Buenos Aires, the first HackerOne freelancer to earn $1 million. Lopez has found 1,607 flaws at recent count, having scrutinized the IT systems at companies including Goldman Sachs and Verizon, Mickos said. “Software can be wrong in so many ways,” he said, comparing freelance hacking to the production of open-source software.
“It’s the only way to deal with it,” Mickos said of fighting cybercrime, which he called “asymmetrical threat, in that those who do it are very few, who can do huge damage.”
HackerOne has worked with the Defense Department to carry out the program Hack the Pentagon, which uses the crowdsourcing method to secure its IT systems. In that case of that program, the Pentagon does background checks on the good-guy hackers, who are required to be law-abiding, U.S. citizens.
Asked about the worst digital security threat, Mickos answers: “The problem is you and me. Human beings are not disciplined, they’re vulnerable.” For his part, “I’ve become very disciplined with my own passwords.”
Can Anyone Beat Amazon?
“The reality is, in the short or medium term, nobody can beat Amazon. If you try to run up against amazon directly, it’s like going up against Usain Bolt in the 100 meters,” said Chieh Huang, CEO of Boxed, the e-commerce company he co-founded in 2013.
OK, so how did Boxed become a juggernaut of its own, attracting $244 million of venture-capital funding so far?
“We didn’t understand why Amazon didn’t sell really big packages,” said Huang, who started selling wholesale volumes of toilet paper out of a garage in New Jersey.
“Timing was everything,” he said. At the time, investors were wary of e-commerce, so the partners did things for themselves, selling $40,000 worth of bulk products in their first year, mainly to business customers. They limited themselves “to selling only the wholesale package and not trying to be the Everything Store,” he said. “There’s a fine line between hubris and being naïve.”
Part of Boxed’s current business model is to build its own propriety technology for inventory management and other parts of the business, in which they can incorporate higher-value features. Among e-commerce sites, “We’re the only national retailer that tells you the expiration date of the product you’re buying,” Huang said. “If there’s a recall of beef jerky,” he said, the company knows exactly which customers to notify.
While automating his warehouse in New Jersey has replaced people with machines to some extent, Huang said the growth of his revenues has led to a net increase in jobs. Plus, technology has its limits, for now. “It’s hard to simulate the dexterity of the human hand to pick up things,” he said.
Asked what keeps him up at night, the entrepreneur said: “The ever-rising bar of the consumer. Consumers don’t care where that innovation comes, but they see it and then they want it across the whole spectrum of retail,” he said, giving the example of two-day shipping leading to one-day shipping and now same-day delivery.
The Internet Civil War
Techonomy founder Kirkpatrick set the table for this panel discussion with a cover story in the company’s magazine, in which he took stock of divergent powerful interests that could render the term “world wide web” obsolete. Already, the trend has given rise to a new term for the frayed global connections: the “splinternet.”
“On the one hand, a small band of huge global technology companies have achieved a scale and influence that dwarfs most countries, even as they have shown insufficient concern for public welfare,” Kirkpatrick wrote. At the same time, “an existential split over the internet has emerged between nations. Is it a vehicle for freedom and the empowerment of individuals?” as the U.S. and Europe have generally believed, “or is it a means for state control, surveillance, and the muzzling of political speech?” as China notably practices, with countries like Russia, Iran, Saudi Arabia, Turkey and Hungary leaning in that direction. The risk, he concludes, is that the internet becomes balkanized and loses its global potency.
In the shadow of the Big Tech companies, “we are living in a commercial zone that lacks any regulatory standards,” said Dipayan Ghosh, a fellow in the platform-accountability project at Harvard’s Shorenstein Center on Media, Politics and Public Policy.
“Tradition in this country has always been to put the markets first,” Ghosh said. With the rise of Facebook and Google, we have seen the emergence of a dominant business model involving several insidious factors: “compelling platforms fostering addiction,” the “uninhibited collection of data on users,” and “the creation and refinement of algorithms that are sophisticated and opaque,” he said.
With companies like Facebook, Google and Amazon dominating their fields, “you could make the case that in each of these silos is a monopoly and potentially damaging our media ecosystem,” said Ghosh, who said that citizens should call for establishing some borders around those business models “to give the consumer some power back.” Indeed, he predicted “over the next year we’re seeing a tsunami of regulation coming to Silicon Valley, from around the world. I hope the industry can come together with legislators for some improvements in transparency.”
In terms of totalitarian countries building walls to separate themselves from the internet, what’s the worst scenario? “The one I’m most worried about is that countries see a security threat,” said Scott Malcomson, director of special projects at the Strategic Insight Group. “They see a threat to their physical safety” from losing control of the web, he said. “Once you get onto that escalator, it’s hard to get off.”
Will Tech Unify or Divide?
Bank of America’s Bessant, who warns of technology’s tendency to race ahead of our ability to deal with the effects, said, “We have to choose the path of good, but it won’t be the path of least resistance.”
Of particular concern, she said, is a worsening of income inequality. “I’m optimistic by nature,” she noted, but “what happens when we’re 5G [wireless] enabled and all of us have five to six devices?” she asked. “What happens in parts of the world that can’t afford it? Rich kids will have it, but poor kids won’t. From the outset, that has to be unacceptable to us.”
Banks should care about the widening economic divide because one of their core missions is “democratizing the safety of money. We have to stand for equality and justice,” she said. That’s a practical concern too, since banks do better in societies with economic diversity. “We know that vibrant markets are better for banking.”
Bessant said that even bankers worry about the economic fallout of technology. “Whenever you use the word transformation in front of an employee, they think, ‘Yeah, you’re going to transform me out of a job.’” That’s one reason she has a monthly conference call with thousands of employees, during which they can ask questions freely and anonymously.
When Corie Barry was named the new CEO of Best Buy on April 15, her route to the top drew attention as a promising career path up through the glass ceiling. Barry had been the Minnesota-based company’s chief financial officer (CFO), a post increasingly occupied by women.
The number of female CFOs among the S&P 500 and Fortune 500 rose to 84 last year, an all time high, reported Bloomberg, calling Barry’s promotion “a positive sign for the rising number of women who are taking on finance jobs at the largest U.S. companies.”
The number of women CEOs among the Fortune 500 has been rising steadily and reached an all-time high of 32 in 2017, but slid back to 24 last year.
Barry, 44, takes over from Hubert Joly, 59, who is credited with rescuing the company during his seven-year tenure, a time of massive disruption in the retail industry.
Barry, who led the company’s pivot into services, including tech help for consumers, will face the challenge of keeping that momentum going. “There’s no room for mediocrity in retail,” she said in a call with reporters. “Anytime it’s easier to do something digital—whether that’s booking a plane ticket or purchasing a TV—your expectations as a customer are constantly rising.”
Not long after Barry’s promotion was announced, the largest U.S. banking company, JPMorgan Chase, announced the elevation of two women to top positions. Marianne Lake, currently the bank’s CFO, was promoted to CEO of the bank’s consumer-lending operations, while Jennifer Piepszak was promoted to CFO.
“For years, Lake’s name has come up as a potential successor to the company’s current CEO Jamie Dimon, which would make her the first female chief executive officer of a U.S. bank,” reported Forbes. Piepszak’s promotion, meanwhile, adds another potential contender to that succession race.
While most self-respecting corporations tout their corporate culture as an important recruiting tool, a new book makes the case that culture can’t be reliably measured across big organizations.
For a new, research-driven book, Nine Lies About Work: A Freethinking Leader’s Guide to the Real World, from Harvard Business Review Press, authors Marcus Buckingham and Ashley Goodall asked employees at many different companies to evaluate statements like, “At work, I clearly understand what is expected of me,” and, “Do I have the chance to use my strengths every day?” to evaluate the workers’ experience.
The authors found that within most companies, the answers varied greatly from department to department.
In an interview with HuffPost, Buckingham, who studies people and performance at the ADP Research, said the celebrated rankings of “best companies to work for” serve a valid purpose, but more attention should be paid to Individual leaders, especially by prospective job seekers.
“For an individual employee, it means the most important thing for you is your local team. Find out as much as you can, and whenever you get worried that the team leader you’re joining is somebody that you can’t click with or don’t trust, take that really seriously,” said Buckingham.
Top executives at a company, and their vision, are important too, since it’s hard to work for an organization where you don’t respect the leadership.
However, “your actual experience of working is the day-to-day people who just keep showing up every day, working next to you and bringing their work and bringing themselves,” Buckingham told Huffpost. “The good news is it’s much easier to control the experience on a team than it is to try to shift an entire aircraft carrier of a company.”