Apple cuts community from its priorities…
Even for those among us who love Apple’s gadgets and software (and we’re die-hard Apple fans here at footnoted), it’s not like the company is exactly soft and cuddly. There’s that business of the prosecutor and the AWOL iPhone 4 prototype, and of course a Texas jury earlier this month found that Apple violated several patents central to some of the Mac’s niftier features. (Apple is appealing.)
But for all its prickliness, the company has prominently counted “Community” among a select list of core principles. Here’s the list of Apple’s Principles of Business Conduct — enshrined at the very top of the company’s Business Conduct Policy. Here’s what the full list looks like:
Apple’s Principles of Business Conduct
Apple’s success is based on creating innovative, high-quality products and services and on demonstrating integrity in every business interaction. Apple’s principles of business conduct define the way we do business worldwide. These principles are:
• Honesty. Demonstrate honesty and high ethical standards in all business dealings.
• Respect. Treat customers, suppliers, employees, and others with respect and courtesy.
• Confidentiality. Protect the confidentiality of Apple’s information and the information of our customers, suppliers, and employees.
• Community. Conduct business in a way that benefits the communities in which we operate.
• Compliance. Ensure that business decisions comply with all applicable laws and regulations.
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Rather, that’s what the full list looked like, until July of this year. Yesterday, along with its 10-K, Apple filed the latest version of its Business Conduct Policy. And wouldn’t you know it, that line about “Community” is mysteriously missing:
Apple’s Principles of Business Conduct
Apple’s success is based on creating innovative, high-quality products and services and on demonstrating integrity in every business interaction. Apple’s principles of business conduct define the way we do business worldwide. These principles are:
• Honesty. Demonstrate honesty and high ethical standards in all business dealings.
• Respect. Treat customers, suppliers, employees, and others with respect and courtesy.
• Confidentiality. Protect the confidentiality of Apple’s information and the information of our customers, suppliers, and employees.
• Compliance. Ensure that business decisions comply with all applicable laws and regulations.
Now, deeper into the document (on page 8), Apple seems to have kept a few lines that encourage employees to warn the lobbyists if they hold elected office, and asserting that the company complies with the law and operates “in ways that benefit the communities in which we conduct business.” But there’s no doubt that the new version of the code relegate Apple’s community affairs from the most prominent of positions to something resembling an afterthought.
On its website, Apple helpfully offers a one-page summary of changes to the document (PDF). But other than noting that the section was “[u]pdated … to focus on four core principles of Honesty, Respect, Confidentiality and Compliance,” the change isn’t acknowledged or explained.
It’s all a little odd, given outside indications over the years that Apple isn’t shy about getting involved. Presumably, it can still do so, even if it doesn’t count community among its top principles of business conduct. We hope it will.
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Posted in Tags: code of conduct |
 5 Comments » |
October 29th, 2010 at 10:46 am
It’s actually refreshing to see they took it out, it’s more focused and actionable. Honesty, Respect and Compliance details all the responsibilities they should have their stakeholders and community
Let’s face it, the “benefit the community” principle was very wrong headed. Apple should be in the communities that make the most economic sense for the business, it’s up to those communities to ensure that Apple’s presence is a benefit through the taxes and fees they levy, and laws they impose. I don’t want the profits of a business I own to be skimmed to benefit the business’s community or it’s stakeholders because employees feel some vague moral imperative. I want all of those profits to accrue to shareholders, so they can leak them to THEIR communities through their own choices.
As an example, Apple shouldn’t be making cash donations to it’s employee’s children’s schools, esp. those of it’s executives, including Steve Jobs. Those excess profits should accrue to shareholders so they can donate their share to their own children’s schools.
November 1st, 2010 at 11:34 am
Just giving you a little good-humored hard time….
“… if they hold elected officer, …”
Now that you’re a part of Morningstar, I would have thought you’d have access to an editor?
(I shouldn’t complain. My writing is usually worser.)
November 1st, 2010 at 11:41 am
Whoops — thanks! Fixed now.
November 1st, 2010 at 1:55 pm
Randy’s reply shows he is not business savvy. Employees engaged within their company are far happier than those who turn up just to work. Knowing that their company cares more about the employees community gives the workers a better feeling with regard to THEIR company. You say you don’t want the profits of a business you own to be skimmed…. just who is making you these profits? They are working WITH you, not FOR you and would soon leave with your work requirements – very Dickensian! Running a company purely for shareholders maximum benefit will quickly fail.
November 8th, 2010 at 1:40 pm
Hmm, I’ve helped start and run several businesses, including one that was sold for nearly $100m. So I guess I’m an over-achiever given my lack of business savvy. Even more interestingly, the biggest compliments I received as an executive were by outsiders impressed by our high levels of employee morale and motivation, and our extremely low levels of turnover.
If we had a secret, it would be that we treated employees as partners, with respect, and always communicated honestly with them. When there were tough times, and we had many, employees didn’t have the additional burden of wondering about what we would do, or where they stood. ANd if you read Apples improved corporate conduct guidelines, it is now better focused on those important qualities.
The company needs to respect employees personal commitment to their community, whether it’s specifically schools, family, church, or charity. But when business managers start committing business resources to their own pet community projects, it can send a bad message to employees that the company serves executives personal agenda, and that can be very dismotivating in itself. But it’s also a misuse of company resources, resources that have been pooled by shareholders, that are owned by shareholders, and are meant to benefit shareholders.
In the end for employees to reach their career goals, and to maximize their personal investment in the company, whether they have equity or not, the business should be run to maximize it’s financial performance as it obeys the laws of it’s community. Better financial performance means bigger bonuses and more valuable employees, not just more valuable stock for shareholders.
Like the chicken to breakfast, employees are involved, but shareholders, like the pig, are committed. Employees can leave at any time for a better opportunity. They typically have no financial commitment or investment in the business. Shareholders, on the other hand, don’t have that choice. If the business is run poorly, they have no option to have their investment refunded in full so they can leave. The shareholders own the company, and decisions about any use of any profits outside of the businesses direct needs, should only be made by the owners, not managers or employees.