Just For Kicks: In the Swing of Things

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.

*Trademark of The Dow Company


     Also of interest: