The Ethical Workplace

THE Supreme Court's recent decision barring companies from unilaterally excluding women from jobs that could expose them to hazardous substances evokes the sharp contrasts that exist between companies that must be forced to treat their workers fairly and socially responsible firms that do so automatically. In 1986, Digital Equipment Company conducted a study on the possible effects of semiconductor assembly on pregnant women. When the study revealed that this work could increase the possibility of miscarriage, DEC published the results and encouraged women to transfer to lower-risk positions - at their current pay.

Openness, flexibility, and respect for employees are characteristics of DEC that earn it top ratings by women's groups as an excellent workplace. DEC is recognized for a commitment to women formalized in 1962, before most companies had a policy. It offers flexible options for working mothers. Its mentoring program assists women and minorities form positive relations with upper management.

Research by the Council on Economic Priorities (CEP) shows that companies with an ethos of fairness are making inroads in encouraging women's advancement. They're placing more women on their boards (789 companies in the Fortune 1000 in 1989, up from 571 in 1988), encouraging women employees' networks and "caucuses," and so on. The Conference Board, a research group in New York, found that more than 4,000 employers offered a form of child-care referral by mid-1989, up from 110 in 1978.

Companies in the forefront of these achievements, CEP found, tend to be featured in ethically-screened investment portfolios that select companies based both on financial factors and social responsibility. Such companies are much sought after: $550 billion are now invested using social screens, according to the Social Investment Forum in Minneapolis; financial analysts have found such portfolios to perform well.

CEP found that technology-based companies with the best programs for women have a major common feature: a visionary leader who advocates a policy of inclusion rather than exclusion.

One of them, pharmaceutical giant Merck's CEO, P. Roy Vagelos, has pioneered women's programs. Last year the company named women to two key jobs: one as chief financial officer, the other as a vice president of research. For working mothers (and fathers), Merck offers child-care leave for up to 18 months, with benefits and seniority unchanged. It provides financial support to daycare centers and helps with child care and family needs. Flexible work arrangements are widely available.

For the 8,000 top executives surveyed in Fortune magazine's annual poll of most-admired companies, Merck's accomplishments are not news: Merck has ranked in the top 10 for nine years. It's been No. 1 for the past five. What's news is that social responsibility is a growing concern.

One of the "flip sides" of CEP's research is finding companies unwilling to provide information, and that have records of poor social performance. USX consistently scores low in CEP's rankings. Public documents show no women on the board or as senior officers. In 1987, a Pennsylvania judged ordered USX to pay $3.3 million in damages to more than 300 women denied jobs at mining operations because of their sex.

Nearly a decade ago, 3M settled a sex bias case for more than $2 million - but has taken giant steps since. It now has a 25-member women's advisory committee that helps shape company programs. Members of 3M's women's program encourage schoolgirls to consider careers in math or science. Three women sit on 3M's board, which is rare.

Hewlett-Packard sponsors "Careering-for-Women" seminars to help women enter management in male-dominated areas. The company's annual report lists the percentages of women and minorities in four employment categories and compares them with figures for the previous five years, showing slow but steady advances in management and professional jobs. Few companies disclose this data.

In researching companies, CEP has found those with records of responsiveness to employees to be frank and often self-critical, willing to share information about what they do.

There's a rich payback in these corporate investments: by offering flexible workplace and family-centered policies, Merck found itself with a more loyal and skilled workforce and less turnover. In a financial analysis, Merck found that it ultimately cost more to recruit and retrain replacement workers than to provide current staff with flexible workplace options and leave programs that would eventually guarantee their return. That's socially responsible investing at its best.