Ethics dilemma 4

This scenario, based around the organisation of a charity event by a not-for-profit organisation and its sponsorship, is taken from a set of four scenarios on teaching ethics contributed by Alison Dempsey (University of British Columbia). It is concerned with conflict of interest and confidentiality.

The non-profit organisation where you work is holding its annual community charity fundraising event. It is one of the organisation’s highest profile events of the year, and the funds raised are critical to ensuring that the organisation can continue to meet the critical needs of its stakeholders and the community.

The fundraising committee for the event has individual and corporate representatives from the community, and you are the chairperson.
Government cutbacks have meant the committee has had to seek out new sources of funding to stage this year’s event. This has meant approaching a much wider range of companies than the long term corporate sponsors. Many of those companies were unable to make mid year funding commitments due to ongoing market uncertainty and increasing management of ‘donations’ through fixed annual budgets.

Yesterday you met with Malcolm, the Director of Communications and Community Affairs from one of the event’s co-sponsors. He needed to speak with you in confidence about some information he had just received. Malcolm’s CEO has told executives that the company is about to be a target of an hostile takeover by a foreign owned company. If it proceeds they will not be in a position to resist. Malcolm has taken a personal and professional risk by breaching his employer’s confidentiality policy to share this information with you before it is public. He explained that it was his personal commitment to the charitable cause that compelled him to go against this policy and tell you the news so that you had as much advance notice as possible, since the takeover will mean his company can no longer be involved with the event.

Your telephone rings – it is Alanna, the Head of Public Relations of a local company that has recently been the subject of allegations about environmental transgressions at their South American operations. She has heard that you need an additional sponsor for this year’s event. Alanna mentions the government cutbacks and says she sympathises with you and feels strongly about your organisation’s good work. You find yourself wondering whether, given the timing of the call, she may have heard the takeover rumour and saw an opportunity to help her company’s public image.

Alanna’s company is willing to step in with a commitment over and above the funding you require. While this is an incredible windfall and just in time, alarm bells go off in your head – you had a friend who got into trouble when the money she accepted from a business ended up being tainted. Since you believe in being open in your dealings, you mention to Alanna your concerns about accepting this offer given the high profile controversy in South America. Her view is that these are merely allegations stemming from a complex political situation that has not had fair media coverage. You agree to present the offer to the fundraising committee this afternoon.

You realise that as chair you need to be very careful how and to what extent you share this information with the committee. You must be seen to be impartial.

Take 15 to 20 minutes to consider the following:

1. What action will you take?
2. How do you get around the fact that the information about the sponsor withdrawal and funding shortfall was told to you in confidence by Malcolm, and his job could be at risk if his employer found out?
3. You cannot help wondering if Malcolm should even have told you – what would happen if everyone decided to put their personal values before others that they have agreed to follow?
4. If you don’t tell the committee, how do you introduce the subject of the potential new sponsor?
5. The committee will look to you as chairperson for guidance on accepting the new sponsorship – what are you going to advise?
6. What are the risks/repercussions to you and to others involved?
7. Who will you need to involve and how much information will you share with them? How much detail will you provide?

Things to consider before you decide what to do:

1. Do you have to respect Malcolm’s request for confidentiality, not least because of the risk he has taken in speaking with you? Maybe the rumour is already out given your suspicion about Alanna’s call this morning.
2. As chairperson you are responsible for ensuring that this event happens regardless of whether it was within your control. You are anxious to make sure that if anything goes wrong it will somehow not reflect badly on you at work.
3. There is a clear risk in associating the event with a company that has been the subject of controversy, but that controversy is based on mere allegations at this point, and Alanna’s side of the story sounded pretty convincing. Is it right to make a judgment without all the facts, and before investigation of the allegations by the proper authorities?
4. You cannot help feeling uncomfortable about the timing of the telephone call, so closely after the allegations in the press and resulting negative publicity. Does it matter if Alanna has an agenda other than just wishing to support the charitable event, particularly since you have no proof that this is the case?
5. The committee looks to you as chairperson to set the standard and to make final judgment calls on what is acceptable. But you know that the decision will be strongest (and most easily defended if something goes wrong) if the decision making process is clear, ethical, takes account of all available information, and based on a group discussion that involves all of the committee members and explores different perspectives.
6. You would really like to consult with a senior colleague. Is this possible, given that you have information that was told to you in confidence?

Last Modified: 30 June 2010