Top Issues - Week of 3/13/17
Of Headscarves and Religious Freedom. The difference in the attitudes in Europe and the United States to religious freedom demonstrate very different ethical values. In Europe this week, the European Court ruled that private employers can ban the Muslim head scarf and that this does not constitute discrimination. The French government has for a number of years banned the wearing of the headscarf in French schools by either teachers or students. These rules limiting the free exercise of religious belief and dress would be considered discriminatory in the U.S., where the courts have debated whether simply filling out a form that says a religious employer will not cover contraception constitutes an undue burden on religion. Perhaps the difference lies in the different history of Europe where an ardent secularism has displaced state-sponsored religions. Ironically, the American athletic clothing firm Nike this week introduced a headscarf for Muslim women athletes to wear in competition.
Ethical Values in Health Care Reform. Republican proposals for repeal and replacement of the Affordable Care Act are being widely debated this week. It is worth identifying the ethical and value judgments in the reform proposal introduced by House Speaker Paul Ryan. Despite President Trump’s comment that “no one will lose their health insurance” under the reform, many millions will do so. The ethical choice Ryan’s plan makes is that increasing the number of uninsured is acceptable in order to reduce the government’s expenses for health care and to provide billions in tax relief for the wealthiest Americans. Other ethical choices in the reform proposal include reducing health insurance costs for the young while increasing them for the elderly, reducing costs for the rural population while raising them for urban populations, and shifting health care costs from government to private and public hospitals, which are required by law to treat those who arrive without health insurance.
Activist Shareholder Loses Big Over Drug Pricing Strategy. I have to admit I took no small delight this week when Bill Ackerman, perhaps the most prominent activist investor of the moment, sold his shares in Valeant Pharmaceuticals and took his biggest loss ever – some $4 billion. His firm, Pershing Square, had backed Valeant CEO J. Michael Pearson in a perverse strategy of buying smaller drug companies with old drugs and sharply raising prices to reap outsized rewards until users could find an alternative or another firm could mount all the FDA approvals and compete. This predatory strategy outraged the public and the medical community. Valeant’s strategy recalls the predatory practices of some retailers that dramatically raise the price of clean water and food during disasters.
A Counterexample in Business – BlackRock. In contrast to Valeant and Pershing Square, BlackRock, a money manager with $5.1 trillion under management, announced its top engagement priorities for meetings this year with corporate leaders as climate risk and boardroom diversity. BlackRock and its CEO Larry Fink have been an insistent voice for the impact of social and environmental factors on corporate success. A BlackRock executive, Michelle Edkins, said the goal was to assess the risks of climate change, for example the potential inundation of oceanfront properties due to sea level rise. Regarding board diversity, she said many boards incorrectly believe they are diverse. “A guy from Yale and a guy from Harvard does not count as diversity,” Edkins told Reuters.
Photo Credit: AP Photo/Burhan Ozbilici, File
