Alex McAdams was offered to join the Board of directors of Consolidated Mines International Inc. CMI’s revenue for 2004 was approximateley $4.5 billion dollars and it employs about 25,000 people worldwide. It operates mines located in Central America and northern South America. In deciding whether to accept the board seat Alex needs to consider allegations of questionable business practices. Also, political unrest in several of the Latin American countries has pushed CMI to pay paramilitary organization United Peoples Liberation Front “security services” payments. If payments are not made it could result in harm to personnel and/or property. The ethical dilemma is if Alex, as a member of the board will continue to authorize these payments, or stop all future payments, or shut down the mines.
The first step is to conduct a stakeholder’s impact analysis to identify all stakeholder groups and interests likely to be affected. Also, they will need to be ranked by importance.
Stakeholder Interest Rank
Alex McAdams Potential Success or dismissal,
Harm to reputation 1
Local employees Risk of harm/ or no job 1
Shareholders Financial success, legal action by US Gov., Fines, and harm to reputation 1
UPLF Resources/ or drop in pay 2
Host Community Murder, rape, and drug trafficking/ 2 Potential increase in violence
Local Gov. Proliferation of terrorist organization 3
The second step is to assess the impact of the proposed action on each stakeholder group interests with regard to their well-offenses, fairness of treatment, and other rights, including virtue expectations, using a 5-questions approach:
Question Response 1. Is it profitable? Yes, for the Co. cost of 1.7 million over 10 years 2. Is it legal? No, UPLF has been labeled a terrorist organization
By the U.S. making it a crime to do business with UPLF 3. Is it fair? Not for Alex, local employees, shareholders,