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Headlines recently blared that Walmart has refused to sign the new “Accord on Fire and Building Safety in Bangladesh”, despite the fact that 24 other companies (including Europe’s two largest clothing retailers, as well as American brand Tommy Hilfiger and Canada’s Loblaw) had signed.

Other news sources avoided the Walmart-centric hysteria and pointed out that lots of retail chains have in fact opted not to sign. For its part, Walmart says says it plans to undertake its own plan to verify and improve conditions at its suppliers’ factories in Bangladesh. Supporters of the accord, however, are skeptical about the effectiveness of company’s proposed independent effort.

From the point of view of ethical responsibilities, could a well-intentioned company conscientiously decline to sign the pact?

It’s worth looking at a few reasons why a company might choose not to sign a pact designed to improve, and even save, lives. Walmart presumably believes that its own effort will be sufficient, and perhaps even superior. The company’s famous efficiency and notorious influence over suppliers lend some credibility to such a notion. Other companies have worried that signing the pact would bring new legal liabilities, which of course is precisely the point of a legally-binding document. (Gap, for instance, has said that it will sign only if language regarding arbitration is removed, a stance that effectively amounts to refusal.)

There may also be worries about governance: the accord provides for the appointment of a steering committee “with equal representation chosen by the trade union signatories and company signatories” — equal, but to be chaired by a seventh member selected by the International Labour Organization (ILO). Perhaps some worry that the ILO-appointed chair won’t really be neutral, giving unions an effective majority.

Other companies — including ones like Walmart, which is famous for its efficiency — may worry about the extra administrative burden implied by weaving this accord’s regulatory apparatus into its own systems of supply-chain oversight.

Another worry might be the fact that the accord applies only to Bangladesh, and makes that country the subject of a separate set of procedures. The accord also commits signatories to expenditures specifically on safety in Bangladesh, when from a particular company’s point of view Bangladesh might not be a priority. In the wake of the April factory collapse, it’s worth pointing out that there are other places in the world with unsafe factories and crummy working conditions. It’s not unreasonable for at least some companies to focus their efforts on places where conditions are equally bad, and that host even more of their suppliers.

None of this goes any distance toward excusing inaction. None of it condones apathy. The point is simply that while failure to sign a particular accord makes great headlines, we need to look carefully at reasons, as well as at a company’s full range of obligations, if we are to make sense of such a decision.

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As an example, consider the following HR dilemma, which was posed to me recently.

I work for a nonprofit organization in health research, and I’ve recently been told that I will be hiring and supervising a new individual whose parents are donating her salary for one year (it’s to be a one-year, limited-term position) in addition to making a sizeable donation. The hope is that, in time, the donors will make a significantly larger gift of a million dollars or more. The arrangement presents numerous challenges to me as a manager, since everyone in the upper levels of the organization agrees that the true nature of the arrangement can’t be revealed, but many employees will realize that the situation is unusual and will have serious questions about it.

I’ve presented my concerns to those involved, but the decision-makers are rationalizing their actions (they tell me it’s “for the good of the organization”), and asking me to embrace this “opportunity.”

Clearly, the mid-level manager here is in a tough position, caught between a rock and a hard place. The manager is being told, by those higher up, that this is the way things are. But the manager also has a team to manage, and the unorthodox hiring of this new “employee” may cause trouble.

Here are what I think are the relevant considerations:

1) I don’t think the basic arrangement itself is obviously unethical. The “employee,” here, is essentially a volunteer, being bankrolled by her father. A bit lame, for her, but if she provides the organization with some value, that in itself could be a good thing, in addition to the donation that her father is making and may later make.

2) Point #1 above assumes that this person will actually do some work, rather than just be padding her CV by means of this one-year position with a reputable nonprofit organization. If she’s just going to take up space, then her presence is inevitably going to be resented and hence disruptive.

3) Then there’s the question of whether this “hire” is affecting anyone else’s job. From what I understand, no one is being fired to make room for this new person. But even if no one’s job is immediately in jeopardy, it may have implications for who gets hired over the next year, who gets overtime, whose job is expanded in interesting ways, and so on. So other employees do have reason to be concerned.

4) The fact that senior management sees a need to hide what’s really going on, here, seems to be where the ethical problem lies. That part seems highly problematic. If this is a good “hire”, why not be transparent about it?

5) At a certain level, this is as much a “wise management” question as it is an ethics question. If (as seems to be the case) the current plan is bad for morale, then wise senior managers should realize that, and think this through more carefully.

All in all, I would suggest that the situation, as it is being handled by senior managers, represens a significant lapse in leadership. Their motives in accepting the deal — hiring this woman in return for a big donation — are reasonable enough. The mere fact that her hire wouldn’t go through the usual processes isn’t itself damning, provided that the net value to the organization is positive, and as long as no one’s rights are violated. Perhaps the ends here do justify the means — after all, we’re talking about the potential for a very large donation. But the fact that senior managers feel the need to keep the deal secret is a major red flag. Wise organizational leaders should work hard to make sure that, when compromises are being made, they are at very least compromises that they are able to defend, and about which they are willing to be transparent.

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