Companies must differentiate between procedural and substantive moral repair to fully repair relationships with stakeholders whose trust and hope have been torn apart by a serious transgression.
When a company has committed a transgression against one or more of its stakeholders, and wishes to rebuild the stakeholders’ trust and confidence, it engages in ‘moral repair’. For example, a mining company in South Africa wanted to make amends to the families of striking mine workers killed by police during the strike. The company provided employment opportunities, coverage of the education costs of the victims’ children, and new homes. In addition to these material reparations, the company also made symbolic amends that included annual commemorations of the fatal clashes. During these commemorations, the company’s CEO publicly expressed regret for the events and repeated his and the company’s commitment to prevent any further violence.
According to researchers Jordi Vives-Gabriel and Florian Wettstein of St. Gallen and Wim Van Lent of IESEG, moral repair is based on a company’s broad and absolute moral principles and norms, which drive the company’s effort to restore the trust and hope of victims harmed by the company’s actions. Principles alone, however, are insufficient in designing and delivering the right amends to the victims. Effective moral repair requires the full input of the victims as well as the company’s representatives.
Companies and victims must work together in determining the amends required after a transgression, the researchers argue, moral repair takes place at two levels: procedural and substantive.
The more concrete procedural moral repair relates to managing the process of making amends—including deciding which material and/or symbolic amends to make; to whom the amends to be made; and how (e.g., timing, public or private). The more abstract substantive moral repair relates to acts and gestures that has moral significance to the victims—that is, acts and gestures that reflect the company’s recognition of the moral dignity of the victim.
While procedural moral repair is the prerogative of the corporate offender—making the decisions and implementing the process—successful substantive moral repair depends on the victims’ perspective: they alone decide whether the company has achieved substantive moral repair.
To help companies navigate these two levels of moral repair, the researchers propose the following three-phase model for moral repair implementation:
From Identification to Establishment. In the Establishment phase, the supposed offender and potential victims discuss what happened (the nature and scope of the transgression), who was harmed, and who might be responsible. Before Establishment can take place, however, the company must become aware that there was a transgression in the first place, and that it has a moral obligation to reach out to the victims—what the researchers call Identification. Thus, Identification is the moral trigger of the Establishment phase. The Establishment phase involves mostly procedural moral repair: specific procedures are required to hold the fundamental discussions on what happened and who was hurt. However, the fact that the victims are being listened to and respected by the company injects some substantive moral repair into the procedures.
From Acknowledgment to Elaboration. The discussions between the offender company and victims of the transgression in the Establishment phase lead to Acknowledgment: that is, the company acknowledges that it is responsible for the transgression and has a moral duty to make amends. Acknowledgment triggers the Elaboration phase, in which the company and the victims agree on the material and symbolic amends the company will deliver. As with the previous phase, the Elaboration phase is heavily procedural, but, again, some of these procedures will have morally substantive meaning. For example, when victims are allowed to identify what they believe the appropriate amends should be, they are asserting their self-worth. From Commitment to Execution. Once the appropriate amends have been agreed upon, the company must make a commitment to fulfil its obligation to the victims. With this commitment in place, the moral repair process now moves to the Execution phase: delivering the material and symbolic amends to the victims. No more discussions and negotiations. The victims now receive or witness the compensation and other amends that the company offers as a result of accepting its moral obligation to respond to the transgression. This phase is essentially substantive moral repair: when a victim receives compensation and other amends from a company, the victim is asserting moral authority over the company. The victim believes the company had no right to do what it did; through its amends, the company is demonstrating that it agrees.
While the three-phase model maps out action steps for moral repair, the core lesson of the research is to understand two important facets of making amends:
These two facets of moral repair lead to two key recommendations for companies anticipating and preparing for moral repair situations:
Moral Repair: Toward a Two-Level Conceptualization. Jordi Vives-Gabriel, Wim Van Lent, Florian Wettstein. Business Ethics Quarterly (May 2, 2022).
Further Relevant Resources:
Jordi Vives-Gabriel’s profile at University of St Gallen
Wim Van Lent’s profile at IESEG School of Management
Florian Wettstein’s profile at University of St Gallen LINK NEEDED
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