Why Harvard Mishandled Its Cheating Scandal The World Is Catching Up on Anticorruption Enforcement Corporate Social Responsibility for Profit Thalidomide: A Specter Still Haunts the World www.levick.com/insights

1. EDITION 7
Weekly
September 7, 2012
Why Harvard Mishandled Its
Cheating Scandal
The World Is Catching Up on
Anticorruption Enforcement
Corporate Social Responsibility
for Profit
Thalidomide: A Specter Still
Haunts the World

2. Why
Harvard
Mishandled Its
Cheating Scandal
Richard S. Levick, Esq.
Originally Published on Forbes.com
It’s an unpleasant trait of the human per- or basically ignore the underlying issue in this
sonality that we instinctively want to think particular case. Happily, a few recent pieces do
the worst of those who have more money, eloquently define that underlying issue, argu-
more power, more opportunity than we do. ing that, in fact, a grave injustice is being done.
When, for example, an institution like Har-
Yet responsibility for this injustice ultimately
vard University announces that it is investi-
rests neither with the media nor the public’s
gating possible cheating by its students, it’s
collective schadenfreude. We design institu-
not long before high-authority publications
tional codes to assure the fairest possible pro-
are posting articles with titles like “Yes, they
cess when problems arise, and we have best
cheat at Harvard, too.”
communications practices to protect institu-
One week after Harvard’s announcement, tions and individuals from calumny.
many of the stories still highly ranked on
Harvard failed its students on both scores.
Google news either discuss cheating itself as a
national problem that needs to be addressed, The inquiry focuses on a take-home final exam
and the possibility—based on purported simi-

3. Weekly
larities in how exam answers were phrased— It’s a very fair guess that, after a year of dutiful
that students may have copied answers. Around silence, Harvard was contacted by the media
125 students are involved; they were enrolled in and decided to go proactive. Get ahead of the
a course called Introduction to Congress taught story. Don’t wait for reporters to tell it for you.
by Matthew Platt. Show how transparent you are. To be sure,
corporations and institutions are well-advised
The students under suspicion will be sum-
to consider just such practices in the shadow of
moned to an Administrative Board hearing and
an impending crisis.
face sanctions ranging from one-year suspen-
sions to formal reprimands. As the events in But absent sound judgment regarding the
question happened last spring, students who particulars of each situation, these bromides
were supposed to graduate in 2011 remain in are just that—bromides, ill-advised and rather
limbo. They’re not the only ones whose lives dangerous. Lawyers don’t typically comment
are on hold. Some who did graduate are cur- on pending litigation, and for good reason.
rently unemployable. Others are loath to apply Boards don’t reveal the details of their inves-
for jobs under the assumption that they may tigations when CEOs are under fire, and for
be disciplined and their standing with their good reason.
employers fatally compromised as a result.
In compliance with Harvard’s own policy, a
Needless to say, the students at risk are not
brief statement, with only minimal confir-
likely performing at full capacity under
mation (if any) that an investigation is being
these conditions.
speedily conducted, would have sufficed.
Now, I should not be telling you any of this
The need for a tight-lipped response was all
because no one should have told me. Univer-
the greater because of that aforementioned
sity policy demands total confidentiality. While
“underlying issue,” which could well exculpate
Harvard naturally declined to reveal names,
the majority of students involved. The Student
we should certainly not be reading that “Har-
Handbook provided by the Administrative
vard officials called it the biggest such probe
Board prohibits students from discussing exam
in living memory.” We should not know how
questions or in any way collaborating on how
many students are involved, nor how a teach-
to interpret and answer those questions. But
ing assistant was disturbed by what he read
there is a crucial exception.
in the suspicious exams, nor what steps the
university will take to spread the gospel of According to the Handbook, “The amount of
academic integrity—which assumes the as-yet collaboration with others that is permitted
unproven point that those steps are at all nec- in the completion of assignments can vary,
essary in light of this inquiry. depending upon the policy set by the head of
the course. Students must assume that col-

4. “ The Elizabeth Warren plagiarism controversy may
have played a hand in light of the savage depictions
of Harvard’s response by the conservative media.
Equally savage, there are the inevitable academic
politics, including support from some faculty for a
formal honor code. (Like most American universities,
Harvard has never had one.) The “scandal” plays
right into that agenda.”
laboration in the completion of assignments is The shroud over these students is all the more Anyone who’s ever experienced on-campus about where collaboration ends and cheating
prohibited unless explicitly permitted by the lamentable since there is a fundamental peda- politics anywhere can well imagine these 125 begins, the solution lies with open, university-
instructor…” gogical issue here—the role of “collaboration” students caught in such a power struggle even wide dialogue to define and stabilize the
versus enforced individual effort—hat merits as the institution itself indulges a dubious stab middle ground.
Instructors are thus allowed to waive the
open and lively discussion. Instead, we get it at reputation management. One shudders at
restriction, which many students may reason- It’s a much more practicable and equitable
buried under a disciplinary probe. the possibility of FOIA requests down the line,
ably have believed to be the case. After all, his solution than preaching academic integrity
of careers damaged in ways we’ll never know
office and those of the class’ Teaching Fellows One can fairly assume a few extraneous forces to students and instructors. You might just be
about. In all matters involving communications,
—some of whom innocently provided specific influencing Harvard in this matter. The Eliza- preaching to the choir. L
proactive or not, the Hippocratic imperative,
answers—were open at all times. Discussion of beth Warren plagiarism controversy may have
“First, do no harm,” is a guiding principle. Richard S. Levick, Esq., President and CEO of LEVICK,
the test questions was encouraged, so much so played a hand in light of the savage depictions represents countries and companies in the highest-stakes
that it may be fair to surmise that, if the exam of Harvard’s response by the conservative Fortunately, I am quite sure that Harvard has global communications matters—from the Wall Street
answers seemed familiar from student to stu- media. Equally savage, there are the inevitable the institutional integrity to seize on any honor- crisis and the Gulf oil spill to Guantanamo Bay and the
Catholic Church.
dent, it’s because those students picked up the academic politics, including support from able way out of this situation. There is one.
phraseology from Platt and the Teaching Fel- some faculty for a formal honor code. (Like
Since the whole issue of “collaboration” has
lows themselves. Students were also permitted most American universities, Harvard has
come to the fore (albeit as a result of disclosures
to share lecture notes, which would likewise never had one.) The “scandal” plays right into
that should not have been made), Harvard can
encourage similar-sounding answers. There that agenda.
now focus on it as a positive take-away. If
were no restrictions put on how the direct help
the problem can be defined as lack of clarity
provided by the instructors could be shared.

5. The World Is Catching Up on
“ When it comes to external communications, companies
are sometimes reticent to publically discuss compliance
issues for fear of creating an issue where none exists.
anticorruption
Canada—a figure that ranks the country with When companies encourage employees to
Australia and Austria as Transparency Interna- speak up, they keep potential whistleblowers
tional’s most-improved enforcers. Even China is within the fold while also providing them-
getting in on the act, as it has promised to stiffen selves the opportunity to self-report (a strategy
Enforcement
anticorruption controls after a series of embar- that often diminishes the penalties at play).
rassing episodes—including the 2011 ouster of
When it comes to external communications,
Railway Minister Liu Zhijun from the Commu-
companies are sometimes reticent to publi-
nist Party for allegedly accepting bribes.
cally discuss compliance issues for fear of
With intensified enforcement and new anti- creating an issue where none exists. But when
corruption regimes springing up all over the they do so, they not only provide themselves
John Lovallo world—and even in the most unexpected of an advantage in markets that are emphasizing
Originally Published on LEVICK Daily
regions—boards of directors need to carefully ethics like never before, even as they condi-
examine what their companies are doing tion the marketplace, investors, and regulators
For the last several years, corporate direc- That’s a good thing—because the U.S. in no to articulate compliance both internally to give them the benefit of the doubt should
tors in the U.S. have been wrestling with cor- longer among only a handful of countries that and externally. trouble arise.
ruption issues with greater frequency than are intensifying their anticorruption efforts.
Within the company, the board needs to ensure The U.S. is no longer the only sheriff in town.
ever before. Aggressive enforcement of For- Today, the world is catching up and introduc-
that all employees know the rules of the road And with more watchdogs come more oppor-
eign Corrupt Practices Act (FCPA) strictures ing a new universe of liability for companies
that govern their dealings overseas and the tunities to attract their attention. That means
and new game-changing whistleblower laws that do cross-border business.
consequences for operating outside acceptable boards must not only ensure that compliance
have introduced a number of new liabilities
Consider the six new cases that have been boundaries. That means the C-Suite needs to set is a priority; they also need to ensure that the
that include record-setting fines, jail time
filed under the UK Bribery Act 2010, which has a strong “tone at the top” with messages that company’s dedication to ethics is articulated
for executives, high-profile securities litiga-
been called the toughest enforcement stan- emphasize a culture of compliance. It means far and wide. L
tion, and the reputational challenges that
dard in the world and, for the first time, made routine training for foreign agents and even
accompany each. As a result, compliance is John Lovallo is a Senior Vice President, Chair Corporate
failure to prevent bribery a criminal offense contractors and other business partners. Reputation Practice at LEVICK. He is also a contributing
taking on added significance in many board-
(even the FCPA doesn’t go that far). Consider At the same time, every employee also has to author to LEVICK Daily.
rooms as directors seek to ensure that a
the 34 bribery cases under investigation in be well aware of the internal mechanisms by
commitment to ethical behavior permeates
which they can report perceived violations.
their companies from top to bottom.

6. Corporate Social Responsibility
FOR PROFIT
Richard S. Levick, Esq.
Originally Published on Forbes.com
There’s an ongoing transformation in the very
way companies define their Corporate Social
Responsibility (CSR) programs. The messages are
different, the goals are different, and, to be sure,
the strategies are different.

7. Weekly
Consider two recent studies. the direct beneficiaries of our CSR largesse— In turn, that message rivets consumer attention companies by buying their products. 53% would
even at the cost of a few big shareholders. on the products themselves and encourages the even pay a 10% premium for those products.
One report by the Havas Media Lab under-
compelling supposition that responsibly manu-
scores this transformation with a list based Many of the highly ranked CSR programs on But the benefits don’t stop at the check-out
factured products are simply better products.
on a survey of 50,000 consumers worldwide the Havas list predictably feature green initia- line. They extend to stock value as well, as
who identified the companies they feel have tives, often, as with Leroy Merlin, highlighting In the new CSR lexicon, “impact” is invoked suggested by Harvard Business School data
the most “meaningful” CSR. The 10 top names how the company’s own employees person- as the crucial factor—the impact of a phone confirming that this new species of socially
included Unilever and Bimbo, Ikea and Leroy ally volunteer in repair and recycling efforts or a computer on the daily lives of their users. responsible company gets more favorable rat-
Merlin, as well as consumer technology compa- around the world. Here too, with this volun- The key is to build a better mousetrap, not just ings from securities analysts.
nies like Samsung and Sony. As the Lab’s direc- teerism, we’re a long way from the passive provide lavish demonstrations of goodwill.
The Harvard report specifically underscores
tor Umair Haque quips, they’re not “necessar- check-writing that defined the old CSR. Such an approach to CSR comes quite naturally
the difference between yesterday’s CSR, which
ily the do-gooding corporate entities you to consumer electronics leaders like Steve Jobs
The message to consumers is, again, personal. was largely based on gratuity, versus today’s
might expect.” whose ingenuity, more than their philanthropy,
Since these Leroy Merlin people commit model based on impact. The study notes that
won the hearts and minds of consumers in the
In lieu of such “do-gooding,” Haque talks about themselves, their own time and sweat, to these the former were often perceived by the mar-
first place.
CSR as a way to connect to the personal well- responsibility programs, it’s no reach to infer kets as “value-destructing” while the latter is
being of customers. Nike+ is a prime example. that they do the same when they manufacture To be sure, the green movement has played a now seen to be “value-creating.” Today’s ana-
“Instead of putting up another campaign of the home improvement products that have a key role for many industries in the transforma- lysts know that high-impact products generate
billboards with celebrities saying, ‘Buy our direct impact on our lives. tion of CSR because it’s all about being systemic revenue simply because they work better even
shoes’…Nike+ actually helps makes you a bet- in approach. You’re expected to not pollute as they provide the tools with which society
In another report, Pike Research found that
ter runner,” he says. the river—Haque would call that the “table can improve itself. L
“the closer the company’s business is related to
stakes”—but, beyond that, what “impact” on
In other instances, companies underscore consumer electronics, the higher its CSR score.” It doesn’t matter what you sell. People are
the environment do all your business opera-
their commitment by taking substantive risks. Companies like IBM, HP, and Texas Instru- looking hard at how you do business and the
tions have, including how much water the
Early last year, for example, Unilever CEO Paul ments topped the charts for transparency and companies that do it best win the CSR race,
plumbing in your corporate office saves on a
Polman really spoke the language of CSR as reported results. For starters, their sustainabil- ahead of those for whom “corporate giving” is
yearly basis?
value—not just donations—when he made an ity initiatives have impressed consumers, the the only index of corporate responsibility.
ambitious sustainability and anti-hunger plan report suggests. Mr. Haque’s new book, Betterness: Economics
Richard S. Levick, Esq., President and CEO of LEVICK,
an investment prerequisite. “If you don’t buy for Humans, provides a useful context in which represents countries and companies in the highest-stakes
These sector-leading companies have pushed
into this [program], I respect you as a human these varied issues can be understood as part global communications matters—from the Wall Street
hard to highlight their greater focus on en-
being, but don’t put your money in our com- of the transformation from impersonal cor- crisis and the Gulf oil spill to Guantanamo Bay and the
hanced sustainable design, manufacturing, Catholic Church.
pany, he said. porate giving to the “impact” of products and
distribution, use, and end-of-use management.
services on consumers’ lives—and, of course,
It’s easy for consumers to read this resolve as a The message is, our products are socially re-
the profits generated in the process.
personal message to them: that we as a com- sponsible across a broad spectrum of consum-
pany are guided by the same determination to er needs, beginning with the benign impact There is ample data to confirm this profit-gen-
produce beneficial impacts for you—not just they have on the world in which they’re used. erating potential. More than half the consumers
surveyed by Havas want to reward responsible

8. Thalidomide:
A Specter Still Haunts
the World
Richard S. Levick, Esq.
Originally Published on Forbes.com
William Faulkner said it. “The past is never Grünenthal settled a lawsuit in Germany in
dead. It’s not even past.” Those are caution- 1972 and expressed regrets. But the company
ary words in an age when digital coverage has not admitted liability, claiming all required
of today’s global disaster seems to imme- clinical trials were dutifully conducted.
diately erase the memory of yesterday’s
News reports about the apology were haunting
global disaster.
on at least four levels.
So there it was over the Labor Day weekend,
Personally, it was a reminder to me of the
topping the Google News charts for most of
forces and events that have shaped my own
one day. The Grünenthal Group, German
sensibilities, political and otherwise. In fact, I’d
manufacturer of the drug thalidomide, issued
group thalidomide with the Vietnam War and
its first apology to the victims a full 50 years
the civil rights movement as formative impacts
after agreeing to recall the infamous drug.
in my life. I’m particularly haunted by the me-
Thalidomide, which was given to pregnant dium through which those impacts were made.
women to relieve morning sickness, was Dead soldiers and civilian babies, hoses turned
recalled in 1961 in the aftermath of a wave of savagely on peaceful protesters, limbless chil-
birth defects in Europe, Australia, Canada, and dren held fast by agonized parents…Then as
Japan. The drug was also found to cause pro- now, visual images mold our perceptions and
found damage to the eyes, ears, heart, genitals, transform our lives.
and internal organs of developing babies. It
was never approved in the United States.

9. Morally, it was a reminder that no one can es- Professionally, it was a reminder that, for all According to Stock, the need for a public apol- believe that you’re taking steps to ensure that
cape the shadow of the past; that, somehow in that companies may be learning in terms of ogy was impressed on the company during similar tragedies won’t happen in the future.
some way, we eventually confront the demons crisis communications, there are still situa- recent talks with victims. Yet it’s hard to imag- Instead, Stock maintained that “the suffering
of our own actions, individual or corporate. tions that sorely test those evolving skills. In ine that Grünenthal could have expected many that occurred…50 years ago happened in a
They call it karma, from which there’s no that context, the Grünenthal Group’s current of those victims or their families to respond world that is completely different from today.”
escape by simply writing a settlement check to ordeal merits a closer look. warmly to its pronouncements. Predictably, vic-
In many countries, victims are still waiting for
remit ancient sins or recent misdeeds. tims like Freddie Astbury—born armless and
Grünenthal’s chief executive Harald Stock not compensation from Grünenthal. So we have
legless 52 years ago and now a thalidomide vic-
Historically, it was a reminder of how the tha- only apologized for the suffering of thalido- only a stunningly belated apology that offers
tim’s advocate—were instead contemptuously
lidomide nightmare helped shape the current mide victims, he apologized for not apologiz- no solution for anyone to anything. Instead,
dismissive. “It’s a disgrace that it’s taken them
environment in specific practical ways. Class ing. “We ask that you regard our long silence the company has only underscored the tardi-
50 years to apologize,” said Astbury. “For years
actions and plaintiffs’ lawyers cast as moral as a sign of the shock that your fate caused in ness of the apology (it was in “shock” for 50
[the company] insisted they never did anything
avengers; aggressive regulation on all business us,” said Stock, speaking in the city of Stolberg, years) and encouraged perceptions that its cur-
wrong and refused to talk to us.”
fronts (nowhere more so than with food and where Grünenthal is based. The occasion was rent tears are but crocodile tears.
drugs); lobbyists enlisted to ease the burden the unveiling of a bronze statue of a child born In the art of the Public Apology, there is a
The apology is additionally puzzling in light of
on manufacturers and NGOs deployed in the without limbs—again, a reminder that power- central precept: in order to be credible, there
ongoing class action litigation that Grünenthal
opposing cause—the thalidomide litigation and ful visual images drive events. must be some sort of remediation, a penitential
has refused to settle. (Grünenthal’s British dis-
public furor were indeed eloquent precursors act that will serve those who’ve been injured
tributor did settle in July.) From a strictly
to our current mélange. and provide the public with sufficient reason to

10. Weekly
business standpoint, Stock’s apology won’t like- past liability or infuriating victims with is
ly serve the company’s interests in that lawsuit; apology, Grünenthal might have used the oc-
it may only remind the fact-finders of what the casion to propose any number of initiatives
plaintiff’s lawyer in the case calls “a calculated underscoring the company’s good citizenship.
corporate strategy to avoid the moral, legal Grünenthal did take a step in that direction in
and financial consequences of its reckless and 2009 when it pledged 50 million euros to help
negligent actions…” victims, although bitter complaints still abound
as victims say Grünenthal’s settlements and
What then could have possibly driven Grü-
benefactions are woefully inadequate to sup-
nenthal to ensnare itself in this cul-de-sac?
port their day-to-day needs.
One explanation is that, when the idea for the
memorial was proposed, the city government A more practicable strategy may lie with the
stipulated that Grünenthal be involved. Pre- drug itself. After all, thalidomide is still used
sumably, the company felt it had no choice. as a treatment for multiple myeloma (a plasma
How could it refuse? But once it said yes, what cell cancer) and leprosy. Research is also being
was Stock supposed to say? conducted to determine if thalidomide is useful
in the treatment of AIDS and arthritis as well
It was a no-win situation. If Grünenthal had
as other cancers.
simply declined to participate, it would have
seemed heartless and indifferent. On the other It would seem that here, if anywhere, is an
hand, in a hard-ball approach, the company opportunity for the company to make what-
could have cited ongoing litigation as reason to ever atonements it feels in its soul should be
bow out. The adverse reaction might have been made. Direct support for that research, as well
less stinging than the response to its messy as a public information campaign to spotlight
apology for not apologizing, while the city of its potential, might be apology enough for 50
Stolberg might have shared the blame for set- years of guarded silence. It’s never too late to
ting an impossible condition to the memorial save somebody’s life. L
going forward.
Richard S. Levick, Esq., President and CEO of LEVICK,
represents countries and companies in the highest-stakes
Once Grünenthal decided to participate, the
global communications matters—from the Wall Street
error in judgment was in saying too much.
crisis and the Gulf oil spill to Guantanamo Bay and the
Some few careful, compassionate words would Catholic Church.
have sufficed and, for the rest of the occasion, a
dignified non-committal silence.
THE URGENCY
OF NOW.
Yet there was an alternative solution to which
we have already hinted. Without admitting