Stark choices for Tony

I have two excuses for this blog post. The first is that any parent of an eight year old is obliged to be able to name a favourite super hero.  The second is that once I’d thought of this title, the only way to get it out of my head was to write the post.  For those who don’t have a favourite super hero, Tony Stark is the billionaire engineer and industrialist who, in the Marvel comic book series created by Stan Lee, and in the recent re-imagined films, becomes Iron Man.

Stark’s wealth comes from his ownership interest in an arms manufacturing company.  However, when captured by terrorists who try to force him to build a weapon of mass destruction, he instead builds a powered suit of armour, which he uses first to escape the terrorists and then, following multiple improvements, in his new guise as Iron Man, to save the world.

While being held hostage, Stark discovers that Stark Industries’ products are making their way into the hands of terrorists, and being used on civilians.  When he arrives home, the first thing he does is announce that Stark Industries will no longer manufacture weaponry, and he diverts its resources to developing clean fusion energy.  But is that his only choice as a responsible businessman or is it possible to be a responsible arms manufacturer?

I believe it’s possible to develop a code for ethical behaviour in any industry.  While an ideal world would be one without armed conflict, there is an ethical role for weaponry in the world we have created – to protect freedom and defend human rights.  But an ethical arms manufacturer will not want to supply those whose aims are the opposite.  It will, therefore, need a code of behaviour which, if adhered to, will prevent its products and intellectual property from ending up in the wrong hands.

In common with other codes of trading behaviour (for example, anti-bribery and corruption), an effective code for ethical supply would need to cover the tone at the top of the organisation, risk assessment and management, policies and procedures, communication to and training of employees, relationships with third parties, internal controls and monitoring, review and discipline.  Within each of those areas, the organisation would identify its objectives, for example setting the limits as to what types of customer behaviour might lead to black-listing, identify the threats to those objectives, and the resulting controls that could be put in place.

Evaluating the effectiveness of the code would require a top to bottom look at how it has been implemented across the organisation including, for example, the effects on corporate governance, recruitment, internal audit, contract due diligence, physical controls over inventory and cyber-security.  Scepticism might demand that the organisation makes an external statement about its principles and how they are applied in practice, and that that statement comes under scrutiny from an independent organisation.

An added complexity for an arms manufacturer is the question of how much of the decision-making around ethical supply can be sub-contracted to the government of the day.  Some would argue that if a particular territory is considered by a democratically elected government to be a suitable customer for weaponry, the manufacturer should not have to think further about this.  I don’t think it’s so clear cut; adding a layer of agency to the decision-making, introducing other agendas, can muddy the decision-making waters.

In fairness to Tony Stark, he wouldn’t have had any luck implementing this approach anyway, as his chief executive officer is a wrong ‘un for whom ethical supply is the bottom of the agenda – without buy-in from the board, any plan to change behaviour would surely be doomed to failure.  And Stark Industries doesn’t seem to have internal or external auditors; or at least, if it has they don’t feature in the story, sadly – auditors could have been Tony’s best ally in implementing and monitoring the effect of a programme to change behaviour.

Becoming Iron Man might be Tony Stark’s only choice, but it isn’t the only choice for an arms manufacturer.  We might wish weapons didn’t exist, but we all rely on their existence. The challenge for a responsible business is how to control their supply in a way that maximises their deterrent power and minimises the devastation they can cause.

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