Whirpool Corporation - a Lawful, Ethical, and Csr-Minded Business

Whirlpool Corporation - A Lawful, Ethical, and CSR Minded Business

Whirlpool Corporation - A Lawful, Ethical, and CSR Minded Business

During the past several years global companies, like Whirlpool Corporation, have gained global awareness of the complex and evolving legal, ethical, and social expectations of their stakeholders. While many companies have started to tackle these new set of requirements by modifying their mission statements, business policies, and workplace practices, leadership companies continue to wrestle with the challenge of integrating these three vital topics into their overall business operation. Companies that successfully integrate plans to incorporate the legal, ethical and corporate social responsibility concerns within all areas of their business stand to gain financial and social benefits through the identification of new business opportunities, the strengthening of their brands and corporate reputation, the attraction and retention of top employees, and the recognition as a trusted partner (Integrating CSR: New Risks, New Rewards, 2004).

In this particular paper, the author will attempt to describe how legal issues, ethics, and corporate social responsibility (CSR) impacts the management planning of Whirlpool Corporation.

Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances, with annual sales of over $13 billion. They employ 68,000 people, and have nearly 50 manufacturing and technology research centers around the globe. The company markets Whirlpool, KitchenAid, Brastemp, Bauknecht, Consul and other major brand names to consumers in more than 170 countries. Whirlpool Corporation is also the principal supplier to Sears, Roebuck and Co., of many major home appliances marketed under the Kenmore brand name (Fast Facts, 2005).

Embedded in Whirlpool Corporation and their Board of Directors is the deeply held value that continues to guide them: "There is no right way to do a wrong thing" (Continuing Legacy, 2005). This basic code of conduct underlies the company's long tradition of strong and independent corporate governance. Whirlpool's Board of Directors is currently comprised of eleven directors, nine of whom are independent directors who are highly regarded individuals with broad and deep business experience and with significant and relevant management experience. The Whirlpool board's principles and processes - which include internal annual reviews of board practices, the board selection process and the company's Code of Ethics - have been in place for many years. It is through this Board of Directors that Whirlpool Corporation implements the needed procedures and projects that governmental laws require.

The Whirlpool Board of Directors has established some Corporate Governance Guidelines that will ensure that Whirlpool Corporation follows the governmental laws applicable to them. Some of these guidelines include Board Involvement in Corporate Governance Issues. The Corporate Governance leads the Board in an annual discussion of major corporate governance issues and makes recommendations regarding how to implement governmental laws. In addition, the Board of Directors periodically assess the Corporation's Code of Ethics to assure it addresses appropriate topics, contains compliance standards and procedures, and complies with relevant NYSE listing rules or law. The Board alone can approve any waiver of the code for management or directors, and any such waiver must be promptly disclosed to shareholders in accordance with relevant NYSE listing rules and law. Furthermore, Whirlpool Corporation has come to realize that the operation of a Board of Directors is a dynamic and evolving process. Therefore, these Guiding Principles need also to be periodically reviewed and revised. While no guidelines can cover each and every issue that may surface, Whirlpool Corporation believes these principles set the proper tone for the operation of the Whirlpool Board and will assist them in fulfilling their obligations to the diverse group of Whirlpool owners and other stakeholders (Corporate Governance Guidelines, 2005).

An example of how Whirlpool Corporation's Corporate Governance Guidelines work within the laws of India was seen back in 1999 when the company was shown to support false advertising concerning their Quick Chill refrigerator. Whirlpool stated in an advertisement that their Quick Chill model's harmful gases used in normal refrigerators has been replaced by environment friendly ones. However, the Advertising Standards Council of India (ASCI) had all documents to establish that the new gas, which Whirlpool was using, was not environment friendly. After a panel discussion, Whirlpool Corporation was forced to withdraw their advertisement. As a result of this incident, Whirlpool Corporation Board of Directors added to their Corporate Guidelines the following section on Advertising: "All Whirlpool Corporation's advertising must be truthful, not deceptive, and comply with the applicable laws, regulations, and Company advertising policies. Any claims about the performance or qualities of our products in advertising, sales-training material, and point-of-purchase displays or literature must be substantiated before being made. Whirlpool Corporation will hold ourselves and our competitors to the same high standard when making comparative claims about competing products" (Appliancemagazine.com, April 2003).

As one can see, implementing procedures and guidelines to keep one's business in line with governmental laws is vitally important. Another topic that is equally significant to proper business management is ethical integrity. This is an area where Whirlpool Corporation leads the way.

The aim of Whirlpool Corporation and its worldwide subsidiaries is to be known, trusted, and respected as one of the top enterprises in the world. To do that requires strong financial and ethical performance. In support of their High Performance Culture and customer focus, Whirlpool's code of business ethics requires each of its employees to act responsibly and maintain the highest levels of personal, business, and legal conduct. That means walking away from a business agreement rather than violating the law or compromising their standards. It also means showing respect for those whose lives they affect and treating others as they would want to be treated, whether that person is a supervisor, colleague, or subordinate.

This policy is provided to help employees make the right business conduct choices. It highlights what the shareholders, customers,