Kardell Paper Company Ethics Case

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Background The Kardell paper mill was established at the turn of the century on the Cherokee River in southeastern Ontario by the Kardell family. By 1985, the Kardell Paper Co. had outgrown its original mill and had encompassed several facilities in different locations, generating total revenues of $1.7 billion per year. The original mill continued to function and was the firm’s largest profit center. The Kardell family no longer owned shares in the firm, which had become a publicly traded company whose shares were widely held. Kardell Paper Co. was a firm with a record of reporting good profits and had a policy of paying generous bonuses to the chief executive officer and other senior executives. Kardell’s original mill was located…show more content…
In raising his concerns in 1985, Jack pointed out that the Ministry of Environment, responding to the serious nature of concerns raised by the sonox issue, was considering internal proposals from its staff that additional research be done into the sources and implications of sonox. Given the early stage of work in this area, Jack could offer no indication of when, if ever, the Ministry would enact new regulations to do with sonox. He argued, however, that the ground rules might change, as they had with previous compounds, and that Kardell should give some thought to the worst-case scenario of how the sonox issue could turn out down the road. Kardell’s CEO was sympathetic to the concerns raised by Jack, a valued employee of the company who had proved himself in the past by identifying many cost-efficiency measures. The CEO felt obliged, however, to match Jack’s concerns about sonox against the substantial cost of refitting the plant. The CEO felt there simply was not enough data upon which to base such an important decision, and he was wary of any external force that attempted to influence the company’s affairs. The CEO told Jack, “We simply can’t let these ‘greens’ tell us how to run our business.” While the CEO did not feel it would be appropriate for Kardell to adopt the recommendations in Jack’s report, the CEO did take the step

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