Western Digital wins ethics award months after settling lawsuit over SMR scandal

Western Digital is being recognized as one of the “World’s Most Ethical Companies” by Ethisphere for the fourth year in a row just three months after settling a class action lawsuit for $2.7 million over adding lower rewrite performance SMR disk drives in its Red NAS product line in 2020 without telling customers.

The company admitted to the substitution and promised clearer product technology communications in April that year.

Tiffany Scurry, SVP and Chief Compliance Officer at Western Digital, said today of the award: “We are proud to once again receive this recognition from Ethisphere, further underscoring the ethical responsibilities we have with our stakeholders, including employees, shareholders and the broader market.”

Ethisphere is a for-profit company based in Scottsdale, Arizona, led by CEO Tim Erblich. Apart from providing annual “World’s Most Ethical Companies” awards, it runs a Business Ethics Leadership Alliance (BELA) with members paying a subscription to participate, and various business ethics-focused events and benchmarking services.

Companies such as WD that want to apply for the recognition take Ethisphere’s Ethics Quotient survey – a proprietary rating system that collects and objectively scores self-reported data in five weighted categories: governance, leadership and reputation, ethics and compliance program, ethical culture, and environmental and societal impact.

Other storage-related companies on the Ethisphere list include Dell Technologies, HPE, IBM, Intel, Micron, Microsoft, and Teradata.

Ethisphere comms VP Anne Walker told us: “We strive to honor organizations based on their body of work and not just one particular policy or program that is groundbreaking or admirable. Likewise, we don’t believe that one particular controversy, settlement, fine, regulatory action, or lawsuit necessarily disqualifies an organization from being honored.”

Walker added: “That being said, these outcomes are taken into consideration during the evaluation time frame. How organizations respond to unethical or illegal actions once uncovered, and their general culture and policies are also considered in our evaluation.”

She told us more about Ethisphere’s rating methods: “In short, we evaluate an organization’s (i) Ethics and Compliance Program, (ii) Culture of Ethics, (iii) Corporate Citizenship and Responsibility, (iv) Governance, and (v) Leadership and Reputation. Each category is evaluated through a combination of answers to our Ethics Quotient (EQ) questionnaire, submitted supplemental documentation, and where necessary, independent research and follow up with a candidate. Evaluation of the Leadership and Reputation category also includes a review of publicly available information with a bearing on an organization’s reputation for acting ethically.”