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The ethics of negotiation… what would you do?

Wednesday 16 September, 2020
by Anonymous

You are the CFO of a large retail property organisation that owns a number of shopping malls across the country. Given the sizeable food courts in each property, a large portion of your tenants are small business owners operating eateries within the food courts.

Since Covid-19 hit, they – like the rest of retail - have seen a significant drop in their business and are struggling to stay afloat. In one of your largest CBD properties, the food court tenants have formed an alliance to ensure they have a stronger voice. 

You are aware they have accessed government support where eligible and taken advantage of pausing loan repayments for the moment. But as the pandemic and economic crisis drags on, a number of them are getting very close to losing their business and defaulting on their business loans if visitation does not start to improve soon. 

Some retail tenants have refused to pay rent during this period stating wealthy landlords should share the financial burden of this Covid-19 crisis. The food court tenants argue that given Covid-19, government restrictions and recommendations of not going to shopping centres, the shopping centre landlord should at least be willing to offer a rent reduction at this unprecedented time. Your organisation - as the landlord - is insisting all tenants abide by their lease agreements and uphold their legal commitment to pay full rent.

The situation is creating tension between your personal values of what is the right thing to do at this time of crisis, and the commercial duties and obligations placed on you as CFO of your organisation.

What would you do?

  • What ethical considerations would you give to your decision-making?

We encourage you to post your answers in the comments so we can create a healthy discussion, with the aim of learning from our peers, becoming aware of differing perspectives and challenging our own biases.

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