Putting Ethics Back into Business
In their book Making Good: How Young People Cope with Moral Dilemmas at Work, Fischman, Solomon and Gardener (HUP, 2004), writing before the current financial collapse said:
“It would be comforting to think that the acts of corporate malfeasance which had come to light in the United States at the start of the twenty first century are isolated events, and that the world of work is generally of an unacceptable behaviour across professions and in a variety of workplaces.” (p.1)
Before the financial collapse they were able to list scandals at Enron, Arthur Anderson, WorldCom and other corporations. We now know that considerable failings have become endemic in the systems of global capitalism. What has changed is just how far human beings can pursue their greed:
“It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown so enormously” (Federal Reserve Board chairman Alan Greenspan quoted by Fischman, Solomon and Gardener on p1)
Stephen Green, of HSBC, has written a book entitled Good Value: Reflections on Money, Morality and an Uncertain World (Allen Lane, 2009). The author is chairman of HSBC and has been an ordained priest in the Church of England since 1988.
The word value is commonly found in two areas. On the one hand there is the ethical world of values; principles or moral rules for living by, perhaps informed by profound beliefs about life or God. They influence what people believe to be good and bad and how they act. On the other hand ‘Value’ is used to define a range of food stuffs in a popular supermarket chain that are cheap. These food stuffs tend not to have Fairtrade labels, or free Range labels. It is curious that the word value has become synonymous with lowest price or best deal. Perhaps this is a symptom of the moral crisis that some think have driven the global economic system into meltdown.
The recent collapse in global capitalism and the resulting recession has left many people reflecting on truths of business. There was a view that the market system should be left free to do whatever is necessary for business and that by bringing in other factors, such as morals or regulation is simply bad for business. However, the actions of a very small people have left millions of others facing economic hardship. What some did has caused long lasting economic harm for others, the destruction of business, the loss of retirement savings and the by-products: stress, unemployment and family difficulties.
The view expressed by some people, that business is just business and any talk of right and wrong is a luxury, has come back on itself. It would appear that selfishness and greed bring about economic catastrophe, not just erosion of goodness or the soul.
Stephen Green as a banker, may not appear to be the first person of choice when it comes to getting advice on what to do now. But he is both a banker and he is a priest which explains some of his thinking. His book sets out a series of relevant questions
How should we create wealth in societies, and why is it necessary to do so?
What improves the lives of the largest number of people?
And how do we, living in a globalised world caught in an age of financial and ecological turbulence, respond to the differing needs of individuals and institutions?
He still believes that capitalism is the best system by which to improve human wealth, but that the drives for exploration and exchange must be aligned with spiritual and psychological needs. He argues that businesses – and especially banks – have a duty to society that goes beyond the creation of profit.
He notes that for some people the only factors in business are:
Is there a product?
Is there a market in which to sell it?
Is there a profit to be made?
Answer yes to each question and that is all you need to justify the business. But he adds a further question.
Does the business contribute to the common good?
If the answer to this is no then the business should not go ahead. The idea of the common good is found in a number of philosophical and religious traditions. Here it is being used to describe the moral concern that we might normally apply in our personal relationships, applied to public life. Green thinks we must not compartmentalize our morality – reserving it for our private sphere but not business:
“Compartmentalization – ‘dividing up life into different realms with different ends and subject to different rules’ – is a besetting sin of human beings. [It] is a refuge from ambiguity. One of the most obvious and commonplace manifestations of the tendency to compartmentalize is seeing our life work as being a neutral realm in which questions of value (other than shareholder value) or of rightness (other than what is lawful) or of wisdom (other than what is practical) need not arise.”
Seeing work as morally neutral is damaging and corrodes society. He notes:
“The discovery in late 2006 that in modern Britain 70% of three year olds recognize the McDonald’s symbol but only half of them know their own surname, or that the average 10-year-old is familiar with between 300 and 400 consumer brands but would be unable to name 15 wild birds, was poignant evidence for our fears. What sort of people were we becoming?”
Ultimately work, money and wealth is not enough for the common good:
“We cannot fulfil ourselves in business through power or work or wealth.”
While this approach seems laudable in the light of the financial collapse and the actions which brought it about, there are strong cultural factors which need to be overcome to bring about any kind of change. Firstly, the idea of the common good is one which will need to be strongly embedded in social and cultural life. The individual ‘me-me-me culture’ is not going to lie down easily. Individualism has bred an attitude of self-interest which dominates every aspect of our life with personal mobile phones, personal computers, personalised approaches to life choices and an attitude that your individual feelings are all that matters.
Secondly, the competitiveness that drives companies to compete in the market place, is also what drives workers in those companies to do whatever it takes to beat the others. If I take a moral approach to my business, how can I be sure you will take such an approach to your business? If I fail to make my financial target because I am worried about moral consequences, will I miss the bonus payment or lose my job? Will my virtue lead me to business failure?
An additional sort of challenge is even harder to address ‘exactly what do you mean by the common good’? What precisely does that mean? A sense of the common good is likely to be based on some kind of view about what makes for a good life and on this issue people seem divided. Religious and philosophical opinions differ on what a good life would look like. Therefore some process of discussion needs to take place before we can really apply the idea of the common good to our moral decision making business.
Green may be right, but putting the plan into action presents enormous challenges.