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Can business ever act morally?

September 10, 2018

The Royal Commission on Financial Services in Australia continues to unearth unprincipled and sometimes illegal activity within many of the industries leading players. These include the enormous scale of commissions paid for the sale of useless products.

In Sweden – yes, the land of ethical leadership – a former General Counsel is on trial for using bribes to win business in Uzbekistan. In the US, a pillar of society is accused of fomenting drug dependencies and seeking to benefit from the invention of an expensive remedy.

No matter where you turn, the stories of malpractice abound. Has it always been this way? The answer is surely yes, but today there is much greater exposure and stories that once were local are now global.

So on one level, you might say that things today are better because at least we know more about what is going on and there is some degree of accountability. Yet is that enough? Will society in general simply shrug its shoulders, or is this undercurrent of unethical business behavior eroding public trust to such a point that it threatens social structure?

These are big questions and I pose them on this blog because it might be argued that it is the duty of the modern commercial function (and each professional within it) to challenge the practices that lead to these unethical activities. In some instances, we have become part of the game. There are certainly lawyers who take the view that it is not so much about doing the right thing, but rather doing the things you can get away with. Procurement functions, when measured on savings, are too often complicit in manipulating the system to meet their measurements rather than the business interest. Contract managers may observe underlying dishonesty in the claims or commitments being made, even sometimes questionable payments, but do they question, or do they turn a blind eye?

Of course, one answer is ever greater levels of regulation, but is that really where we want to go? What sort of world will that create? Another view might be that since most of the unethical practices in business occur in the setting up and management of trading relationships, commercial staff are in a unique position to observe them. The big question, therefore, is what role might we play to raise the integrity of business dealings?

 

 

 

One Comment
  1. Ian Mack permalink

    Ethics, never an easy subject. In reality, whatever system one puts in place, the unethical folks will game it. I have always contended that it is EVERYONE who has a role to play in any trading deal that has an ethical duty to be vigilant, do occasional “deep dives”, and raise concerns to the highest levels if something seems not right. SO yes Tim, commercial people have a role to play. So do the technical folk, the lawyers, the accountants, the secretaries and other assistants on the program. And of course, it only starts as the contract is signed, it must be part of our company cultures and personal belief systems. Idealistic perhaps, but I have loved by it always. Ian

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