This past weekend the financier George Soros spoke out on the subject of bankers’ bonuses, labelling the present system as handing out indirect gifts from government due to the terms on which banks can borrow and then buy government bonds.
An article in Sunday’s Independent by David Randall and Margaret Pagano provides an excellent up-to-the-minute concise overview of the public debate.
This morning I am angry. Yet another form of financial abuse!
On Monday afternoon I checked into a London hotel. My accommodation was being paid for by the organisation whose event I was attending but on arrival at the front desk I was asked for plastic so that they would have some way of charging for any extras. I had no intention of using any extras but handed over a card and was given an assurance that no charge would be taken from it. I was not asked to sign anything apart from the usual kind of hotel registration card.
Without thinking I gave them a debit card which is linked to an account that my wife and I use for household incidentals. I thought no more of it until on arriving home last night my wife asked me why, when earlier in the day she came to use her card at a supermarket, there was fifty pounds less in the account than there should have been. Fortunately it did not cause a major disaster, but it could have been serious.
As I could think of no other explanation, this morning I telephoned the hotel and asked whether they had blocked off fifty pounds on my card. They confirmed that this had in fact been done.
Now I fully appreciate that a hotel needs to protect its income. What I do not accept is that they should be free to block off funds in my bank account without telling me how much, indeed without telling me they would be doing it at all, without my permission, and even after telling me (inaccurately) that no charge was being taken.
Having travelled the world during a long business career I suspect that this might well have been happening on a regular basis without my noticing it. Well now I have noticed it, and as far as I’m concerned unless the hotel specifically states that a clearly specified amount is to be placed on reserve to cover their possible charges, and unless I sign my approval to that, any such action is tantamount to theft.
If, as I’m now told, this is standard hotel industry practice then that industry needs to clean up its act. Many hotel groups have implemented “continuous improvement” programmes. Here’s an area of unethical practice that needs urgent improvement attention.
Thanks to a post (a “tweet”) on Twitter I’ve just come across Richard Branson’s blog, Business Stripped Bare. Take a look at this item on social responsibility. It was especially encouraging to see his attack on bribery as a way of doing business. Transparency International will no doubt be delighted to be able to quote this.
I agree entirely that governments generally make bad business managers. The history of both nationalisation in mixed economies and state control in centralised economies tells a consistent story of failure. Hopefully those governments that have recently been responding to the global economic crisis by investing massively in banking and other industries will have learned the lessons and stay well away from management (although they may need to prod some of them toward responsibility!).
Business and governments do need to come together to deal with some of world’s major challenges. In fact the collaboration needs to go further than that. There’s an urgent need for a quadrilateral approach - business, governments, civil society organisations and the major international institutions such as the World Bank and the IMF working in harmony. The Extractive Industries Transparency Initiative (EITI) is an outstanding example of how this might work across a far wider range of gloabl issues.
In the course of my career I have worked alongside people at all levels in large national and international corporations. Often I have listened to senior figures in major corporations bemoaning the way the public accuse them of being too powerful. They don’t feel powerful.
Corporate managers often feel hemmed in by combinations of rules, laws and community and media pressure, as well as shortage of funds for what they believe needs to be done, while the public outside imagine an inhuman, and inhumane, machine able to do more or less what it wants regardless of its impact on the little people.
It is very easy to forget that companies are made up of human beings, and that the majority of them do not wish to damage others or to be irresponsible. They also have to live with their families, and do not want their sons and daughters to be faced at school with, “Your dad works for xxx? How could he be so evil?”
Once a corporate reputation has gone it is immensely difficult to regain. I recall some years ago sitting next to a vice-president of a major global oil company as he faced hostile questioning on a Q&A panel at a conference when he turned to me almost in despair and said, “I know we got things wrong in the past, but we’re not like that any more; what do I have to say to get them to believe me?”
Then again, even when corporate policies are sound, behaviour on the ground ten thousand miles away from head office, in a subsidiary of a subsidiary of an operating division, is not always easy to manage even with modern communications. It is too easy to condemn the chair of a global company for something done by two or three managers a long way from home.
And yet …. . It is the responsibility of people at the top to ensure that what is being done in the company’s name complies with its declared values and standards.
So what shall they do? Shall they set up a military-like command and control structure in which staff at all levels are so constrained that they can’t even sneeze without consulting a manual on how to do it? Surely people need to be given their heads, allowed freedoms to be imaginative, innovative and even entrepreneurial within the broad framework of the corporation. Without adaptability at many levels the organism will surely shrivel and die.
Yes indeed, but the limits need to be clear. The principles need to be understood. Humanity needs to pervade the organisation from top to bottom around the globe and in all its relationships, internal and external. Not an easy task.
Which brings me to the news story that brought me to think again about this subject today. Music piracy has been a major problem for a long time now, and does need to be addressed, but the recording industry moguls in the USA seem to have lost the plot.
What good is being done to their industry when masses of young people are now refusing to buy from the major record labels because of the way that the industry is attacking defenceless individuals? Yes, I repeat, music piracy has to be addressed. But the present onslaught against the almost defenceless is by very many (and not only the cash-strapped young people who want cheap music) considered to be a serious abuse of the power that comes from size.
Instead of focusing on the large-scale culprits, the ones difficult to catch, the people who make millions from copyright-related theft, the industry is now going after the little people, private individuals with small chance of mounting an adequate defence against the might of the big-time lawyers. Judges have spoken out against the development and lawyers with a sense of public responsibility are now beginning to provide pro bono support to people suffering under this disproportionate blitzkrieg.
What caught my attention today was a story from Pittsburgh of a 19-year-old chronically ill, frequently hospitalised young woman from a low-income family who is on the receiving end of a 60-page battering ram of Federal legalese for allegedly downloading and sharing music illegally, something she says she has not done. And she’s only one example.
Do these people have no shred of humanity left in their souls? Are the top people in the industry seriously aware of this abuse? Or are their fee-focused lawyers simply out of control?
In an industry as in a company there can be no escape for those at the top from moral responsibility for damage done in their name. The powerful have an ineradicable and eternal duty to protect and not to harm the weak. They must get their rottweilers back on the leash.
Since closing down my office in town my wife and I have periodically revisited to check whether any mail has failed to be redirected and is sitting there waiting to be collected. Today there was an envelope labelled, “DFID - Department for International Development”. Two or three years ago I had a contract with them and it appears that I am still on the suppliers list of this arm of the UK government.
I am impressed! The letter tells me that DFID are now promising that provided invoices are submitted correctly, and the amounts involved are to be paid into UK banks and in pounds sterling, they will now aim to pay suppliers within ten working days of receipt. This will be excellent news for many small organisations struggling against the financial current during the present economic downturn.
Whether or not this is a policy being applied across all government departments I don’t know. Nor do I know whether it is a direct response to the current economic situation, giving help to smaller organisations at a time of difficulty, or whether it is something that would have been implemented in any case as honourable business practice.
Whatever is the case, it is highly commendable and something which is close to my heart as it was a formerly state-owned organisation which in the early 90s almost drove my fledgling business into bankruptcy due to its immoral behaviour - keeping a small and financially weak supplier waiting many months for payment. I blogged about this earlier with an extract from my 1997 book, “Ethics in Organizations” - See “Paying Small Suppliers On Time“.
Today’s note is, sadly, once again a negative remark. Oh, I do wish there was more positive news at present!
Also, today it’s more about the ethics of public service than of business. We have seen here in the UK the sad spectacle of an opposition Member of Parliament being arrested, and his homes and offices searched, by anti-terrorism officers. His offence? He had in his possession information about immigration which is uncomfortable to the government.
Of course, the way the police describe it is different. Totalitarian regimes always do conjure up obscure rationales for their action, and Britain under the present administration (like the USA under the much-abused “Patriot Act”) is going deeper and deeper into nascent totalitarianism. We’re not there yet, thankfully, but the building blocks of bureaucratic control are increasingly coming into place such that a future administration could seriously abuse them. Legislation and regulation in many areas are being developed in ways that will enable them to be used for purposes not declared during their introduction.
In this case an obscure offence had to be dug out and dusted off to provide a excuse for the police responding to a request from a government senior official. He says that Ministers had no knowledge of the incident in advance but of course, “He would say that, wouldn’t he!”.
The timing is interesting also. Under normal circumstances this would have been the number one item on the national news programmes. But it was all done right in the middle of the public’s focus on the Mumbai bombings. Astonishingly convenient!
In my years of work on anti-corruption I often saw abuses of power in the tin-pot dictatorships and totalitarian states of this world. But here in Britain also, attacks on our civil liberties are becoming all too frequent, and from many directions.
This present case, however, goes even further. It is an outrageous assault on the fundamental liberties of parliamentary democracy. Government officials are there to serve the people. They exist for us, not over us. One would hope that the monarch would intervene at this point (even if behind closed doors) to call for the protection of her Parliament from the overweening power of the bureaucracy. Maybe we need a new Runnymede, not this time to moderate the excessive power of the monarchy but to guard against abuses by employees of the State.
When a paid official of the government, however senior, can use the excuse of protecting “the effective operation of my department” (incidentally a department which in recent years has repeatedly been condemned as “not fit for purpose”) to trigger an attack on a democratically elected member of our parliament it is clear that the ethics of public service are in a severe state of collapse.
Under this kind of regime every MP, every member of the House of Lords, every political journalist, and everyone involved in civil society advocacy movements has cause to fear for their freedom.
Within just a few minutes of the BBC News this lunchtime we have seen two disgraceful demonstrations of the lack of ethical conscience in Britain’s premier broadcaster.
Firstly, it has been announced that the BBC’s top presenter, Jonathan Ross, is to keep his job in spite of the vile and abusive telephone calls included in one of his recent programmes. There have been more than 40,000 complaints from the public and the BBC Trust has condemned the programme (and others from the same series) in uncompromising terms. But the BBC itself appears to be more interested in its ratings than its ethics, and Ross is to keep his job. Lord Reith must once again be squirming in his grave!
Secondly, just a few moments later came yet another example of irresponsible editing. In an item on the recent increase in home repossessions the reporter said that the person interviewed was too embarrassed to be identified and showed a shot only of her hands and the mortgage company’s letter. So far OK, but the camera then moved to show the woman in a head and shoulders profile shot that made her clearly identifiable to anyone who was even slightly acquainted with her. I hope she sues the BBC. They should be made to pay off her mortgage!
When will our broadcasters learn that ethics matter, and that the limit is not 10% beyond what they think they can easily get away with? The corporate culture of Britain’s premier broadcaster is clearly on a downward slide.
One of my commitments in launching this blog was that it would not simply be a place for moaning and complaining, but would take a positive approach to improvement. On this particular story I am somewhat perplexed as I freely admit that I know insufficient about the ethical monitoring processes of the BBC to be able to comment in a very meaningful way.
Clearly the BBC Trust has an important role, but the extent of its power and influence is (to me at least) unclear, so I have to conclude this brief item with a question: What needs to be done to the ethical monitoring processes of the BBC for the British nation to recover a clean, honest and socially responsible national broadcaster?
- David Murray -
Technorati Tags: broadcasting ethics, corporate culture
On Monday evening I ventured south to London for the first time in many months to attend the Annual meeting of the UK chapter of Transparency international. I had thought of going anyway, but my mind was made up during a phone conversation a few days earlier when I learned that Laurence Cockcroft was standing down as chairman after many years of sterling service to the anti-corruption movement. It was my privilege to serve with him as Deputy Chairman for several years. I can testify from personal experience to the unique combination of knowledge. skill, commitment, persistence and wisdom that he has brought to that role, often facing and overcoming significant obstacles … and not only in the UK but also to the global TI movement of which he was one of the original founders back in the early nineties. It is good that Laurence intends to remain on the Board for a while longer, and I wish my old colleague John Drysdale well as he takes over the chair.
There is much that could be said about the fifteen years of his involvement but one major contribution was his leadership of the international (and multi-stakeholder) group that developed the “Business Principles for Countering Bribery“, an initiative which has helped many companies to implement anti-corruption policies which go far beyond the publication of a glossy brochure and a tick-box approach to legalistic compliance.
Having mentioned compliance I should now move on to the lecture which followed the formal meeting on Monday. It was delivered by Michael Hershman, a board member of TI-USA, on the subject of improving anti-corruption compliance procedures in a major company which has suffered bad publicity of recent years due to a number of serious bribery scandals. Extracting a few points from my notes I’ll comment on just three of what I felt were his key themes.
Firstly there was his wise statement that if a company discovers that it has a bribery problem it should “investigate thoroughly and come clean”. To my own knowledge several major companies have discovered the wisdom of this in recent years. In some cases the bribery has been an isolated incident. By being open a company’s reputation can be recovered quickly and even enhanced by taking strong action. Where a culture of corruption is unearthed it is even more important open it up to the light, even though the short and medium term pain may be considerable.
Secondly, the role of a compliance officer should be a “real job” and not merely an additional secondary title given to people who already have too much to do and are unlikely to spend more than 1% of their time on ensuring that the anti-corruption processes are watertight. He described an interview programme during which his team discovered “compliance officers” who couldn’t even find the company’s anti-bribery manual. As in other areas of business ethics a tick-box approach will deliver little or nothing and could even make the situation worse as both managers and staff realise that the upper echelons of management and the Board have no serious intention to change.
Finally, it was great to hear once again reiterated the message that corporate philanthropy and corporate ethics are not one and the same thing. Personally, I would go even further and say that corporate philanthropy is a quite separate thing from corporate social responsibility; or if it forms a part it is a very small part of the whole. Too many companies have in the past given to charity and sponsored social projects whilst simultaneously conducting their normal day to day business on principles which are far from responsible. Too many still do! Michael Hershman described a company which for many years gave generously to development projects in the developing world, and yet many of its managers only knew how to sell by paying bribes. They’ve in recent years been learning new ways of selling, the culture of bribery is on its way out, but the road of change is long and hard.
I am not going to mention company names here. Most important are not the identities of organisations but the principles of improvement. It was a fascinating evening during which I learned of much progress made during the couple of years since I moved out of the maelstrom, but also of the enormous challenges still ahead. Where are the younger people to pick up the baton?
Here’s an interesting current news story that has, it seems to me, significant ethical implications for all involved in supplying segments of the global information infrastructure - and major practical implications for the rest of us!
Two telecomm companies in litigation. One decides to cut all internet connections with the other. OK? Maybe, but what about the thousands (millions?) of third parties whose information systems have been built using those connections?
For more on this “news-case” of ethics in telecommunications click here on the link.
As with many of the other pages on the site so far, this page is based on material in my 1997 book, “Ethics in Organizations” - from page 122.
Once a new corporate values statement or ethical code is developed it needs to be communicated to people who will be affected by it. There can be many such groups. Asking the following questions should help with planning the communication process.
Back in the mid-90s on-line facilities were much less developed than today. The following page nevertheless did challenge the reader to consider “how to use modern technology in ethics training”. More than a decade later the opportunities for developing powerful on-line training programmes are vastly greater.
