No Scrupples

FAVORITE BOOKS
By Moje Ramos-Aquino

No Scrupples? Managing to be responsible in a turbulent world
General Editor: Roger Cowe
(Spiro Press USA)

At CNBC last Sunday evening, the very young and dapper owner-president of Thai Express declared assertively that one cannot stay long in business if he is in business primarily for money, pride or ego. He said that to stay long in business and compete globally, one must love what he’s doing and must be fair to his employees and customers.

Enron Corporation, Baladjay, Multinational Telephone Investors Corporation (Multitel), Halliburton, Mateo Management Group, Worldcom, ICS Exports, Tyco, Ma. Teresa Santos Trading, Tibayan Group, Ponzi, Power Homes, Patrick Corporation, Marcopper, and many others similarly situated. What do they have in common?

One fantastic read if you are interested in the business of your company and how you could enhance your HR function and help make your company more “fair” to your employees and your customers or if you are thinking of investing your hard-earned money is the book, No Scruples? Managing to be responsible in a turbulent world. edited by Roger Cowe.

Let me share with you this Foreword by Will Hutton, chief executive of The Work Foundation and author.

“The idea that private business organizations are sovereign fiefdoms with no obligation to their workforces or customers, other than the dictates of profit maximization, is in historical terms very curious—even eccentric.

“The act of incorporation in all capitalist societies was originally conceived as winning a license to trade in return for the acceptance of obligations set out by the government of the day. The notion that corporation status somehow conferred absolute privileges, and that society should be grateful for the existence of corporations, would have struck early capitalists as absurd. Society and company were intertwined.

“The same was true throughout the 20th century, at least until the collapse of communism. Companies were mindful that they had a core economic and social purpose that was the reason for their existence, and from the pursuit of which they made profits. Unilever, typically, set out to make the best ‘every day things for every day folk,’ while every American company had founding document setting out its economic rationale and moral purpose. In the competition with communism it was vital that companies sought legitimacy, and they accepted their obligations willingly as part of their license to trade.

It is only over the last 20 years that the doctrine has been born that companies are solely in business to maximize shareholder value, and devil take the hindmost. Yet the businesses and wider societies this doctrine is generating are unlovely and much criticized—even while we, through our pension fund, and insurance companies, own the majority of company equity. We need to remind corporations that they are embedded in society, enjoy its fruits, and must recognize its rules. They are not somehow important that they are above the law—nor should the law be shaped to reflect their sole needs.

“In No Scruples? a range of authors from across the debate examine the current crisis in corporate status and attitudes, and call for a return to our roots.

“We have learned that markets operate better than their alternatives, but that does not mean that they and their corporate actors are above criticism or that they have no wider social obligations. No Scruples? urges the adoption of a different culture and attitude.

“Capitalism is far too valuable a system to be allowed to go feral on us, but that is where it is headed unless we all take more seriously the propositions advanced in this fascinating book.”

Being in business is like living in a fishbowl. Its impact on society will be scrutinized in ever-greater detail and with increasing sophistication. How companies fare and react to such scrutiny will be important to the “development of their reputation, their attractiveness to staff and investors, their relations with governments and their ability to retain consumer loyalty.”

As the teenager sitting next to you would say, “to be fair!” I wonder how many companies could pass such meticulous scrutiny and come out squeaky clean?

And to the HR professional, what will you do if your company is found unscrupulously wanting?