Sunday, September 24, 2017

Do Ethics Matter?

It seems that not a week goes by without the reporting of unethical behaviour in business and politics. Yet most organisations usually have a list of corporate values on their hallowed walls somewhere – but does the constant stream of scandals mean that the only place you can find corporate values in the 21st Century is on walls, rather than in the hearts of leaders and employees, where they belong? It definitely seems that organisations are failing to move their values from ‘wall plaques’ to actual living entities within their employees, at all levels, in business (and politics for that matter).
As citizens of the world we have to decide the kind of world we want the next generations to inherit and then teach our children accordingly. If greed and unethical behaviour is going to be the rule rather than the exception, as it seems to be – then we might as well take the leap and start develop our children to be excellent liars and cheats; giving them a head start into the business world they will eventually join.
But if we genuinely want a world where ethical values are the rule – then we really need to start standing up to the constant stream of unethical events around the globe and start holding people and organizations to account. We, that’s the global ‘we’ of consumers, have the power to make significant change if we really want to. Politicians and the media know the power we have – which is why they are constantly trying to keep us divided – as they know if we come together and use our consumer power, we can make more change in a day than any government or multibillionaire makes in a year (or more) – just simply through our combined buying power.
We’ve been brainwashed into believing ‘this is the world we live in’; ‘we can’t change anything’; etc, but we have to stop believing this rhetoric and start ‘fighting’ for the world we want for our children and their children.
As an example of the stream of scandals and unethical behaviour I just researched two days, Friday 8th September and Monday 11th September and looked at some of the unethical practices being reported in the media; some of which I’ve shared below.
We’ve seen the report of a young British mother who is suspected of running a massive tourist sickness scam that allegedly defrauded the industry of at least 9.2 million British pounds. She is alleged to have controlled touts who enticed hundreds of British holidaymakers in Majorca to make false sickness claims against hotels on the island over the past three years (Graham K Madrid, The Times, Fri 8th Sept, p.5). On the same day the Times reported how two retired footballers are alleged to have invented ‘ghost learners’ to steal 5 million British pounds meant for training apprentices.
The environment editor of the Times, Ben Webster, reported how Tesco has been accused of holding on to millions of pounds that should have gone to charity from the proceeds of the compulsory 5 pence charge on disposable plastic bags. The retailer retained 3.4 million British pounds last year to cover the ‘cost of administering donations’ unlike other major supermarket chains, which did not deduct any of the proceeds for that purpose, (p.8, 8th Sept).
Mark Bridge, the technology correspondent of the Times, highlighted how ‘virtual assistants’ are at risk from hackers. Where researchers in China have found that cheap off-the-shelf technology could compromise virtual assistants from companies such as Apple and Amazon, potentially enabling criminals to instruct them to carry out tasks for their own illegal ends. Imagine situations where ‘psst, Alexa, unlock the back door. And Siri, transfer $1,000 to bank account number …..’ Where criminals could use ultrasonic sounds to ‘whisper’ commands and take over voice-activated electronic devices such as smartphones, (p.17, 8th Sept).
We had David Bond and Emma Dunkley on the 8th September reporting how staff at Bell Pottinger have been told that the scandal-hit PR firm is likely to go into administration as early as next Monday, after attempts to find a buyer failed. Co-founded by Margaret Thatcher’s favourite advertising executive Tim Bell in the late 1980’s, Bell Pottinger has been battling for its future after the PR industry’s UK trade body expelled the agency for at least five years over the Gupta controversy. In a damning report, the Public Relations and communications Association concluded that its messaging for the Guptas targeted wealthy white individuals and corporations in South Africa and was likely to inflame racial tensions, (p.12, FT, 8th Sept).
Sarah Harris, Jack Doyle, Daniel Martin and Tom Payne, reported in the Daily Mail on 11th September how demands were growing for the Government to slash the ‘outrageous’ interest rates of up to 6.1 per cent levied on student loans. Chancellor Phillip Hammond is being urged to use his next Budget to help students by at least replacing the outdated inflation measure used to set repayments – the Retail Prices Index (RPI) – with the historically lower Consumer Price Index (CPI). Its adoption could save students as much as 18,000 British pounds over their lifetimes, according to recent estimates. Last month Theresa May’s former joint chief of staff, Nick Timothy, described higher education as an ‘unsustainable and ultimately pointless Ponzi scheme’ that burdens graduates with debts and needs radical reform, (p.10, Daily Mail, 11th Sept).
Ilan Ben Zion, from Tel Aviv, reported how the controlling shareholder of one of Israel’s largest supermarket chains was arrested on suspicion of corruption. Rami Levi, chief executive of Rami Levi Chain Stores Hashikma Marketing, as well as a local politician, another businessman and a reporter were detained for questioning for alleged fraud and breach of trust involving the owners of a shopping mall and the local municipality; according to a police statement, (p.14, FT, 11th Sept).
Ben McLannahan, from New York, reported in the Financial Times how emerging markets are hit by financial crime curbs. The global regulators’ assault on terrorists, tax dodgers and money launderers is sapping vitality from a host of emerging market economies, according to the private-sector arm of the World Bank, as big banks cut ties that could expose them to sanctions. Over the past few year’s banks such as HSBC, BNP Paribas and JPMorgan Chase have paid billions of dollars in fines for failing to keep tabs on criminal activity, while spending heavily to increase their routine flagging of suspicious transactions, (p14, FT, 8th Sept).
At the political level you had Laura Pitel from the Financial Times in Ankara reporting how New York prosecutors have charged a former Turkish economy minister with taking millions of dollars in bribes in order to conceal a scheme that bypassed US sanctions. Where Mehmet Zafer Caglayan is accused of receiving cash and jewellery as part of an international operation to trade billions of dollars of gold with Iran, (p.3, FT, 8th Sept).
Joe Leahy and Andres Schipani, from Sao Paulo, report how the Brazilian supreme court ordered the temporary arrest of billionaire Joesley Batista, who in May revealed he had secretly taped a conversation with Brazilian President Michel Temer allegedly discussing bribes, has been ordered to face at least five days in jail alongside close associate, Ricardo Saud. “There are multiple indications …. Showing that they were part of an organisation dedicated to the systematic practice of crimes against the public administration and money laundering” supreme court judge Edson Fachin said in the order, (p.2, FT, 11th Sept).
And of course not surprisingly on the same day, 11th Sept, Joseph Cotterill, Southern Africa correspondent for the FT highlighted how Robert Mugabe’s spy agency secretly controls a diamond mine in Zimbabwe’s Marange region that has enriched the president’s allies and funded state repression, according to anti-corruption campaign group. The evidence, gleaned from company records and secret documents linked to CIO, will reignite fears that a hole of up to $31 billion in reported revenue from Marange has enriched the country’s political elite and the ruling Zanu-PF, (p.4, FT, 11th Sept).
As I start to wind down my own career and think of retirement, I’m genuinely concerned for the future of business and politics; and the generations to come after me. In my lifetime I’ve seen a dramatic change in business behaviour, mostly for the worse. I do wonder how long it will take us to work together as consumers to make positive change and make a real difference throughout the business world, for the generations to come.
I don’t believe (or don’t want to believe) the reported argument that that the current generation don’t care – I actually believe they do. The problem is we are ‘divided’ and until we come together for the greater good, these greedy, unethical people and businesses will be laughing at how gutless we all are, all the way to their offshore banks.
At the moment I think history will look back very poorly on the current world we live in and how much ‘crap’ citizens are prepared to take – let’s stop being divided and come together to make a difference; and lets starting living our corporate values today.