Sobering - the ethics of business
Publish date: 27 September 2019
Issue Number: 14
Diary: CompliNEWS Ethics
Prof Leon van Vuuren (first published on 26 August 2019 for The Ethics Institute monthly newsletter)
This is a satirical account from the point of view of executives who see ethics as a 'soft' issue. Some may think it is an exaggeration, while others will have encountered colleagues and bosses who continue to have this attitude. Leon shows that ethics, in fact, permeates all of business.
A cynical take on the ethics of business ...
'The number one thing that works about this company: we have got our priorities right.'
We know that the Art of War, by Sun Tsu, is prescribed reading in many business schools around the world. This gives us, as business executives, licence to equate doing business with making war. We may therefore be strategic in our thinking and planning. Be tactical in executing our plans. We launch products. We target consumers and their markets. We take no prisoners. Lean and mean is good. Our offices and factories are adorned with posters of our competitors’ brands, to which we have added the words ‘know thy enemy’. To accomplish our aims, we need to get involved in the war for talent. Since we tell the world how powerful our brand is, we have slithered our way onto the list of the best companies to work for. Our competitive mindset makes us strong and broadly admired. After all, business is not for sissies.
Our shareholders, cutting costs and heads
This year the shareholders again demanded ‘more’. As investors, they take huge risks and have the right to demand higher returns on investment. Gordon Gecko in the movie Wall Street (1987) proclaimed that ‘greed is good’. Although our political correctness does not allow us to say ‘greed’ out loud, we can and will insist on our pound of flesh. We are conscious of our rights in a capitalist economy. There is nothing wrong with always wanting more.
So, to please the shareholders, we have to work smarter, be more creative and insist on cost-cutting across the board. The Chief Financial Officer reports that the salary and wage bill of employees amounts to 73% of annual expenses. This is preposterous. As executives, we need to spend the company’s money on the right things. So, let’s embark on an intensive cost-cutting strategy. Put out the word to squeeze suppliers, sweat the assets, pass costs on to customers and use more aggressive sales tactics, even if we have to cut a few corners to appropriate some of our competitors’ customers. All is fair in business and war. Hopefully our pitch to the Board for bonuses and phantom shares is approved. They had better not hold the loss we made this year and our lethargic share price against us.
Down-sizing is our mantra going forward. Some call it re-engineering, rationalisation, trimming or right-sizing. Instead of using the real R-word (retrenchment), we refer to ‘issuing Section 189s’. Thus we say that we are ‘reducing our headcount’ (or ‘cutting our payrolls count’, as our colleagues in the USA call it). This is far easier than admitting we are putting 60, 600 or 6 000 people (human beings) out of work. We’ll just tell employees that downsizing was our last resort to save the company from doom. Let’s not be too concerned about the effect on them and society – other companies do it all the time. Having a job, after all, is not a right, but a privilege, and they should know that. In business, one has to ‘break a few eggs to make an omelette’, or so the saying goes. Make sure that everything is done by the book, though. If you have to run it past the ethics department, run it fast!
We probably have to ascribe to the TCF (Treating Customers Fairly) initiative as the other companies are doing. Time to get Marketing to ‘massage’ our advertisements to get them in line, and then target other markets, especially the untapped ones where customers don’t know so much about fair treatment. Credit is the placebo of low disposable income – we are simply giving the people what they want! Make no mistake, the fine print is in order and the consultants in the call centre are ready to field any nasty calls.
It might be a good idea to use the money we owe our suppliers to fund our Research and Development. Pay them after 90 or 120 days. But keep in mind that this is an unwritten policy and all the compliance stuff is wrapped up tight. Suppliers need our business anyway and should be grateful – they will get their money, eventually.
Our regulators and legislation
This corporate governance, or ‘King III’ thing, merely creates truckloads of paper. We have done very well without it for many years. The Companies Act requirement of having a Social and Ethics Committee is high-handed. We don’t need another committee. Get ARC (the Audit and Risk Committee) to ask Human Resources for a report on disciplinary hearings and call it a day. Red tape is the enemy of business progress.
Ethics: WTF (why the fuss?)
We should get some strategy consultants to draw up a set of values that we can post on the walls. Ask them to include the usual suspects – integrity, fairness, honesty, excellence, a passion for customers – and perhaps some cool phrase like ‘at this company we make magic’, ‘losing is not an option’ or ‘we make it happen!’. That should take care of the ethics thing that everybody is getting so worked up about.
We all know, after all, that employees either have ethics or they do not and that there is little that one can do about it. Ethics training and management? What for? You cannot ‘teach’ ethics! Besides, it is too expensive to manage ethics. It costs just about the same amount as the CEO’s office furniture and we can’t have that.
Just come down harder on those employees who break the rules. That is not the same as an executive bending the rules, however. When that happens, we should discuss it behind closed doors before everybody overreacts and brings shame onto him or her. We should handle it discreetly: give a good separation fee and release a statement that the resignation is due to ill-health. If there is a golden handshake involved, make sure it is an undisclosed amount.
As for lifestyle audits of the Board members and executives – which some of our competitors are doing, goodness knows what for – it simply is not feasible. They declared their conflicts of interest ages ago, anyway, what more is needed?
The number one thing that works about this company: we have got our priorities right.
Prof Leon van Vurren is Executive Director: Business and Professional Ethics at The Ethics Institute. He holds a Doctorate of Industrial Psychology from the University of Johannesburg.