Is business really a force for good?
“Japanese police, prosecutors and securities agencies in Japan, the United States and Britain are investigating Olympus after the firm admitted this month that it hid losses on securities investments for decades, disguising some as acquisition payments and fees. The scandal at the once-proud firm has rekindled concerns about lax corporate governance in Japan and revived worries about links between companies and organized crime. A unit from the Tokyo Metropolitan Police Department’s organized crime division has joined the investigation, a source familiar with the matter said on Friday. But the source added it was premature to say if gangsters were involved.”
REUTERS (21 November 2011)
There are news reports that make you despair. This is because I am somebody who believes in the nobility of business. I believe that corporations can be a force for good in society. I believe many products are created that are of great utility for the ordinary person. I believe corporations can provide meaning and fulfillment for their employees, in a world largely devoid of meaning.
But there are days when all those beliefs are challenged.
Reading the excerpted article about Olympus provided one of those difficult days. Yet another famous brand, yet another organization with a proud heritage, is found to have been cooking the books. Olympus’s top brass, after weeks of strenuous denials, we’re forced to admit that they had been hiding losses in the form of bloated payments for acquisitions and professional fees. In other words, Olympus was living a lie.
This comes in the wake of many similar fiascos, all over the world. India’s Satyam was revealed to have been showing inflated margins to investors and keeping fictitious cash reserves on its balance sheet. America’s Enron gave us the mother of all corporate frauds, creating a much-lauded company that was actually a phantom. Also in the US, Bernie Madoff gathered money from gullible employees for decades while pretending to invest it and earning unbelievably consistent returns.
What do these multifarious scandals have in common? In all of them, hype outstripped reality. The egos of a few took precedence over the interests of the many. Regulators were asleep at the wheel. Big-name auditors faced questions about what they actually do, and why they can’t provide meaningful oversight. The media happily constructed myths around larger-than-life business leaders. Professional advisors took the tainted coin and looked the other way. Whistleblowers were treated with aggression and derision.
Some days, it’s all I can do to stop myself from giving up on the business world.
And yet, carry on we must. Those of us who believe business should be bigger and better than glorified gangsterism need to carry on fighting. There are plenty of good businesses driven by more than the need to accumulate grotesque personal fortunes and feed bloated egos. Those businesses must be honoured and show-cased.
Casino capitalism must be seen off the premises. Society must learn to see through the spin-doctoring of PR practitioners. We must separate the wheat from the chaff. Bad businesses give you plenty of signals that they are up to no good. Regulators, journalists and business schools must join hands to analyse and expose bad practice before it gets out of hand, not partake in the gravy train that usually signifies bad companies.
If we don’t do this, we are all complicit. Those who believe in a greater good, and in the power of the business world to transform ordinary lives, must step forward and prove it. We can only do this if we anchor our businesses in genuine values.
Company directors and executives are very good at talking the good talk. They are less good at walking the good walk. What status do you attain, however, from masking the facts, selling a lie, succeeding by corrupting others, competing by cheating? There can be no pride in common criminality, where business bosses behave no better than common street tricksters.