Business Ethics: Oxymoron?

By Shlomo Maital

   ethics

    I’ve just written my fortnightly column for a magazine (Jerusalem Report), about how “plunder and blunder” ruined a first-rate supermarket chain, endangering the livelihood of 3,500 employees, as it goes into receivership and bankruptcy. The shareholders plundered the profits rather than reinvest them. Legal? Sure. Ethical? Far from it.

   Strategy guru Gary Hamel has a new book out, What Matters Now: How to Woin in a World of Relentless Change, Ferocious Competition and Unstoppable Innovation. You can download a long summary by doing a Google search on the title.

     Surprisingly, this is not a book about how to compete at all costs, in a jungle. It is about values and ethics. Hamel writes, “managers are the ethics teachers of the company. They define the defining moments and how to deal with them.” He cites the 5 responsibilities of stewardship: fealty (view things with trust, not personal gain); charity (put others’ interest before your own); prudence (safeguard the future, don’t take great advantage of others or the present); accountability (take responsibility for your actions); and equity (distribute rewards based on contribution, not on power). The managers of the Israeli supermarket chain, the Board of Directors and the shareholders did none of the above.

     Hamel goes on: “We need an ethics revolution in business.   In a 2010 Gallop study, only 15% of respondents rated the ethical standards of executives as high or very high. Nurses came in first at 81%. Corporate lobbyists, at 7%”.

     I know countless businesses that were ruined by ethical corner-cutting. I know of a high-tech exec, billionaire, who back-dated options to the benefit of his workers….and fled a court summons, and now lives with his family in a very poor country, not his own, because it has no extradition agreement.

     Are you going to be a values leader? Hamel asks,   or a values laggard? “Having a set of ethical principles can ensure that our enlightened self-interest doesn’t go unchecked and cause a meltdown within our company.”

     Sounds like a sermon in church or synagogue? It’s actually a powerful, crucial business lesson. We would all do well to heed it.