In 2000s, we started to waver in a circle of concepts dedicated to serving ethics and compliance, internal auditing, internal investigation and similar purposes in company organisations. The issue generally came to a dead end at the goal-intention-result trio, which could be considered as “a cure worse than the disease”.
Even if we leave aside the financial aspect of the damage caused by bribery, corruption, abuse, negligence and other behaviour, its “emotional” aspect can still get a corporation into trouble for many years.
We have been watching a miniseries in which global players star since 2000. For instance, we watched the developments after Madoff, who was the most reputable personality of the time and who marked a period with Enron, had conned his investors out of billions of USD.
Then, we saw investment banks like Lehman Brothers, whose income was more than the Turkish Republic’s GNP, falling to the ground as dominoes and the walls of Wall Street, where the whole world was being dragged into the gutter of debt and despair, cracking.
We witnessed scandals such as FIFA, which built a supra-political secure area through its unique constitution, giving some people USD produced by the football industry for years.
We saw Volkswagen, a giant automotive manufacturer, lying by looking in the eyes of everyone in the world!
There are countless other examples.
However, the main problem is that nearly all these corporations which have become a current issue due to their unethical behaviour have “ethical codes, ethical processes, internal auditing systems, reporting systems and even regular independent external auditing reports”. They also have professionals and consultants specialising in these areas and organisations auditing them.
There are two main problems that we need to discuss: The first one is that there are systems for preventing the above-mentioned moral erosion in policies and processes that can be accepted in corporate terms! The second one is even more serious. The judicial mechanisms cannot affect the people who cause this moral erosion, especially CEOs and boards of directors. Moreover, these people can get their compensation ending with at least seven zeroes and go on living freely.
We also watched a movie called “banksters” in the banking system that caused the 2001 recession in Turkey. We know that no justice was done to the stars of that movie in order to comfort the people who waved goodbye to their deposits!
I am sure sociologists will evaluate this issue better. However, I think two basic types of behaviour make professionals in accountable positions “stray from the path“. The first group includes people who get involved with abuse, bribery, corruption and such due to their own ethical misbehaviour in order to line their pockets. Corporate systems may be able to stop these type of people in time, but there will always be malevolent people.
The second group is more dangerous than the first one: people who force top management, including themselves, to stray from the path in order to achieve some self-proclaimed “targets”. Add the top manager’s ego, ambitions, greed and shamelessness on top of this, and you get catastrophes which can even hit governments like the global economic recession in 2008.
When we talk about reputation and reputation management, we emphasise that they are not “a project” but “a philosophy“. We act believing that the people who manage companies are the “teachers” of this philosophy. In order to be able to take part in “the league of reputation“, companies must take chances on paying “the price” for it.
Two important developments have recently been given wide international media coverage. The company producing Mars chocolate and confectionery decided to recall all its products in 55 countries since a consumer in Germany complained that s/he found a small piece of packaging in one of their products. The company did not get any regulation warning when making this decision. The decision which cost millions of USD to the company proved that it deserved to be in the league of reputation not only for its own consumers but also for the entire world.
The owners of yemeksepeti.com distributed 27 million USD of its income, which was obtained by selling their company, to their employees in Turkey. That was a development which will be given as an example of being “ethical and fair” in the business world history for many years to come. The company owners had no commitment or legal obligation to do so. Nobody asked them to do such a thing. However, they made that decision by saying that “they owed their success to their employees“.
Ethics and compliance, internal auditing, internal investigation etc. are all related to our points of view on life. Every company has their “corporate values” written nicely. They are put in nice frames and hung up on the walls of meeting rooms. Nearly all companies have “ethics” among their values maybe because it is “fashionable“! However, they do not have a system determining whether these values are reflected on the companies’ policies and processes as a whole. The existing systems are aimed at repair and maintenance of the current troubles!
In fact, we have a simple prescription which should be applied starting from “tomorrow morning”. Every company can ask each meeting owner whether decisions made in meetings are in accordance with their corporate values. If there is any trouble, it can be identified at its source with the meeting owner.
Corporate values can be used as a functional checklist instead of accessories.
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