In December last year I had the honour of speaking at the Glasgow University Colloquium Conference on Ethics in Business. There was a very impressive speaker panel, including Stewart Hamilton, Emeritus Professor at IMD, Switzerland, Sir Kenneth Calman, Chancellor of the University of Glasgow and Ken Macdonald, BBC Special Correspondent. I took as my topic “Ethics in Business: An Oxymoron?” Most media attention has been focussed on the questionable machinations of very large companies, such as Royal Bank of Scotland, Starbucks, Rangers Football Club, and so on. However I wanted to address it from the perspective of the privately owned business.
Starting with tax evasion/tax avoidance I made the point that while no-one wants to pay more than their tax dues, it is rather rich for the politicians, who after all make the tax rules, to suggest that people should pay “their fair share”, which I think is PR speak for “more than they are paying now”. All I can say is that when it comes to tax planning Craig Corporate clients generally are keen to ensure that they stay within the law and don’t want to take unnecessary risk of an HMRC investigation which would interfere with the operation of their businesses. Next, I explored the systemic moral hazards that have been created by our culture of regulation and compensation. This is particularly true in Financial Services, possibly the most regulated industry we have – it didn’t stop the banking scandals. Compensation for clients receiving “bad” investment advice undermines the principle that people should take responsibility for the results of their own decisions – including what advice to take; and it simply heaps cost and bureaucracy on to the good guys, while the bad guys seem rarely, if ever, to get caught.
I concluded by re-iterating my strong believe that what is needed is the culture of honesty which you generally find in privately owned businesses, coupled with a regulatory system that actually does the monitoring properly and effectively, and when a company and its directors are identified as operating outside those boundaries, they are prosecuted, convicted, financially penalised and put in prison.