Friday, February 25, 2011

"Companies delivering values"

That's the English transliteration of the German title of the presentation I was asked to give in Germany, earlier this week.

Here is the outline of what I said:

We are assured by various "authorities" that the crisis is past, but that only indicates how unreliable most such "authorities" are now

Most economic tools and approaches have become unreliable. This is demonstrated by the fact that Germany had such an unexpectedly high rate of growth last year - unexpected by ANY of the "authorities"! We are in a volatile world where all the traditional instruments we have are useless - we can be surprised positively and we can be surprised negatively.

We should expect continued and increasing volatility in the global economy (and of course in national economies), leading to larger crises, if the underlying problems are not sorted out (and they are not being sorted out).

The only satisfactory solution is to have a set of minimum global rules that are sensible, and light.

It would be easy to have an inappropriate set of global rules, or rules that are excessively burdensome - and both those dangers need to be recognised and fought against.

Meanwhile, we need to recognise too that capitalism was damaged by its so-called friends. The free market was damaged by free marketers who wanted so much freedom that they wanted no rules at all!

And we all know what happens when there are no rules - it becomes like what Americans call the Wild West and what we Indians call a jungle - a place without rules is a place without the rule of law - and that is bound to be a place where the fastest or strongest win, at the cost of those who seek to do business fairly, honestly and in accordance with universally acknowledged values.

Of course there are companies, such as Abus and Loh and Obi, which are represented here, who at least have a reputation for trying to do what is right. But they are exceptions - or at least they were sufficiently out of the centre that whatever influence they had counted for nothing in terms of opposing the conditions that led to the crisis.

The fact is that we are in the middle of a global civil war today where it is not enough to simply have some values, it is necesaary first to be aware that we are in the middle of a war, and then to consider carefully the nature and resources of the opposition, as well as one's own resouces, allies and cobelligerents in order to develop and follow the most effective strategy possible.

Let me put it this way.

The first level is to ensure that one is following values oneself as an individual. That is only possible if one is self-reflective and self-critical. I find that following Jesus the Lord has made that possible for me, because I do not need to be either afraid of such self-reflection or surprised/ upset at the results - I can ask for forgiveness, seek to ensure restitution, and start again on the difficult (because delicate) journey to be a person of values.

The second level is to try to ensure that values are embedded in the conduct of a company one owns or for which one works or with which one is assocated - as Abus and Obi and Loh try to do.

The third level is to try to ensure that values are embedded and followed in the companies associated with the company in the second level (above). Again, companies such as Abus and Loh have tried to do so, for example with supplier companies and subsidiaries and joint-venture partners in China. Delivering values is easier in Germany than in China. And we sometimes forget that it was equally difficult in Germany till the 16th century when the Reformation transformed society in ways that make it even today easier to deliver values here versus in all non-Reformed parts of the world, including Eastern and Southern Europe.

But of course even the third level (above) is simply the start of the real battle, because while that sort of voluntary action is to be commended, it entails both a cost and a benefit to individual businesses (the cost of the extra mangaerial effort and any financial consequenes; and the moral and reputational benefit of being known as an ethical business with the implications of that for customer preference and loyalty).

The fourth and more essential level is therefore for companies to seek, through direct lobbying as well as through industry associations (and where legally permissible) through political processes, to influence national rules, regulations and legislation in the right direction, so that ALL companies in that national area are required to comply at least at some minimal level with humane values.

So why is the fourth level (above) inadequate? Because there is every incentive for multinational or international companies to exploit any discrepancies between the legal systems of different countries, and to focus their activities on that national system which imposes the lesser (or the least) requirements for compliance with universal values. Companies can even move their entire headquarters out of countries which are perceived to work for greater compliance with universal human values. That is why a merely national or regional approach (while admirable and somewhat useful) is finally inadequate. That is why we need global rules.

May I conclude by saying that it is fatally easy for us gathered here for this conference to start with thinking at the level of ourselves as individuals or as individual companies - and to stop there. We need to recognise that the really important battles are taking place at the national and global levels.

So it is important for us to follow those and to addresss those, however naturally disinclined we are to do so, if we are to really deliver on values. May I remind you that even the Bible, the basic text of your civilisation, does not focus only on the individual. It starts with God creating the universe in such a way as to reflect his glory and character, but when individuals want to run their lives in a way that violates God's design, that wrecks God's system, so that God then has to search for individuals who WILL be willing to live in His way out of love for Him - but even those individuals are not meant to live merely in a cosy love relationship with Him, but to live in that relationship for the purpose of being a blessing to the world - that is, of changing the world positively.

That is why, when Abraham decides to follow God, it results in the eventual deliverance of his descendants from Egypt and their being given a new orientation and new policies and structures in economics and politics - deepened of course by Jesus the Lord.

It is in following those economic and political principles even today that policies and structures can be created which bring light and blessing to the world. There are in fact no values apart from those social, economic and political principles.

To the extent that you and I study them, understand them, and apply them individually and corporately, we will become real deliverers of vlaues - that is, those who contribute to creating the right global laws, regulations, policies and structures.

Thank you. Sphere: Related Content

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