Moral values, globalisation and corporate ethics

DO ETHICS have a place in a global village? How should corporate ethics be fashioned in the globalisation age? Although there is plenty of literature on the subject - both corporate ethics and globalisation have, in fact, become hackneyed - it was interesting to hear fresh insights from a distinguished speaker, Dr. Robert T. Drinan recently.*

Undoubtedly the background of the speaker mattered. A former U.S. congressman, member of the U.S. Supreme Court Bar (among others) and Professor of Law at Georegetown University Law Centre, Washington D.C., Dr. Drinan is also a Jesuit Priest, having been ordained way back in 1953.

A spiritual dimension to the subject was therefore inevitable. Arguably it was the most distinguishing aspect of Dr. Drinan's dissertation.

Citing two important sources of corporate ethics - the Caux Principles and the Interfaith Declaration of 1993 - he pointed out that the intense worldwide emphasis on business ethics since the demise of the Cold War is unprecedented.

The Caux Principles (named after the place in Switzerland where world business leaders deliberated and drew up a code) is aptly subtitled ``Business behaviour for a better world''. It emphasises the Japanese concept of ``Kyosei'' (living and working together for the common good) along with the more Western concept of human dignity.

Even its preamble states that ``laws and market forces .... are necessary but insufficient guides for comfort.''

Business can be a powerful agent of positive social change and hence a ``commitment to shared prosperity'' is essential in the operation of the corporation.

The Caux Declaration affirmed the ``centrality of moral values'' in economic decision making. Its cardinal principles are the corporation should (a) share the wealth created with all its employees, shareholders and customers in order to improve their lives; (b) be responsible citizens from whom competitors can expect ``a spirit of honesty and fairness''; (c) contribute to human rights, education and welfare; (d) protect and wherever possible improve the environment; (e) in the exercise of its vast power be guided not by the law alone but by the ``centrality of moral values'' in economic decision making; (f) pledge to support human rights and democratic institutions and to cooperate with those forces that are dedicated to raising standards of health, education and work place safety.

Greed and loss of soul

In 1993 the Interfaith Declaration having the core values of the Abrahamic religions in mind sought to give a distinctly spiritual flavour to the issue. Central to those religious - indeed to all the world's great religions - are traits such as justice, fairness, love for others, stewardship for natural resources and honesty and integrity.

A significant conclusion after perusing both Caux Principles and Interfaith Declaration is that an ethic for the global village may need more than secularistic approach.

Quoting from the seminal works of Father Hans Kung, a respected Roman Catholic theologian, Dr. Drinan wondered whether materialism or a non-religious ethic can resolve the world's social problems without the prophetic message of Judaism, Christianity, Islam, Hinduism and Buddhism.

Also in 1993 at the Parliament of the world's religions all business executives were urged to respect life and the age-old directives to deal honestly and favourably.

And in a memorable declaration issued then it warned that ``in greed humans lose their soul, their freedom... their inner peace..''

Openness and human rights

Two other developments keeping pace with the evolution of ethics and effectively complementing it have been (1) a move to promote honesty and openness in governments and (2) a global commitment to human rights. Across the globe there is felt need for stable and honest governments.

The literature on the subject is enormous. Key issues here are (a) how corporations can preserve integrity while operating in a corrupt environment. (b) Is the dominant purpose of the corporation to return profits to its shareholders? Or are there larger purposes going beyond the maximisation of profits? (c) how to set higher ethical standards for business - government interaction and especially in tackling corruption, money laundering and so on.

Dr. Drinan pointed out that business schools, corporate leaders and political officials around the globe are following closely the interwoven forces that want to make a better place of a market-driven world: after the horrors of the 40 years of the Cold War how to foster a system that will bring economic decency and political stability to the world's poor and vulnerable.

The task appears almost insuperable but cannot be avoided or evaded. ``The globalisation of every facet of human existence requires - indeed compels - corporations and governments to develop as rapidly as possible a system that distributes the world's goods in equitable ways so that the fifth of humanity that now lives in circumstances unworthy of human condition can in the future obtain dignity, decency and justice.''

Turning to human rights, ``the ultimate source of business ethics,'' Dr. Drinan said out that the United Nations Charter unlike that of the League of Nations specifically incorporates the term human rights. Since then significant developments have taken place.

The Covenants of Economic and Political rights were accepted in 1966 and entered into force as customary international law in 1976. The economic rights agreed to by some 130 nations are now the birthright of every human being. In 1993 at the UN World Conference on Human Rights held in Vienna as many as 172 nations signed the declaration. In Dr. Drinan's view the declaration can be categorised as customary international law and that it binds every sovereign nation.

The corporations of the world are quasi-public in that they are the creatures of their government and are duty bound to carry out their mission in accordance with world law. However, it is unrealistic to think that those mandates are self-executing. Their principles must be constantly restated. Governments and multinationals must be forced by world opinion to understand their ethical duties and carry them out.

C. R. L. Narasimhan

*The Tenth JRD Tata oration on ethics in business, XLRI Jamshedpur.

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