A rchive Date
[ 01-07-2002 ]
Category
[ International Relations ]
sub-Categoy
[ U.S ]
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[http://www.canoe.ca/Columnists/meedward.html
Corporate accountability
It's your RRSP and mortgage they're fooling with
By MARIANNE MEED WARD -- Toronto Sun
July 1, 2002
The bad boys of the corporate world are at it again. The latest news is that WorldCom Inc., a U.S. telecom giant, "overstated" results by $3.9 billion. Oops.
Maybe now we'll take a hard look at corporate ethics.
Even U.S. President George Bush - the great defender of get-the-government-out-of-our-boardrooms capitalism - is mighty ticked off. When the WorldCom scandal broke last week, he warned the corporate world to shape up or face justice.
Too late for warnings, methinks. Time to force a cleanup - because it's not going to happen voluntarily. The independent mindset, greed-is-good attitude and buyer-beware ethos are too entrenched in the American psyche. And among some conservatives here.
Every time I've lamented corporate ethics (or, more to the point, the lack thereof) I can count on at least a few readers e-mailing me with suggestions that I remove my rose-coloured glasses and wake up and smell the leather in the boardroom. Usually, the rebuke goes something like this: corporations are accountable to their shareholders, period, not some whiny, secretly communist columnist with portfolio envy.
These readers are scandalized that I would even hint that corporations have a larger social accountability. But it's the "accountable to shareholders only" attitude that has largely contributed to this latest market debacle, like Enron before it. Using creative accounting practices, corporations hide debt, bad decisions and poor profits, while promising shareholders the moon. Reminds me of all the spam e-mail I get. And it's just about as regulated.
And I'm amazed that people still counsel a hands-off approach to regulating business. It's your RRSPs these people are fooling with. And your mortgage rates. And the value of your dollar.
Europeans pessimistic
It matters little that these latest scandals occur in the U.S. When you sit next to a giant, a sneeze can knock you over. Even people farther afield are feeling the ripples. A Frankfurt banker was quoted in The New York Times last week as saying the mood of European investors toward the U.S. is the most pessimistic it's ever been: "There is unanimous agreement that the U.S. is not the best place to invest any more."
When people are saying that about the world's powerhouse economy, we should all be afraid. Very afraid.
And we should start demanding that two little words be added to the list of corporate commitments: social responsibility. Other industries have gone through such a transition - journalism, for example.
Once upon a time, newspapers existed solely for the purpose of spreading the views of the state and the church (often the same). If you published anything the crown didn't like, you lost your printing license, or worse. This is called the Authoritarian period.
Along came the Enlightenment, and free thinkers like John Milton and, a few hundred years later, John Stuart Mill, who argued for a press free of government control. Anyone should be able to own a press, and should be allowed to print whatever they liked. Truth would triumph in an open marketplace of ideas. This is called the Libertarian period.
Some newspaper proprietors - CanWest comes to mind - are still stuck in the Libertarian period. Journalism has progressed beyond that out of necessity. It's not so easy to own a newspaper any more - unless you're wealthy. And why should the voices of the wealthy be the only ones heard?
Not to mention that readers grew tired of the one-sided tirades, half truths and outright fibs that were common when a publisher's only responsibility was to his own version of the truth. So along came the Social Responsibility period.
Journalism changed to serve the needs of readers first - for accurate, balanced and relevant reporting. Thus were media ethics born. (Whether we achieve our high calling is another story.)
The battles at CanWest are really battles between Libertarian owners (who heavy-handedly insert their opinions and purge certain criticisms) and a socially responsible staff.
Corporate America needs to similarly evolve. Its responsibility is larger than profit maximization, and shareholder happiness. When one of its members messes up, it threatens to take an economy with it. And that affects all of us.
Big business is accountable to the public, not just to itself.
Marianne Meed Ward, a freelance writer with an interest in social and ethical issues, appears Mondays. Her e-mail is:pward@interlog.com Letters to the editor should be sent to editor@sunpub.com.
 World Fact Book (CIA)]
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