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I will never forget a vibrant debate that occurred at an international risk management conference years ago.
It stuck with me all these years. The
subject was that of morality. We
debated how morality affects our
risk management practices globally,
whether moral beliefs are inherent to
human nature and whether they are
negotiable depending on your country.
We discussed acts such as murder
— a universally immoral act. But the
discussion got murkier on “corporate
morality.” One act stood out: Was the
issuance or acceptance of kickbacks
or bribes to gain a business advantage
Such acts were argued as being
‘normal’ practice depending upon the
country. Risk managers felt beholden
to the shady tactics and had to
surrender to them.
The question remained: if
something of questionable ethics
becomes mainstream, does it stop
One risk manager whose ;rm
clearly struggled with corrupt acts
spoke up: “What is considered normal
for the company, does not make it
moral with all of us. Shareholders,
employees and the community feel
this. We will suffer the consequences
ultimately. Morality must prevail.”
I think part of a CEO’s objective
is to de;ne an organization’s purpose
and assure that purpose trends toward
good. The CEO must foster a culture
that is loyal to that purpose, assures it
can stand the test of time and is in the
best interests of all its stakeholders.
In the end, a company is merely a
collection of people who come to work
everyday motivated by their own moral
codes – codes expressed by the nagging
voices that torment them when they do
wrong. Threading those morals into a
uni;ed culture gives an organization
a corporate soul. Management actions
deeply affect this culture and the ability
to grow loyalty, pro;ts and innovation.
Does morality matter in business
and in modern capitalism? Should dog-eat-dog? Do good guys end up last?
Maybe in the short-term dogs will win,
but not in the long.
These ideas are best expressed
in the book which I treat as the risk
management bible for corporate
sustainability: Corporate Survival: The
Critical Importance of Sustainability
Risk Management, by Dan Anderson.
The book examines “the rising
sustainability risks that affect thriving
businesses, the environment, various
societies, people in foreign lands, and
our children.” It says for a company to
survive and thrive, it must respectfully
balance pro;ts, planetary footprint,
and the people affected by its purpose:
People, Planet and Pro;t in harmony.
If one P is neglected, survival is at
risk. Good management requires the
perpetual reconciliation of competing
obligations of all the Ps.
A crystal clear moral code is needed
to keep decisions in line. There
can be no moral ambiguity. When
an organization suffers eclipses of
integrity or moral meltdowns, this only
leads to organizational meltdown. &
JOANNA MAKOMASKI is a specialist in
innovative enterprise risk management
methods and implementation techniques.
She can be reached at email@example.com.
BY JOANNA MAKOMASKI