Business must deal with its cowboys

2013-04-14 10:00

Revelations that some retailers have been selling meat that was not what consumers thought they were buying reflects a problem that lies beyond retailers.

Corporate greed is as rife as corruption in the public sector.

The pursuit for profit at any and all costs lies at the heart of what we are witnessing in the meat retail sector; and the construction sector, where collusion and bid-rigging seems rife. Cases reported to the Competition Commission tell a story of how business needs to find its moral compass and stop hiding behind gaps in the law while they hurt consumers and the economy.

Whereas government has institutions that regulate and punish corporate malfeasance, it is now up to business to promote ethical behaviour and make it standard practice.

It is not enough to argue that it is the nature of capitalism for companies to do whatever is within the law in the pursuit for profit. The logic of “profit at all costs” is antiquated.

Laissez-faire capitalism has shown itself to be unsustainable and a potential threat to peace and social wellbeing.

There is no doubt that there is a place for tighter regulation. In addition, the state needs to ensure that such regulation is adhered to and severe penalties are visited upon those who cross the line.

The state’s role does not absolve corporations from acting ethically, even though they may be acting within the law. It is not enough for businesses to take advantage of the public while hiding behind there being no legislation in place to outlaw their behaviour.

Business is usually the champion of self-regulation and prefers as little interference from government as is possible. However, if business wants to be trusted with making profits fairly, then it must demonstrate to the increasingly sceptical public why this should be the case. It must lead the line against corporate cowboys and charlatans.

A balanced scorecard that not only looks at the organisation’s bottom line but takes societal interests to heart in the quest for profit must become the norm.

Ultimately, it is for business’ own good that it finds its ethical compass. If it doesn’t, it will not only harm consumers but further erode its own right to pretend that it is a social player whose opinion about the plethora of social and economic problems South Africa has is worth listening to.

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