When will we be ruled by ethics?

2007-11-16 00:00

It is a pity that relatively few people attended the lunch-time meeting that was addressed by Professor Oliver Williams and held at Chamber House recently. Those who were there enjoyed the presentation and felt stimulated by the topic, “Restoring Public Trust in Business - the Current Role of Corporate Governance”.

One of the points made by the professor was that we are governed increasingly by regulation rather than principle.

Several thoughts come to mind. The first relates to the nature and purpose of regulation. Regulation should strike a balance, surely, between enablement on the one hand and the common good on the other. In business, particularly, we want the freedom to be innovative, flexible and prompt in our response to market forces. To satisfy simultaneously the common good, we should be transparent, fair and honest. We should not apologise for being driven by the profit motive, but we should avoid ruthless exploitation and avarice. For many, these are matters of moral principle. Unfortunately, the decline in principle has necessitated more regulation as a protective means. The effect of this is that compliance ceases to be a virtue and becomes a kind of necessary evil. In fact, an irritation to the extent that more ways are sought to find ways of avoiding it. It is a vicious circle - the greater the amount of evasion or manipulation, the greater the perceived need for more regulation.

This is a mind-set manifested more frequently in the public sector. A typical bureaucrat (my apology to anyone in public service who may not be typical) finds reasons for not permitting. All the entrances, bar the one identified as being the “right” one, must be bolted. An alternative way in is unacceptable, even though it may be more effective. The fear is that the alternative will be exploited by those with nefarious motives.

I encountered this while working in the Education Department and wrestling with the challenge of processing voluntary severance package pay-outs more quickly so that successful applicants did not have to wait months. Files had to follow a prescribed route from office to office, each, in a way, a control point. The potential for delay was significantly increased by the number of desks on which a file had to sit awaiting attention. I found little support for my suggestion to eliminate some of these unnecessary stages. “But what if ..?” they asked. Over the years, the procedures had been developed to deal with the exceptional rather than the normal.

In a world where the constancy of principle is assailed from all sides, regulation becomes a buffer against criticism.

Consider the case of the deputy minister who sent flowers to his partner at the expense of the ministry. Apparently, the regulation allows a person in his position to send flowers. It is the vagueness of the regulation that is at fault and, no doubt, it will be amplified to define exactly when and to whom flowers may be sent by a deputy minister. It may, for example, permit the sending of flowers for a funeral and when that is also shown to be lacking in clarity, the next revision will spell out exactly which people's funerals may be favoured. But the principle is clear. Taxpayers' money is not for the private use of government officials. There may be no breach of regulation, but, if the reports are true, the action is distinctly unprincipled - at least to me.

There have been several examples of similar dilemmas, ranging from parliamentarians who have exploited travel allowance privileges to leaders who have “shared” their legitimate perks with family members and close associates.

Our difficulty is that principle is a matter of personal conscience and choice. There is no fundamental authority that sets ethical standards for everyone to uphold. Yes, there are issues of principle common to people within a particular group, although even this commonality is being slowly eroded. However, I have to recognise that the importance to me of my principled position is not shared by another who may, or may not, stand by principles at all, and if he or she does, they are likely to be different. What is becoming increasingly certain is that I will get less credit for my principles and he less discredit for his lack of them as time goes on. If I am honest, pragmatism is attractive - it has become more acceptable, and more difficult to resist, over time. Will there be a day, I wonder, when South Africans across the board will have a common understanding of what is ethically unacceptable?

• Andrew Layman is a former headmaster and now the CEO of the Pietermaritzburg Chamber of Business.

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