So much is happening now in this post-GFC Australian economy that it is hard to know where to begin. The threatened resurgence of a skills shortage, business challenges dealing with the 'big' banks, interest rate increases, and even property price warnings.
For every business, executive, contract CFO and adviser there are many topics of concern. However, it is the issue of 'ethics in business' that has really grabbed the media's attention in the last two days, so this month's newsletter will focus here.
I don't know about you, but March 2010, the first month of the Year of the Tiger, has really flown by! Not so, however, for the four ex-employees of Rio Tinto who were sacked by their employer on Monday night and who have just received between seven and ten year gaol sentences for accepting bribes in China.
Somewhere in this lies a set of lessons for anyone who deals with other people's money. Whether it be Australian Government money or another company's money. But what does this have to do with Part Time Professionals?
According to Smart Company and other media sources, both entrepreneurs and politicians are greatly disappointed by the Chinese judgement. Rio Tinto stated that it was beyond doubt "millions in bribes" had been accepted, and because this breached Rio's "code of conduct" the four were fired.
These responses raise a few interesting questions...
(1) Does the existence of a "supposedly" corrupt legal system mitigate criminal or corrupt behaviour?
(2) How do companies reduce the risk of corrupt employee behaviour? Is simply having a written "code of conduct" enough? And a cynic may ask: Do companies really care if they or their employees do the wrong thing - as long as the company doesn't suffer loss and neither is caught?
On this theme, the Australian Financial Review reported on 30 March that "the rorting of the Federal government's stimulous spending on schools and home insulation is a reminder that many businesses operate in a moral vacuum".
And so more and more regulations, laws and "red tape" are created!!!
Perhaps it's time to reassess our suppliers, customers, advisers and stakeholders. Can we really trust them to do the right thing when their own profits are at stake? Are their ethics/standards the same as ours?
Companies need to review their management, their culture, their employment practices and their ethics irrespective of whether there are any written rules or legislation in existence. It is too late when the company is eventually caught out. What may appear perfectly legal and commercially acceptable one day may later, in the full glare of publicity, become a significant commercial disaster and public relations nightmare.
In the field of business ethics it certainly always pays to be "on the ball" and ahead of the pack!
One of the reasons Part Time Professionals was formed was to affordably introduce independent and qualified professionals into businesses. We believe that with an independent and unbiased professional on the in-house team, companies can benefit from their experience and their independence and that corporate governance will ultimately benefit. It's simply a matter of planning and judgement.
For more information on this subject and how we can help you, call us on 1300 79 1946.
This month I attended a fascinating workshop hosted by MCI and during the forum it was mentioned that a new, post-GFC economy could be coming into existence - the Economy of Trust.
Attracta Lagan, principal of Managing Values, who has worked at the St James Ethics Centre and as a consultant at KPMG says that if she asked a room full of employees what is the purpose of their organisation, the answer is likely to be that it is to make money for shareholders, rather than to serve the community. "But that is the sort of thinking that leads to price-fixing" she says.
You never know. This "Economy of Trust" may actually become a reality!
And Australia may actually beat the Kiwis!!!
And on a much "lighter" note on the topic...
Ever wish the people in your life were more honest and trustworthy?
Then turn on some more lights. According to a new study reported on CBS News, people are more likely to lie, cheat or even commit criminal acts if they’re in a dimly lit room! That’s the conclusion of research undertaken by the University of Toronto’s Rotman School of Management.
In one experiment, psychologists divided a group of students into two rooms – one that was brightly lit, and one that was dimly lit. The students were asked to solve a list of maths problems. Then they were asked to score their own work, and pay themselves a “reward” based on their score.
Researchers found that even though both groups of students answered the same amount of maths problems correctly, the group that sat in the dimly lit room gave themselves an average score that was almost four points higher than the group who sat in a well lit room.
In a second experiment involving money, students who wore sunglasses acted more selfishly and gave less cash to random strangers, compared to those students who wore clear-lensed glasses!
So that's the answer to all our ethical dilemas, Australia - better lighting and no sunglasses!
New Zealand had better watch out now!
Next Month: Finding the Treasure Chest under your nose $$$
About Part Time Professionals
Part Time Professionals™ is wholly owned and operated in Australia. Our principals together have over 40 years experience in public accounting and as CFO's and Directors of many succesful companies - both listed and unlisted. They are members of the Institute of Chartered Accountants in Australia, CPA Australia, the Australian Institute of Company Directors and the National Institute of Accountants.
Our aim is to help companies succeed by sourcing the most experienced CFOs, executives and corporate accountants in the most affordable way!
We are constantly updating our website, so take a look at www.ptprofessionals.com.au for more information or call us on 1300 79 1946 to discuss your needs.
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