November 27, 2011
Robert Phang received the Master Class Award in Anti-Corruption 2011
Congratulations Tan Sri and may he continue in this worthy cause of fighting rampant corruption in our country. In his honour, I am posting “Corruption Spawns Violence”, an article from GW Business, a publication of The George Washington School of Business, The George Washington University (Fall, 2011 issue). –Din Merican
Corruption Spawns Violence
When it comes to war, multinational corporations have been blamed for everything from causing the conflicts to profiteering from them. But the Director of GWSB (George Washington School of Business)’s Institute for Corporate Responsibility argues that business can a force for peace.
Timothy L. Fort (right), who is also a professor of business ethics at GWSB, has written three books to show how companies, run honestly, can promote peace in society. “Ethical business behaviour has an unexpected payoff”, he said. ” It contributes to more peaceful relations among people”.
The premise of Fort’s fresh take was a study he worked on with Cindy Schipani, professor of business administration at the University of Michigan’s Ross School of Business. That research showed how corruption fuels violence. By comparing two indices, one measuring corruption and the other political conflicts, they discovered a nearly perfect correlation between corruption and violence in countries around the world. The more corrupt a regime, the more likely it was to resolve disputes through violence.
The violence doesn’t just flow from rulers, said Fort. Sometimes the populace is so frustrated by corrupt leaders that their resentment finally explodes in a physical act. The uprising that has spread across Arab countries began earlier this year with resistance against the corrupt leadership of Ben Ali in Tunisia.
“Those protests were largely peaceful”, Fort said, “but the point is the level of frustration that can build in a corrupt system”.
Ethical companies build trust in three ways, he said. Hard trust comes from following the law. Real trust comes from running a company that is fair and honest to workers and customers. Good trust comes from moral excellence in everything you do.
Ethical companies can promote peace in countries by respecting their laws, contributing to economic development and engaging in community building. “To the extent that a company can have a strong anti-bribery policy, it does something to move the needle away from violence, he said.
In his book, Business, Integrity and Peace, Fort shows it wouldn’t be much of a stretch for businesses to behave ethically. He said that the basic components are already in place. That is, peace and ethics are deeply rooted in human, even primate, nature. People and companies just need to draw upon those instincts in contemporary times.
Asked whether any companies are known for acting ethically in foreign countries, he said it’s difficult to say because corruption is hidden from public view. But, given that caveat, he said, Motorola, Caterpillar and Deere & Company all seem to run ethical shops.–GW Business (Fall, 2011)