Regulation and Ethics, CSR, Leadership and Vision Ian “Ren” Rennie

Hong Kong’s perfect market

• In business, ethics can be defined as:• the ability and willingness to reflect on values

in the course of the organisation's decision-making process

• to determine how values and decisions affect the various stakeholder groups

• to establish how managers can use these precepts in day-to-day company operations.

Business ethics

• The Golden Rule: Act in a way you would want others to act toward you• The utilitarian principle: Act in a way that results in the greatest good for the

greatest number• Kant's categorical imperative: Act in such a way that the action taken under the

circumstances could be a universal law, or rule, of behaviour• The professional ethic: Take actions that would be viewed as proper by a

disinterested panel of professional peers• The TV test: Always ask, "Would I feel comfortable explaining to a national TV

audience why I took this action?"• The legal test: Ask whether the proposed action or decision is legal. Established

laws are generally considered minimum standards for ethics• The four-way test:

– Is the decision truthful? – Is it fair to all concerned? – Will it build goodwill and better friendships? – Will it be beneficial to all concerned?

Ethics codes

• “... making business managers simultaneously responsible to business owners for reaching profit objectives and to society for enhancing societal welfare represents a conflict of interest ...”

Milton Freidman

• Only six percent of respondents perceive the top 100 companies as good corporate citizens

• Only seventeen percent of respondents definitely trust what companies promise in their advertising and marketing

• Only nineteen percent of respondents trust what companies say in official reports

• Fifty four percent of respondents definitely agree that Microsoft is a responsibly-run company earning it the top spot for governance

• The Walt Disney Company wins citizenship with fifty percent of respondents definitely agreeing that The Walt Disney Company is a good corporate citizen

• Google takes first place in workplace with fifty percent of respondents definitely agreeing that Google is an appealing place to work and that it treats its employees well.

Top trends

Source: 2012 Global CSR RepTrak™ 100

• Going Global• The Triumph (or Tyranny) of Transparency• Employee Engagement • Political Pitfalls • Collaboratition• Sustainability • Occupy From the Inside• Social Media Rules• Human Rights• Earth at 7,000,000,000 and Growing.

Forbes – CSR Trends

Source : Forbes : The Top 10 Trends in CSR for 2012

• Involves influencing the writing of society's rules by legislative or regulatory bodies ...

• ... so that loopholes, exclusions, and ambiguous language ...

• ... provide future opportunities to "work around" or circumvent the rules' intent for private gain

• The Rule-Making Game is an influence game.

The Rule Making game

• Involves the actual exploitation of these gaming opportunities

• This game involves following the letter of the law but not necessarily its intent or spirit ...

• ... as well as violating grey areas of the law in ways that are not easily understood or recognised as violations

• The Rule-Following Game is thus a compliance game.

The Rule-Following game

Lawful but Corrupt• inconsistent management style

by institutional leaders ... • coupled with perverse

incentives ... • breakdowns in internal

controls ... • ineffective board oversight ... • and an absence of transparency-

can quickly neutralise regulation [and] grease the wheels of ethical drift ...”.

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