Samaranch warned him in relation to doping in sport: the rules are behind. Something like that happens with corruption and the law. It usually takes not a short time until a new immoral practice, with damage to third parties, is prosecuted by law in the business world. The corrupt defend themselves by saying that this or that is “legal”, and it may or may not be, but at least they are unethical. Whether it is greed or negligence that opens the way for corruption, it is destructive to the community and one wonders why it is not pursued further. The answer goes beyond complicity and perhaps points to the roots of the culture in this regard.
Today, by the way, I read in the newspapers (in Madrid) that the National Court will judge Emilio Botín (and other executives) for a case of fiscally opaque financial assets, which the bank commercialized at the end of the 80s. The Santander Group insists on the legality of its actions and alleges the repeated request for dismissal and filing made by both the Tax Agency and the prosecution. It may or may not be legal, but it does not seem very ethical at first glance: it will be seen… It also seems that this solid businessman has another case of millionaire bonuses pending, the legality of which has yet to be confirmed.
Weeks ago, and I end in this paragraph my references to the daily press, I read in EL PAÍS a column entitled Corrupt and confessed, in which it was said that it had taken 13 years to learn the details of the corruption of a former judge who, incidentally, he enjoyed important protections in the concealment of his crimes. Certainly, the information media often offer news that would also serve us as an example - an example of an apparent abuse of power - referring to businessmen, politicians and even judges, and which we already read with some reluctance. Fortunately, there is also news from businessmen, politicians, judges and other professionals, which is comforting.
Putting the daily press aside, then, the latest book by Peter Drucker reads: "I think it is socially and morally unforgivable for managers to reap huge profits for themselves, but lay off workers"; In the same book, the author says he is horrified by the greed of today's executives. If the reader follows me, I will refer here to the business world, where positive and negative emotions spring from, and in which there are behaviors consistent with ethics and also some clearly immoral.
Interested in the subject, I have already written some articles on the integrity (and corruption) of managers; with them I wanted to underline the importance of ethics in safeguarding prosperity and quality of life in the company. I also posed to the reader the dilemma of witnesses to corruption. Now, in this new text, I wish to insist on the margin that the law leaves to employers, and also on the ability of managers to maneuver within the organization. The autotelia or professional vocation seems to succumb to some hasty fortune seekers, great experts in exploring and exploiting the terra incognita of the law. It would seem that business is no longer what it used to be, and that the best benefits come more from the intangible than from the tangible. It still seems to be practiced, for example, the purchase,the inflation and the sale of companies, although sometimes the bubble collapses earlier than expected and falls apart in our hands.
To this end, buying low and selling high can contribute, for example, the so-called management buy-out, a practice that, obviously, does not always imply being outside the law or ethics. (I already related in a previous article the case of the consulting firm FYCSA, which was sold under extraordinarily favorable conditions to its executives and the consulting firm Gestlink, although shortly afterwards it was precisely the owner who sold it: the former president of Alcatel Spain, Miguel Ángel Canalejo. FYCSA. tried to draw the attention of the media to its forecasts of excessive growth, supported by the expansion of e-learning, but its sales in 2003 remained at a fifth of the supposed forecasts. It significantly increased its workforce with young consultants, but then had to fire some seniors).
Of course, disregard for ethics, but also for the law, often occurs in the daily life of companies, regardless of sales or other transactions. The corruption of some executives and managers, not only greedy but widely understood, includes practices such as the following:
- Use the company to do business of a personal nature Receive commissions from service providers hired for this purpose Punish financially and psychologically employees who retain independence of judgment Practice sexual harassment, taking advantage of the position of power Benefit friends or Family, in charge of the company Impose the mediocrity of the environment, to ensure their own position Distribute privileges among employees, in a capricious way or under spurious personal interests Wasting money from the budgets that are administered Making of lies and cynicism habitual tools of communication Prefer tranquility to truth and punish messengers Attribute merit to others and deflect responsibility for failures Publicly humiliate subordinates and disqualify those who are absent.Use company resources and funds for private purposes Lying to the market in reports, press releases, etc. Assigning unjustified monetary supplements Pursuing power simply to have it, and not to do great things Paying distinctions, awards or appointments with money of the company, to nurture the ego.Exceeding in the trips and doing them for private purposes.Practicing accounting tricks, to avoid taxes or other perverse purposes.Exceeding in travel and making them for private purposes, practicing accounting tricks, to avoid taxes or other perverse purposes.Exceeding in travel and making them for private purposes, practicing accounting tricks, to avoid taxes or other perverse purposes.
Society, so to speak, seems to accept - to take for inevitable - corruption, and perhaps respect for the corrupt is only withdrawn when they are openly discovered, or when they are too reckless or even boastful; as if that were his mistake: notoriety. So that all this is sustained in secrecy, in the safeguarding of forms, in the neutralization of witnesses, including, where appropriate, the victims. Within the company, greedy corruption may not be the most serious, but it certainly is, and it cannot be orchestrated without the consent or prominence of Senior Management, that is, of whoever has power: the CEO.
Working on this topic myself, I happened to read some interesting pages by Jorge Nascimento Rodrigues on Gurusonline.tv, which include a reference to a magnificent article from Fortune magazine. A high level of immorality is denounced by some CEOs, regardless of the legal consideration that their actions deserve. There is talk of their excessive enrichment through various practices, while their companies become very impoverished and, in some cases, go bankrupt. Examples are provided for different countries, but in this article of mine you will have seen that my country is also on the map, although it does not stand out especially.
Power and corruption
Let's look at the exercise of power within companies. As is known, the Board of Directors delegates the same through a notary, with which the responsibility for the actions remains with the recipient (CEO), without excluding periodic inquiries and reports.
Let's look at some delegated powers:
- “Buy, sell, transfer, exchange, give and take the option to buy or sell and dispose, in any other way allowed by Law, of all kinds of movable and immovable property and rights, tangible and intangible, constituting or accepting, where appropriate deferral of payment or collection thereof, real guarantees, especially those of a mortgage and personal nature, as well as resolutive conditions, with the power to cancel them in due course; practice notifications and requirements, answering those made to the granting entity; grant and sign as many public and private documents as necessary for this purpose and execute those incidental or complementary acts of what has been said, without any limitation ”.
In this same case –it is taken from the delegation to a counselor (1999) in one of the companies (70 employees) of an important group that, in total, employed about five thousand people–, the series of infinitives continued:
- "Settle, accept, endorse, discount, collect, pay, guarantee, intervene, protest and negotiate bills of exchange… Arrange all kinds of loans…; guarantee loans and credits granted to companies in whose capital the principal participates; stipulate terms, interests, form of payment and any other common or special agreements… ”.
To a reader unaware of these formulas, it seems that the chief executive is all-powerful, and it can be assumed that the delegation is made of people who deserve the trust of the Board, both for their professional profile and for their ethical behavior…, assuming that ethics constitute a requirement of the Council. The fact is, abuses of power do occur and are sustained, even though they are public knowledge. Of course, it is not possible to imagine that a senior executive will tolerate the corruption of a subordinate, formally empowered or not, without sharing in the profits or without there being something that forces tolerance. It could even happen that the manager is empowered to carry out special missions.
If a powerful executive wanted to use his powers for his own benefit, he would foreseeably have to buy complicities among his close associates; so corruption is often widespread by its very nature, and there are not always funds to buy all the necessary cooperations or silences. In fact, some presidents of large companies have had to leave their position and the organization, due to the denunciation of some non-silenced witnesses.
Money and corruption
We continue to observe the companies within them here. Obviously, commercial operations lend themselves to commissions and complicities; But, to be specific, we can stop at money that is especially attractive for corrupt managers. If a manager had a budget for the purchase of supplies, enriching himself at the cost of their quality would be noticed by users; but there are supplies whose quality evaluation is quite relative. Let's think, for a moment, about the money from continuous training of managers and workers. It is known that, in general, training, although it consumes high budgets, does not usually achieve the objectives that it declared it pursues. Take for example the money from training in companies.
Naturally, there are companies that manage their training budgets well, and, in addition to learning, obtain improvement in the motivation and satisfaction of the participants in the actions that are orchestrated; But there are other companies that, while proclaiming their large investments in training, declare their lack of interest in an excellent quality of it, and opt for an average quality. In fact, some providers of management training (for example Grupo Doxa, PricewaterhouseCoopers, Epise, Tea Cegos, FYCSA, Development Systems, BearingPoint…) declare that companies buy training by price, and not by quality. Furthermore, José Ignacio Díez, CEO of FYCSA -the company whose MBO we had talked about-, blames his own clients for failures in e-learning:"These managers do not allow themselves to be advised by the consultants they hire and, in the end, what happens happens."
Indeed, as seen in a recent study by Accenture, training in companies is not effective, for many millions of euros involved, and without the apparent awareness of it. Another study, now by Santillana Formación, came months ago to show that e-learning users dismissed this learning modality, complaining about the ineffectiveness of the content offered to them; This is a curious fact, after training managers from large companies proclaimed the success of e-learning in 2003, and formulated the keys to it in a book from the Aedipe Library.
So that training monies do not seem to always be used well, without anyone seeming to be responsible for mistakes; if there is no greedy corruption, there is negligent corruption. It does not seem ethical that Human Resources areas are satisfied with the training they orchestrate -and they look attractive annual reports full of figures-, while their internal customers are dissatisfied, either with e-learning or with other modalities. It is the case that some training areas of large companies encourage the follow-up of courses through credit systems or points that threaten to influence the professional trajectory, without establishing measures of the effectiveness of scheduled training.
There will be companies in which funds are used well, appropriate subsidies are obtained, users are satisfied, and a visible improvement in performance is obtained; but, according to the Accenture survey, they would be in the minority. Therefore, it must be considered that the administration of these budgets presents a very wide room for improvement in a majority of large companies. I chose this example of training in companies because it seemed to me, so to speak, immoral, unethical, that the human resources areas proclaimed successes that only satisfied themselves, or that they bought training by price, without paying attention to the quality of the service (as the main providers say). But subordinate my point of view to your own - yours, dear reader - and to your confidence in the polls.
conclusion
Actually I do not intend to formulate conclusions, but to finish the article before I mess it up. When addressing the issue of the integrity of managers, what I modestly intend to contribute to is reflection on a greater presence of ethics in companies (internally and in their external operations); among other things for the sake of the quality of life in them. It is not about living well in the office as this expression can be understood colloquially, but about leading a more morally healthy and rewarding life, for the benefit of performance and collective satisfaction; to put all online interests and efforts in synergy, and to return home satisfied and responsive each day.
Unfortunately, my observer impression is that, in business, ethics has less presence than corruption, and that it is more harmful than it seems; sometimes I think it is even harmful to the corrupt themselves. But I want to end by reminding the reader of points of view more valuable than my own. Carlos María Moreno, professor of Anthropology and Ethics: “The manager focused on integrity generates trust and nurtures his credibility. Both trust and credibility are difficult to achieve, but very quick to lose… ”. By distinguishing between values and virtues, Professor Moreno places integrity in a middle ground; curiously and indeed, integrity is often spoken of as a virtue: “The most admirable virtue in every person, both managers and workers, is integrity. The most important thing is to be upright and honest ”,says Juan Miguel Antoñanzas, one of our prestigious executives.
And more in this regard: "Integrity is a character trait that encompasses the cardinal virtues, that is, prudence, justice, strength and temperance." This is how Ray F. Carroll maintains it, but other authors also refer to the cardinal virtues when speaking of integrity. It will be understood, however, that it is not necessary to be a religious believer or practitioner to be professional in integrity. And, also alluding to the legal, let me recall a note from José María López de Letona: "In the business world, not everything that is legal is ethical." This contribution is good, because indeed the corrupt white collar, in their maneuvers, seem to go faster than the laws, as we had already commented at the beginning.
