The seemingly endless series of corporate scandals emerging around the world underscores the point that responsible business management is in the long term vital to making profits, according to the leader of a global group that promotes business ethics.
“The basic idea is that all businesses need to conduct themselves so that they are fair and ethical with regard to all of their stakeholders — not only shareholders, but customers, staff, suppliers, communities that they are living in (and) the environment,” George Vojta, chairman of Caux Round Table, told The Japan Times in a recent interview.
The CRT, founded in 1986, is a group of senior business leaders from Europe, Japan and North America committed to the promotion of principled business leadership.
Vojta, a former vice chairman of Bankers Trust, noted that there have been many scandals in the corporate world in recent years, not only in developed nations but also in countries of the emerging market.
“When that occurs, trust in these companies is lost and trust in the free-market system is lost,” he warned. “It is a very dangerous situation for the world.”
U.S. energy giant Enron Corp., whose accounting scandals stunned the world, is a good example of a company that marks quick profits, but goes bankrupt and faces other allegations because it did not follow ethical business standards, said Stephen Young, CRT global executive director.
Japan has seen its own spate of scandals, such as the coverup of vehicle defects by Mitsubishi Motors Corp., the beef-mislabeling frauds committed by Snow Brand Foods Co. and Nippon Meat Packers Inc. and the concealment of damage at nuclear reactors by Tokyo Electric Power Co. and other utilities.
“The common conclusion is, whatever the reason, this occurs all over the world,” Vojta said. “It is a bad thing, and it hurts the global economy, and it hurts development of people’s welfare.”
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