Honesty Matters

The Tesco debacle is another reminder that a lack of honesty and integrity in business matters can have catastrophic effects. Before we start pointing the finger, however, it would be wise to reflect for a moment. The presentation of financial information can be complicated. That is why we have Accounting Standards to guide us — and even accountants have been known to disagree how information should be presented in particular instances. The first question we need to ask, therefore, is, was this a deliberate fudge? So far, the evidence suggests that it was. The next question is, why? Why should a leading retailer need or want to suggest it was doing better than it actually was?

We all know about Tesco’s decline, the profits warnings, the changes in management at the top, and so on and so forth. But it is difficult not to see the attempt to massage Tesco’s profitability by £250million as an attempt to bamboozle investors and protect the interests of some senior management. Someone, somewhere must have decided that they could ‘get away with it’. That is not a very noble way of thinking, nor was the action taken very noble. The consequences are already plain to see: the movement in the stock price has hit both private and corporate investors, may have placed the jobs of Tesco staff in jeopardy and will have a detrimental effect on suppliers, too, if, as seems likely, Tesco goes into further decline.

What interests me, however, is not the mechanics, so to say, but the morality. What is the point at which not revealing everything, a perfectly legitimate and indeed necessary business practice, passes into failure to disclose and an attempt to mislead? What kind of mind can justify that sort of behaviour? Is it merely greed or fear masquerading under the guise of  business acumen or financial astuteness? To lie, to deceive, is not an accidental act. It is not a mere ‘mistake’. We cannot separate public and private morality so completely that we can be honest and upright in our private lives and distinctly dodgy in our public lives. That is why revelations of misconduct in the public sphere are so disturbing. They reinforce the sense that no one is to be trusted; and without trust, society falls apart. There can be no fudging the fact that honesty matters.


Good Deeds, Do-Gooding and the Benefits Cap

Today sees the roll-out across England, Scotland and Wales of the cap on benefits that people aged between 16 and 64 can receive. The arguments for and against have been gone over so many times I have nothing to add to them, but I notice that the language of the debate has become more and more polarised. I wonder whether that is because we are beginning to apply to State spending many of the ideas that are increasingly governing charitable giving in the private sphere.

The first word many people think of in relation to ‘benefit’ is ‘scrounger’, i.e. almost a contradiction in terms. A benefit is, of course, meant to be a good deed (Latin benefactum, from bene facere) but perhaps we have come to equate good deeds done by the State with an outmoded form of do-gooding in the private sphere. Donors to charitable causes nowadays tend to want to be personally involved in the causes they support and are highly selective about those they will favour. The bigger the amount of support given, the more likely they are to impose conditions (there are, of course, some honourable exceptions to this). Transpose that kind of thinking to the State, and it is easy to see why there is such a a storm of indignation about welfare payments funded by the taxpayer.

I know I have said this before, but I think it worth saying again. Being a taxpayer does not confer moral superiority on anyone. Paying tax is an obligation of citizenship. One is a citizen whether one pays tax or not; and one’s ability to pay tax, like one’s obligation to do so, may change at various times of life. A civilized society will always want to help those of its members who need the basic necessities of a decent existence. How it does so is for public debate. But I can’t help thinking that if the State does not make provision for those who are unable to provide for themselves, the private sector is not going to, either. Many people take their notions of right and wrong from what is legal/obligatory or not. ‘Public’ morality is increasingly the only form of morality accepted by many. The idea of the State setting an example is not one I personally am very comfortable with, but can you think of a better?

I am well aware of the huge contribution made by the churches and other religious and humanitarian bodies, but many people in the UK no longer subscribe to such.


Public Service and Responsibility

According to today’s headlines, the most important recommendation in the Parliamentary Commission on Banking Standards’ report is that bankers should be jailed for recklessness when their actions cause their institutions to fail. Quite apart from the fact that I suspect lawyers would have an ‘interesting’ time establishing criminal negligence when the decisions that lead to failure are, in most cases, group decisions of the Board or management team or whatever, I do wonder whether the media have simply seized on something that resonates with public anger rather than on something more substantive, that might actually eradicate the causes of failure as distinct from dealing with the consequences.

At the same time as we are reading about bankers comes news that the Guides are to drop references to God and country in their promises in an effort to be more ‘inclusive’. Am I alone in thinking that there may be a connection between the two, and that it has to do with the concept of public service and responsibility? The language we use to define our loyalties and to express our relationships is critically important. Our private morality, using that word in the widest sense, inevitably affects our public morality and the way we see our obligations to others. If we acknowledge no good to be served other than self, we shrink our world and our values. I have sometimes asked myself whether the decline in public standards reflects this private shift in values. As a Benedictine, my vows are publicly professed and commit me to the observance of certain standards in both public and private life. Maybe both bankers and Guides could usefully ask themselves what standards they intend to live by, too.