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.