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«Global TrusT and EThics in FinancE Innovative Ideas from the Robin Cosgrove Prize Carol Cosgrove-Sacks / Paul H. Dembinski Editors Trust and Ethics in ...»

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The question of how, the connecting factor, the methodology and the hermeneutics of CSR remain controversial. Piper writes that it would be relevant for CSR-oriented companies to exhibit through “rigorous reasoning, not indoctrination – that an active, enlightened concern for ethics and corporate responsibility often is the right path for a firm and for 376 Trust and Ethics in Finance the individual in the long run, economically, organisationally, and competitively”.

Assuming that business ethics can be taught, norms can be ambivalent, as some managers may say that rules are meant to be broken for the sake of maintaining a competitive edge. Certainly, norms can also be reactive, as they are usually based on past experience and their application to the individual character is not yet sufficiently precise.

It is no surprise, then, that even CSR-oriented or theologically minded individuals often tend to say “it wasn’t me” or “everyone is doing it”. Most managers obviously do not wish to instigate wrong or evil actions, but neither do they want to expose themselves too far by preaching to others in matters of law, ethical understanding, or social acceptance. Many prospective employees, both consciously or unintentionally decide to go with the flow. Managers in the course of their careers have to face many ethical challenges in different corporate cultures that all are subject to various expectations and pressures from their consumers, employees, and even society. However, decisions in business do have to be made, and temptation is rife.

But there are also dynamics that may inspire more CSR-oriented behaviour in individual managers. In the secular model of CSR as well as in Christian ethics, individuals trust in the idea of a better future, believing that their investments will change the quality of life. Interpersonal relationships in business require confidence in identity, maintaining moral principles and virtues in the widest sense.

The ethos of the company

CSR is also established within corporate culture and shaped by the individual identities of managers and employees. Every company has a culture, whether or not it is intentionally managed. Left to themselves, employees usually remain hesitant about implementing CSR in their business decisions. CSR-oriented actions may create jealousy among Virtuous Enterprises 377 colleagues, or even isolate them from an existing culture of gossip, unfair pay scales, investment fraud, or exposure to job insecurity in times of financial crisis. This may be true of a person who has just been hired, or applied to an existing employee who needs more ethical guidance, personal support, and CSR education. All people bring their own virtues to the corporate culture, but many still leave them at the door. Individual ethics are therefore reshaped by the existing ethos of the company.

However, if managers find an already existing, working model of CSR, it is also much easier for employees to respect these rules.

Many prospective employees search the web looking for a company’s formal mission statement and aspects of its corporate culture before applying for a job. During the hiring process, applicants usually hesitate to challenge the interviewer with questions on the company’s mission statement, code of conduct, and other statements that are posted on the website. New employees later discover any discrepancy between the stated intentions of management and the real goings on in the company. CSR has valuable side effects on the enhanced management of human resources, public relations, and financial risk. CSR not only serves to emphasise the motivation in human resources, it also contributes to the reputation of the company in public relations.

The purpose of CSR is not to make huge short-term profits, but to transform the character and culture of business in the long term. As a result, managers may tend to think of CSR as something it is nice to have.

CSR should therefore be presented on the basis of its moral ability to transform and improve business. In accordance with the principles of the Christian faith, CSR should always be implemented freely and responsibly, but not as a tool to implement an excessively financially-driven business that might result in frustration at all levels within the company.

378 Trust and Ethics in Finance

CSR and religion

Finally, CSR is derived from the Christian faith. Discussions on CSR are all about human actions, which have always been shaped by religion in the history of humanity.

Obviously, the first problem when theorising and discussing CSR in the context of religion is: which religious language or tradition we are talking about? Which specific faith, if any, has shaped the business practice of the company? Although there are sensitivities and complexities contained in these questions, we have to be aware of the dangers of slipping into Biblicism or eclecticism. Nevertheless, I believe that the Scriptures have been written with authority and can be understood through the Holy Spirit. We may become eclectic if we become excessively selective in the interpretation of CSR models or if we communicate them too one-dimensionally or to excess in public. We believe that an obvious link remains that underpins both faith and work in the basic concept of CSR. This can be found politically between left and right; socially between business and society; and ideologically between Christian ethics and capitalism.

The third dimension has taken on new relevance because of the financial crisis in capitalism, the decline of the established church in Christianity, and also the breakdown of traditional family structures at home, which is where strong foundations for ethical education were previously provided. On the other hand, longer work weekends, more intense social networking on the Internet, and the globalisation of companies encourage anonymity.

The Christian faith reconciles any existing gaps in ambiguous relationships through Jesus Christ, the scriptures of the Bible, and the fellowship of the Christian community. An example of this are the terms “corporation” (breaking bread at the Eucharist), “company” (having Christian fellowship), and even “economy” (salvation through the Holy Spirit within the Trinity), which have roots in Christian theological voVirtuous Enterprises 379 cabulary. Becoming aware which public language is used in church history, it becomes possible to find patchworks of marketplace issues such as the Benedictine ora et labora.

In modern times, the Christian Evangelical movement in the Southern states of the USA, as well as other faith traditions like the IslamicGulen movement in Turkey, show the validity as well as the independence of academic public theology in the corporate world.

The church and economic issues

This suggests that the practice and development of CSR can be examined in light of the church’s interest in dealing with economic and social issues. The church was not only created out of idealistic, altruistic, or selfless interests; giving makes people feel good because they have the resources to do so, and have gained the ability, discerned a certain vocation, or meaning in their own lives through God. As a strategic moment, the theological doctrine of vocation could be linked to human resources, both inside and outside the company. Martin Luther has provided meaning and vocation to profession, in the German term Berufung, which means both worship and work, and is similar to the Hebrew word Avodah.

In the church, leaders have started to ask how they might re-involve the missing majority of members who are involved in the secular marketplace; in companies, managers have again started to reflect on their business ethics, seeking a higher purpose, a meaning in ordinary work, and enhanced relationships through these and other virtues: trust, honesty, reliability, and credibility, all of which the Christian faith considers as challenges in the secular business world.

CSR is not a mere marketing tools kit aimed only at increasing company profits, or used to avoid grey areas in the law, circumventing the checks and balances of the federal government. Many companies cerTrust and Ethics in Finance tainly continue to interpret CSR that way, lowering their external costs by improved public relations and less costly lawsuits.

–  –  –

 To take this moral behaviour to an extreme, for the sake of clarity, the cases of fraud by Enron, as seen in the interview with Sherron Watkins and WorldCom, show the riskiness of those business operations that are the closest to the ethical margins. So from the very legal minimum and worst case scenario, there are quite a few incentives for any company to behave ethically.

Do absolute ethical standards exist?

CSR itself still needs more congruence, integrity, and adapting to the individual business than what offered by the Christian faith. In fact, any law, scripture passage, or conception of CSR require a degree of interpretation and depend on the given situation, and individual moral discernment. It would seem too rigid to state that there is any absolute moral standard beyond the Ten Commandments and Jesus’ summary of the Law. So, is there any absolute moral rule businessmen should obey?

Virtuous Enterprises 381 Does morality change if businessmen engage in different roles? What would ethical training in the human resources department look like?

Individuals make very different moral judgments. Even if CSR were merely understood as a legal issue, contracts would require deeper agreement as far as keeping promises that have been made. Doug Lennick and Fred Kiel (2005) write on the importance of purpose and meaning in business: “Scientists who study behaviour tell us that humans have an innate need to make sense out of our lives”. A businessman, who has discovered his vocation due to God’s hearing him, as well as his own God-given talents and passions, is likely to be more successful holistically speaking, in achieving a sustainable balance. Leaders as role models need to be better understood, rather than giving way to their emotions, because if they “lack emotional control or insight into the moral needs of their followers, the work environment suffers”. Lennick emphasises the moral lessons directly and indirectly communicated by the business leader as “giving back is more than a public-relations tool”.

This is in accordance with the Bible, as the more one gives, striving for the well-being of surrounding communities, the more one ultimately gets back.

In the rationality of economics it might not be initially clear that stewardship means more to some extent than mere ethical good.

As a critical tool, business ethics actually enable relationships, trust, and the redistribution of wealth needed in a global business community to simultaneously increase the markets for economic goods and services.

Lennick embraces a universal list of virtues that appear in the Bible in a different language. Without any particular evaluation as to the order of presentation, they are integrity, responsibility, compassion, forgiveness, generosity, commitment to a transcending power, justice, temperance/self-discipline, humility, wisdom, courage, and care for living things and the environment.

382 Trust and Ethics in Finance The author also recommends that people identify core values such as affiliation and thriftiness, comfort and safety, wisdom and gratitude, community and friendship, loyalty and altruism, inner peace and openmindedness, and last but not least, perseverance and meaningful work.

De facto, managers are seen by their employees as role models in a way that could be even “more powerful and more persuasive than that of churches, schools, and families”. Instead of blaming both companies and churches, theology and the behavioural sciences should work more collaboratively on CSR.

References Boatright, J., 1999. Ethics in Finance, Oxford, Blackwell Publishing.

Crane, A. (ed.), 2008. The Oxford Handbook of Corporate Social Responsibility, New York, Oxford University Press.

Fischer, J., 2002. Theologische Ethik: Grundwissen und Orientierung, Stuttgart, Kohlhammer.

French, P., 1984. Collective and Corporate Responsibility, New York, Columbia University Press.

Lennick, D. and Kiel, F., 2005. Moral Intelligence: Enhancing Business Performance and Leadership, Upper Saddle River, Wharton School Publishing.

Pauchant, T. (ed.), 2002. Ethics and Spirituality at Work: Hopes and Pitfalls of the Search for Meaning in Organisations, Westport, Quorum Books.

Piper, T., 1993. Can ethics be taught?: perspectives, challenges, and approaches, Cambridge, Harvard Business School.

Pruzan, P., 2008. “Spirituality as a Firm Basis for Corporate Social Responsibility”, in: Crane, A. (ed.), The Oxford Handbook of Corporate Social Responsibility, New York, Oxford University Press.

Schwarz, F., 2005. Wirtschaftsimperium Kirche: Der mächtigste Konzern Deutschlands, Frankfurt, Campus Verlag.

Stackhouse, M. et al., 1995. On Moral Business, Grand Rapid, Eerdmans Publishing Company.



Prof Marc Chesney

Professor of Finance at the University of Zurich. Previously in Paris, he was Professor and Associate Dean at HEC, President of the CEBC (Centre d’Etudes sur le Blanchiment et la Corruption) and an external expert with the World Bank. He has published articles and books in the areas of quantitative Finance and also of financial crime mechanisms. In addition, he focuses on the subject of Ethics and Finance. At the University of Zurich, he is member of the Board of the Graduate Programme for interdisciplinary Research in Ethics and co-organiser of the Ethical Finance Research Series. He is also member of the advisory Board of Finance & Common Good/Bien Commun. Marc Chesney holds a PhD in Finance from the University of Geneva and obtained his Habilitation from the Sorbonne University.

Dr Carol Cosgrove-Sacks

Robin’s mother. Lives and works in Geneva. She was formerly Director of Trade in the United Nations in Geneva (1994-2005); since 2006 she is a Professor at the College of Europe, Bruges; a Professor at the Europa Institute, University of Basel; and the Senior Advisor on International Standards Policy to OASIS, the global eBusiness standards organisation.

She also maintains interest in some British academic centres, including the Institute of Development Studies (IDS), University of Sussex, and the Centre for Euro-Asian Studies (CEAS), University of Reading.

Prof Henri-Claude de Bettignies

Holds the AVIVA Chair in Leadership and Responsibility and is Emeritus Professor of Asian Business and Comparative Management at INSEAD He is also Distinguished Professor of Global Responsible Leadership at the China Europe International Business School (CEIBS), in Shanghai. He had been teaching ethics at Stanford Business School (for the last 16 years), and he started and led the development of the ethTrust and Ethics in Finance ics initiative at INSEAD before moving to China where currently he is creating, with CEIBS, the Euro-China Centre for Leadership and Responsibility. Professor de Bettignies is director of AVIRA, an INSEAD programme pioneering a new approach to enlighten CEOs. HenriClaude was the founder of the Euro-Asia Centre at INSEAD, seeds of INSEAD successful development in Asia. He is the Founder and Director of CEDRE (Centre for the Study of Development and Responsibility), Chairman of the LVMH Asia Scholarships, member of the Editorial Board of five academic journals and he is a member of the Board of Jones Lang LaSalle.

François Debiesse

After graduating from the HEC, François Debiesse joined the Bank of Paris and the Netherlands in 1971, holding various management positions. In 1999 he became Director of the Private Bank BNP Paribas, and in 2008 he was appointed Director of BNP Paribas Wealth Management.

From 1995 to 2008 he also serves as Chairman of BNP Paribas. François Debiesse is now President of the Fondation de l’Orangerie for individual philanthropy since 2009 and Advisor for Philanthropy and Microfinance for BNP Paribas Wealth Management since 2011.

Christopher de Mattos

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