The integrity of the corporate world is on trial. First it was the demise of Enron. Now the telecom giant WorldCom has misrepresented its profits by billions of dollars, through blatant accounting irregularities.

The integrity of the corporate world is on trial. First it was the demise of Enron. Now the telecom giant WorldCom has misrepresented its profits by billions of dollars, through blatant accounting irregularities.

Mahatma Gandhi used to say that ‘there is enough in the world for everyone’s need but not for some people’s greed’. Frank Buchman, the founder of MRA/Initiatives of Change, supplemented this with the notion that ‘if everyone cared enough and everyone shared enough, surely everyone would have enough’. His message was also delivered in India, and it went down well with his audience.

Not everyone, however, has ‘cared enough’ at Enron or WorldCom. Someone was deliberately cooking the books, with the result that employees have been thrown out of work, shareholders have lost their investment, and customers have all suffered.

It was not just greed at WorldCom, manifest in a process of endless acquisitions by its swashbuckling founder, which has led to the company’s downfall. It was also due to the dishonesty and deception in WorldCom’s accounting procedures. Dishonesty and deception, like greed, are human motivations—negative ones—which should and could have been exposed by anyone in the know with the courage to blow the whistle.

That failed to happen till it was too late. The whole sorry saga calls into question the basis of integrity—or the lack of it—in corporate boardrooms.

The old Michael Douglas movie, Wall Street, played on the notion that ‘greed is good’. The world’s stock markets are said to rise and fall on the balance between the human emotions of greed and fear, rather than on the integrity of investors putting their money in companies in which they truly believe and have faith. But investors also need to have faith in the accounting practices of their chosen companies. No wonder that they are now taking flight in droves.

WorldCom and Enron emphasize once again the need for a basis of integrity in individuals, without which the whole capitalist edifice is called in to question.

In his Theory of Moral Sentiment, Adam Smith, the father of free market capitalist theory, wrote about the ‘Vice Regent of the deity’ and ‘the demi-god within the breast’—conscience in today’s parlance—which would act as a guiding and regulating force on the ‘invisible hand’ of the market, and on human behaviour. Smith wrote of the need to ‘co-operate with the Deity and advance, as far as is in our power, the plan of Providence’. He saw his two texts, The Wealth of Nations, and The Theory of Moral Sentiment, as one vision. Yet, tragically, the separation of these two texts has led to a distorted notion of how the capitalist system should work. The result is that today there appears to be no ‘invisible hand’ to regulate greed and deception. Capitalism without conscience leads to corruption.

Such self-interested motivations of greed and deception give fuel to the anti-globalization protesters, who see the relentless pursuit of wealth for a few, at the expense of the many, as a kind of globalized evil empire. And of course WorldCom itself, as the name implies, is a globalized business.

One hopeful sign may yet emerge: the balance of power between the corporate world and elected governments may swing back in favour of the latter. Perhaps fewer of the world’s leading economies will be corporations rather than nation states.

The first objective of Caux Initiatives for Business is ‘to promote a culture of honesty and integrity in the workplace’, through a process of listening, reflecting, discussing and engaging with the issues. The mission of CIB, which holds it annual international conference in Caux, Switzerland, 20 to 24 July, is to ‘strengthen the motivations of care and moral commitment in economic life and thinking…. in order to address to root causes of poverty.’ If ever that was needed it is especially now. In a globalized world, there is, above all, a need to globalize integrity.

What do you think? Send your comments to Caux Initiatives for Business.