OPINION: Business Ethics
Asian business leaders need to blink. Like rabbits caught in a spotlight, they seem genuinely bewildered by the fuss in the west about corporate governance and ethics. They are incredulous at being required to engage or explain their actions in corporate responsibility, governance, environmental management and ethics – regimens their own governments are not imposing on them.

Chandran Nair

The high-stakes play for Unocal is a lesson for China’s CNOOC oil group. It showed that cash alone will not seal the deal, especially when there are questions about possible easy loans from its state-owned parent that go to the heart of the corporate governance and ethics debate. There were other considerations for Washington, but these blew into a political storm and clouded the debate.

Unocal made Asian business leaders wonder if different rules were applied to them, outside the open-market, free-trade, good-governance, ethics ethos that the west preaches to the world. But the rise of Asian corporations is causing disquiet outside the region, sparking debate about outsourcing to India, and Chinese competition, and they must learn to endure the corporate-ethics spotlight if they are to survive in the global markets. Many multinationals see Asia as the source of opportunity, but it will also give them their greatest challenges in business ethics and corporate social responsibility.

Policed by a strong civil societies at home, western businesses are beginning to exercise values of good corporate citizenship in the very countries where they intended to take advantage of cheap labour, large domestic markets, special incentives and even poor regulations and lax enforcement. Far from being alien, most of these values are in essence good. But there can only be a fair debate about present business practices of Asian corporations if certain realities are acknowledged, including that colonialism and rapid corporate expansion allowed western companies to grow virtually unopposed and gain control over the global economy, and that socio-cultural differences exist between Asia and the west.

Asian business leaders, and governments to some extent, believe they have a right to be left to develop or catch up. Is this valid? They believe there are more pressing priorities than a western ideal of corporate ethics: to compete they must keep costs low. They also believe that, having helped haul their countries’ economies from post-colonial second-class status to the riches of “tiger” nations, they are above criticism. They have been emboldened by financial analysts lionising their global push and by their governments’ encouragement and willingness to build close relationships. They particularly resent that when some of the western giants were at the same stage of their development, they ignored issues of ethics in their march to dominance. They remember slavery, Nazi collusion and gross environmental violations.

Maybe many Asian chief executives do not care about what western institutions believe they should – the environment and governance – but that does not mean their intrinsic values are different. In the west, civil society has driven companies to be more responsible in exploiting raw materials and labour; in Asia civil society is weakest, in contrast, in two of its most mature economies – Japan and South Korea – and nowhere else are corporate-government relationships so opaque and close. It would, however, be wrong to say Asian companies and governments are deliberately unreceptive. After the second world war, left-leaning Asian organisations were seen as spreading communism, and were quashed. Now Asian business attracts the best minds to create wealth. Too few are left to be concerned with other important things, depriving communities of leaders and holding back civil society.

Today’s climate requires business leaders to look beyond profit making. But not one Asian business forum exists with an enlightened and public position on corporate responsibility or climate change. Asia needs to reach its own equilibrium between corporate growth, responsibility and ethical behaviour. We cannot shirk responsibility for shaping our own future by leaving the job to the west. The challenge must come from within Asia. When it does it will be better received; the intrinsic value in western corporate ethics will not be lost in xenophobic rhetoric, or seen to be that different from common core values. The impetus ought to come from Asia’s business leaders. They must blink. Now.

Chandran Nair is founder and chief executive of the Global Institute For Tomorrow, a pan-Asian not-for-profit think-tank and a platform for debate on global issues, and business, socio- and geo-political drivers.
www.globalinstitutefortomorrow.org/