Column, Chandran Nair: Business Leadership in Asia
Executives in Asia must re-educate themselves in how to do business in a changing world

Chandran Nair

Tata Motor is poised to turn the ignition key on producing the world’s cheapest car in the world’s second most populous nation. The Indian carmaker is on schedule to roll out the first of 250,000 cars a year in 2008.

While its Rs100,000 price tag will put driving within reach of millions, the four-door car flouts the most urgent climate concerns: it does not meet European safety and emissions standards at a time when auto industry pollution is one of the biggest challenges facing urban India, nor does it acknowledge growing international pressure on India to reduce CO2 emissions.

There have been a number of recent high-profile Asian corporate moves, inclusing Tata’s, that would spin the best spin-doctor’s head. Chinese companies have signed deals with Sudan's government to exploit oilfields in the Darfur humanitarian disaster zone, reached agreements with Aboriginal people in Queensland, Australia, to develop vast bauxite reserves, and are involved with logging in Papua New Guinea.

Misunderstanding
HSBC, too, has got caught up in logging industry links, and with other banks and Asian corporations engaged in deals contrary to the high standards of the Equator Principles and other frameworks they have signed. South-East Asian palm-oil companies are jumping on a bio-fuels bandwagon, branding themselves as sustainable development companies – but either chose to ignore or miss the huge contradictions.

The chiefs of these companies show that their understanding of the world they are operating in is poor at best. How would Tata, for one, with an enviable corporate social responsibility reputation, explain to critics the consequences of the world’s cheapest car?

Each instance gives fuel to critics who paint them as one-dimensional, without thought of issues that are of the gravest international concern. Worse still, they are often accused of not caring since they do not openly champion corporate social responsibility, sustainable development, corporate governance, ethics and similar issues.

None of this means they do not care, or act. In fact, they do a great deal, and explain the absence of “splash” as a cultural bias against boasting. This reluctance is in contrast to the developed world, where business leaders and politicians are becoming masters of spinning on these topics – even, it is felt, sometimes preaching. It also seems Asians feel the international media is hell bent on looking for ways to put them down.

But these are difficult positions to defend now, especially with public opinion everywhere demanding honesty, integrity and accountability. By exploring the world to attract investments, tap markets for their goods and services, and resources for their industries, Asian business leaders have put themselves under the watchful eye of investors and activists. Their governments also make demands on them to better protect social nets, guard the national image, and be partners in more balanced development.

Prime Minister Manmohan Singh raised the pressure in June when he scolded India’s business elite for behaving badly and excessively. China took a more extreme step. It sentenced a former head of its national food and drug agency to death for taking bribes. And local officials in Xiamen stood back when protesters blocked the building of a chemical plant.

New skills
Asian business leaders need to understand that their jobs are changing. They can no longer be benevolent mandarins and rajahs. They will need to explain their actions at home and globally. For this, they must educate themselves in the 21st century’s key issues surrounding the “business of business”: ethics, globalisation, sustainable development, corporate social responsibility, corporate governance and climate change. In other words, honesty, integrity, accountability and business acumen. Leadership from the business elite that lacks these qualities has failed. Honesty and the trust it engenders are the very foundation of ethical values that must be at the core of every company and business decision made in the pursuit of equitable wealth creation.

The personal integrity of a chief executive is at the heart of a company’s culture and reputation. To lose it because of misunderstanding the full picture means a long, rutted road to redemption that may even be in vain.

Asia’s business elite needs to do these things:
 get coaching;
 build competencies in-house to research these important issues;
 structurally change how information flows to them so that it does not get lost in corporate affairs, community development, or in the PR and CSR department;
 understand they must commit management time – maybe as much as 20% – to these issues, then link that to how they make decisions; and
 get out there and talk about what they are doing.

Learn, listen and talk. It is only good for business.

Chandran Nair is the founder and chief executive of Global Institute For Tomorrow.