The Eighth Deadly Sin

Alongside  wrath, greed, sloth, pride, lust, envy and gluttony - the seven deadly sins - should surely be added "money". For it is now proving to be a deadly sin even in the Vatican.

News came out on Wednesday that all forms of plastic money - ATM cards, credit cards, debit cards, etc have stopped functioning in the Vatican. So if you want to visit the Sistine Chapel, you have to fork out cash for admission - cannot wave your plastic.

This has happened because the Bank of Italy (Italy's Central Bank) has suspended all electronic operations by banks inside the Vatican in exasperation at the Vatican's continued inability to follow anti money laundering and anti terrorist financing regulations. This has been going on for a long time - the Vatican does not meet the anti money laundering requirements that all countries have to meet and has not been able to set this right for years.

Part of the problem is "Ramamrithamisque". Regulations demand all sorts of KYC forms and it is quite likely that the Holy Fathers have not been rigorous enough in filling 74,432 forms - their minds being, hopefully, absorbed with higher matters. Here, my sympathies are with the Vatican.

But the other half of the problem is serious. The Vatican, as indeed many successful religious organisations are, is a huge business enterprise. In this, they must follow laws that seek to curb international crime. But they usually turn a blind eye to where their money comes from , and this is an unpardonable eighth deadly sin.

This problem is not unique to the Vatican alone. Every religious organisation, I dare speculate, would fail the test of anti money laundering. Much of their finances are murky, shady, and accounting rigour, transparency and tightness of control is conspicuous by their absence.  If you stretch the argument, is it right for the Tirupathi temple,to accept donations from every scoundrel who goes and makes an offering of a fraction of his ill gotten wealth as appeasement ?

Religious organisations have to be whiter than white. These days, they are as much business organisations as religious ones, commanding large capital and cash flows. Excuses that they are solely concerned with matters temporal, won't fly. They must meet every test of international law, as all of us are expected to. Failing which they must be blacklisted, as the Bank of Italy has tried to in a small way.

"In God we trust" cannot be an empty slogan.

In defence of business

The word business is nowadays accompanied by a metaphorical holding of the nose. Post the financial crisis, businessmen would probably rank just above bankers and below more traditional last placers like real estate agents, in the list of reputable professions. Readers of this blog would know that the author is a staunch defender of business and advocates the view that the profession is unfairly maligned. An earlier post had touched on this subject.

It was gratifying to read The Economist’s Schumpeter column, The Silence of Mammon, which argues that business people should stand up for themselves. The article recounts the two arguments it says proponents have put forth in defence of business – that many firms are devoted to good works and that businessmen have done more than any other institution to advance prosperity. It opines that these are not enough and puts forth three more arguments to counter the critics of business who have dominated the discussion on corporate morality – that business is a remarkable exercise in cooperation, that business is an exercise in creativity and that business helps maintain political pluralism. All excellent arguments, in an eminently readable article.

I wade into this debate with unbridled enthusiasm. I have little sympathy for those who taint businesses as immoral with a broad brush. At the cost of oversimplifying a complex matter, I set out a central theme in defence of business and industry.

I come from a poor country, India, and now live in another one, China . I have seen how degrading poverty is to humanity. And it is China that I want to present in defence of business. In 1981, 84% of China’s population of a billion plus was below the poverty line of $1.25 a day. In 2005, in the same China, the percentage of population below the same poverty line had decline to just 16% (source : World Bank working paper 5090). Yes SIXTEEN per cent. That equals to 700 million people who have climbed above the poverty line. We all know how this was done.

Show me any other way of pulling 700 million people out of poverty and I’ll abandon all defence of business.

Dilemmas - IV

One final poser and I'll move on from this topic.

You discover something about a key supplier of yours that you didn't know before. He employs child labour.

Would you

1) Stop buying from him even though it may affect your business
2) Report his employing child labour to the authorities, but continue to buy from him
3) Ignore this, saying its his business and none of yours

If you work for a global company, you probably have no choice - NGOs will roast your company alive. (Remember Nike in China ?)

But , assume you are in a small local company. What will you do ?

Would your answer be different, if instead of discovering that he employs child labour, you discover one of the following

- He is cheating on VAT (excise, sales tax, whatever) and evading them , or,
- He is discriminating against women

Would your answer be the same ?

Dilemmas - III

Today's poser.

You resign from your company and join another company. Your were happy with your previous employer and he treated you well - you are moving just because a better opportunity arose.

In your new job, you need to hire four good lieutenants. You know that if you approached your four buddies in the old company, they would join you (for they loved working with you). But if those four left too, the business in the old company would be seriously affected.

This is one of those cases where in different cultures, you'd get completely different first responses. In some cultures, this is not a dilemma at all - you'd just do it. In other cultures, this would be a complete no no.

But, as I mused before, I believe these are deeply individual decisions based on one's values and beliefs. There is no "right" answer.

Would you place the call to your buddies ?

Dilemmas - II

Ethics are either black or white - there are no shades of grey in my view, as I posted before.

But there are some situations in business life where ethically it seems OK, but morally its not so clear. In such a situation, an individual's value systems determine what's right or wrong and there is no one right way.

Today's poser.

Does it matter what business the company you work for, is in ? If your company is an IT company or a soap company or a telecom company or a steel company, there is no issue.

But would you work for a cigarette company ? Would you work for a company that makes land mines ? Would you work for a company that buys "blood diamonds" from Africa ? Would you work for a logging company in the Amazon?

Or, does it not matter what business your company is in, as long as what it does is legal and you do your job professionally ?

Dilemmas - I

Ethics are either black or white - there are no shades of grey in my view, as I posted before.

But there are some situations in business life where ethically it seems OK, but morally its not so clear. In such a situation, an individual's value systems determine what's right or wrong and there is no one right way.

I intend to post a few dilemma's over the next few days. I have no answers for any of them - each of you readers will have your own "right" way.

Here's the first of the them.

You've worked in a company for 10 years. You've wanted a key job, but are not getting it. Your company's direct competitor is offering you that position. Remember its your direct competitor, whom you have spent the last 10 years of your life fighting.

Would you take it ?