We’ve asked Moreno Zani, Chairman and Founder of Tendercapital, to tell us his personal opinion on the evolution of the relationship between business and ethics, that is strongly important to better understand the spirit of the times we’re living. The answer couldn’t help but come from history: here it is, in this Top & Hot written by Moreno Zani.
The current and ever-important debate regarding the relationship between business and ethics has roots in the works of the ancient philosophers. If Socrates is considered to be the founder of the science of ethics, it was Aristotle who coined the term “ethics” to name this discipline of practical studies. According to Aristotle, the ultimate purpose of human existence is the pursuit of happiness or well-being, to engage in activities which lead men to be happy: only through the exercise of his rational capacities and the attainment of the dianoetic virtues (such as empirical and scientific knowledge, intellect, art, wisdom) can man achieve happiness.
For the philosopher, and in general for the classical thinkers, there is a distinctive difference between a purely speculative science – and therefore indifferent – and an applied science. More recently, Abraham Flexner caters to the classical thinkers in his essay “The Usefulness of Useless Knowledge”. Mankind’s greatest discoveries, which have ultimately had the most impact on society and human lives, were borne from the pure spirit and thirst for knowledge of men, led by innate curiosity and a total lack of concern about the utility and practical applications of their work. However, insights from completely “useless” reflections often proved to be the most valuable and beneficial to human welfare.
Popper’s claim that “Science and technology frees man and opens up possibilities” can be of help at this stage.
The tight relationship between cultural and economic growth
At the closing ceremony of a conference in Vienna in 1991, Karl Popper remarked: “…The world is a wonderful place which we, as gardeners, can still improve and cultivate. And in these attempts, use the modesty of an expert gardener, who is aware that many of his attempts will fail.” In his essay “Technology and Ethics”, Popper dwelt on how the wealth created by science and the industrial society had strongly contributed to improving the working conditions and the lives of the majority of the people, attaching a strong cultural significance to technological progress. Despite recognizing the possible dangers, and carefully listening to the criticisms relating to the abuse of technology and economic growth, Popper argued that industrial revolutions (such as transportation, enabling the possibility of easily moving people and goods via rail or road, and the invention of light and electrical appliances which lead to the improvement of the helpers’ working conditions…) heralded in a new era of civilization, in which even the less fortunate portions of the populace could benefit.
Popper claimed that inventiveness stems from the fulfilment of primary needs and that primitive experiments – fire for protection, the cudgel for defense – required creativity, risk, and courage. People’s lives, like those of a company, are full of inventiveness, risks, and courage!
The Man at the centre to explain an only apparent dichotomy
There is a common denominator underlying all these doctrines and observations, which can help better understand the alleged dichotomy between business and ethics: Mankind. Whether he is the author of abstract concoctions, the creator of useful inventions, or the leader of organized ventures, Man is always at the center, the promoter and responsible in positive and negative. Maybe this could be the turning point for the modern day company: the return to a greater humanity/attention to immaterial/intangible assets as a factor of equilibrium and the development of the company.
The difficult times in which we live in are also filled with opportunities to re-assert this relationship. An era in precarious balance between progress and regression, in which human values, the common good, and the assistance to others are perhaps reaffirming themselves again. The firm as a subject at the service of the society. Ethics as an endeavour to search for human talent.
The company as an assertion of the human talent
In his book “The Rise of the Creative Class”, Richard Florida claims that human talent is the real wealth of cities, demonstrating – after many years of research – that specific metropolitan centers exhibited a productive renaissance and a higher level of economic development whilst others could not manage to halt the industrial decline. The difference was due to their ability to attract creative minds, able to promote innovation and break-through ideas, and pushing companies to move their operations and invest in urban areas characterized by the presence of creative workers. Hence, the company as a means of reclaiming areas and the assertion of human talent.
In the last few years, there has been much talk of the relationship between business and ethics; the governing principles of a company, the labor relations, the system of internal guidelines that qualify a positive corporate behavior, and more, especially in reference to the scandals that have accompanied the implosion of the financial system.
The objectives of business between nature and culture
But many questions still remain open and await concrete answers: what role does the company need to have within the framework of social relations? What weighting should the return on capital have when compared to the human workforce? Will the firm be able to restrain and tame its underlying animal spirit and, for certain aspects, its pursuit of own interests?
Over the years, the rules and the increasing collective awareness have permitted an improvement of the interaction between what is considered ethical and the Company’s pursuit of its business objectives, despite often being reduced to mere formal acts. But its nature always tends to move it towards the opposite direction. It is essential that the economic aspect does not overwhelm all the other aspects, negating the co-existence of morally authentic, ethical, and, above all, cultural values. And unfortunately, we must not forget that a vast portion of the planet has not yet embarked down this path!
Despite most global businesses currently strive to implement ethical and socially sustainable processes, and indicate with information published on their annual company reports that they engage in such activities, this does not prevent incidents such as Enron from happening, where we can recall one of its top executives continuously re-iterating that the company maintained an impeccable behavior throughout all its business undertakings.
The pursuit of a mental balance between ethic and business
In my opinion, a company is founded on and thrives thanks to the creativity and ingenuity of the people within, which through their talents, enable the firm to grow and integrate with the surrounding environment and intertwine its interests with their interests and those of the community at large. It is a daunting task to attempt to coincide the private interests with those of the firm. Often ethics is muddled or confused, or often covered by a thin veil of apparent patronage and/or welfare. It is hard to identify a system that is able to balance out these two different needs. I believe that the relationship can be structured as an exchange, a re-distribution of the opportunities between the firm and the emerging human capital (for example, the youth). This should start from basic and simple concepts, which are easier to achieve, and are already being implemented in projects by various entrepreneurs.
A concept of doing business that embodies values that could lay down the foundations for a more sustainable future where private interests and the needs of the community share a common goal. This will enable the achievement of not only short-term objectives, but medium-term goals, and provide a mouth-piece for a conscious and sensible way of doing business, and to build what Freidman considers a moral corporate model, taking inspiration from the philosophers of the age of Enlightenment.