Kelvin Wong

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• Kelvin Wong
• Deputy Managing Director
• COSCO Pacific Limited
• Email kelvinwong_at_coscopac.com.hk

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Ethical dilemma of business world

• Is big business bad business? Newsweek
• American capitalism takes a beating. The
  Economist
• System failure Corporate America has lost its
  way. Fortune
• Can trust be rebuilt? Businessweek

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Pressing need for ethical leadership

• Never before in the 33 years of the World
  Economic Forums history has the situation in the
  world been so fragile, as complex and as
  dangerous as this year. We feel that we are
  living in a new world within new rules and new
  dangers but certainly also with new
  opportunitiesToday we need a new, an enlarged
  concept of business leadership!
• Klaus Schwab, President, World Economic Forum,
  2003
• It is time to reaffirm the basic principles and
  rules that make capitalism work truthful books
  and honest people, and well-enforced laws against
  fraud and corruption. All investment is an act
  of faith, and faith is earned by integrity. In
  the long run, there is no capitalism without
  conscience there is no wealth without
  character.
• President George W. Bush, 2002

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What is the aim of ethics?

• What makes life worth living is fulfillment
• To live a life which can be characterized by
  fulfillment is the aim of ethics and morality

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What is Business Ethics?

• Business ethics is the application of general
  ethical ideas to business behavior.
• Unethical behavior at work include-
• Unsafe working conditions (56)
• Deceptive sales practices (56)
• Mishandling proprietary or confidential
  information (50)
• Violations of privacy rights (38)
• Creative accounting

Source 2000 Organizational Integrity Survey A
Summary, Integrity Management Services, KPMG LLP
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Business Ethics Across Organizational Functions

• Accounting Ethics
• Financial Ethics
• Marketing Ethics
• IT Ethics
• Production
• Purchase and supply

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Why Ethical Problems occur in business?
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10 Principlesof highly ethical business leaders

• Treat all employees as unique, valuable
  individuals
• Support each employees freedom, growth, and
  development
• Communicate to employees by name with respect
• Model and encourage a balanced life of good work
  and rest
• Honor and respect employee families
• Protect employees life, safety, and health
• Create a working environment free of sexual
  harassment
• Be fair and just in financial matters
• Communicate honestly and truthfully
• Cultivate a positive attitude toward others and
  their accomplishments

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9 Good Reasonsto run a business in an ethical
manner

• Its Right
• Personal Pride
• Employee Performance
• Customer Loyalty
• Supplier/Partner Trust
• Investor Confidence
• Public Acceptance
• Regulatory Freedom
• Litigation/Indictment Avoidance

Source Institute for Business, Technology, and
Ethics 2004
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8 Traitsof a healthy organizational culture

• Openness and humility from top to bottom of the
  organization
• An environment of accountability and personal
  responsibility
• Freedom for risk-taking within appropriate limits
• A fierce commitment to do it right
• A willingness to tolerate and learn from mistakes
• Unquestioned integrity and consistency
• A pursuit of collaboration, integration, and
  holistic thinking
• Courage and persistence in the face of difficulty

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7 Habitsof highly effective ethical leaders

• strong personal character
• passion to do right things
• proactive behavior
• stakeholder interests in mind
• recognition of their value as role models
• awareness that their decision making should be
  transparent
• holistic view of the firms ethical culture

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7 Principlesof running business with profit

• Harness innovation for public good
• Put people at the centre
• Spread economic opportunity
• Engage in new alliances
• Be performance-driven in everything
• Practice superior governance
• Pursue purpose beyond profit

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Code of ConductThe Hong Kong Institute of
Directors

• Becoming Conduct
• Honesty
• Legality
• Diligence
• Accountability
• Integrity
• Justice
• Leadership in Enterprise
• Participation
• Excellence in Contribution
• Continuing Professional Development
• Discipline

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Strong linkage betweenethical behavior and
corporate performance

• Empirical evidences strong support the linkage
  between a management commitment to strong
  controls that emphasize ethical and socially
  responsible behavior on one hand and favorable
  corporate financial performance on the other
  hand.
• Investors in firms that fostered an ethical work
  environment realized an annual shareholder rate
  of return that was about 45 higher than firms
  that ignored ethics.

Source Curtis Verschoor, A Study of the Link
between a Corporations Financial Performance and
Its Commitment to Ethics, Journal of Business
Ethics 17 (1998), pp. 1509-16
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QuestionsSelf reflection

• How a good person should live?
• How society/organization should be structured in
  order to make such lives possible?
• Moral training is as important as moral theory
• Understanding of what is good and noble is not
  enough without motivation, which knowledge alone
  cannot provide

From Classroom to Boardroom He who learns, but
does not think, is lost, From Boardroom to
Courtroom He who thinks but does not learn, is
in grave danger. Analects, Confucius
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Learn from the great leadersWhat are their value
statements?

• Kites rise highest against the wind not with
  it. Sir Winston Churchill
• The probability that we may fail in the struggle
  ought not to deter us from the support of a cause
  we believe to be just. Abraham Lincoln
• I believe that unarmed truth and unconditional
  love will have the final word in reality. That
  is why right, temporarily defeated, is stronger
  than evil triumphant. Martin Luther King Jr.
• A leader is a dealer in hope. Napoleon

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Thank You!