It is a well-written article that has, for me at least, tragic implications. John Gollop, writing for CNBC, penned a piece (May 7, 2013) entitled: “Companies Cook the Books to Meet Tough Targets.” As a business ethics speaker and author the article hit home on a number of fronts.
Mr. Gollop reported on a survey conducted by Ernst & Young in 36 countries in Europe, the Middle East, Africa and India. In all, 3,500 accounting and financial professionals said that they had witnessed some type of financial manipulation by their companies over the past year. Their boards of directors weren’t much better; 42 percent of board directors and top managers admitted to being aware of irregularities.
Here’s the “kicker” as people sometimes like to say:
“… almost a quarter of top financial services staff surveyed said they were aware of manipulation, and almost 10 percent of all staff said their companies had understated costs, overstated revenues or used unprincipled sales tactics…”
The survey goes on with an unrelenting drum beat. I will again directly quote the article:
“Almost half of the sales staff surveyed across all sectors did not consider anti-corruption policies to be relevant and more than a quarter thought it acceptable to offer personal gifts or services to win or retain business.”
I’m starting to sweat!
I almost don’t know where to start, except with the most obvious. People need to be trained or re-trained or made aware that it is not OK to over-step ethical boundaries. If those on the inside, and those seemingly responsible for watching over them on the outside in Europe, the Middle East, Africa and India – as well as countless ethical transgressions in the United States think that cooking the books (or whatever the terminology of the local dialect may be) is acceptable, then I maintain we are miserably failing not just as business people but as people.
There can be no doubt that there will be those reading this post who might say, “In all honesty, Chuck, who cares?”
I have been there. I know the arguments. For what it is worth, none of the arguments hold water.
Financial departments might say that they were under pressure from upper management to “cook.” Boards of directors might say they were under pressure from shareholders to look the other way. Accounting firms might lament that they were afraid of losing the business and those in sales, those accepting bribes or giving bribes, might just shrug and say, “Well, everyone does it.”
I teach no, not everyone does it. No, not everyone is under pressure, and strangely – values such as integrity, honesty, decency and even purpose still exist. My purpose, my mission is to teach such things to those who have forgotten. When we forget globally or locally or personally that ethics matter, everyone ultimately loses.
I think of these things
I think, as I write this, of an overcrowded building collapse in Bangladesh where hundreds of people lost their lives. All these poor folks were doing was trying to make a life for themselves and their families.
I think of gifts exchanged under tables, and gifts awarded; of companies 10,000 miles away profiting from cheap goods, of boards of directors looking the other way; of accounting firms not raising flags; of those inside and outside companies saying, “Well, everyone does it.”
I think of engineering firms and building inspectors looking the other way; builders and contractors who knew better; suppliers and sales people shrugging their shoulders at horrendous outcomes of ethical missteps. I think of those who say, “It’s not my problem.”
We really never know, do we? If we, individually, make an intentional, ethical mistake, do we know where it will lead?
Do you remember the pet food companies that were intentionally supplied with poisonous rice gluten? How about the accounting firm who looked the other way with Enron? In one case thousands of family pets died and in the other, thousands of good and decent people lost their livelihoods.
I think of these things.
I think of physicians and hospitals pushing drugs and procedures that they know won’t work. I think of food companies who intentionally adulterate their products, of politicians doing what is best for them but not for the public they serve but mainly, I think about those who are hurt.
We can talk about Europe, the Middle East, Africa and India cooking the books or we can talk about it happening here. We can talk in lofty and in very esoteric terms. What most of us never talk about are our friends and families, so let me do just that with some brief examples:
Suppose you had a young child who couldn’t make friends very easily. You bought her a puppy to help her relate a little better to the world, and she blossomed. The dog became her best friend. With the best of intentions, you fed the puppy some premium food that had been laced with Melamine adulterated rice meal. The vet can’t save the dog.
Or you and your wife have scraped together every penny you could find to buy a modest home. Your wife worked for Enron and she was a good hard worker. She wasn’t a big shot, just someone trying to do the right thing in a support function. Getting the keys to that house was one of the happiest moments of your lives. One day, your wife comes to you sobbing. She holds a crumpled “pink slip.” Enron has begun to collapse. You have to sell your house and it may be years before you can buy another.
Or your friend is working on a construction job where corners were being cut on the concrete because someone accepted a bribe and someone else was pressured. The building collapses and your friend is now paralyzed for life.
If you believe any of the above examples to be extreme, I can assure you they are not. There is a consequence to every action. Somewhere in each of the examples above, someone made an ethical misstep. It was minor; someone else looked the other way. It is happening much too often.
I am Chuck Gallagher and I am here to tell you that there has never been a good tasting stew made of cooked books. gallagher.pcgdev.com
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