Official Opening of Business Ethics Conference

Official Opening of Business Ethics Conference By Séamus Brennan T.D. Minister for Social Affairs Milltown Institute, Milltown Park Friday 23rd September 2005

Thank you for your kind invitation to perform the official opening of this important and timely conference on Ethics and Leadership for Business.

I see that you have assembled an impressive list of speakers who over the next two days will wrestle with exploring and attempting to identify the core ingredients that shape our attitude and approach to ethics and leadership at a time, in Ireland , of unprecedented economic growth and affluence.

Ethics and leadership in business has probably never been more important than it is today. In today's business climate there are many factors, both external and internal, that put pressure on companies to address their ethical standards.

These include the knock on effect of corporate accountancy scandals, the increasing influence of Non-Governmental Organisations, as well as changing consumer and employee expectations.

Business ethical standards, as we are all aware, go beyond the legal requirements for a company and are, therefore, discretionary. They apply to the conduct of individuals and to the conduct of organisations as a whole. It is about how a company does its business, how it behaves intrinsically. It is now apparent that companies that are transparent and accountable will benefit through enhanced customer loyalty and confidence.

The reality today is that companies do not operate in a vacuum, but are a central part of society. And, just as society expects a certain standard of responsibility and behaviour from individuals, it also rightly expects business to abide by similar standards.

This was borne out in very clear terms by the findings of a 2002 survey undertaken by Business in the Community Ireland survey which indicated that:

• 60% of adults in Ireland believe, rightly or wrongly, that Irish businesses do not pay adequate attention to their corporate responsibilities
• 7 in 10 of both Irish and European customers say that a company's commitment to social responsibility is an influencing factor when buying a product or service
• over half of all Irish adults claim that they would pay more for a products or services that are environmentally and socially responsible

The conclusion to be drawn, from this survey at least is that Irish people, in their many roles as consumers, employees and investors, are willing to reward socially responsible companies with sound business ethics.

Another important aspect is the contribution good business ethics plays in maintaining. It provides an internal focus and improves a companies standing and reputation.

Of course responsibility for implementation of a good and respected ethics regime must start at the top and this is where solid leadership is all important.

Ireland has come a long way in a relatively short time. Standards in business have improved but this is an area that requires constant vigilance. I had better not call them vigilantes, but the constant vigilance and swift actions of people like Paul Appleby as Director of Corporate Enforcement and Liam O'Reilly, the Financial Regulator, has had a highly positive impact on improving ethical standards in business in recent years.

As a Government we can, and have over and over again, legislated for bad business behaviour. We will continue to respond whenever new laws are needed to confront poor ethical standards. Observing ethical business policies is good practice and forms one of the hallmarks of a well-run business.

It is clear that having an ethical policy helps to protect and enhance corporate reputation. Employees like it; customers like it, and investors like it. I think it is fair to say that when we act with integrity and a sense of moral fairness it is something we can all be proud of.

The Ireland that today stands in the doorway of the 21st Century is a confident, vibrant nation.

It is in its stride with close to full employment, a workforce of 2 million people and an economy that is growing faster than any other in Europe. Projected economic growth is 6% per year for the foreseeable future.

Ireland is a country striding confidently forward as an equal to other nations. Perhaps now is a good time to take a step back and to consider how the generations that follow will look back and judge us. They will look on us as the people who had a grasp of the Holy Grail of economic success, wealth, full employment and endless opportunity.

Most of all, I believe, they will judge us on how we used that prized possession. Somehow I doubt they will be overly impressed by how many millionaires, even billionaires, we created during our time in that economic oasis. Instead, and rightly so, they will judge us on how we harnessed that unprecedented splurge of profits and wealth to reach down and lift those who had been left behind by our buoyant economy.

And not just how we helped our own people but how, as a rich nation whose history is littered with hunger and struggles, we reached out to the parts of the world where people are attempting to survive, but are mostly likely dying, on a dollar or two a day.

We are all aware of the growing importance of corporate social responsibility. More and more businesses are showing leadership by channelling a slice of their profits into supports to those less well off.

It is a very welcome trend but I am not convinced that signing a cheque or holding a charity gala black tie event is doing enough.

Since becoming Minister for Social Affairs I am increasingly of the opinion that we cannot salve our social conscience simply by signing a cheque and hoping the problems will go away.

My Department is spending €12 billion-or €1 in every €3 that the State will spend this year-in benefits and supports that directly helps each week almost 1.5 million men, women and children. The easy way is to sign the cheque. The real challenge is to look behind the payments and tackle the social issues that have given rise to the need for such welfare payments in the first place.

And that is what I am now doing by looking deep into the reasons for child poverty; the welfare trap that lone parents find themselves caught in, and the inequalities that leave many of our older people struggling in their twilight years. My own experiences have lead me to believe that businesses, also, can contribute a lot more to help the less fortunate in Ireland and abroad.

For example, I am deeply impressed by the head of a construction firm who leads a group of volunteers each year for a few weeks to South Africa to build real homes-brick and mortar- to replace tumbledown shanties for families in poor townships.

This is a shining example of how business can use its skill and expertise to transform in a practical way the lives of those on the margins of a society.

Today I would like to use the opportunity this conference offers to appeal to businesses in Ireland to look at ways of transferring their accumulated wealth of knowledge, skills and organisational ability down the line to help those who can not help themselves.

Ireland has never had a more fortunate business generation. Fortunate people have responsibilities. That is why I believe the leaders of business in this country, at a time of great wealth, must strive to find practical ways of improving the lives of others.

It is a question of ethics and of leadership. If they do that, and if they do it well and with vision and leadership, then they will be passing on a legacy that future generations can look back and be proud of.

I wish you well with your conference.