Financial Times

A sector so private?

By Mohan Mendis

Recent events at the Ceylon Chamber of Commerce, brings the whole question of privacy in business transactions sharply into focus and public discussion. It was reported recently that the Chamber hierarchy declined to speak to a newspaper regarding the outcome of a vote taken in respect of a violation of the Chamber’s Code of Conduct. It was claimed that the subject was an internal matter.

Social contract
Has not the time arrived for us to take the PRIVATE out of business? We need to understand that actions by institutions such as business chambers have very public outcomes. The Chamber has expressly taken on the responsibility to society to behave in an ethical manner, in return for the right to exercise economic freedom granted to its constituents. While pursuing the objective of their members to optimize profits, there is held out a promise to society to contribute to good governance. It cannot be denied therefore, that those who hold office in these institutions have a public duty to perform apart from fulfilling the obligations to the membership. Their members do business not only between themselves but also with society at large and therefore it is clear that there exists an enforceable social contract between the public and the Chamber.

In the criteria now applied to corporates in regard to the extent of their responsibility and accountability, it is evident that the circumference of those impacted by their actions is wider than merely including those designated as shareholders. The subjects of corporate social responsibility, good corporate citizenship, business ethics have all evolved from the growing awareness that business has undeniable obligations to society.

To determine the extent of the privacy we may appropriate to ourselves in doing business therefore, we must be mindful that the capital we employ in exploiting business opportunities is not merely those introduced by shareholders as capital. We engage a multitude of the earth’s natural resources to get things done. The value of these natural resources like, water, air, soil, oil, minerals, the rivers, the seas and animal and plant stock all of which we have long been taken for granted, we now know, have a limited period of supply. Humankind has inherited a 3.8 bln-year store of natural capital and at the present rates of use and degradation, there will be little left by the end of this century. We have to be conscious that the earths resources we borrow to do business, is not a debt we owe only to the generation we presently live with. Likewise the marketplace owned by all casts responsibilities on all who exploit it.

The proposition that this is my business, my company, my capital, my factory, my employees, my customer, has long been rendered obsolete. Every business transaction has public and social implications. Though no better substitute for free enterprise has been found so far, its extension to unbridled and unregulated levels with the freedom of the wild ass, has taken the world into the brink of a serious global collapse.

Even with recent reform in Company Law, the concept of a Private Company has been unfortunately retained. To have overlooked the ill effects of continuing to describe companies as PRIVATE is fraught with the dangers of perpetuating the perception “I am minding my business, you mind yours”. They still feel that they indeed are private in all senses of the word with a license to be less accountable to society. For reasons already explained, in the contemporary and interdependent world we live in today, no business can consider it self truly private. There is a preponderance of private companies operating and doing business in Sri Lanka .These companies I dare say, constitute the bulk of the names in the Chamber’s membership register. This mindset of privacy unfortunately filters through even to the Chamber’s affairs. To claim that a matter subject to public litigation has no public implications is therefore a totally unacceptable position.

The debt we owe society is not only in terms of the exploitation of the planets resources but even more importantly in the values, rules, codes of behaviour, precedents and standards we pass down from one generation to another. As much as it is our duty to keep the very air we breathe pure and unpolluted for our children to live without being choked, it is a sacred duty to pass on a code of behaviour clean, untarnished, pure and unsullied, which they can live by, and pass on in turn to their descendants.

It is for the public to determine whether the Chamber did right or wrong in dealing with this particular issue and the public needs to know the facts. Society at large is an important stakeholder in business. Withholding this information shows total disregard for one of your principal stakeholders to whom you have held out a promise. By your actions, you not only disregard the validity of a judgment made by the highest court in the land but at the same time break the sacred promise you have made to society.

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