Feature Article

Let ethics have the whip hand

Blueprint for business – 2

The financial crisis of recent years revealed a moral vacuum at the heart of corporate life. Here, in an edited version of his speech to business leaders this week, the Archbishop of Westminster explains how a thriving commercial sector with clear values can contribute to the common good

Reflecting on the continuing debate about the problems and misjudgements by some in our business sector, I found myself drawn to Plato’s allegory of the human soul as a chariot driven by two winged horses. The horses are not natural allies but have to be drawn to work together if the chariot is to speed forward on the road. That is the charioteer’s task.

In Plato’s allegory, one horse – black in colour – represents our deep but irrational desires and appetites: energising, but liable to go out of control. The other horse, which is white, represents other desires, such as courage, creativity and a sense of higher purpose. The charioteer is reason personified. His is the task of keeping both horses in check and working together. The white horse is amenable to argument and debate. The black horse sometimes needs the whip.

A business can be compared to such a chariot: the black horse representing the desire for profit maximisation and the white horse the social purpose of good business – the desire to provide meaningful work and useful goods or services – operating in a principled way. The charioteers are the business or team leaders. Their role is to keep these two sources of energy and drive in harness, obeying the rules of the road, striving towards the long-term goal of creating sustainable social and economic progress.

Both horses are essential if, on the one hand, the business is to be dynamic and profitable and, on the other, it is to inspire trust and respect, attracting loyalty from customers, workers and society. Led by the black horse alone, the business chariot seeks profit without wider purpose; that is an extremely hazardous road to follow. Led by the white horse alone, the chariot can easily become bogged down in a quagmire of worthy but unprofitable activities. The art of the business leader is to find a route the chariot can take within the constraints of the highway, retaining competitive edge against other chariots, with both horses at full stretch, yet firmly under control, and pulling in the same direction.

The energy of the black horse is essential, especially when times are tough, but without the white horse the single-minded pursuit of profit for its own sake can pull the chariot off the road. This ultimately results in a build-up of mistrust; a backlash from a disillusioned workforce; discontented customers and suppliers; and a vengeful public opinion. And then profit goes, too.

In 2009 and 2010, I convened two private seminars for leaders in the financial sector in the City. Following these, a number of the participants, along with others, wrote a letter published by the Financial Times in August 2010. The letter explicitly criticised those in the financial sector for an approach to business that, in our Platonic analogy, put the black horse in sole charge and subverted trust in the market.

But the first question the now highly sceptical public will rightly ask is: “why should we trust you?” If the sole motivation is to make as much money as possible out of each situation, the project of restoring trust will fail, and so it should. For any business to retain the implicit licence to operate given by society in the long term, the primary motivation must be – and be seen to be – the desire to provide goods that are truly good, and services that truly serve people.  

Many excellent, trusted businesses have always understood this and have sought to set and reinforce the highest expectations of behaviour. But the prevailing culture, and especially the relentless focus on short-term profitability, makes this difficult. When businesses see themselves as set apart in some way, free to create their own value systems divided from the rest of life, then they are liable to do the most harm. Then there appears, for instance, an unhealthy focus on power or reward, or an expectation of overwork to the cost of family or spiritual life. This fosters a sense of living an unhealthily “divided life”, in which we leave the better part of our values and ideals at home when we go to work.

A fresh examination of the social purpose of business – the language of the white horse – alongside profitability, is fundamental to opening up a common basis of dialogue about the place of business at the service of the common good, and the human values needed to deliver that purpose in practical ways. This requires the participation and engagement of many civil institutions existing separately from the market. It is here I see that a contribution can be made by faith communities, and where the framework known as Catholic Social Teaching offers principles that can help us reflect on how to unite corporate purpose and personal values to serve society. 

There are two foundational ethical prin­ciples: the innate dignity and value of every human person, and the principle of the ­common good. For Christians, human dignity is rooted in the idea that we are all made in the likeness of God. It is echoed in the universal moral intuition that each person can never be merely an instrument valued just for his or her usefulness. Every person matters, and it follows that we have duties to respect others and promote their personal fulfilment.

When people come together to pursue a shared goal, they create common goods – such as a friendship, a family or a business. We are not innately selfish beings, even if some ­suggest that we are. This wider common good is understood in Catholic Social Teaching to be the set of social conditions that allow people more easily to develop, individually and communally. Businesses contribute to building up this wider common good through their products and services, the jobs they create and the economic and social purpose they provide. But they can undermine it if the black horse is given sole charge of the business chariot through strategies that exploit people, or destroy the natural environment. 

Attending to human dignity and to the common good provides a powerful lens for examining business decisions. It forces people to look at the human dimension, and to ask how a decision will affect the dignity, respect and potential for development of those people affected. The savings industry, for example, has the skills both to produce the financial return that customers expect, and also to encourage businesses that are clearly ­purpose-driven with strong core values. The savings pool in the UK represents the accumulated savings and pensions of hard-working people. Is it invested in a way that best serves the UK common good? Could more be done by ­investment businesses and investors generally to bring together long-term social and ­financial returns?

The framework of Catholic Social Teaching then goes a step further and brings in two other ideas: solidarity and subsidiarity. Solidarity is a determination to strive for the common good and is what drives the white horse. It means being in touch with the needs of communities, striving for the common good particularly by looking for ways of helping underprivileged communities. Subsidiarity in this context means promoting accountability at all levels by proper delegation of decision-making – based on the ability to make the right decision rather than based purely on hierarchy. Might not better decisions have sometimes been made about levels of executive pay, aggressive tax avoidance, mis-selling, or misleading advertising, as well as corporate governance and regulatory compliance, if solidarity with others, promoting the common good and subsidiarity of ­decision-making were – and were seen to be – part of the overall approach to management?

Another key principle is reciprocity. It means building relationships of trust by looking beyond purely contractual or legal obligations. Catholic Social Teaching identifies two levels of reciprocity; the lowest is at the level of justice – giving what is due, including truth and honesty, and not misusing knowledge and power. But it also extends to “fraternity”, or “gratuity”. This exhorts individuals to seek ways to truly understand the needs of others and to seek to provide for those needs.

Finally, we need sustainability. The responsibilities of business extend to future generations, who will have the same rights as we do to use and enjoy the earth’s resources. Our duty now must be to seek to replace what we use, repair what we damage and strive to leave the planet in a better condition than we found it. 

So, a conscious effort to consider human dignity, the common good, solidarity, subsidiarity, fraternity, reciprocity and sustainability is a way to ensure that better decisions are made to build better businesses. These principles engage both the white and the black horse of the business chariot. They reflect the best of what a business can be: showing authentic respect for the whole person by creating a committed workforce, loyal customers and supportive governments.

Other resources, independent of the market, are needed to give people in business the confidence to drive and defend good behaviour and outsiders to challenge poor decisions and outcomes. The principles of Catholic Social Teaching and, in particular, the seven principles I have outlined, offer a profound contribution to that thinking by acting as a sword to lead the fight for better business and as a shield to defend those who are prepared to stand up for better business in a better society.

But applying these principles is not a technical fix. What matters is practice and the cultivation of habits – skills – which, over time, form character and make it easier and more habitual to act well. We are all weak and frail, and need rules and reminders. It does not surprise me that research shows that, when people have just been reminded of what the codes of conduct are, they are far less prone to cheat in a test. It matters then, that the prevailing ethos in a company clearly brings together, consciously and consistently, corporate purpose and personal values, and that business should be seen to prize the development of both competence and character. 

I am convinced that the deepest resources for the transformation of business, as for society as a whole, lies within the human heart. It is there we have to seek what it is we truly value and yearn for, and where we can harness the strongest motivation to change – both ourselves and our world – for the better. We can indeed be expert ­charioteers, especially with the grace of God.

We are at an extraordinary moment of opportunity in our own country to question and reset our collective priorities and ideas about what makes for a truly good society and the place within it of a thriving private-­business sector. In a world of sharply rising inequality, and still too often driven by seemingly insatiable desires for more, we urgently need to reframe how we collectively understand what business is for and, as citizens, customers and colleagues, decide what we want, and act accordingly. The business chariot has immense power for good but it can also dehumanise and destroy. There is nothing predetermined about how the role of business in society will evolve in the coming years and decades. It is a moral, social and political choice, not an outcome preordained by economic logic. I believe that, together, we can help making the right choice the easier and better choice for business and society.

• The Most Revd Vincent Nichols is Archbishop of Westminster. This article is adapted from a lecture he gave at a conference, “A Blueprint for Better Business? Uniting corporate purpose and personal values to serve society”, in London on 18 September.