The Great Debate UK

from The Great Debate:

Three principles for a new Wall Street

By Don Tapscott The view expressed here are his own.

Protesters set up the “Occupy Wall Street” base camp in New York a month ago because the location epitomizes the economic forces that control the U.S. and global economies. As one sign read: “This is not a recession. It’s a robbery.” To many it feels like just that. The financial services industry is in desperate need of reform. Many bankers have behaved as secretive corporate titans serving only their own interests, and insist the devastating consequences are not their fault. They are failing to fulfill their obligations to society—in some cases, even to shareholders--and a growing number of critics view the day-to-day behavior of the financial services industry as unacceptable. If the industry doesn’t initiate reform from within then it will eventually have more extreme reform imposed from outside.

In 2008, the routine gambles of Wall Street almost brought down global capitalism and yet, so far, nothing fundamentally has changed. Restoring long-term confidence in the financial services industry requires more than individual banks changing their behavior or even governments intervening with new rules. The industry needs a new modus operandi, where all of the key players (banks, insurers, investment brokers, rating agencies and regulators) adopt the three facets of collaboration: integrity, transparency, and embracing the commons.

Integrity. Trust is the expectation that the other party will act with integrity – be honest, considerate, and abide by its commitments. To re-establish trust, the financial services industry needs to have integrity as part of its DNA. But the cavalier manner in which many banking executives violated integrity was stunning. For example they sold sub-prime mortgages to people who could never make the payments; bundled them into securities and convinced rating agencies to classify them as AAA, and insurance companies to insure them.  They then sold these to unsuspecting investors. They violated all the values of Integrity. Everyone in the process suffered and the global economy was sent into a tailspin.

The 2008 meltdown and the Euro crises we face today illustrate how interconnected our world has become. Organizations must be much more aware of what is going on around them. It’s important to know the behavior of others and the potential impacts of the actions of distant third parties. If there is anything Wall Street should have learned from the mess they created it was that business cannot succeed in a world that is failing.

In everything from motivating employees, negotiating with partners, disclosing financial information, or explaining the environmental impacts of a new factory, companies and other organizations must tell the truth, be considerate of the interests of others, and be willing to be held accountable for delivering against their commitments.

Companies need to act with integrity – not just to secure a healthy business environment, but for their own sustainability and competitive advantage.  Increasingly, firms that exhibit ethical values and candor have discovered that they can build trust with customers, employees, shareholders and business partners. This makes them more competitive and profitable.

The corporate hijacking of Occupy Wall Street campaign

By Kathleen Brooks. The opinions expressed are her own.

As New Yorkers hurried to work on Wall Street on Friday morning they were greeted by police bracing themselves to cope with a wave of protestors apparently threatening to storm the New York Stock Exchange. By lunchtime the storming had failed to occur, 14 protestors had been arrested and hungry workers were free to go out and get a sandwich.

In recent days the Occupy Wall Street campaign is looking more like a damp squib than a counter-capitalism movement. The protests may be born out of a genuine frustration with bank bailouts funded by the tax payer, but no sooner had the first placard been written then corporate big-wigs sensed the opportunity it presented and rushed in to join the fray.

According to reports, a condom maker is in on the act creating a brand of protection specifically for the protest; obviously some think there is the risk that Occupy might turn into a mini Woodstock. Added to this, the directors of the board of ice cream maker Ben & Jerry’s released a statement saying they were supporting the protest.

But this corporate alignment doesn’t seem to have had the desired effect. Instead of drumming up support for the protestors it has made them something of a laughing stock. Papers, blogs and TV reports are running competitions for the best flavour ice-cream Ben & Jerry’s could create to honour the protests (ocu-pie is gaining some traction). But all of this is distracting from promoting the protestors’ aims and message.

The problem is that corporate support is doomed from the start primarily because it is self-serving for the companies involved. Banker-bashing has become incredibly popular in recent years. Saying that you work in finance and earn squillions of dollars is outright unacceptable. It labels you as old school, probably male, out of touch with reality and a fervent believer that climate change is a conspiracy of the left – in other words the opposite of cool. Cool sells, so by aligning yourself with the protestors you can boost your bottom line.

It doesn’t take long for advertisers and other corporate machines to claim counter-culture for themselves. Look at Woodstock and the 1968 protests. Images of these events pervade so much of modern advertising. Free love sells jeans, fizzy drinks and beer these days.  Thousands of films have been made about the summer of love that have earned billions of dollars for Hollywood’s largest studios.