Tuesday 2 December 2008

A Quantum of Conscience

Quantum Physics is a heck of a thing to get your head round. Central to its concept is that by viewing any particular event, the result is changed by the act of viewing it. No such thing as voyeurism at that level.

Quantum Physics - A Metaphor For Life?

Hardly - Quantum Physics underpins life itself. However, there is a parallel in that each new life, each existence, each death has some impact upon the earth that will forever change it.

I don't believe that to be a theory - it's a truism.

The benefit of being a particle is that it may not care what impact it had while at the macro level every life has an impact and so has a responsibility for creating a future. Either that is in producing offspring or just trying to make the place civil enough to live in, humans have a burden of responsibility like no other particle or animal to help create a future.

Corporate and Social Responsibility

This blog piece was prompted by a lively discuss on I joined on the IOD Forum on Linked In. A question on Maternity Payments which was labelled 'Have the Lunatics Taken Over the Asylum' which berated European Lawmakers for introducing ever more onerous payments for Maternity Leave. It's certainly true that such payments and Maternity Leave itself hits SME businesses much harder than larger companies yet the levels of payments are exactly the same. As a small business owner and a person experienced in running SMEs, I know how hard that cost can be.

The trouble with the particular argument, and it is a perennial concern, is that where does social and corporate responsibility stop and start. You see, at the heart of the question, unspoken or not, is why should employers have to pay for the new generation of children. Maternity in the Employer's eyes is often as a lifestyle choice and should not burden the company cost. In the thread of the discussion, one contributor asserted that the sole purpose of businesses was wealth creation which contributed to the greater good. Even a lady professed 'it was not a company's responsibility to bring up the next generation'.

I argued otherwise.

Evolution of Corporate Responsibility

If we take the assertion that businesses are there solely to create wealth for the shareholders etc then I would suggest left to their own devices, most businesses would try to obtain as much profit for the lowest cost as quickly as possible. Without any encumbrances like laws, most businesses would not have evolved from the 18th century. Over a long period, things have changed and for the better too. After all the riots, demonstrations, strikes, unions which did not always help us business-wise, we have arrived at a point where companies have a responsibility to earn their profits within a framework of law which is designed to stop doing it without regard to everything else. We have a minimum wage, we have Maternity Leave and allowances, we have Health and Safety Laws, we have Carbon Emission restrictions and lots more. Gone are the days of companies polluting rivers without recourse, gone are the days of companies killing their workers and other people by exposing them to toxic chemicals without recourse, gone are the days when a coloured person had to worry about discrimination.

Or have they? What the debate showed is that when it comes to cost and profits, companies should be allowed to earn their profits without any thought to their employees or the outside world. It took laws, lots of laws, over a long time to get us to where we are now and what we have learnt along the way is that companies will not take on such responsibilities unless compelled to do so. What we also know, is that companies will disregard the laws and responsibilities at the earliest opportunity if allowed it.

Corporate Responsibility in Practice

My father died of an industrial disease caused by exposure to asbestos which he inhaled having been compelled by his company to delag control rooms without proper protective equipment despite that fact the dangers of asbestos were discovered 30 years before. He was not the only one on that detail to die a hard and cruel death many years later fighting for his last breath. The only company he had ever served for over 40 years turned their backs and our family dealt with their insurance company who paid a nominal sum. That company turned in one of the largest profits in British corporate history last quarter.

That same company polluted its local environment and the spot where my father's ashes lie overlooks an unsightly black marsh where no wildlife thrives as it was a reservoir for dumping the contents of pipes - no amount of clearing up after the event has brought back the natural plants and animals despite the companies dazzling green logo.

In Alaska, my father commissioned the first oil down the pipeline from Prudhoe to Valdez and constantly berated his executives for lack of attention to safety and hazards - he had written several safety manuals in his old place of work. Despite that, a pump station explosion took a life and later a tanker spilt its contents into the waters around that beautiful place.

Did the company learn? No, in Texas a few years ago, a major disaster killed several people and the company was found again to be at fault. Yet last quarter it earned £billions in pre-tax profits.

At what price does profit come? And without the compulsion of law that company, amongst many, would never have changed because it found it hard to change even when compelled.

The Next Generation

You may think that I am using extreme examples to prove a case. Not really - if Maternity Laws were not introduced and enforced we would not only have less women in the workforce but we would have widespread discrimination against them - much more than there is already. Because if a female can justify that a company is not responsible for somehow playing a art in bringing up the next generation, you can bet your bottom dollar a man will not.

Here's a commercial take on it. Many businesses directly market to mothers and rely on them for profits, and many focus on young people to make money. That's simple. However, it is simple mathematics to work out that if life was not renewing itself, all of us would go out of business soon. So it makes commercial sense to support the next generation - we should be thanking women who take a career break to have children and encouraging them rather than discriminating against them and berating everyone for their cost. Yet even with laws, companies have a problem with it even though if women were not allowed to have that break then the economy would not grow at the same rate and the rate of births would likely drop - buying business a problem.

Just as with carbon emissions, companies do not see what that has to do with them. It's about that Quantum Theory thing again. We each have an impact on this earth and the bigger we get, i.e. companies, the bigger the effect. Companies have a huge responsibility to make their money the right way.

But We Do, Don't We?

Last year the top half dozen banks in North America paid out a collective $28bn in bonuses. This year one of those banks collapsed completely and the other has been bailed out by the US Treasury despite firing 72,000 staff. Greed is a very powerful opiate - it makes you think that only you are important and that wealth is king.

Corporates today at the highest level continue to behave without a conscience when they can. It starts at SMEs too. In the IOD thread a person struck the nail on the head and said that if he were running a small business now he would be very wary of employing women. Everyone thinks this a PC thing and laughs it off as a Brussels-induced hallucination - lunatics running the asylum.

We have moved on as a race thankfully. No one should get discriminated against for their gender, religion, sexuality or race - it's pretty fundamental.

How We Should Pay

Where I do sympathise with all my co-threaders at the IOD was that the amount that SMEs have to pay is disproportionate. As with personal tax, SMEs pay at the same scale no matter what their size but we all know the bigger or richer you are the more you can pay to 'mitigate' tax. But like most citizens, SMEs are soft touches - they pay. I do believe that within all the Corporation Tax and NI that employers pay some should be spent on supporting working mothers and that the great pool of tax out there should be covering SME businesses for these extra costs. One person going on maternity leave in a 10 person company is a huge cost to the business whereas one to someone like BT is trivial. And so the payments should be reflected in this and this is where the tax system can and should help.

Direct taxation has been the hallmark of this Government, forgetting its Socialist roots. I have no problem in BT having to pay a slightly higher rate of tax than my company in order to subsidise the hard hit SME in this situation. And should I ever grow my business to those giddy heights, I would gladly accept it the same way.

Good Behaviour

Without the framework of law, companies would earn their money in whatever way they could and ignore their responsibilities wherever possible. I don't have a massive amount of time for the 'lunatics running the asylum' in Brussels or anywhere else but I do believe without them, companies would have not changed by themselves.

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