Post No. 86: A Few Thoughts about Corporate Responsibility Elsewhere

© 2009, the Institute for Applied Common Sense

Earlier today, on Public Radio International, we heard an interesting discussion between a public radio talk show host and a New York Times reporter. They were talking about corporate responsibility in Asia.

The broadcast reminded us of how self-righteously myopic Americans can be. We tend to view our way as the right way, believing we’ve attained the right to call ourselves the greatest country in the history of humankind.

We often fail to take into account that our history was preceded by several great empires, many of them strong enough to last hundreds of years.

We suspect that this hubristic attitude may have contributed, at least to some extent, to our current economic difficulties. That is why we frequently suggest that we “step outside of ourselves” in analyzing issues.

We stumbled upon this broadcast after it started, and at a point where the discussion was about corporate responsibility in Japan.

Apparently base Japanese CEO pay is only 15 times that of the average Japanese corporate worker, whereas in America CEO pay is 40 times higher. While sitting CEOs in Japan do receive other benefits, such as company vehicles, there is nothing even remotely close to bonuses in the 20 million dollar range. Moreover, corporate jets are a rarity.

When Japanese CEOs are relieved of power, according to the broadcast, a ritualized script is followed, and it is ceremonial in nature. It is recorded for the citizens to see. The CEO bows and transfers the reins of power. Although formally relieved of responsibility, he or she is kept on as a consultant, never actually leaving the fold. In the background, they continue to be of value to the company.

The reporter told of a Japanese CEO who stepped down last year, after only a couple of months in his exalted position at the top of a company. He had been brought in to turn things around, but was unable to do so in the short time allowed.

While addressing the public in his farewell speech, he began weeping. He asked that some other company take just 1 or 2 of his workers, inasmuch as it was his people who would bear the brunt of the company’s difficulties. The Japanese public noted his sincerity, because his gesture was apparently unprecedented in Japanese corporate circles.

(We recall an earlier PBS program about the differences between businesses in Japan, Germany, and America. It was noted that major Japanese corporations, during the Japanese heyday in the 1980s, continued to acquire loans from Japanese banks, even though they were flush with cash. They wanted to thank the banks for assisting them while they struggled to emerge from the ashes of World War II.)

During the public radio conversation, the reporter switched the discussion to China. He began, “The Chinese, well…” and realizing that he was trying to sugar coat it, simply said, “It’s pretty well acknowledged that they execute CEOs who fail.” He was referring to the executions of CEOs associated with the poorly constructed school buildings, which collapsed during the massive earthquake last year, not to mention the heads of companies who paid for the recent tainted food scandal with their heads.

The reporter noted that South Korean practice was a blend of what we see in America and Japan.

It occurred to us, as we thought about the whole issue of corporate responsibility, that while we here in America think of ourselves as being the best at most things, it’s quite likely that the one thing we may be better at than any other country is pointing our fingers at others. We choose to blame others for what has and is going wrong. It’s always the other guy. The last CEO. The last president. The other political party.

As our regular readers well know, this is not a religious blog. Still, the admonition in Proverbs 26:18 is worth remembering: “Pride goeth before the fall.”

If we weren’t so arrogant, and if we opened our eyes to the world beyond our borders and finally paid more attention to the practices of other cultures, might we not benefit, even just a little?

All systems have limitations. None is perfect. None is or can be all things, to all people, under all circumstances.

All approaches to solving problems have limitations, too. These days, with the world spinning topsy-turvy on so many fronts, and the economy being the most urgent issue on the table, “tried and true” solutions are as valuable as yesterday’s newspaper.

As our leaders go forward, searching for good answers, let’s hope they remain flexible and open to change if and when circumstances warrant it, which they no doubt will. If they wed themselves to rigid philosophy or point their fingers accusingly at the other side in their discussions, we’re all sunk.

That’s only common sense.

© 2009, the Institute for Applied Common Sense