BUSINESS,ETHICS, VALUESAND EDUCATION

PREFACE

Introduction

There are fourteen contributors to this specialissue on ethics. They are drawn from Business,independent institutes of learning and

scholarship relevant to ethics, and universities. All thepapers are written by highly successful professionals in their field.At the outset, I would like to offer some preliminaryremarks on the general relevance of ethics to Education,the particular association between ethics and Business,and highlight some of the themes that readers will find in the papers that follow. Building an ethical company is important, as ethical Education is, andthere is uniform sensitivity to the fact that ethicalbehaviour must involve preparedness to take sensitiveaccount of the well-being of others. Readers will findcommon concern that Business and Academia havemuch more to do to help foster awareness of the importance of ethics.The criteria for running a successful company sharemuch in common with the principles of a good ethicalEducation. Both need to inculcate respect for the individual and to engender trust, co-operation andintegrity. In the words of one contributor, “In bothBusiness and Academia ethics constitute a way of life,not just a rule of life”. Also, both Education andBusiness serve community needs; without civic morality,communities perish.

The Relevance of Ethics to EducationMost of the papers in this issue question in one way or another whether we as a community, and as individuals, are losing our capacity to distinguishbetween right and wrong, morality and immorality,integrity and dishonesty, truth and falsehood, and theabsence of self-interest and corruption.Are more and more of us treating wrongs against society’s accepted norms as inconvenient distractionsthat ought to “go away” because we do not want to bedistracted from our quest to serve other interests?Contributors ask us to consider whether Education isfailing to argue, as well as it could do, for its social and moral relevance.The answers to such questions are vitally important.They are important to universities, especially becausethey are conduits for the Education of our youth. Foruniversities and other institutes of learning, ethical conduct should be a fundamental part of their mission.Education is an anchor that holds the communitytogether as human beings, as co-participants in thatcommunity, and as members of society. Trust and values make civilizations of world societies not onlypossible, but make them just and honourable for everyone. Both Education and Business have to makethe same kind of arguments.If Education loses its commitment to truth, we losemuch. For then we shirk our responsibility to protectthe rule of reason against the tyranny of the situation.If we grow to accept the premise that all things are relative and that law and reason apply differently to different people, then we have broken faith with values.In the words of one contributor leaders of bothEducation and Businesses should have the courage “tobe publicly true to our private values”.Universities are especially important in supplying asense of moral and social responsibility that requires a commitment to ethics; and this will be required byfuture technology. In pursuit of proper objectives, universities of the new millennium have to aim explicitly to foster a reflective culture that engendersself-confidence and social responsibility.There seems to be an attitude of resistance to the appreciation of ‘proper ethical behaviour’ that runsdeep in our cultures. Universities, for example, oftenunwittingly prevent their most immediate constituentsfrom understanding and coping with its real importance.As for Business, Education frequently obscures theworth of co-operation and trust in the drive for competition. Education should be majorly concernedabout moral truth in ways that address the importanceof prime social issues such as the value of individualand social responsibility.

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PROFESSORPETER WSHEEHAN AO

Vice-Chancellor, Australian CatholicUniversity

The Relevance of Ethics to BusinessEthics is a defining attribute of the functioning of a good society, and important in particular to Business. A key concept relevant to many of the papers in thisIssue is the notion of corporate citizenship. This conceptlies behind the expectation of the community thatBusiness leaders must play a leading role in helping toshape the social fabric of society because of the dominantposition they play in our society. Yet while manyBusiness leaders are, in fact, involved in taking positivesteps in shaping our community, there are serious questions that contributors raise about the sense ofsocial responsibility within the corporate sector.As Robert Hinkley tells us in his influential essay on theProfit Motive, corporate law establishes rules for thestructure and operation of corporations. The keystoneof this structure is the duty of directors to preserve andenhance shareholder value. Under such a structure theobjective of stockholders becomes the duty of directorswhich, in turn, becomes the way of determining how a corporation’s officers, managers and employees workeffectively. But most corporate decisions are made bythose who do not have any real incentive to promotesocial responsibility. Yet many of us would believe thatbringing Business, the Community and the Universitycloser together for the common good enhances corporate social responsibility which must become partof the heart of any company before it can claim genuineallegiance to the notion of citizenship.Most people admire companies that make a real investment in their community and corporate philanthropy is necessarily doing good for the community, but how closely must good citizenship and social responsibility be associated with profit?Nothing in the system encourages (or let alone requires)corporations to be socially responsible or to contributeto, co-operate with, or sacrifice themselves for the benefit of the community or the common good. Indeed,as Hinkley bemoans, nothing in the system makes anyprovision at all for public or societal interest.Perhaps a key challenge is how managers in corporationswho manage their companies to make money strategicallyrelate their behaviour and attitudes to the notion ofgood corporate citizenship. Is commitment to ethics lessthan completely genuine when it also produces profit?The answer is clearly “No”. A particular challenge liesbehind my question, however. How does one distinguishbetween the appearance of genuine commitment in orderto make profit – which, after all, is the raison d’être of an effective corporation – and genuine allegiance to corporate citizenship that hopefully spins off the by-product of profit enhancement? But does this questionreally matter? And what if some think it matters andothers not. I believe all the contributors to this Issuethink it does matter.

Themes in this IssueMost of the contributors to this Issue believe that thecase for ethical behaviour is not being heard loudenough. Business has complex rules of managementand more teamwork is clearly needed to help (Deveson). We need to make the move from shareholdersto stakeholders, and Business needs to stress more the relevance of virtue ethics which focuses on theimportance of the individual person; in that process,the engendering of trust is vital (Dwyer). The dialoguewe have with the community has profound implicationsfor communication to stakeholders (Duncan). We havevery real cultural differences, though, which influence the

perceptions and practices surrounding values and ethicsand these are especially evident in the field of highereducation (Ewan). In Business and Education ethicalstandards are set at the top; and in both, there is a definiteproblem when the disposition to the ethical breaks down,or cannot be established in the first place (Ferguson).It is important to recognise that behaviour may be legaland not improper, but also not all that ethical, and it isunfortunate that accountability mechanisms in Businessencourage minimum compliance (Gleeson). There is alsogeneral failure to understand that moral dilemmasencountered in Business reflect moral acts that are individually based and human self-belief and corporatemistakes are different matters. In the drive to act morally,there is generally no substitute for truth-telling andpromise-keeping or acquisition of virtues such as prudenceor courage (Gregg).Business companies, and universities are ethical communities, and the same criteria for an ethical culture reach out to both. In Education (as in Business)relationships often go wrong and the matter of industrial relations raises important messages for salvaging trust and mutual co-operation (Moses).Both Business and Education importantly argue for therelevance of community where understanding and integrityhave to be maintained. In all cases, ethics depend onindividuals; and attempts at regulation need to recognisethe risks of over-stepping the limits (Phillips). Theworkplace and the University setting are the poorer, ifthey do not engender trusting relationships (Provis).Organisations must also sustain a culture that respectsthe dignity of individuals, and act responsibly to theirconstituents (employees and customers). If they do not,organisations will not attain their potential and theirsurvival will necessarily be threatened (Ralph).In setting relationships right, contributions to the community are very important. The commitment to socialresponsibility is very good for Business, as for Education,and enhances the strength of the organisations (Ritchie). Ethics should never be seen to make a minimumcontribution and organisations (in Education andBusiness) will fail unless there is respect for an inherentethic (Tobin). Ultimately, however, statements of principleabout values and ethics, both in Business and Educationmust conform to actual practice (Toner). In the generalanalysis, it is action that matters and people in institutionsor organisations must enact (at every level) the valuesthat are claimed to be important.

Summary CommentThere are many words of wisdom for both Business and Education in the contributions that follow. Theyconverge on the importance of what Tobin calls aninherent ethic, but they also challenge us in many different ways. Is what Deveson calls “the third dimensionof management” starting to get out of control? How much do Business and Education have an obligation to promote the public good? How do wecounter the silence that frequently surrounds unethicalbehaviour? How do we move beyond the law to dowhat is right? Is Business (and Education) more competitive than society really needs? And what is theproper limit between doing good and long-term profitability? Obviously codes of conduct can help us,but they have limitations.All these questions, and many more, are raised by thecontributors. I welcome readers to enjoy some of theexcitement of what the contributors are saying, andshare in their collective wisdom. ■

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PRESIDENT’S MESSAGE

When I joined the Business/Higher Education Round Tablethree years ago, I had littleunderstanding of BHERT’s past achievements and itsinfluence on public opinion and both Government and non-Government policy. I was impressed with BHERT’sstated purpose: “to... advancethe goals and improve the performance of both businessand higher education for thebenefit of Australian society”.This is not just a noble sentiment but an objective of vital importance for the future of our country.

We are living in an exciting but crucial timefor Australia’s development. To quote theChief Scientist, Dr Robin Batterham,

innovation is the only way forward. In its recentInnovation Action Plan Backing Australia’s Ability, the Government announced its intention to spend anadditional $2.9 billion over five years on science,research and innovation. This initiative should be welcomed by all. The challenge for BHERT is to increase the interaction between business, highereducation and Government so that each sector understands the views and needs of the other two.Given the diversity of interests in each sector, this is nosmall task! As incoming President, I am determined to play my part in continuing the excellent work done by BHERT’s previous and current members andoffice-bearers to achieve this objective.Finally, I would like to pay tribute to the enormous contribution Dr Roland Williams has made to BHERTin the three years of his Presidency. He strengthenedBHERT’s relations with Government, increased business membership and raised BHERT’s profile inGovernment and industry. He will be remembered byall of us for his leadership, his energy, his eloquenceand, most importantly, his commitment to the successof BHERT. He has every reason to be proud of his termof office.In this issue of BHERT News, the Guest Editor,Professor Peter Sheehan, has assembled a fine collectionof papers on ethics in business and education. I’m surewe will all learn from reading the views of so many eminent people on this challenging topic.

DRMARK TONERPresident

As the Foundation Chancellor of RMITUniversity, I repeatedly asked businessleaders, what is it that they wanted in the graduates of our famous institution.All emphasised the values of knowledge,skill and learning, but without exception,all emphasised the need for employee candidates “to fit into our team – be a team player”.

While all of us can be proud of the improvedfocus on training and education in Australia,as we set out to become that “clever country”,

I do not believe that ethics, values and teamworkreceive enough emphasis during the journey. Given thedilution of influence that Church and family are havingon such personal values, business and academia have todo more to help in filling the gap. It is arguably themost important “community role” that they can play inthe third leg of the triple bottom line.As a Director of the Sydney based St James EthicsCentre, a small organisation that tries to promote thedebate and focus on ethical standards, I became awarethat the Centre’s Executive Director, Dr SimonLongstaff, recently asked a graduating class in one ofSydney’s prestigious universities, how many of thegraduates thought they could get through their businesscareers without significantly lying or cheating. Whatpercentage of the class said they could? Zip! The“Christopher Bonds” and Gordon Gekko’s, while smallin number may have taken a permanent toll. Politiciansconstantly justifying lies, tax cheats, cash for comments,“junkets” in sports administration, price fixing andwelfare bludgers, add to the belief for some, that “greedis good”. The next generation of business leaders areentitled to be confused. Business law and regulation,corporate governance and continuous disclosure areamong the requirements that have improved the situationsince Trevor Sykes wrote the “Bold Riders”, but we allknow that we cannot regulate ethics, values or conscience.We also know that without high standards of integrityand ethics, a business leader really has nothing!I am, I hope, a few steps from the top of the “stairway”of business and public life. I hope that I have a fewyears to go to reach “the top” – but I am high enoughto see what is up there. A few good friends, goodhealth, family and a “mirror of self-analysis” wheremost will be able to look at themselves with pride – some will not! I have seen more than my share

PROFESSOR IVAN DEVESON AO

Chairman,

United Group Limited

ETHICS ANDVALUES – INBUSINESS ANDEDUCATION

of those who will not, and I fear for Australia’s potential if we do not turn the tide.Business leaders face a never ending multitude of ethicaldecisions – large, medium and small – anyone of whichcan send a message to the organisation about the good,the bad, the ugly standards of the leader. Productrecalls, safety shortcuts and bribes are part of the “main game” – shipping borderline quality, deceptiveaccounting and meeting the competitor at lunch to talkabout “margins”, are among the “curtain raisers”. Amyriad of running decisions test the business leadersvalues and ethics on a daily basis – a test for whichmany are not prepared adequately. The occasionalcriminal conviction or executive dismissal does not reflectthe extent of the world of the “corporate cannibals”.As Chairman of an engineering company in whichGeneral Electric has invested, I am impressed by theemphasis that Jack Welch has put on values. It is fundamental, perhaps simplistic, but if the values of an organisation are clearly stated and non-negotiable,they send a powerful message to employees, andwould-be employees. Ethical standards and expectationsshould be clearly stated for all organisations. Breaches should be dealt with harshly.It is hard to believe that a major Japanese auto manufacturer has been covering up product defect datafor over two decades. It is hard to believe that BCAmembers gathered around Alan Bond, like bees at thehoneypot, and none of us saw what was coming. It ismy perception that the greatest pressure on ethical standards in business takes place in what I call “thethird dimension of management”. The first is a discipline– like production or sales. The second is general management. The third is where the “advisors” play –the takeovers, acquisitions, divestments – where the“corporate carcass” is on the table, and where mostbusiness leaders learn how to play in “the deep end”. It is where many of the deals are made. As Chairman of the Seven Network during recapitalisation in 1993, I well remember an advisor suggesting that I concentrateon maximising the return to the lenders, without regardfor the future shareholders or the employees, or hewould “arrange to assassinate my character”. BusinessSchools have, I believe, a need to increase their focus onthe “third dimension” for several reasons!As the longest serving Lord Mayor of Melbourne inover forty years, I was amazed at the focus on an electedofficial’s expenses, income and personal integrity. Insome cases it was over the top, but the experience leftme believing that company directors and senior executivesshould be encouraged to increase the disclosure of “bigticket items”, where they expend significant shareholderfunds more or less on a routine basis.The Business/Higher Education Round Table is animportant organisation to facilitate “two-way communication” between two of the most importantorganisations in our community. BHERT is in an excellentposition to encourage the learning and adherence tovalues and ethical standards. Australia had a “near miss”in the late ’80s when those few “corporate cowboys”nearly damaged our international reputation beyondrepair. Establishing ethical standards from the classroomto the boardroom can help prevent it from happeningagain. The evolution of the triple bottom line can beexpedited by the promotion of values.I do not believe that justified regulation and thestrengthening of ethical values necessarily dilutes entrepreneurialism. The Body Shop in Australia is acase in point. They have combined all of the ingredientsthat contribute to a good triple bottom line, whilemaintaining an ethical, entrepreneurial environment. ■

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There are a number of forces at work that highlight the importance of ethics in business today. Some of the forces that are now affecting business includenew technology, globalisation, ecological concerns and sustainability, restructuringof business, the changing role of government leading to more accountabilityand transparency. Being a good corporatecitizen is recognised as a duty that flowsfrom the right to run a business. Anotherforce at work is the need to attract andkeep talented people who are increasinglylooking for organisations that promotehuman well-being both within and beyond the organisation.

The most important development in businessethics in recent years has been the move fromshareholder theory to stakeholder theory. Boards

have traditionally seen their responsibility primarily interm of shareholders’ interests, but now see it more tothe good of the company which has many stakeholders,that is people whose lives are affected by the decision,and their interests need to be taken into account.

Building an Ethical CompanyThere is much that needs to be done to develop an ethicalcompany, but in my experience the critical factor is thequality of the leadership. Mark Twain said “fish go badfrom the head down”. I do not know if that is true offish, but it is true of companies. Good companies havegood leaders. These are Directors and Chief ExecutiveOfficers who have a clear vision of what the companystands for, where it is headed and the core values thatconstitute its essential nature.Leaders lead or mislead – they have no choice but to do one or the other. If they lead well they will promoteand protect the values that shape the structures of agood company.In choosing a leader virtue ethics provides importantconsideration. This approach attends to the whole person and not simply a set of skills that are required to run a company. Who has this person become through their life choices needs to be part of the equation in considering applications or who to targetfor the position of CEO.Given the right leadership one then needs to attend todeveloping the culture or the ethical environment within the organisation which will have a major impact on the way individuals within the companymake their decisions.

Shaping the Corporate EthicalEnvironmentA Code of Ethics needs to be developed. This is noguarantee of ethical behaviour but properly handled it can be a most useful tool in helping to develop a constructive culture within the company. However, a Code of Ethics will not be effective if it is left to asmall group to develop. This may be an efficient way to

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handle it, but it will be ineffective. The people in thecompany need to be involved in clarifying what thecompany stands for. They also need to distinguishbetween a Code of Ethics and a Code of Conduct.Often what is developed is a code of conduct whichspecifies what behaviours are expected in various situations. While it is important to specify certain standards of behaviour, it does nothing to help peoplemake decisions in situations which are not prescribed.They need to be given clear values and principles uponwhich to base their decisions. If this is not done peoplecan finish up thinking if there is not a law against it, itmust be alright.A Code of Ethics would specify the values and principles that form the basis of the Code of Conduct.Some of the key features of a Code of Ethics are:• It is expressed in general principles and is directed

to all persons affected not just employees.• These principles provide guidance in areas that are

not addressed in the Code of Conduct.Some examples of these general ethical principles would be:• All actions should enhance human dignity.• All actions should promote the good of the

community and the environment.• The company should provide a safe and

challenging workplace.• The company will provide quality service to

its customers.And so on taking into account the purpose of theorganisation.The Code of Conduct would flow from these principlesand give specific guidelines in different areas. Thesewould cover such things as:• Gifts and benefits where employees must disclose

to their manager any gift or benefit offered to them in connection to their work.

• Conflicts of Interest to ensure there is no actual or perceived conflict between their personal interests and the performance of their work.

While the Code of Conduct may seem far more helpful, it is the Code of Ethics that is more important.For it enshrines the core values and principles that helpto form people’s conscience so that they can makejudgements and take responsibility for the decisionsthey take. They can see how fairness and justice areundermined by conflicts of interest etc.Codes of Ethics and Conduct do not guarantee an ethical company but they can help shape the culture ifthey are developed in consultation with those affectedby them. In introducing them you need to begin with anevaluation of the current culture to know what needssupporting and what needs to be changed. Here somevalues audit needs to be undertaken and there are a number of helpful instruments for that.

It is the people within the company that understand bestwhat needs to be done and their participation in theprocess will lead to their commitment to the changesreceived. Such a process also builds trust within thecompany. A process of review of the codes will keepthem before people and relevant.

Ethics Training and CorporateProgramsPeople need to be helped to analyse the ethical dilemmas that arise in the workplace, using the principlesin the code and other major approaches to ethical reasoning. This helps people integrate these principlesinto their lives and so the company will become moreethically responsible to its stakeholders.Involving employees in projects that help change thecorporate culture so that it expresses the core valuesmore effectively is another way to develop an ethicallysupportive environment.These programs also safeguard a company againstcriminal liability where a company can be liable if its culture encourages a breach of the law. A companywill need to be able to show that it has a practical commitment to developing its culture within a soundethical framework.Technology has also raised new ethical questions.Invasion of privacy, violations of intellectual property,not to mention the huge ethical issues of the newbiotechnology. Business has tried to ensure the appropriate use of technology by monitoring the use ofemail and the internet.Finally, there is the role of business in developing thecommunity in which it operates. Business enjoys specialprivileges given it by the community such as limited liability. It therefore has an obligation to promote thepublic good. Companies support a wide variety of community activities from education, the arts, scienceand charitable organisations. Corporate downsizinghas a significant impact on the community and strategies are needed to deal with the impact this has ona local community. Here co-operation is requiredbetween business unions, government and communityorganisations. Partnership and volunteerism can be away for business and the community to address socialproblems. All of this recognises that a strong businessenvironment requires a strong community, and businessis there to serve the needs of the community. ■

FATHER DES DWYER

ProfessorialAssociate,St James EthicsCentre

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“BUSINESS TODAY MUSTBEHAVE MORE AS IF ITWERE A PERSON, OFUPRIGHT CHARACTER,BRINGING EXPLICITMORAL JUDGEMENTS TO BEAR IN EVERYTHING IT UNDERTAKES”1

Values, Principles andCommitment – Centre Ground in Business Decision MakingRunning in parallel with the rise in public interest in therole of business and in particular the role of ‘multinational’business in society, has been burgeoning interest in issuesof corporate values, principles and social commitment.For Shell, such considerations have been centre-groundin business planning and decision making for manyyears2 – but in particular the years of transformation of the company since 1995. A deliberate decision in1996 to change the global company from an inwardlyfocussed, technocratic organisation to one more externally focussed – ‘connecting better’ with our manystakeholders – was accompanied by a re-evaluation ofcompany values and business principles. In an era far removed from the corporate profligacy ofthe 1980s, and in part perhaps because of it, businessesacross the world – but especially rapidly globalisingbusinesses – are beginning to focus on similar issuesand it is instructive to briefly examine why this is soand how those involved are faring.

Drivers of the ‘Corporate Social Responsibi l i ty ’ DebateThe role of business and the morality or ethics of multi-national enterprise are hardly new ground for publicdebate. However, there are a number of new forceswhich are altering the nature of this issue and bringingit to the fore. In particular, the increasing willingness ofcommunities to form judgements and to exercise choice– itself a function of rising education standards, theinformation revolution and increasing wealth.The changing role of the private versus the public sectorsin modern economies is adding a new urgency. Weoperate in a world today where people are withdrawingtheir trust from business and other institutions unless itcan be demonstrated that such faith is warranted. Shellcharacterises this as a move from a ‘trust me’ to a ‘showme’ world and now even to an ‘involve me’ world. Ifthis trend proves itself, and we have no reason to doubtit, it has obvious implications for the way in whichbusiness must communicate with its stakeholders.Gradually, although still only at the margin, viewsformed as a result of consumer perceptions of companyethics, values, honesty and behaviour are translatinginto purchasing and investment decisions.Although wide variations exist, rising wealth is allowingconsumer decisions to be based increasingly on personal

choice rather than need. Companies too, are rapidly re-evaluating who their stakeholders are. For the reasonsoutlined above, the stakeholder base is dramaticallychanging, as is the definition of what constitutes astakeholder. For Shell, we judge a stakeholder to be any individual or organisation with the capacity toinfluence our business either positively or negatively.This does not contradict our prime role in the creationof value. It simply sets it into the broader context of ourrole in society.A key element in decisions made in the mid-1990s, following a period of reputational crisis for Shell, wasto deliberately and actively engage with the stakeholders where we do business. In a company ofShell’s size, this is no easy task.

Operating Across the WorldShell operates in more than 135 countries, employing100,000 people in thousands of locations and communities. Our business principles and global environmental expectations set the same standards forall our operations in every region. Operating to perceived ‘double-standards’ in what is now effectivelya CNN world is destined to bring into question a company’s commitment to operating principles andseverely damage reputation.The way we manage our business is based on a set ofcore values – honesty, integrity and respect for people.These are embodied in our nine Shell ‘General BusinessPrinciples’ (SGBP), which describe the behaviourexpected of every employee in their business relationshipswith other people, organisations and companies. Theprinciples encompass our commitment to human rights,sustainable development and high standards on issuesrelating to health, safety and the environment. Shell believes in the promotion of trust, openness, teamwork and professionalism. To make sure that we behave according to our values we have put intoplace – in some cases we are still installing – the management systems to help employees conduct theirdaily business in a responsible way consistent with theShell SGBP. Here in Australia we are incorporatingthem into the processes by which we discuss and assessperformance of our staff. There are still many things we need to do to fully integratethe concept of sustainable development into the way wedo business. This will take time, but we are determinedto advance and we have developed detailed plans toshow our intentions and progress.3

Promoting our Principles We use our influence in joint ventures to persuade ourco-venturers to operate the activity in ways that arecompatible with our principles. We also expect our contractors, in their work with Shell companies, to becompatible with the principles as they relate to the waythe work is done. If this cannot be achieved we will terminate contracts and divest from joint ventures. In 1999, some 62 contracts were cancelled (69 in 1998)and one joint venture was divested because of operationsincompatible with our business principles – mostly withrespect to principle 6 (Health, Safety and theEnvironment) and principle 4 (business integrity).Shell companies in 119 countries explicitly discuss theSGBP in contract negotiations with contractors and in107 countries with suppliers too. In numerous countrieswhere we operate, expectations with respect to the SGBPare written into contracts. In many cases screening for

PROFESSOR CHRISTINE EWAN

Deputy Vice-Chancellor (Education), University of Western Sydney

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SGBP compliance takes place. Shell companies areassisting local suppliers and contractors to reach Shell’srequired standards in 127 countries.Assistance ranges from management support and supplying documentation and videos to training on ISO quality assurance and HSE auditing. The SGBP areavailable in 51 languages, covering the local languagesof 99 per cent of Shell employees. Shell companies in135 countries have a procedure to ensure that newemployees receive the SGBP, and in 109 countries thereis a new employee training program about the businessprinciples and their importance.

What We Have LearntToo often it’s possible to see companies (governmentsand sometimes non-government organisations too) takea ‘decide, announce, defend’ approach to their actions.Shell has learnt, sometimes via bitter experience, thatthis is destined to failure. It is vitally important forcommunities affected by decisions to understand thereasons for them, and that community concerns are listened to and understood by companies and actedupon. Such engagement is not achieved by hiring consultants to do the work for you. It is achieved byopening a dialogue with the community and across thecompany. Its success is predicated on the commitmentand competence of your own management and employeesto deliver on community expectation.We in Shell are far from claiming that we have reachedthe peak of excellence in inculcating values-basedbehaviours into our organisations. We have howevercome a long way and we believe that openness, listeningand continuous learning are (in this and in other aspectsof our operations) the best way to ensure that we continue to improve. Our views are not founded purelyon idealism (which can be a transitory virtue) but onour belief that these new dimensions will be essential toour successful existence in the future.What I have described here takes time and effort. It issurprisingly easy to avoid doing, particularly when thereis often little short term or even long term quantifiablebenefit to the bottom line. It requires continuing management commitment, time and sometimes significantresources. Most of all it requires companies to “behavemore as if they were human, bringing explicit moraljudgements to bear in everything they undertake.” ■

Footnotes:1 From The Economist

2 Shell first wrote its Statement of General Business Principlesin 1976. They were published and issued externally in 1983making Shell one of the first multinational companies to prepare and issue a set of guiding business principles.

3 The 2000 Shell Report – See www.shell.com

MRPETER DUNCANChairman and Chief Executive, Shell Australia Limited

ETHICS ANDVALUES INMODERNHIGHEREDUCATION

Over the last decade ethics and valuesin higher education have become amore visible factor in higher education.In part this is attributable to the wellpublicised failures of professionals invarious fields to adhere to acceptedethical practices, but there are broadersocietal issues at work as well. Thetransition from elite to mass systems of higher education, the explosion ofscientific knowledge and capability,which has generated unanticipatedethical dilemmas, and the renewedacknowledgment of the responsibilityhigher education institutions have to educate leaders for social justiceand global responsibility have allplayed a part.

Over the past 20 years higher education hasbeen transformed from an elite system toa mass education system. Worldwide the

number of students enrolled in higher education

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increased from 13 million in 1960 to 82 million in1995. The World Declaration on Higher Education forthe Twenty-First Century1 points out that this increasehas also been accompanied by widening socio-economicgaps in access and resources for higher learning andresearch. The report concludes that “[H]igher educationitself is confronted ... with formidable challenges andmust proceed to the most radical change and renewalthat it has ever been required to undertake, so that oursociety, which is currently undergoing a profound crisisof values, can transcend mere economic considerationsand incorporate deeper dimensions of morality andspirituality.” The participants at the World Conferenceon Higher Education assembled at UNESCOHeadquarters in 1998 went on to specify a number ofArticles defining the mission and functions of highereducation. Among those Articles the issues of ethics andvalues feature prominently. They point to the ethicalrole of university staff and students in providing “akind of intellectual authority” to help society reflect,understand and act. They emphasise that relevance is akey concept “basing long term orientations on societalaims and needs” with the ultimate aim of “the creationof a new society – non-violent and non-exploitative –consisting of highly cultivated, motivated and integratedindividuals, inspired by love for humanity and guidedby wisdom.” The report emphasises that the teaching ofhuman rights standards and education on the needsof communities should be reflected in all disciplinesbut especially those preparing for entrepreneurship.The report recommends that each institution shoulddefine its mission to include actions towards thebetterment of its community through sustainabledevelopment and social justice.Differences in response to the transformation froman elite to a mass system are evident in policy positionsin different countries. The UNESCO report, as befitsits status as an aspirational document, emphasisesglobal social justice issues. In the UK the response is characterised by an increasing concern about the maintenance of “standards”, a concern to define thecharacteristics of “graduateness” or fitness for employment.The landmark National Committee of Inquiry intoHigher Education chaired by Lord Ron Dearing2

adopted a highly instrumental view of higher education.While it acknowledged that education is fundamentalto an improved quality of life its recommendations inrelation to the nature of higher education programswere predominantly directed towards the skills that meetthe needs of employers. The report defined as necessaryoutcomes of all higher education programs, key skills incommunication, both oral and written, numeracy, theuse of communications and information technology andlearning how to learn. Notably absent is any specificreference to values, ethical principles or social responsibility.A mass higher education system brings larger numbersof graduates from more diverse social and academicbackgrounds to the workforce with a broader but lesspredictable set of skills. Perhaps it is not surprisingtherefore, that in Britain with its traditionally strongindustrial economic base, the focus of the Dearingreport was on maintenance of quality and standardsdefined in instrumental rather than moral terms.Although individual British universities have adoptedmission statements which acknowledge an ethical andvalues base, the policy preoccupation is with qualitydefined by traditional research and teaching outcomes.This preoccupation is also reflected in British studentviews of the university experience. Only 2 of 206 students

surveyed in 1996 on what constitutes a “graduate” volunteered the view that graduate status “imposed a level of social and personal responsibility to be participative citizens.”3

A similar preoccupation with instrumental ends is evident in Australian policy. The most recent formalreport on Australian higher education financing andpolicy chaired by Roderick West4 observed that “highereducation is beginning to lose its way”. The vision forthe future which it articulated, however, was framed asequipping “our graduates to play a productive role inan outwardly oriented, knowledge-based economy.” Its terms of reference focused on structure and financingof the sector to ensure economic growth of society leavingaside consideration of super-ordinate values or ethicalimperatives for education which might contribute to amore just society. The report explicitly emphasised thefact that higher education must be regarded as an industrybut did not provide a balancing perspective of highereducation as an instrument for social or ethical enlightenment. Given the social challenges facing modernAustralia moving into its third century this omission isdisappointing. Like the British approach it follows froman assumption that economic growth of itself leads toimproved quality of life – a materialist view which failsto acknowledge spirituality, morality and ethics asfoundations of community life.

The publicly funded higher education system in NorthAmerica, however, reveals a different preoccupation.The British Higher Education Quality Council5observed that lists of the attributes expected of graduatesin the UK often tend to give less weight to overall personaldevelopment and to social purpose than similarAmerican lists. The HECQ attributed this to differences ofhistory and social function of higher education togetherwith the fact that North American higher education hasbeen a mass system for at least a generation.Interestingly, Australian lists of graduate attributesmore closely resemble American than British lists. Thepreoccupation emerging in publicly funded Americanuniversities over the past decade has been with a revivalof commitment to community service. This is a reactionto the dramatic growth in research prominence postWWII with a concomitant lowering of the status ofteaching and service in universities. The KelloggCommission6 in its report “Renewing the Covenant”sums up the movement in the statement “Our missionis a mindset as much as a program. The irreducible ideais that we exist to advance the common good”. Amongthe seven commitments that the Commission believespublic higher education must make are “learning environments that meet the civic ends of public highereducation by preparing students to lead and participatein a democratic society” and bringing universityresources to bear on “community, state, national, andinternational problems.”

…the pol icy preoccupation

is with qual i ty def ined by

tradit ional research and

teaching outcomes.

9

North American Universities have also engaged the issueof ethics from an interdisciplinary academic perspectivewith many major institutions (including Harvard,Stanford, Princeton, Carnegie Mellon, MIT, Duke andUniversity of British Columbia in Canada) supportingspecialised centres for ethics and the professions. Themission and purpose of such centres is exemplified bythe Mission Statement of the Harvard Centre for Ethicsand the Professions7 which identifies as one of its aims“to help meet the growing need for teachers and scholarswho address questions of moral choice in such areas asbusiness, government, law, medicine, public policy, andsocial science.” The Kenan Ethics Centre8 at DukeUniversity aims to create and sustain a strong focus on ethics in teaching, research and everyday life atDuke and to promote approaches that “enrich moralimagination and inspire personal integrity and civic commitment”. The need for such centres has emerged as a consequenceof the rapid advances in science and research. Asknowledge accumulates and science allows for increasingintervention in natural processes (the human genomeproject and genetically modified food are two topicalexamples) the need to better understand the moral andethical consequences of professional, commercial andsocial choices grows. As societies become more pluralistand secular and as globalisation brings more diversityto any context the complexity of ethical decision-makinggrows. The Harvard Centre, stimulated by this problemrelies on what it calls “practical ethics”, linking theoryand practice, taking account of institutional context,and acknowledging the political – the distinctionbetween the right decision and the right to make thedecision in any given context.Several Australian Universities (including Monash,Queensland University of Technology and CharlesSturt) have established similar centres for the study ofethical practice and there is an Australian Associationfor Professional and Applied Ethics9 whose formal aimsinclude facilitation of networking between individualsand encouraging a focus on the teaching of professionaland applied ethics. The Australian Business EthicsNetwork10 has been established to promote ethicalpractices in business and to advocate the need for inclusionof ethics in business courses.Despite the lack of national policy encouragement virtually all Australian Universities have incorporatedinto their mission statements and the now universal listsof graduate attributes an ethical or social responsibilitydimension. This dimension is expressed in terms such as“to value truth, accuracy, honesty, accountability andethical standards” (QUT), “understanding of typicalethical dilemmas and importance of ethical conduct,intellectual integrity and professionalism in ... civic life”(UWS), “the active pursuit of equity and social responsibility” (Deakin), “an acceptance of individualresponsibility and accountability; an understanding ofprofessional ethics, and a willingness to contribute in a positive way to society (USQ), “acceptance of individual responsibilities and obligations and of theassertion of the rights of the individual and the community” (UOW), “committed to ethical action andsocial responsibility”(UNE), “acknowledge their personal responsibility for their own value judgementsand their ethical behaviour towards others” (Sydney).Although Australian universities have incorporatedthese sentiments into their corporate identities there is less evidence that they are universally applied in

curricula or assessment of students. There is a considerable literature on ways to incorporate theteaching of ethics into various professional courses (eg 11 12) but achieving success usually depends on thecommitment of dedicated individuals. For those whoare committed there are extensive resources available toassist – with a number of the specialised centres andgroups having established websites, bibliographies andresource lists. 13 14 15 16.

Cultural differences, even among English speakingcountries, obviously influence the perceptions and practicessurrounding values and ethics in higher education. In the Australian context the institutions themselvesacknowledge the fundamental principles, the resourcesare available to educate for leadership in this area andthe social issues are present in abundance to provideopportunities for academic involvement in the ethicalfoundations of Australian society. Stronger resolve todo so in a systematic and serious fashion, however,awaits a suitable imperative such as the NorthAmerican universities experienced when legislaturesbegan to question their social relevance and their valueto the communities that were supporting them. ■

References1. World Declaration on Higher Education for the Twenty-First

Century: Vision and Action and Framework for PriorityAction for Change and Development in Higher Education,adopted by the World Conference on Higher Education,UNESCO Paris, 9 October 1998.http://www.unesco.org/education/educprog/wche/declaration_eng.htm

2. Higher Education in the Learning Society, The NationalCommittee of Inquiry into Higher Education, 1997. (Dearing report). http://www.leeds.ac.uk/ncihe/docsinde.htm

3. Wisdom J, What is a graduate? A Consultation Exercise with Students, 10 June 1996, London Guildhall University.http://www.lgu.ac.uk/deliberations/graduates/consult.html

4. West, R Learning for Life. Final report. Review of highereducation financing and policy. DEETYA, April, 1998http://www.deetya.gov.au/highered/hereview/execsum1.htm

5. What are Graduates? Clarifying the Attributes of‘Graduateness’. The Higher Education Quality Council:Quality Enhancement Group, 1995.http://www.lgu.ac.uk/deliberations/graduates/starter.html.

6. Renewing the Covenant. Learning, Discovery, andEngagement in a New Age and Different World. KelloggCommission on the Future of State and Land-GrantUniversities, National Association of State Universities andLand_Grant Colleges, March 2000. http://www.nasulgc.org

7. Centre for Ethics and the Professions, Mission Statement,Harvard University 1999.http://www.ethics.harvard.edu/mission/index.html

8. Kenan Ethics Mission.http://kenan.ethics.duke.edu/Newmission.htm

9. Australian Association for Professional and Applied Ethics.http://www.arts.unsw.edu.au/aapae/

10. Australian Business Ethics Network.http://www.bf.rmit.edu.au/Aben/index.html

11. Brown P & Mausehund J, Integrating managerial ethics intothe business communication curriculum. BusinessCommunication Quarterly, 60 (1): 77, March 1997.

12. Bridgman A et al Teaching and assessing ethics and law in the dental curriculum. British Dental Journal 187 (4) August 28, 1999.http://www.bdj.co.uk/archives/1999/v187n4/full_text/4800243a.shtml.

13. OTRP Resources: Annotated Bibliography- Ethical Issues inTeaching and Academic Life. http://www.lemoyne.edu/OTRP/otrpresources/otrp_eth-teach.html

14. Association of Program Directors in Internal MedicineEducational Clearinghouse. Medical Ethics http://www.apdim.med.edu/ec/mdethics.htm

15. The Online Ethics Center for Engineering and Science.onlineethics.org

16. Ethics Updates Home Page. http://ethics.acusd.edu/index.html

10

“At the beginning of the 1980s there was a kind of moral fad in parts of the UnitedStates that spread almost immediately to Europe. The age-old, Anglo-Europeantaboo of handling money was shoved offstage by the sheer force of events in the financial world, clearing the way for a new money culture.1

Adecade later the “new money culture” is stillwith us in many ways. It is merely an extensionof the fact that capitalism tends to push the

community toward a “having mode” as “where one hasan attitude of wanting to have everything for oneself”.2

So one is what one owns, and this leads to “I am whatI have, and if I have nothing I am nothing.” The “beingmode” is the opposite of the “having mode” and is harderto describe. But one manifestation is to be interested inideas rather than things. Going back, St Paul describedthe love of money as the root of all evil. More recentlylove of money has been described thus: “Love of money– like bindweed, it springs up perennially and unlesscontinuously rooted out, overgrows the most flourishingcommonwealth, binding to destroy.”3

What the ’80s and ’90s saw was a cyclical explosion in“the money culture” and the financial markets were thecentre of that activity. The sheer force of financialevents that pushed aside the long-established conservatismof the banking and finance sector was the arrival offinancial deregulation via a market-driven approach toour economic problems. Now as we challenge the beliefin unbridled markets and economic rationalism we arein a more reflective mood. We are realising that whilethe market system brings a lot of good things like efficiency there are plenty of undesirable side effects.In 1990, when Warren Buffett, the new Chairman ofSalomon Bros, appeared before a sub-committee of theUnited States House of Representatives to apologise forthe actions of a number of ex-employees of Salomon’sin regard to activities in the US Treasury bond market,he summed up the issue nicely. Buffett said: “Huge markets attract people who measurethemselves by money. It’s not the only type of peoplethey attract, but there is a special attraction of markets.If somebody goes through life and measures themselvessolely by how much they have or how much theyearned last year, then sooner or later they are going toget into trouble.”4 This sounds like another version ofdescribing love of money as the root of all evil.

THE NATURE OF MARKETSReading between the lines, what Buffett seems to besaying is that markets are not corrupt, but that they arecorrupting. Markets are not a living thing but anabstraction. They therefore lack a charged moral quality,being neither moral nor immoral, but amoral.

Essentially, our financial market system works reasonablywell in allocating the scarce resource of capital, and certainly better than any known alternatives. Problemsemerge when the humans who operate in markets failto exhibit a disposition to be ethical.

One response to this is to insist on prudential standardsexpressed in the form of rules and regulations. Butwhile these work as a disincentive to bad behaviour,they do not necessarily have the positive effect ofincreasing the formation of appropriate moral attitudes.Rather, they tend to reinforce an attitude based on thefear of getting caught. But there are some regulationsthat, within limits, have a positive effect on the smoothand efficient operation of a market. Essentially, theseare rules that try to achieve maintenance of competitionthrough requirements such as that of full disclosure.

Other forms of regulations, those that assume participantswill act immorally, are necessary evils. They are necessarybecause they ensure that market players do not outstripcommunity expectations, and they are evils becausethey are negatives on the efficiency of markets due to the impediments they impose. These rules and regulations thus reflect the cost of not being able totrust market participants.

A QUESTION OF ETHICSThis leads to the subject of appropriate ethical behaviour.What are ethics? The word “ethic” comes from theGreek “thos” which means custom, while “moral”comes from the Latin “mos”, which also means custom.So ethics and morals are to do with how one behaveswhere one belongs.

The first question on ethics was asked by Socrates whenhe said, “What ought one to do?” As Dr SimonLongstaff has pointed out, “Such a question challengesevery aspect of our lives: from the way we allocate ourtime to the way we treat one another in our dealingswith each other.”5

The question of ethical behaviour is, therefore, animmensely practical question, and not just one for academic theorists. However, like any profound question,it sometimes seems difficult to pin down an answer.

Is it too far-fetched to suggest that in regard to everydaymatters we all know what is right or wrong? Dr Johnson once said of morals: “People need to bereminded more often than they need to be instructed.”C S Lewis has noted that we all “have in mind somekind of law or rule of fair play or decent behaviour”6

about which we all agree. This law – frequently calledthe law of nature – is thought to cross the gulf betweendifferent cultures and different ages. As C S Lewis says,“Can you think of a country where people are admiredfor running away in battle, or where a man felt proudfor double-crossing somebody who had been kind tohim? ... Selfishness has never been admired”.

One test of our awareness of right and wrong is tocompare our behaviour at home with the values and

THE MONEY CULTURE

11

standards we apply in the workplace. (This, of course,assumes that good standards of behaviour apply at aperson’s home). They should be complementary. Oftenthey are not, because the workplace is to do with competition, ambition and survival, whilst support,acceptance and belonging tend to be the founding principles of the home. At the end of the day, this testcan be no more than a test. Values, once established,must transcend one’s environment; otherwise they aresuperficial values.

Buffett’s response to the ethical issue in Salomon’s wasto try and call on people’s sense of right and wrong. Theway he did it was to ask people to think of themselvesas their own compliance officer. That before theyundertook any action, to ask themselves whether theywould be willing to have any contemplated act appearthe next day on the front page of their local paper to beread by their spouses, children and friends with thereporting done by an informed and critical reporter. Hemade the point that if you adopted this attitude, therewas little need to consult the statutes or ring a lawyerbecause this approach, which is based on the law ofnature, would abide by the spirit of the legal system andnot just the letter of the law.

What he was really doing here was seeking to equatethe typically higher standards and values of the homewith the workplace. The underlying assumption of thisapproach is that those closest to you at home or elsewhere have views and opinions that you really value.

The tendency for those dealing in money to be corruptedhas long been recognised. Aristotle said in Politics:“interest, which means the birth of money from money ... of all the modes of getting wealth this is themost unnatural”.

Anti-usury laws long existed in reflection of the Church’sview on usury. The charging of interest for profit waslegalised in Great Britain in 1571. This liberalisationfacilitated the growth of the great family banks of Europeand, when ultimately combined with the inventions ofthe Industrial Revolution and the creation of limitedliability in 1855, produced the capitalist society that weknow today.

But capitalism is based on self-interest which, on thefact of it, seems to conflict with ethical behaviour. So, if(as C S Lewis says) “selfishness has never beenadmired”, how do we reconcile this apparent conflict?

When people talk approvingly of the power of self-interest they use Adam Smith’s “invisible hand” asjustification. But in The Wealth of Nations, Smith alsosaid: “To promote the little interest of one little orderof men in one country, it hurts the interests of all otherorders of men in that country and of all other men in allother countries”. This statement was made in relationto cartels and monopolies. However, it does go to showthat Adam Smith, a moral philosopher, never abandonedhis concern that “good be gained for all” be set against“the selfish interests of a few.”

Having said this, it should be observed that appeal toself-interest could take you a fair way along the road ofgood ethics. For example, as a bank you may decide notto lend to somebody who is immoral because that personis unlikely to feel overly inclined to repay you. Thisstand avoids the reputation risk of being involved withimmoral people and may also be good ethics from a

community standpoint as it denies funding to animmoral person.

But self-interest runs into difficulties when you applythe concept Glaucon used in his proposition toSocrates. Glaucon proposed a situation in which youhave the magic ring of Gyges. Possession of the ringwould make you invisible and therefore would allowyou to get away with all manner of unethical and evenevil deeds. As a bonus it would protect you from damageto your reputation that might flow from dealing withimmoral people. With this device it would be possible tolend money for any purpose – however reprehensible.Your loan would be repaid and your reputation preservedas your name would be kept secret. Glaucon said: “If youcould imagine anyone obtaining this power of becominginvisible, and never doing any wrong or touching whatwas another’s, he would be thought by onlookers to bea most wretched idiot.”7

In response to Glaucon, we might continue to try theself-interest line and argue that we would not deal with thatperson because such activity could have an impact onour family. However, Glaucon could easily provide acircumstance that avoided contaminating your familybut contaminated some person or community somewhere.

So ultimately we are called upon to have an ethicalstandard that surpasses self-interest. Self-interest is toonarrow a standard to operate under. Ethical behaviourinvolves preparedness to take account of the well beingof others.

C S Lewis expands on ethics by saying: “Morality seemsto be concerned with three things. First, with fair playand harmony between individuals. Second, with whatmight be called tidying up or harmonising the thingsinside each individual. Third, with the general purposeof human life as a whole: what man was made for;what course the whole fleet ought to be on; what timethe conductor of the band wants it to play.”8

When I read this it reminds me of a story told to me bya colleague. He was attending a school speech nightwhere a woman spoke on the research she had done onthe common characteristics of enduringly successfulorganisations – not just in business, but in health, education, welfare and other activities.

In her view, successful organisations were characterisedby three things:

1. Respect for the individual.

2. A desire by the organisation to be the best and to develop its people to be the best they can be.

3. What the organisation was doing had to be worthwhile, of value.

This analysis is very similar to what C S Lewis is sayingand suggests a framework for answering Socrates’ question: “What ought one to do?”

So it seems to me that the resolution of the conflictbetween capitalism’s emphasis on self and the ethicalquestion becomes a little clearer.

In a capitalist society we only accord genuine respect toenduringly successful organisations, not fly-by-nighters.To be an enduringly successful organisation, you needthe members of that organisation working to their optimumand respecting each other (that is, a minimum of politics).And finally and most importantly, the organisationneeds a social purpose beyond itself and its constituents.

12

In other words, values and standards that go beyondself-interest.It seems to me that the main problem in the ’80s and’90s was that business, and particularly those in thefinancial sector, lost sight of the three fundamentals onwhich are built enduring, successful organisations. There were plenty of people in organisations who weremotivated to work hard, fewer who respected their fellow workers’ efforts and not many at all who felt theyhad a social purpose beyond themselves. This syndromeis epitomised by the ’80s and ’90s attitude of workinghard to accumulate wealth quickly to enable earlyretirement to some mythical beach. Implicit in this was anattitude of doing something that you didn’t necessarilylike or see as a long-term career. These people ran therisk of burnout and usually failed to balance therequirements of their business and private lives.How do we ensure that in the future the ethical issueremains at the forefront of employees’ minds ratherthan drifting into the unconscious as it seemed to do inthe ’80s and ’90s?Mark Twain had a saying that went something like:“Fish go bad from the head first”. What this means isthat the ethical standards of any organisation are set atthe top. Unfortunately, group behaviour and the natureof organisations are such that people tend to suppresstheir sense of right or wrong if they feel that this is what is required of them. The positive side of this is that people would prefer to do the right thing. So management has to make it clear where it stands.Remember Dr Johnson’s observation: “People need tobe reminded more often than they need to be instructed”.This is not done simply by written codes and pronouncements, but also by setting the right exampleand emphasising what the expectations may require interms of daily conduct. If management convincesemployees that it expects ethical behaviour, then thesense of right and wrong that we all operate under,aided by the healthy discipline of peer group pressure,should lead to the upholding of proper standards. ■

References1 Michael Lewis, The Money Culture2 Erich Fromm, To Have or to Be, 19763 George Goyder, The Just Enterprise, 19874 United States House of Representatives, House Committee

on Energy & Commerce, Washington DC, September 19915 Speech by Dr Simon Longstaff, Executive Director, The St

James Ethics Centre, “Morals & Ethics: Where is SocietyHeaded?”, January 1992

6 C S Lewis, Mere Christianity7 Plato, The Republic8 C S Lewis, op. cit.

ETHICALRESPONSIBILITY

One of the best advertising campaigns in recent decades was that developed by government environment agencies using the slogan “Do the right thing”. It was simple and the community readily understood the message. It raised the community concern about pollution. It required little explanation.

If this is translated to business ethics then again themessage is clearly “do the right thing” by yourself andyour associates. Ethics is now a byword in discussions

on behaviour by government officials and in business.

Ethics considers the question of what behaviour may inprinciple be justifiable and worthy or right and good.

Ethics is about the appropriate behaviour and the valuesthat we bring to that behaviour – values such as honesty,integrity, justice, fairness and sensitive treatment of people.

In the past year the media has had a field day reportingthe behaviour of prominent persons and organisationswhere clearly the right thing was not being done. Thesewill be remarked upon separately but topping the listmust be the South African Test Cricketers, the I.O.C.(including Mr Gosper), the Taxation Commissioner, theElectoral Commissioner, the AMP and the behaviour ofcertain Ministers during the Republic Referendum.

Concerning the Referendum, Australians are accustomedto ‘fear’ campaigns conducted at general elections for State and National elections. New heights werereached during the Referendum when those opposing a Republic ran a campaign based on the theme “You Cannot Trust Politicians”. Preaching this themeto voters could only reinforce the growing cynicism ofvoters and damage our democratic political process.

Yet a few weeks later one of these Ministers appealed toYoung Liberals to become involved in the politicalprocess and to consider entering politics. This was aclear case of unethical behaviour.

Concerning the South African Test Cricketers it is generally accepted that the Captain Hansie Cronje andseveral others behaved illegally and hence unethically.But what about the rest of the team with whom Cronjediscussed the bribes and who remained silent and keptsilent for several years.

What does this tell us about the culture of the organisation and the deference to the leaders when theyshould have been challenged.

MR ROB FERGUSON

Chairman, BT Financial Group Pty Limited

13

Remaining silent is an easy option but it is not the rightthing to do.The recent successful organising of the Sydney OlympicGames shows what can be achieved despite the unethicalarrogant behaviour of its international leaders. The actionsof Vice President Gosper at the handover of the flamein Greece was seen by most Australians as unethical buthis IOC colleagues stood silent until the uproar occurred.Like the South African cricketers this illustrates againthat the culture of an organisation is determined primarily by its leaders. It develops over a period oftime and permeates the organisation and becomesaccepted to the point where the personnel regard thebehaviour set by the leaders as acceptable.In the case of the I.O.C. there has been a sham reviewand so called reforms have been put in place. Even Dr Kissinger became involved and lent his name to the reforms. Some athletes have been added to thisundemocratic body and this is a good thing. Hopefullythese younger people will bring fresh thinking andapproaches but it will not be easy for them to changethe culture dramatically and this is what is required.I turn now to some recent examples at theCommonwealth Government level that give cause forgreat concern. First we had the Taxation Commissionerselling ABN numbers. Worse still was the massiveexpenditure on tax advertisements promoting the benefits of the GST.There were weak explanations that the previousGovernment had spent money on tax policy issues. Themagnitude of the amount spent was extraordinary bycomparison. The issue here is whether the TaxationCommissioner was pressured by Government Ministers ordid he decide the matter unfettered by such pressures.This example is a good illustration of where behaviourmay be legal or not improper but this does not meanthat it is ethical. Ethical behaviour raises the bar and it is this dimension that we must now always take into account.Any discussion on ethical behaviour cannot ignore thecash for comment scandal involving the Banks andradio commentators, Laws and Jones. The behaviourwas scandalous in the opinion of large segments of thecommunity and was the subject of public inquiry by theAustralian Broadcasting Tribunal. The Tribunal haddifficulty in accepting aspects of evidence given to it.But the additional question to be asked concerned thebehaviour of the Bank Board Directors. Were theyunaware of the turn around by Laws in his views aboutBanks; were they not informed by their respective ChiefExecutives or did they simply decide to remain silent,put their heads down and leave it to the ABA to takethe flack?Other major companies such as Telstra, Optus, Qantaswere part of this scene and again we have Directorsremaining silent. Perhaps the saddest part of this unethical behaviour is that the general public appearsto have ignored the behaviour and did not extract anyretribution against the companies and individualsinvolved by way of reduced ratings and/or sales. Thisshows that we have a long way to go in raising community expectation of ethical behaviour. Another recent example of dubious corporate behaviour concerns the AMP. The former CEO was

told by the Chairman to stay home, was later forced toresign and yet received an indecent large payout thatwas not revealed immediately to the shareholders.Subsequently the Chairman lost his position but hissuccessor approved an options scheme for the newCEO where the hurdle was so low that it was achievedwithin a few weeks. All of these actions by the corporategiant were legal proving again that legal behaviour is not necessarily proper and/or ethical behaviour.Switching back to government behaviour we had therecent example of the Electoral Commissioner makeavailable electronic lists of enrolled persons for use bythe Prime Minister in a personal letter. This was judgedto be illegal. Surely when this request was first made theCommissioner should have had serious doubts aboutwhether this was the right thing to do.As statutory officers protected by their separate statutesboth the Taxation and Electoral Commissioners shouldhave defended their independence more vigorously thanwhat appears to have been the case.These examples illustrate that while both public andprivate sectors profess to significant advances in corporate governance behaviour we still have a longway to go. In the public sector the morale has beenraised on ethical behaviour mainly by the manyaccountability mechanisms that have been introduced.Regrettably these encourage minimum compliance, theypunish undesirable behaviour rather than promotinggood conduct. In the private sector Boards regularlypublish statements on corporate governance in theirannual reports but is the culture changing?Three messages that clearly emerge from the aboveexamples are:First, because an action is legal it does not mean that itis ethical.Secondly, too often people remain silent when theyshould speak out and object to unethical behaviour.Thirdly, the culture of an organisation is critical to thebehaviour of its officials. It develops over time and isnot easy to change. The leaders carry the responsibilityfor developing a culture where ethical behaviour is the norm. This means that the Chairman, Board Members, theChief Executives and senior management must provideexample by their own behaviour.Finally we should be publicly true to our private values.We should not leave our private values at the front doorof the organisation as we enter. ■

MRGERALD GLEESON AC

Chairman, Sydney HarbourForeshore Authorityand the DarlingHarbour Authority

14

D RS A M U E LG R E G G

Resident Scholar, The Centre forIndependent Studies,Sydney

ETHICS,BUSINESS AND ‘VALUES-TALK’It is difficult to think of a

book of moral philosophy

that has become the subject of

more debate than Alasdair

MacIntyre’s After Virtue. The

moral fragmentation of our time

is, MacIntyre claims, the story

of the loss of an Aristotelian

morality and the Enlightenment’s

failure to provide a successful

replacement.1 Naturally, there is

much argument about whether

or not MacIntyre’s explanation

for the widespread descent of

morality into mere subjectivism

is accurate. But does anyone

seriously doubt that notions

such as moral absolutes

that transcend time,

place and culture are

significantly questioned

at all levels of society?

The paradox is that the word ‘ethics’ has becomea part of everyday life and business activity to an extent that many philosophers would not

have thought possible. This does not, however, necessarily mean that a clear understanding of thenature of ethics prevails.

Nor, in this connection, is the pursuit of ‘businessethics’ likely to be helpful in clarifying the situation.The ordinary moral duties that one expects peopleworking in business to recognise, such as honesty andfair dealing, flow from ordinary morality rather that aunique ‘business ethics’. When SmithKline andBeecham, for example, withdrew their Panadol productfrom circulation because some samples were found tobe poisoned, their action reflected nothing more thanthe demands of ordinary morality rather than any formal commitment to business ethics.

Certainly, there are moral evils of a certain type (suchas fraud), which often emerge in the corporate world.But one of the problems with the phrase ‘businessethics’ is that it conveys a sense that there is somethingespecially morally hazardous about business. In fact,any human action that involves a choice between good and evil has its moral hazards. While avoiding evil in corporate life is often difficult, it is no morestrenuous than in family life or professions such asmedicine and law.

Unfortunately, we also live in a time where, as JohnFinnis states, ‘there is no clearly settled meaning of“ethics” in modern philosophical discussion’.2

Words like ‘morality’, ‘virtue’, ‘reason’ and ‘will’ arewidely used without any real appreciation of the classicalcontext of such terms and the manner in which theyrelate to each other. Their meaning has been obscuredby the establishment of what MacIntyre describes as‘emotivism’ as the orthodoxy among many Westernphilosophers and within public discourse as a whole.

By emotivism, MacIntyre has in mind the idea thatthere is no such thing as ‘good’ and that when peopleuse such phrases, ‘they are doing no more and no otherthan expressing their feelings and attitudes, disguisingthe expression of preference and whim by an interpretation of their own utterance and behaviourwhich confers upon it an objectivity that it does not infact possess’.3 Hence, we find philosophers such asJohn Mackie announcing at the outset of his book onethics that ‘there are no objective values’.4 The effecthas been to turn much of moral philosophy into a typeof sociology.

Perhaps the most visible manifestation of this tendencyis the ‘values-talk’ that permeates much public discussion of morality. The word ‘value’ was once usedas a verb, meaning ‘to esteem’. Now, however, it is usedprimarily as a plural noun, denoting beliefs or attitudes.It is common to hear people speak of ‘my values’, whileothers are regarded as having ‘their values’.

Values-talk is very democratic, but it fails to facilitateany meaningful discussion about the moral life. In fact, it undermines the very possibility of such a conversation and encourages people to think of ethicsas a type of moral smorgasbord.

Anyone can espouse values. Communist and Fascistregimes, for example, embraced values in the sense thatthey were unquestionably committed to not dissimilar

15

sets of beliefs and attitudes. Herein lies the problem ofvalues-talk. It suggests that one value is as good asanother. The statement, ‘I have values’, is often used toindicate people’s belief that they are essentially goodpersons. Such claims are, however, meaningless untilone discerns what those ‘values’ happen to be. But values-talk discourages people from assessing the worthof those beliefs and commitments, because it impliesthat the only important factor is that a person has chosena belief. To question the correctness of that choice isjudged (in our non-judgemental age) to be wrong,because it implies that some beliefs are intellectuallyincoherent or even downright evil. Discussion of goodand evil is integral to any serious discussion of themoral life, but values-talk sidesteps this in favour of atype of relativistic moral levelling.This becomes clear when one contrasts values-talk withAristotle’s virtue ethics. The Aristotelian tradition holdsthat the virtues are, by definition, not only limited in number, but transcend time and culture in theirtruthfulness. Hence, one cannot hold that the habit of prudence is a virtue for one person and not foranother. Aristotle also specified that it is difficult forpeople to acquire the virtues. We have to choose constantly the same habits of action when faced with achoice between, for example, courage or cowardice,prudence or foolishness.On a number of levels,then, the Aristotelianapproach to the moral life is distinct from the relativistic tendencies ofvalues-talk. Moreover, itopens up the possibilityof serious reflection uponhow we do good andavoid evil. Why? Becausevirtue-ethics is based upontruth-claims, the very type of claim that values-talk is incapable of making (except the claim that everythingis relative).What, then, is to be done? Fortunately, no matter howfragmented our moral-culture, no matter how differentpeople’s heritages or commitments, every person whopossesses unimpaired reason is capable of discerningcertain fundamental moral truths. For while these truthsmay find particular expression in different cultures,they are nevertheless captured in sound practical judgements that may be formed by any thinking person.Reason tells us, for example, that knowledge is in itselfgood (even though it can be used for evil ends). It alsotells us that it is unreasonable for anyone to deny thatknowledge ought to be treated as a form of excellence,or to deny that error and ignorance are evils that noreasonable persons should wish for themselves or others.Nor, one could add, is there any reason to be ‘impartial’between death and life, health and disease, or trash andart. If this is true, then we can say with confidence thatpeople who treat goods such as life, knowledge andbeauty as being of no consequence, are being irrational.The capacity of anyone with unimpaired reason to livemorally should encourage those who work in the worldof business. There is, however, another reason why peoplein business ought to have confidence in their basic abilityto know and do good: ethics is an intensely practical

exercise. Aristotle noted that one only does ethics adequately and reasonably in order to be able to act.Many view ethics as a dry, theoretical exercise.Certainly, there is a contemplative dimension to ethics.But ethics is a very practical activity because the reasonthat one searches for moral truth is in order to be ableto do good and avoid evil. It revolves around the question of what one ought to do. Ethics concerns, inshort, the acquisition of practical knowledge.This essential practicalness should appeal to those workingin the decidedly practical world of business. But thispracticalness should not be understood as referring toopinion polls and focus groups when we try to decidewhether it is morally good to do X and not Y. Norshould moral reasoning be understood as a matter ofapplying particular aphorisms to a situation andmechanically calculating the correct moral result.Aristotle reminds us that “it is a mark of a trained mindnever to expect more precision in the treatment of anysubject than the nature of the subject permits”.5 It isentirely possible for a person to be familiar with all therules of logic and moral reasoning, and yet arrive at thewrong answers, precisely because they have notacquired the habit of thinking and acting prudentially.No course of business ethics can substitute for people’sfailure to acquire this skill.

The moral dilemmasencountered in businessare many. Human fallibilitymeans that some moralerrors will always occur.While the law, codes ofconduct and social conventions help to deterevil acts, in the finalanalysis, only individualpersons can choose to actmorally. It follows that

one of the most effective ways that people in businesscan contribute to the flourishing of a sound moral ecologyis to focus upon doing good and avoiding evil in theireveryday dealings with each other and those withwhom they come into contact. While this will not solveevery moral problem in the corporate world, there is nosubstitute for fulfilment of simple obligations such astruth-telling and promise-keeping, or the acquisition of virtues such as prudence and courage. When theseobligations are abandoned and such virtues left uncultivated, business activity can quickly degenerateinto crony-capitalist arrangements.We are all more dependent on a sound moral culturethan we think. It is only when this culture begins to ebbthat its absence becomes noticeable. ■

References1 See Alasdair MacIntyre, After Virtue: A Study in Moral Theory,

University of Notre Dame Press, Notre Dame, 1981: 22-59.2 John Finnis, Natural Law and Natural Rights,

Clarendon Press, Oxford, 1980: 128.3 MacIntyre, After Virtue, 16-17.4 John Mackie, Ethics: Inventing Right and Wrong,

Penguin Books, New York, 1977, 15.5 Aristotle, Nicomachean Ethics, tr. J.A.K. Thomson,

intro. J. Barnes, Penguin Classics, London, 1955/1976: bk.1, iii, 1094.

Reason tel ls us, for

example, knowledge

is in i tself good

(even though i t can be

used for evi l ends)…

16

Much of my own professional life hasbeen concerned with the academic profession – I have worked with academicsand have researched and written abouttheir work, their values, their hopes,and I have also worked on evaluationsystems of academic performance. My love for academia and respect for scholarship have never faltered. But current patterns of interaction in universities are testing this.

We expect the academic profession tobehave professionally, and this implicitlymeans ethically. Indeed, we see the university

as an ethical community.A dictionary definition (The Collins EnglishDictionary. Australia Edition, ed. By GA Wilkes, 2nd ed.1986) describes ethics on both a theoretical and practical level:

1 the philosophical study of the moral value ofhuman conduct and of the rules and principles that ought to govern it;

2 a social, religious, or civil code of behaviour considered correct, esp. that of a particulargroup, profession or individual;

3 the moral fitness of a decision, course ofaction, etc.

I will address some aspects of the latter two meanings as they apply to interaction in universities.Ethics as part of the curriculum, of teaching and of research, I trust, will be addressed elsewhere inthis volume.Most universities proclaim their values in theirStrategic Plan. One of the universities I am familiarwith, commits itself to fostering a culture characterised by:• trust, integrity, and fairness;• valuing of staff and students;• co-operation and collegiality;• flexibility and responsiveness;• open communication;• creativity and innovation;• achievement through diversity;• accountability for decisions and outcomes.

Ethical standards are described in closer detail in documents such as employee codes of conduct. As onecode states,

“Employment at the University carries with it anobligation to the public interest. It requires standardsof professional behaviour from employees that promote and maintain public confidence and trustin the work of the University.”

The Code then outlines principles for all employeesunder various headings and provides a guide to ethicaldecision making in a number of situations. There is ahost of related policies from Anti-Racism to Alcoholand other Drugs.University staff in the exercise of their professionalduties rarely contravene their code of conduct. For acommunity the size of a university, social relations areharmonious and conduct is ethical.But academics are finding their professional and personal values tested on a whole new level by the current industrial relations framework.The process, in many ways, is proving discordant withthe collegial values that still dominate university life.Since the beginning of enterprise bargaining at our university, I myself have experienced serious cognitivedissonance in trying to reconcile the espoused values ofthe university community with the events that unfolded.As someone who has spent her professional life cherishing academics and academic values, that experience was new:

Many academics do not include the Vice-Chancelloror the Pro Vice-Chancellors, sometimes also not theDeans in the collegium, even though all are academics.

While the normal teaching and research processes continue and all of us play a role in facilitating and promoting these, during enterprise bargaining we are “management”, and deemed to be working againstthe interest of academic staff and to be of ill willtowards them.Most universities provide e-mail access to both staffand students and have internal e-mail lists. Mass e-mailcommunication has made easy the dissemination ofindividuals’ opinions. While there is a code for use of the e-mail list, there is no censorship. Yet some of theactions proposed and discussed on e-mail during enterprise bargaining were not in agreement with ourvalues or our code of conduct.Academic freedom is explicitly defended in our code. So can our academic staff comment on industrialissues? Yes, they can, but with the proviso that theyadhere to the code:

“Comments made on matters pertaining to industrialissues by members of unions in their capacity as a local delegate within the University, or by unionoffice holders employed by the University, areappropriate under this code.”

Indeed, it is expected that employees promote confidencein the integrity of the University and always act in thepublic interest and not in their private interest.Employees are also expected to protect the reputationof the University.

UNIVERSITYVALUES ANDINDUSTRIALRELATIONS

17

I have been told by a senior academic that most academics would not see the Code of Conduct pertinentto Enterprise Bargaining, and that most academicswould clearly separate private morality (which wouldgovern their professional and academic behaviourclearly set out in codes of conduct and which theywould affirm) and their public morality as unionists.Academics would claim that the union is a corporatebody whose morality does not, and does not need to,conform with private morality. And that many academicswould be surprised and hurt to think that their loyaltyto the union would be construed as a breach of theirethical and professional position.Within the university, unlike the wider community,there seems to be a clear division between academic andindustrial matters and values.During 1999 and 2000 the academic union has, in anumber of universities, boycotted anniversaries and celebrations, orientation days for students and opendays for prospective students, their families and teachers;graduations have been boycotted, and strikes have beenheld during residential schools for external students.Extensive media campaigns in the print media, on radioand TV have cast doubt on universities’ managementand care for staff and students. All of these actions harmthe students, harm the ability of a university to attractstudents, harm the public reputation of a university.The public war of words and publicly promoted industrial actions undo the publicity work universitiesconduct to increase the public’s understanding of funding constraints and public support for higher education. Instead, public confidence in universitiesplummets, particularly in country – Australia, whereregional universities are exposed much more strongly tolocal media coverage, and on the whole are strugglingfor their share of good students, good staff, researchand consultancy dollars and sponsorship. Who is accountable? What can we do?What I have outlined above has been happening in many universities across Australia. Acrimoniousnegotiations stretching at some universities over twoyears are the result of the current way of determiningsalary levels and conditions in universities. In the USA,some universities are unionised, others are not.Agreements are reached locally whether with a union or with academic staff. In many European countriesuniversity academic staff are state employees, professorsare public servants. Their salary scale is fixed.In Australia, academic salaries used to be set by theIndustrial Commission. Currently we are determiningwages via so-called Enterprise Bargaining. But localconditions vary; universities have different missions;and universities have different capacity to fund salaryincreases. Within a collegial culture – and academicsstill hold on to it despite the changed nature of the university – Enterprise Bargaining is a foreign body.Normally, all decisions within a university which affectstaff, working conditions, the curriculum, research andlearning support – in short the academic enterprise, are made via a consultative process, often via the committee system.

Enterprise Bargaining is in its established practice confrontational. It starts with ambit claims, in manyuniversities it extends over twelve to twenty months.It poisons communication, engenders cynicism onall sides and saps morale.I believe it is completely incompatible with universityvalues and is unsuitable within a university.Universities are not-for-profit organisations. Theyprovide benefits to students via their education andincreased income generation capability and theyprovide benefit to society by graduating skilled and educated people who can contribute to andshape society. Those who are employed in and by a university,from the beginning Associate Lecturer to the Vice-Chancellor gain monetary benefit only via theiremployment contracts – they have no shares, no dividends. There is much to separate a universityfrom a business. The financial rewards via a salary may not be highfor most academic staff. But there are other financial rewards and indeed intangible rewards:research and consultancies; regular study leave andconference travel; a much higher level of autonomyin the organisation of one’s work, ie teaching,research and service than is possible in other professions. And surely the satisfaction of teachingand seeing students mature is one of the most valuedintangible rewards of being an academic.It is incumbent on the higher education sectortogether with the federal government to find a wayof salary negotiations and salary funding whichdoes not destroy the commitment to teaching,research and service of academic staff and therewards this brings to staff, students and society. ■

PROFESSOR INGRID MOSES

Vice-Chancellor, University of New England

There has always been a significant, and vocal, group in our society, which sees business and ethics as incompatiblebedfellows. In their view, businessesalways put profit before human ideals,and produce a great deal of social andenvironmental damage in the process.Where there is a choice between privateand public ownership, they are wont toargue automatically for public ownership. If that is not practicable for some reason,they might reluctantly accept private ownership, but only with close anddetailed regulation and government supervision.

There is another group which might like tobehave ethically but believes it is not possible toencompass wholly ethical behaviour within the

competitive system as it now operates on a globalscale. This is particularly the case when businessesstep outside their own national boundaries. A businessbound by too many ethical considerations, they assert,has lost the competitive battle before it starts.In a talk he gave in Australia in 1998, CardinalMartini suggested that this latter group saw ethics as a constraint, a set of chains, rather than as a motivating force. Yet, at the level of principle, there is no reason whycapitalism, a market economy and ethics may not co-exist. There is nothing inherently evil in capitalismor in a market economy. As has been said of democracy, they may not be perfect but they sure beatthe other contenders.Properly harnessed and used, they are more likely togenerate economic growth and sustainable jobs (with the emphasis on sustainable), than non-marketalternatives.

However, at the practical level, three reservations mustbe made.First, to use the words of John Langan, the Americanethicist, “business is not naturally hospitable to moralconsiderations.”2

To put that a little differently, the business environmentabounds with what used to be called “occasions of sin”.Business people are frequently faced with temptationsto cut ethical corners. Some are able to resist thosetemptations. Regrettably, some others aren’t.Unethical business behaviour has always been with us.The money-changers in the temple, the black marketeers,the slum landlords, the usurers, all have been well documented since biblical times.If one reads through the commercial histories ofAustralia, including the histories of some of our greatindustrial and financial institutions, the unethical justkeep popping up.Almost five centuries ago, Machiavelli wrote “Peopleare so simple, and so much creatures of circumstance,that the deceiver will always find someone ready to bedeceived”.3

And four centuries later, Phineas T. Barnum said exactly the same thing, but much more succinctly:“There’s a sucker born every minute.”4

Ethical CyclesThe evidence suggests that ethical standards tend tomove in cycles.We go through periods of declining standards, generallyin the face of public apathy, and sometimes, oddlyenough, in the name of civil liberty and freedom of the individual.When things get bad enough, generally when there is acrisis or series of crises, the general public revolts.It may take quite a while for the cycle to reach thispoint. But, eventually it does. Governments are thenforced to react, perhaps to over-react; regulation andsupervision are tightened.For a period, the process goes into reverse; standardsimprove under the strictures of popular revulsion andthe glare of public scrutiny.But memories tend to be relatively short. After a while,other preoccupations take the public’s attention. Thecycle starts again.We have been through an interesting phase of the ethical cycle in recent decades. Through the sixties andseventies, examples of declining business ethics multiplied, culminating in the debacles of the eighties.As a result of these excesses, we saw the establishmentof various Inquiries and Royal Commissions, the creation of the Australian Securities Commission and the ICAC, tougher supervision of banks etc. etc.Even though the 1980’s are now well behind us, and weseem to have been going through a rather better phaseof the cycle, unethical practices are still with us.Regrettably, the world continues to be heavily influenced by the “3 A’s”of human behaviour –Ambition, Avarice and Apathy. In combination, theymake a very explosive mixture.In all of this, and this is the second reservation whichneeds to be made, there is a legitimate, and important,role for governments to play.

JOHNPHILLIPS AM1

Chairman, Australian Gas LightCompany

SOMEREFLECTIONSON BUSINESSETHICS

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Charles Handy, the British academic, wrote in his book,“The Empty Raincoat”, “The market is a mechanismfor sorting the efficient from the inefficient, it is not asubstitute for responsibility”5

And in his encyclical letter, “Centesimus Annus”, PopeJohn Paul II tells us that “Economic activity, especiallythe activity of a market economy, cannot be conductedin an institutional, juridical or political vacuum.”6

In Australia, as in many other parts of the world, wehave gone through a period of “market deregulation”.Certainly, much of the direct regulation in place twentyyears ago has gone. And good riddance, for the most part!

But, other forms of regulation have grown as governmentshave turned their attentions to such things as prudentialoversight, corporate governance, consumer affairs, theenvironment, industrial health and safety, trade practicesand investor protection. In fact, one could mount acompelling argument that there is now more officialintervention in the affairs of business than at any timesince exchange controls were lifted in 1983. One mighteven extend the period to the repeal of the NationalSecurity Regulations after the Second World War.

Are we deluding ourselves that we can create a higherstandard of ethics by Act of Parliament?

Those who favour heavier government interventionhave a broad base of support to call upon. Forinstance, Martin Luther King wrote in 1963 that“Morality cannot be legislated, but behaviour canbe regulated. Judicial decrees may not change theheart, but they can restrain the heartless.”7

These are certainly well constructed couplets, and they contain more than a grain of truth, but there is a point beyond which additional regulationbecomes counterproductive, sometimes even operating to the detriment of those it seeks to protect.

Regulation, and the supervision and reporting that go with it, involve costs, which have to be borne bysomeone, often by the group being “protected”. Thecost of consumer protection, for instance, ultimatelyand inevitably falls on the consumers.

Is this a good reason for not having regulation? Of course not! We need sensible regulation.

But we should be economical in espousing new lawsand should be mistrustful of those who believe that legislation or regulation is the answer to all our problems,including a deficient set of ethical standards. We shouldrequire governments, statutory bodies or lobby groupsto demonstrate that any costs are justified by clear benefits that will flow from increased regulation.

And that is the third reservation to be made.

Why Be Ethical?Why should we regard ethical standards as so important in conducting business?Is it just a hangover from the days when religion playeda more obvious role in society? And, in any case, in amarket-driven capitalist system, won’t the market sortthese things out eventually?Clearly, ethics and integrity stem from our sense ofmorality. But, even at the temporal level, in everyavenue of human dealings, some basic rules are neededwhich parties can take for granted.Even primitive societies tend to have well established

standards of behaviour. Without them, fruitful interaction is just not possible.Some of these rules are universal; some relate to theparticular form of activity. Some are embedded in thelaw; some are not.For instance, we talk a lot these days about competitionand its beneficial effects on our economy.But, if competitive markets are to work properly, if theyare to produce the benefits claimed, a number of preconditions need to be satisfied. Buyers and sellersmust be fully informed (or, at least, equally uninformed);new players must be free to join the market; thereshould be no monopolies or restrictive cartels.One might say that competition itself, to be successful,requires a minimum set of ethical standards. Moreimportantly, if those standards are absent, competitionitself will not create them.It will not ensure that people will be open and truthfulin what they say, what they infer and what they do. Yet, this is the very foundation of ethical behaviour and probably the most basic requirement of effective,constructive competition.It is almost impossible to deal with someone who operates from no ethical position. As some might say, it is like wrestling with a column of smoke.

How do you handle a situation where there is no confidence that the person on the other side of the tableis being truthful or honest, or will live up to any undertakings given? So, there are practical as well as moral reasons for ethical standards. It is a little like having rules for usingthe roads.Some people would go further and argue that there aretangible benefits if companies or individuals act ethically,for two reasons. First, when businesses do so voluntarily,they avoid the prospect that governments will introducecostly punitive regulations.Second, they contend that taking socially responsibledecisions will actually increase profits over the longer term.There is some truth in those arguments, and some companies put great store in them.Nonetheless, the reality is that not everyone agrees withthat approach. There is another view, that behavingethically involves costs, and that ethics and profit considerations are often in conflict.So, if it won’t happen naturally, how do you ensure thatbasic ethical standards are observed?Clearly, there is a role for legislation. But, we shouldnot expect too much from it. And we should be carefulnot to overdo it. We may already have done so in some areas.

Are we deluding ourselves

that we can create a higher

standard of ethics by

Act of Parl iament?

There is also a role for self-regulation and for industrycodes of conduct but both need to be approached withcare. Self-regulation must be genuine and not just a self-serving public relations exercise. Codes of conductneed to be more than just pious statements of best endeavours.But, beyond legislation and self-regulation, ethicsdepends upon individuals. We all need to be committedto ethical behaviour, to act with integrity.To borrow another phrase from Cardinal Martini,ethics is beyond being a rule of life; it is a way of life.It means accepting responsibility for others, not just forourselves. It means going beyond what is law to what is“right”. It means working not just for the good of thecorporation but also for the good of the community.And it is essential that those who favour the ethical wayof life should be willing to stand up and defend (andexplain) their own positions, and to support others oflike mind.

Desirably, governments, the media and the general public should shun those with poor ethical standards,and denounce them rather than laud their cleverness orselect them as business leader of the year, or grant themother honours or positions.We need to encourage those who emulate the characterin “Pilgrim’s Progress”, Mr Valiant-for-Truth.As Bertrand Russell wrote, “Without civic morality,communities perish; without personal morality, theirsurvival has no value.”8 ■

References1 John Phillips is the recently elected Chancellor of the

University of Western Sydney.2 Father John Langan SJ, “Conscience and Business”, Thomas

More Lecture, University of Western Australia, Perth, August1992.

3 N.Machiavelli, “The Prince”, Penguin Classics, UK 1980.4 Attributed.5 Charles Handy, “The Empty Raincoat”, Hutchinson, London,

1994.6 Pope John Paul II, “Centesimus Annus”, Encyclical letter, 19917 Rev Martin Luther King Jr, “Strength to Love”, 19638 Bertrand Russell, “Individual and Social Ethics”, Authority

and the Individual, 1949.

There is also a role for self-regulat ion and for industry codesof conduct but bothneed to be approachedwith care.

COMPETITION, CO-OPERATION,TRUST AND VALUESFor about ten years now I have been runninga course on negotiation for final-yearundergraduate students in employmentrelations. The program involves a mixtureof theory and some practical role-play scenarios that students have to reflect onand analyse as part of their assessment.

The course has evolved, over that time, as therehave been changes in the institutional context ofAustralian employment relations, differences in the

background and expectations of students, and developmentsin my own knowledge and understanding. But one partof it has remained, reflecting its pedagogical success.Students are randomly allocated to small groups at thestart of the program, and each group negotiates withanother over a relatively simple issue like the sale of aused car. Inevitably, some groups use more competitivetactics than others, ranging from forceful argument tobluffing and deception. Subsequently, in the debriefingsession, some groups may identify themselves and others as “winners” or “losers”.These approaches and interpretations endure until thefollowing week when students discover that they are tonegotiate with the same group again over a differentissue: one that requires co-operation to achieve a worthwhile outcome. The role plays set the scene fortheoretical discussion about the nature of competitiveand co-operative behaviour. Of course, there is immediately some opportunity for discussion about theeffects of previous competitive behaviour on chances ofsubsequent co-operation, but other issues arise also,such as the differences amongst payoff structures(sometimes both parties can gain, sometimes they cannot)and behavioural approaches (sometimes co-operationrequires problem-solving, sometimes just compromise).It has been noticeable over the decade that recent studentshave been more strongly imbued with the idea thatcompetitive pressures are the norm, competition is generally laudable, and co-operation either an aberrationor a temporary means to effective competition. They aretherefore bemused by some well-established experimentalresults, like the experiment reported by Kelley andStahelski thirty years ago. Kelley and Stahelski dividedsubjects into pairs and had them play a number of turnsof a “Prisoners’ Dilemma” game. On each turn, if thetwo co-operate, both achieve a small but worthwhilebenefit; if the two compete, both suffer a significant loss,if one co-operates while the other competes, then theformer suffers an even greater loss, while the competitor

DR CHRIS PROVIS

Associate Professor,School ofInternationalBusiness, Universityof South Australia

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achieves a substantial gain. Before the game, subjectshad the game explained to them. They were asked todiscuss their understanding of the game and what theyviewed as an appropriate strategy. Some subjects (“co-operators”) spontaneously expressed the view thatthe point was to achieve co-operation with the otherplayer, others (“competitors”) that the point was tocompete and win. In playing the game, if a co-operatorwas paired with another co-operator, the two quicklysettled into a straightforward co-operative pattern. If acompetitor was paired with another competitor, thetwo engaged in a series of competitive moves. But if acompetitor was paired with a co-operator, the latter wassoon forced to act competitively, to avoid continuinglarge losses. Later stages of the experiment involvedsubjects being paired with a series of different partners.There are a number of points that can be drawn fromthe experiment. One, of course, is that in situations ofthat type, co-operators achieve much greater long-rungains than competitors. But another, perhaps moreintriguing is that co-operators and competitors emergewith different views about other players. Co-operatorshave experiences with some other co-operators, andwith some competitors, coming to understand that bothapproaches are to be found. Competitors, on the otherhand, are likely to come out with a much more limitedview: their own behaviour will have forced competitivebehaviour on all their partners, even those inclined atfirst to co-operate, and so they are reinforced in theirview that the point of the game is to compete: so far asthey can see, that is what everyone does.The experiment is a useful one for class discussion,especially amongst students who have not long beforebeen involved in the negotiation role plays. For some –a few – it is difficult to comprehend that there are co-operative, non-competitive approaches to socialinteraction. Others accept that such approaches arepossible in some settings, like families, but are surprisedat the idea that they are possible in business or at work.In that context, our discussion may branch out to consider emerging literature on such issues as “supplychain management”, the benefits there can be to firmsfrom developing co-operative long-term relationshipswith suppliers. But the emphasis of the program isemployment relations, and so another potential line fordiscussion is the role of competition and co-operation in the workplace. It is possible to consider dynamics of self-fulfilling prophecies, how our expectationsabout others shape our own behaviour in ways thatelicit behaviour from others that we use to confirm our expectations.The discussion can go on to note frequent paradoxes inthings we are told. On the one hand, we are remindedoften of the increasingly competitive environment inwhich we must work. On the other hand, we hear ofbenefits from teamwork in real and even “virtual”teams. It seems that we are asked to perform some mentalconjuring tricks: learn to co-operate better to deal withthe increased competition we can expect. A natural outcome is for us to become uncertain how far we canexpect co-operation from others. What are theirmotives? Is their co-operation just a temporary meansto an end, that will fade away if the wind changes?How far can we trust them to assist us or care for us?Such questions about trust emerge naturally in discussionof competition and co-operation. There is now a largeamount of literature that alludes to the importance of

trust within organisations. Fukuyama’s book Trust:The Social Virtues and the Creation of Prosperity is onewell-known discussion about the general importance oftrust. The need to develop trust within organisationswas a significant element in arguments of enterprisebargaining in Australia. And a number of writers havenoted the importance of trust in modern team-basedapproaches to work organisation. Often, effective teamperformance requires co-operation and trust. Clearly,the two go together. In the Kelley and Stahelski simulation,co-operators had to trust one another on each turn ofthe game: if they acted in a co-operative way, they leftthemselves open to exploitation. Exploitative, competitivebehaviour by the other player quickly removed thattrust. Teamwork in organisations can equally beimpaired if members’ trust in one another is destroyedby one taking advantage of another.So the importance of trust is recognised. But most of thewriting on the topic has concentrated on its instrumentalimportance, the benefits it can yield for productivityand performance. That focus has some limitations. It seems reasonable to suggest that trust is not onlyimportant as a means to improved economic or organisational performance. If we do not have trustingrelationships in a workplace, then it is an inherentlypoorer place to work. Trust and co-operation are intrinsically significant for our well-being. A “balancedscorecard” approach to measuring business successwould need to take account of the extent of such relationships within an organisation as one part of its achievements, quite apart from other benefits therelationships may have.What is more, if we try to foster trust and co-operationjust for the sake of improved performance, then we mayachieve them less well than if we allow them to emergenaturally from respect and regard for people in ourorganisations. If we co-operate with others not becauseof what we can get out of co-operation, but because werespect them and have some concern for them as well asfor ourselves, then they need have no fear that our co-operation will cease when circumstances change.Their trust, and their co-operation, may both increase.To some extent, the emphasis on the instrumentalimportance of trust and co-operation stems from anenduring shyness about value commitments, a shynessthat has been with us since Hume’s eighteenth-centuryeffort to raise a barrier between fact and value, between“is” and “ought”. But Hume’s view has been widelycriticised, and the value of co-operative, trusting humanrelationships seems to be as factual as anything else can be. If so, there are several implications. One isimportant for university teaching and research: theattacks that have been made on value judgments bothby positivists and their postmodernist opponents shouldnot be allowed to push aside the serious academic workthat can be done on such issues. Another is importantfor business: competition is an important fact of life,but it should not be allowed to obscure the worth of co-operation and trust. We should not believe that theseare either unattainable or uncommon, and we mustbeware of self-fulfilling prophecies that can create amore competitive environment than we need. ■

ReferenceKelley, H.H. and Stahelski, A.J. “Social Interaction Basis of Co-operators’ and Competitors’ Beliefs About Others”, Journal ofPersonality and Social Psychology, vol. 16 (1970), pp. 66-91.

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It would be difficult to come to a conclusionfrom a reading of the popular press otherthan that business is antithetical to theadoption of ethical practices and sound values. I believe that this is a false perceptionalthough I would not deny that it is one thatis widely held. Nor would I try to pretend thatall business people are ethical at all times.

There is no doubt that some business people do actdishonestly or unethically, but the same can besaid of any group in the community. It is an error

to suggest that the members of a group are dishonest orunethical just because some members of that groupbehave in that manner.Dishonest or unethical behaviour is, in my experience,no more the norm for business people, than it is the normfor most other groups in the community one couldidentify. This is not to say that the normally ethical orhonest person does not fail in some respect on occasion.This, unfortunately, is the frailty of human nature. Butthere is a difference between a lapse and deliberate, blatantand consistently dishonest or unethical behaviour.We might begin to address the issue of ethics and values in business by considering whether there is a fundamental incompatibility between ethical behaviourand success in business.I do not believe that there is and, in fact, I believe theopposite is true if we are talking about long term success.In his book ETHICS AND EXCELLENCE, RobertSolomon wrote:

‘Business is a human enterprise, to be good in businessis to be a good human being. One can make moneywithout virtue, of course, but success requiresmuch more – a good and decent life, friends andrespect, love and a little admiration’.

Achieving real success in business does, as RobertSolomon points out, mean more than making money. It goes to the heart of how a business person behavesand the satisfaction that comes from the other aspectsthat Solomon describes. Judging success only in termsof money made is a very superficial measure and if onejudges success only in those terms then it is likely to be ashallow and ultimately, an unsatisfying kind of success.It might seem to some that setting out to act ethically inbusiness is really being naive and not recognising thereal world. Some might even see it as giving a competitorwho chooses not to behave similarly, an advantage inwhat is perceived as a “dog eat dog world”. This is notso if you want to be in business for the long haul. Thinkfor a moment of those of whom you read as being meteoricsuccesses in the early 1980s and where they are today.

Some might be living in relative luxury in Majorca orother parts of the world but their current position illustrateswhat happens when businesses or business people clearlydo not exhibit sound values, and act unethically.Elizabeth Vallance who has written extensively onethics in business said:

‘The aim of business is a commercial aim: businessexists to provide goods and services in order tomake profits; if it is not making profits, its very existencewill soon be in question. However in seeking to providethe conditions for profit-making, businesses will, of course, ignore staff, customer and communityinterests at their peril’.

In other words, if a business does not act with integrityin relation to its people, its customers or the community,it is not likely to enjoy the kind of reputation that willkeep good people in its employ, or keep customers comingback for its products or services.To quote the vice chairman of an advertising agency:‘The only sustainable competitive advantage any businesshas is its reputation’.We value our reputations as individuals, recognising thatthey take a lifetime to build but, once lost, are mightydifficult to regain. I believe the same applies to companies.Although a cliche, it is nevertheless true that the strengthof an organisation is in the quality and capability of itspeople. You cannot expect to keep good people if theydo not feel comfortable in the culture of the organisationand, as somebody else has said: ‘a corporate culture isdefined, first of all, by its ethics’.

If the corporate culture is not based on an ethos thatencourages ethical behaviour and a basic level of trustamong people in the organisation then it will not attractor hold people who value these attributes. A corporateculture that places a high value on integrity, fairnessand respect, provides an environment which is constructive and positive for the individual as well asfor the organisation.So it is not solely for altruistic reasons that most companies have a code of conduct that aims to set highstandards of behaviour. Committing a code to writinghelps to ensure that everybody knows what is expectedof them, but it is not what is written that is critical butrather how people actually behave and, particularly,what senior management does. Hypocrisy soonbecomes apparent and the dividend of that is cynicismand consequential negative behaviour that begin to permeate the whole organisation.Behaving ethically means going beyond what the law requires.Being ethical means acting with integrity which in turn means telling the truth, avoiding shady and illicit

VALUES AND ETHICS– ARE THEY RELEVANT

TO BUSINESS?

dealings, refusing to take or give bribes and so on. Itmeans being true to oneself. It also means not puttingtemptation in the way of others. The story is told inTHE LUNCHTIME COLLECTION OF TOMSTEWART how Abraham Lincoln once threw a manout of his office, angrily turning down a substantialbribe. ‘Every man has his price,’ Lincoln explained,‘and he was getting close to mine.’

A question that often arises in discussions about ethicsin business relates to the retrenchment of employees. Is a business acting ethically when it retrenches a significant number of employees, some of whom mayhave been with that employer for a long time? Does thisrepresent ethical behaviour? Certainly it can be difficultfor those who are retrenched and it is no easy matter,either, for the person who has to handle the face-to-facecommunication with those being retrenched. But thealternative of not facing up to maintaining competitivenessultimately means potentially jeopardising the employmentof the total workforce.

As Elizabeth Vallance has said, to avoid a decision toretrench employees in these circumstances ‘would benot ethical but cowardly’. What is important is howsuch decisions are implemented. Actions must be seento be just and fair, having regard to the dignity of theperson as well as to the financial arrangements. This iswhere the test of ethical behaviour comes in.

A lot of what is written and said on the side of businesswhen discussing business and ethics can tend to be defensive.As Solomon and Hansen stated in their book IT’S GOODBUSINESS: ‘Many critics of business are trained in therhetoric of ethics but most business people are not’.

Although a cliche, it is nevertheless true that thestrength of an organisation is in the quality and capability of its people. You cannot expect to keep goodpeople if they do not feel comfortable in the culture of the organisation and, as somebody else has said: ‘a corporate culture is defined, first of all, by its ethics’.

One of the same authors made another statement which isimportant to grasp: ‘Business ethics is too often conceived as a set of impositions and constraints, obstacles to business behaviour rather than the motivating force of that behaviour.’

This is a statement well worth thinking about because itholds the key to the part that ethics play in any companywishing to achieve long term success. Unless an organisationis able to develop and sustain a culture that respects the dignity of individuals and acts responsibly and fairlytowards its employees, its customers and the community, it will not attain its potential and, in fact, can jeopardise itsvery survival.

Clearly the necessary kind of culture will not be developed unless the ethos of the organisation is based on justice and fairness with strong respectfor ethical behaviour and an expectationof this kind of behaviour fromthe leadership of theorganisation.

When I was retiring as Chief Executive of CRA, I related in a farewell speech the warm feeling of satisfaction I derived from the changes in the relationships we had been able to engender within theorganisation in reshaping the Group’s culture. We setout to retain and reinforce the positive features of the ethos that characterised the company, while changing other practices and policies that derogatedfrom the Group’s performance.We recognised that to be successful in the increasinglycompetitive world we had to face as we moved into thenew century, we had to be able to tap the potential ofall those who worked in the organisation. This was notpossible unless we could make some fundamentalchanges to the way people related to one another in the structure of the organisation. We had to move fromthe adversarial approach and the outdated commandand control hierarchical structures that gave negativemessages and negative feedback.This meant building a level of trust, which had to beearned, before fundamental changes could be madewhich led to mutually beneficial outcomes. What is fascinating to think about and rewarding to witness is the ‘WIN-WIN’ situations which developed. What is also relevant, and very relevant to this topic, is thatethical considerations were very much the basis of thechanges that led to benefits for employee and employeralike. For both there were financial rewards but themore rewarding to witness was the lift in self-esteemand the greater job satisfaction that people derivedwhen they were allowed greater involvement andshown greater trust.What often gets in the way of making these kinds of changes is the mistaken belief that we are alwaysdealing with a zero-sum game. Very often, this does not have to be the case, but it can be if unnecessaryrigidities prevent mutually beneficial outcomes being achieved.Sound values and ethical behaviour are relevant to business and a positive and constructive culture delivers benefits to employees and employers alike. ■

JOHN RALPH AC

Chairman, Commonwealth Bankof Australia Limited

23

24

Introduction

I prepared these notes a few weeks ago but when I read them over I realised howsuperficial they were and how COMPLEXthis apparently simple concept of goodcorporate citizenship really is. Trying tobe, (and be seen as) a Good CorporateCitizen has been for me a way of life for 30 years.

But even with our simple business and limitednumber of stakeholders it is still extremely complex – and we are faced with many questions

and disagreements, which go to the matter of corporatecitizenship every day of every week.It is possible that my time would be better spent just trying to give a perception of how involved and complicated this simple question really is on a day-to-day basis.I should begin by saying that I am NOT an advocate ofthe “triple bottom-line” concept – there are not threebottom lines!Nor am I with those people who I have heard, and read,describing customers, suppliers, activist organisationsand communities as “stakeholders” – they are notstakeholders!I understand what these people are trying to imply orbring about – it sounds good and is very politically correct, but I think that in the Australian system of corporate governance that sort of “bleeding heart”positioning is NOT going to work because it is too farfrom the reality of “directors responsibilities” – andalthough (I know) it is designed to attract attention andfire the imagination of management, I am sure it is notgoing to do that.If we want Australian Industry to throw themselveswholeheartedly into supporting their communities andour nation we need to convince them that doing “good”is going to contribute directly to their long run profitability– THE ONLY BOTTOM LINE that means anything.To separate corporate social responsibility from THATbottom line in ANY way is a mistake.We need a focus and perhaps a catch-cry, which inextricably links excellent corporate citizenship to anexcellent profit result.That is what I have grown up with in the McDonald’ssystem.I read a recent article, which called McDonald’s “a pioneer in the field of strategic philanthropy”.Some people might have seen that as praise – I wasoffended by it!Being part of our local community and a good corporatecitizen was the whole BASIS of our business from theday it was founded in 1955, and it has certainly been a

way of life for me for the last 30 years here in Australia.

To me it is simply astounding that the synergy betweendoing “good” and doing “well” has not been very evident to more of our leading companies.

My experience makes it seem, and feel, very straightforward.

Of course, there is literally and endless number of businesses worldwide capable of selling hamburgers,french fries and Coca-Cola.

But how many of those businesses have really forged a relationship with the people and the communitiesthey serve?

How many have worked with local governments to create waste reduction and recycling programs?

How many have sponsored programs to send surgeonsall over the world to operate on kids with cleft palatesand other deformities?

How many have worked with hospitals and doctors allover the world to create Ronald McDonald Houses forfamilies in need – like the 11th & 12th houses that willopen this year in Canberra and Townsville, or our200th later this year in Hungary? The truth is, youprobably can’t find any other than McDonald’s.

I’m not highlighting these efforts just to patMcDonald’s on the back. I only mention them todemonstrate how that endless list of companies sellinghamburgers and fries becomes very small – and verydifferentiated – when you get beyond the level of goodsand services, and start talking about contributions to communities.

We have built a powerful global brand on the strengthof that approach, which explains why McDonald’s hasbeen – and always will be – investing in our relationshipwith customers. We firmly believe a commitment tosocial responsibility is very good for business.

The investments a company makes to forge a relationshipwith customers leads to trust, which builds a better reputation, which promotes a stronger brand, whichopens up new opportunities for growth, which increasessales and profits, which makes for very happy shareholders.

Equally important, it leads to very committed employees(and this has been a particular focus of mine here in Australia) we meet with parents and communitymembers regularly in each and every one of our 720 stores in Australia.

In other words, over the years, our corporate resolve to give back to the communities we serve has resultedin a workforce that’s proud to be a part of theMcDonald’s system.

That level of pride and morale in our system hasenabled us to attract and retain quality people, whichhelp us to maintain high operational standards and outstanding productivity in our restaurants which addsto the strength and competitiveness of our company.

CORPORATE CITIZENSHIP

25

So from McDonald’s point of view does a commitmentto good corporate citizenship make sense – do you evenneed to ask – you BET it does!!But as I said at the beginning – I’m making it sound tostraightforward, too simple. Let me spend a moment ortwo talking a little about the day-to-day complexities.We are a very simple business – we’re a hamburgerrestaurant.One might be inclined to conclude that there would belittle need for us to dwell on ethics or our role as a goodcorporate citizen – people might be surprised, perhapsshocked to hear that even the absolute basis of our business – our menu – is a constant topic and subjectof ongoing debate about what is good corporate citizenship and what are our responsibilities to customers, to suppliers and to the community at large.Similarly in our purchasing and quality assurance policies,in our marketing approach and in our employmentpractices the question is constantly addressed.But look at what might be seen as the most relevantarea – our direct contribution to the local community,our donations and our sponsorships – they are evidentexamples of corporate citizenship.

• We receive around 2,000 requests for help every week.• Our marketing approach is to create a “pool”

of funds – everyone contributes (franchisee andcompany operation) so everyone gets a say.

• We have raised and committed just over $30 millionto Ronald McDonald House over 25 years but thishas been our only consistent support.

• Every other request is voted upon by 250 franchisees,disagreement is common (and even when agreementhas been reached, time regularly causes a change of mind).

If I ask a representative of a particular charity or com-munity group what I’d have to do to make McDonald’sa good corporate citizen I get a pretty clear answer.Unfortunately each of my 250 franchisees inMcDonald’s probably has a different answer. As would10,000 of the shareholders of Westpac – and come to think of it, we would probably even find it hard toreach unanimity around a board table of twelve people!So I am creating a new perspective of a small part of theload taken on by senior management. I don’t look forsympathy for them, I do think however that someacknowledgement of the complexity of the question is necessary before we begin to demand “better corporate citizenship”.

Now I’d like to conclude with a quote from WinstonChurchill, which I think is particularly appropriate, he said -

“Some see private enterprise as a predatory target tobe shot. Others as a cow to be milked. But few arethose who see it as a sturdy horse pulling a wagon”.

For the purpose of discussion, I would suggest that thatparticular image of a sturdy horse pulling a wagon isprecisely the position that enlightened businesses needto cultivate going forward. Why? Because it conveys strength and dependability. Andbecause in today’s ever-changing world, where capitalismand democracy and technology and communicationsintersect at a break-neck pace, the people who make upour universe of customers are looking for things thatthey can depend on – things they can trust.Speaking very much from my personal experience in the Australian market for the last 30 years, I can give assurances that customers, and the community atlarge, are not dumb – they recognise genuine good corporate citizenship, and it is integrity, reliability anda developed trust which they reward with their long-term loyalty. ■

…that endless list of companies selling hamburgers and fries

becomes very small…when you get beyond the level of goods

and services, and start talking about contributions to communities.

MR PETER RITCHIE

Executive Chair, McDonald’s Australia

Limited

26

Some years ago the philosopher/physicianEdmund Pellegrino was invited to explainwhy he thought we should consider ethicalissues in the practice of medicine from thevantage point of a virtues-based rather than a rights- or duties-based account of ethics.Pellegrino argued that ‘virtue-based professional ethics distinguishes itself ... lessin the avoidance of overtly immoral practicesthan in avoidance of those at the margins ofmoral responsibility’.1

He went on: “Physicians are confronted, intoday’s morally-relaxed climate, with anincreasing number of new practices that pit

altruism against self-interest. Most are not illegal, or,strictly speaking, immoral in a rights- or duties- basedethic. But they are not consistent with the higher levelsof moral sensitivity that a virtue-ethics demands. Thesepractices usually involve opportunities for profit fromthe illness of others, narrowing the concept of servicefor personal convenience, taking a proprietary attitudewith respect to medical knowledge, and placing loyaltyto the profession above loyalty to patients.”2

Pellegrino’s remarks focus on the standards (that is tosay, the virtues) proper to professional medical conductin a social context in which a universal right to basichealth care is still thought to be debatable and in whichhealth care is seen as a market commodity. Nonetheless,they invite reflection not only on the provision of healthcare in Australia but, more generally, on the conduct ofeach of the professions in this country. Let me suggestone point for reflection (from health care, for that is theprofession about which I have given the most thought).It is little over a year since Australian radiologists,anticipating a Federal budget decision to introduce aMedicare rebate on the use of magnetic resonanceimaging machines, ordered some fifty-two suchmachines. In the ensuing public debate most attentionwas directed to questions about whether confidentialinformation had been leaked ahead of the Budget,whether orders had been backdated, whether contractshad been falsely claimed to be binding, whether theMinister for Health had suffered a fatal blow to hispolitical ambitions, whether there was sufficient evidenceto maintain convictions of fraud. One journalist, however, drew attention to the fact that a significantproportion of one of the medical professions was willingto act with great haste in its own interest on the basisof information the origin of which itself raises questionsabout the integrity of those who made the orders.

(No doubt some individual radiologists ordered themachines on the basis of a genuine assessments of thetechnological needs of radiologists’ practices; howeverit would be hard to believe this was true of all of them.)My question is: how can we best reflect on the properrestraint of professional activities, which are ‘at themargins of moral responsibility’? For a start we need to recognize that ethical reflectionand evaluation as a sui generis activity, one which is distinct from (though related to) considerations aboutthe legal status of professional activities. Too often ethical reflection about some professional practicedegenerates into, or never rises above, a considerationof the current legal status of that practice. No doubtthis tendency is encouraged by a certain kind of teachingof applied ethics, which over-emphasizes such legalnotions as the ‘duty of care’. But “my conscience isclear for I didn’t break the law” is a pretty primitiveform of ethical reflection. On the other hand, ethical reflection about professionalstandards is not assisted by a view of the law (fostered,in my experience, by some lawyers) as an utterly arbitrary institution, unpredictable, unreasonable,unconcerned about the real challenges of professionalpractice. On the whole Australian law reflects goodprofessional ethics: the best defence against legal suitcontinues to be good professional practice. Even so, thelaw can only deal with the ethical minimum: it has little to offer about what Pellegrino calls the ‘higher levels of moral sensitivity’.Professional codes of conduct can be a help. Wellthought out and well expressed, they can clarify theprinciples or values of a profession’s inherent ethic. Inhealth care, for example, these include the following:treatment decisions are primarily the responsibility ofthe person whose health is at stake; a person’s health(rather than overall happiness or well-being) is the goalof medical inventions; treatments which are refusedand/or which are futile, overly-burdensome or not reasonably available in the circumstances may be forgone;the relationship between health care professional andclient ought to be characterized by mutual trust and arecognition that the distribution of health care shouldprimarily reflect health care need and not the client’s (orsome third party’s) capacity to pay. On the other hand, professional codes, like internationalcharters of rights, cannot provide the last word on matters of ethical significance. They can only speak ingeneralities (often in the language of rights and duties),and by and large what’s interesting and challenging inethical reflection is not a matter of very general rightsand duties but rather of what to do in uniquely particularcircumstances. To take an example from health care:

AT THE MARGINS OF MORAL RESPONSIBILITY:

WHY WE NEED A SENSE OF THEVIRTUES OF PROFESSIONAL PRACTICE

27

DR BERNADETTETOBINDirector, PlunkettCentre for Ethics in Health Care, St Vincent’s Hospital,Sydney & AustralianCatholic University

Would only partly answering the patient’s question inthese circumstances amount to lying to her or would itbe a decent refusal to foster unreasonable fears in analready frightened person? In addition, such codes generally reflect the biases, prejudices and politicalpieties of the cultural conditions in which they are written. Just as an individual’s judgments are fallible sotoo are a whole profession’s: the High Court recentlyhad to remind doctors that the proper ethical standards(specifically, in the matter of giving information andadvice to patients) were not necessarily those current intheir profession. What other resources do we have to regulate the ethicsof the professions? An invaluable one, the recognitionof which is a sure starting point for reflection about a professional practice, is the idea that any genuine profession has its own inherent ethic. This idea is not allwe need, but without it our discussions of these matterswill be intractable. Medicine’s traditional ethic is foundin the Hippocratic Oath. Though it is sometimes dismissed as of merely historical interest, that Oathexpresses the central commitment of the medical profession: the doctor commits himself or herself to acting for the benefit of the sick according to his or herjudgment. In addition the doctor promises to keeppatients ‘from harm and injustice’. These are the ideas,which reveal what was wrong with radiologists ordering MRIs motivated by the knowledge that aMedicare rebate on the use of these machines was to beintroduced in the forthcoming Federal budget. Ratherthan exploiting their patients (or some third partypayer), doctors should be the ones on whom patientscan rely to protect them from the forms of harm andinjustice to which they are at risk in being patients. Today, we are well aware of some of these forms ofharm and injustice. In the professions of medicine and medical research, and indeed in the teaching pro-fessions, an elaborate and expensive institution of“ethics committees” has been developed (in part) toensure that, when research is conducted on humanbeings, their welfare and rights are protected: informedconsent is required, the risks associated with their participation are to be kept to a minimum, the benefitsand burdens of research are to be distributed fairly, etc.Though there are grounds for some pessimism aboutthe capacity of these committees to prevent all forms of research, which are harmful or unjust, they nonetheless constitute substantial protection from theharms that people can suffer when they agree to participate in research. But, taking these concerns wider, such ‘ethics committees’in no way address the harms and injustices which arelikely to be perpetrated on individuals in a health caresystem which distributes health care on any criterionother than health care need. Many forms of ‘health care’are more appropriately described as preferences, desires,wants, luxuries, drives, etc: cosmetic (as distinct fromcorrective) surgery, hotel-type amenities in hospitals,super-athleticism, futile treatments, etc. None of thesesupposed forms of ‘health care’ responds to a genuinehealth care need. Nor do high-tech diagnostic procedures,the indications for which have been inflated either by the practices of ‘defensive medicine’ or by the desireof providers to increase the profits they make out ofmanipulating the vulnerabilities of sick people.

No system of ‘ethics committee’ could restrain, letalone regulate, such practices. Ultimately we do need tobe able to rely on professionals appreciating, and beingdisposed to act in accordance with, the virtues (thehighest practicable standards) of their profession.Anthony Fisher has identified three such virtues in medical practice: medical courage (which inspires activeopposition to sickness and death without an inordinatefear of failure), medical temperance (which resists thedesire to medicalize every aspect of life, which resiststhe impulse to ‘do everything possible’), and medicaljustice (the disposition not to be merely self-seeking,prejudiced or evasive in the exercise of one’s responsibilitiesbut to be concerned always for one’s particular patientsand the common good).3

And we can add one further point. Just as the conductof medical doctors ought to be restrained not only bytheir role as healer of the patient (recommending andarranging only those forms of health care genuinelyneeded by that patient) but also – in undertaking thatrole – by their responsibilities both as delegates of the community and as ordinary citizens, so the conductof lawyers ought to be restrained not only by their professional role as advocate for the client (recommending and arranging only those forms of legaladdress genuinely needed by that person) but also – inundertaking that role – by their responsibilities as delegates of the community and as ordinary citizens.And so on, mutatis mutandis, for any genuine profession.For the point of any profession is ultimately shaped byit contribution to the common good of the communitywithin which its activities are conducted. Perhaps all this is obvious. But if we want to identify (and thusto avoid) practices at the margins of professionalresponsibility, we shall need some such starting pointsto orient our reflections. ■

References1 Edmund D Pellegrino, The Virtuous Physician, in Virtue and

Medicine: Explorations in the Character of Medicine edited by Earl E Shelp, D. Reidel Publishing Company, Dordrecht,Holland, 1985

2 Under “taking a proprietary attitude with respect to medicalknowledge” he mentions selling one’s services for whateverthe market will bear, providing what the market demands andnot necessarily what the community needs, patenting new procedures or keeping them secret from potential competitor-colleagues, looking at the investment of time,effort, and capital in a medical education as justification for ‘making it back’, or forgetting that medical knowledge is drawn from the cumulative experience of a multitude of patients, clinicians and investigators.

3 Anthony Fisher: The Principles of Distributive Justice considered with reference to the Allocation of Healthcare(unpublished DPhil thesis, University of Oxford, 1994)

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ETHICS – THEGAP BETWEENPRINCIPLES AND PRACTICEWhilst it is common for many mediumand large companies in industry to publish their Corporate Values andEthics Statements, the sad reality is thatmany do not practise their values andethics principles in day-to-day business.Thus for these companies one mightwonder if such corporate declarations,together with Mission, Vision and similar statements, have been issuedmore because it is fashionable to do so than because there is a real commitment from the Board and seniormanagement to these principles.

Corporate ValuesThe term “Corporate Values” is commonly used todescribe two different types of values: universal (orpersonal) values and core company values. As anexample of the former, the Rio Tinto subsidiaryComalco adopted “a common set of basic valueswhich all human beings share and which is the foundation of social cohesion. Leadership developmentis dependent on understanding and accepting thosevalues, which the Company has identified as trust,courage, honesty, fairness, dignity and love.Leadership training teaches that acceptance willdepend on what people perceive: leaders mustbelieve in and be seen to be demonstrating these values in their everyday behaviour” (Ludeke, 1996).Many of these universal values, especially honestyand fairness, appear in almost all Corporate Valuesstatements. Research shows (and I believe it is self-evident) that these universal values provide aframework within which corporate personnel makedecisions, which do affect their organisation’s performance (Harrington et al., 1996).As an example of core company values, Collins andPorras (1999) found that visionary companies havecore ideologies, which comprise core company valuesand corporate purpose. The core values are principlesor beliefs which provide guidance to employees, like“leading-edge innovation” or “relentless customerfocus”, and which the company has determined ascritical to business success. The declared corporatevalues of most companies contain a mixture of bothuniversal values and core values, which perhapsleads to confusion amongst stakeholders (ie staff,customers, suppliers and shareholders) as to thenature of the values. One approach to clarify thisissue is to agree that a company should not dictateto employees what their universal values should be,but should require employees to behave and express

their own personal styles and temperaments within thelimits of the corporate values (Jaques, 1989).In an address to the National Chemical EngineeringConference (Chemeca) in July this year, the outgoingPresident of BHERT, Dr Roland Williams, posed thequestion: “Can companies afford to issue their valuesand principles but then leave them on the shelf and notpractise them?” His answer was a definite “No”.Companies are increasingly transparent in the way theyoperate and they have no choice but to live up to thevalues and principles they proclaim. They do this by livingtheir corporate values through consistent leadership (eg “I do what I say”), well-designed systems of work(eg performance appraisals) and appropriate symbolism(eg public recognition of exceptional work).In practice, corporate values are often agreed in Boardand/or senior management workshops as the values theorganisation “should” have and then publicised widely.After the workshop, unfortunately, company executivesreturn to normal business ignoring the published values and thereby rendering themselves as hypocrites(Cairnes, 1998). The same pattern of disconnectionbetween stated principles and business practice unfortunately is often evident in corporate ethics statements as well.

Appl icat ion of Universal ValuesIn any organisation, culture develops, over time, as acollective response to the systems of work, policies,practices, company values and managerial behaviour.The behaviour of managers at work is judged by employeesthrough their “lens” of beliefs and universal values,such as honesty, fairness and courage. Employees willtherefore respond positively or negatively to newchange initiatives depending on their experience of pastpractices. For example, if senior management seeks toreplace a current practice of promotion and reward onlength of service with a system of promotion andreward on merit, it will need to ensure that all policies,practices, systems and managerial behaviours are consistent and aligned with this new approach. Onlythen will employees start to trust their management andreplace their old stories of reward for service with newstories of merit-based reward.The importance of universal values can be illustrated byasking an employee to complete the statement:“For me to be effective in my job I need ...”Typical answers might include:

“... I need• work that is challenging and helps me to learn• adequate coaching and training• a safe work environment• to be paid equitably for the work I do• to be treated fairly• to be given honest feedback – good or bad – about

my work; and• to be recognised for my achievements.”Although most employees want honest feedback abouttheir performance, and deserve to get it, there is a realreluctance amongst many managers, especially (in my opinion) in Australia, to give honest assessments to subordinates. If a manager really holds honesty as acherished personal value, he/she will believe that everyemployee has a right to be given honest feedback abouthis/her performance. How otherwise can performance

29

be improved? But unless the culture of the company (as set and maintained by the senior management)mandates honesty in formal performance appraisals (or if appraisals are not common practice, in informalperformance discussions), it is unrealistic to expectother managers to embrace the practice. They will operatein accordance with the culture of the organisation. Generally, when the corporate environment is notaligned with universal values, negative and destructivebehaviour, insecurity and under-performance result. In contrast, an aligned environment generates positiveand constructive behaviour, enthusiasm, creativity andsuperior performance.

Corporate EthicsUnfortunately, the gap between published policies andbusiness practices is even greater in the area of corporateethics than in corporate values. Some examples in mypersonal experience are:– An Australian Standard (AS 4120 “Code of

Tendering” 1994) sets out the ethics and obligationsof the Principal and Tenderers in tendering for workin the construction industry. The Standard is based ona number of principles, including fair and honestdealings, and tenders being called only after projectfunding has been arranged and the Principal has committed to proceed with the project. In my twentyyears in engineering and construction covering hundreds of significant tenders for the process industries, I can recall seeing only occasional adherenceto this Standard or its principles. In fact, a few majorresource companies still practise tendering in waysquite opposed to the spirit of the Standard, despitetheir published business ethics policies. Most majorresource companies have public ethics policies, but none to my knowledge have adopted AS 4120.Why not?

– Several years ago a major company called for tendersfor the front-end design of a chemical plant costingmore than 500 million dollars. Protracted and complextechnical and commercial negotiations between company and engineering contractor then took place,with many meetings at night or over weekends inview of the company’s stated “urgency” to progressaward. After approximately eight months of intenseperiods of negotiations, the company announced the project was cancelled because feedstock (whichthe company co-owned) to the plant was not available. At this stage the contractor’s own costswere approximately half a million dollars! Apartfrom one “sorry” to the contractor, there was noapparent concern about the ethics of the process.

– A recent major project overran its capital budget by several hundred million dollars. To reduce theoverrun, the company has refused to pay in full manyof its suppliers to the project, saying privately to themthat although it acknowledged the money is legallyowed, it wants to pay less in a “settlement”. Thosesuppliers who demand full payment are therebyforced to take legal action, and the company has made it clear it will fight these actions so that adecision in arbitration or court will take years. In themeantime the supplier will get no further businessfrom the company. In effect, the company is using itssize in the marketplace to bully suppliers (who didnot cause the cost overrun) into taking part

payments. Not surprisingly, the company is nowfacing numerous legal actions, despite its statedpolicy that it will treat suppliers fairly and honestly! I assume the Board is unaware of this particular practice, although Directors have a responsibility to monitor management’s behaviour independently.

The reality, of course, is that, as Sir Adrian Cadbury(1994) wrote, “we judge companies – and managers– by their actions, not their pious statements ofintent”. How many companies can we think ofwhere the management is known to be committedto ethical behaviour? Not many spring to mind!“The Body Shop” is a well-known example of acompany whose CEO (Anita Roddick) has placedethical practice above commercial considerations inthe belief that this policy will produce superiorreturns to stakeholders. Those companies, whichfail to live up to, accepted ethical norms of conducting business are letting down their stakeholders morally in the short term as well asfinancially in the longer term.

ConclusionUniversal values of high moral standard are essentialto give individuals a framework within which theycan make principle-based decisions in business and personal life. These values underpin ethicalbehaviour in business. Individuals should learnthese values in the home, at school, at University,and through religion; Business and Educationshould not only interact about their importance, butalso reinforce a joint emphasis on both values andethics. Universities have a responsibility to reinforcein undergraduates the foundations of these values,and of course Business needs to play its part byinsisting on ethical behaviour by its managementand staff.

AcknowledgmentThe Author acknowledges use of unpublished workby Mrs Sheila Deane of Deane Management Services.

ReferencesCadbury, A. (1994) Ethical Managers Make Their OwnRules, in The ACT Guide to Ethical Conflicts in Finance,Prindl, A. & Prodham, B. (eds), Blackwell Publishers,Oxford.Cairnes, M. (1998) Approaching the Corporate Heart,Simon & Schuster, Australia, p.176.Collins, J.C. and Porras, J.I. (1999) Built To Last, RandomHouse, p.73.Harrington, D. et al. (1996) The McKinsey Quarterly, No.3, pp. 163-167.Jaques, E. (1989) Requisite Organisation, Cason Hall andCo., p. 38.Ludeke, J.T. (1996) The Line in the Sand, Wilkinson Books,Australia, p. 18.

DR MARK TONER

Company Director

AusIndustryINDUSTRY RESEARCH AND DEVELOPMENT BOARD

MAJOR SPONSOR

Results of the 2000 BHERT Awards

Applications were sought earlier this yearand were judged by an experienced panel ofjudges under the chairmanship of ProfessorLeon Mann, Pratt Family Chair inLeadership and Decision Making, Universityof Melbourne and President of theAustralian Academy of the Social Sciences,and comprise:

Dr Bob Frater, AOVice-President for Innovation, ResMedLtdMs Lesley Johnson, Director of Strategic Initiatives,Australian National Training AuthorityMr Peter Laver, Chairman, Ceramic Fuel Cells LimitedDr Jane Munro, Principal & Chief Executive Officer, Firbank Grammar SchoolProfessor Vicki Sara, Chairman, Australian Research CouncilDr Peter Scaife, Director, Centre for Sustainable Technology, The University of Newcastle

The criteria for evaluation included:1. Innovativeness2. Strength of the relationship between

collaborating partners3. Outreach inclusion (e.g. overseas – to

other groups, companies)4. National benefits5. Cultural impact on the partner/

organisation.To be eligible at least one of the participantsin the project or program had to be a member of BHERT.The Business/Higher Education RoundTable wishes to acknowledge the generoussupport of the following organisations:

forOutstanding Achievement

in Col laborat ive R&Dand

Outstanding Achievement in Col laborat ion in

Education and Training

MAJOR SPONSOR

The Industry Research and Development Board is an independentstatutory body whose purpose is to administer specific FederalGovernment programs in support of industry-based innovation,and to provide advice to government on national industry-basedR&D strategies and priorities. By these means, the IR&D Boardhas as its broad mission to increase the level and commercial success of industry-based R&D in Australia. In line with industryassistance programs, the IR&D Board utilises the services ofAusIndustry (within the Dept of Industry, Science and Resources)as a single point of contact for businesses wishing to access theinnovation programs.AusIndustry, the Federal Government’s program delivery agency, isinvolved in a range of measures designed to encourage industryinnovation. Specifically, it aims to encourage research and development and innovation within Australia. Programs administered through AusIndustry include the R&D TaxConcession and a range of programs which provide targeted support for basic R&D through to commercialisation and technology diffusion.

SPONSORSAustralian National University Central Queensland University

Edith Cowan University Griffith University

Mobil Oil Australia Limited P&O Australia Limited

Philip Morris (Australia) Ltd Queensland University of

RMIT UniversityTechnology

The University of Sydney Shell Australia Limited

The 2000 Awards were presented by the Hon Peter Costello MP,Federal Treasurer and Deputy Leader of the Liberal Party ofAustralia, at a gala dinner on Thursday, 16 November 2000, atthe Sheraton Towers Southgate in Melbourne.

30

AusIndustryINDUSTRY RESEARCH AND DEVELOPMENT BOARD

™

MAJOR SPONSOR AusIndustryINDUSTRY RESEARCH AND DEVELOPMENT BOARD

31

FOR OUTSTANDING ACHIEVEMENT IN COLLABORATIVE R&D

Turnover less than $50m per annum andProject/Program less than 3 years in train:

Sponsor: The Australian National University

Winner: University of Sydney and eBioinformatics

Title: Bionavigator System for BioinformaticsThe project has resulted in the development of the BioNavigator system, a unified, integrated, WWW based system for bioinformatics– the management and analysis of genetic information. BioNavigatoris used globally by over 10,000 research scientists for the analysis ofhuman and other genome data, educators and students in academia,biotechnology and pharmaceutical industry segments.

Turnover less than $50m per annum andProject/Program more than 3 years in train:

Sponsor: Central Queensland University

Winner: University of Sydney and Novogen Limited

Title: Pharmaceuticals Based on Isoflavones and their HumanPhenolic Hormone Derivatives

This project explores pharmaceutical development opportunities presented by the discovery of estrogenic compounds in plants andtheir role as substrates for the production of phenolic hormones within the human body. The partnership has enabled the company toproduce synthetic analogues of these hormones and to develop aknowledge base of their biological activities and chemical behaviour.The company is now engaged in the active commercialisation of these technologies.

Turnover more than $50m per annum andProject/Program less than 3 years in train:

Sponsor: Edith Cowan University

Winner: The Australian National University

Volvo

Title: Vision-Based Human-Machine InteractionFuture machine interfaces will understand natural human expressions,including voice, face and hand gestures. A novel interface developedby ANU and Volvo uses real-time image processing to analyse thehuman face. The interface is the most advanced of its kind in theworld, and its success has lead to a spin-off company to commercialisethe technology.

Turnover more than $50m per annum andProject/Program more than 3 years in train:

Sponsor: RMIT University

Winner: University of Sydney and Patrick Stevedore Holdings

Title: Enhanced and Automated Container Handling Equipmentfor Improved Waterfront Efficiency

The enhanced quay-crane project employs a novel reeving system(jointly patented by Sydney and Patrick) and advanced control systemto improve quay-crane cycle times by as much as 40%. The automatedstraddle carrier project aims to automate the entire quay-side operationat Patrick terminals. A new company, Patrick Systems and Technology,has been established to exploit this and other related developments.

Dr Tim Littlejohn, eBioinformatics

Professor Alan Husband, Dept of VeterinaryAnatomy & Pathology, University of Sydney

Professor Alex Zelinsky, Research School ofInformation Sciences and Engineering,Australian National University

Mr Michael Stevens, Australian Centre forField Robotics, University of Sydney

MAJOR SPONSOR AusIndustryINDUSTRY RESEARCH AND DEVELOPMENT BOARD

Professor Tim Napier Munn, JuliusKruttschnitt Mineral Research Centre,University of Queensland

Professor Denise Bradley, Vice-Chancellor,University of South Australia

The Hon Tony Staley, Chairman, AustralianPhotonics CRC

Sponsor: The University of Sydney

Winner: Julius Kruttschnitt Mineral Research Centre (TheUniversity of Queensland), Mineral Processing ResearchUnit (University of Cape Town, South Africa), McGillUniversity (Canada) and AMIRA International

Title: JKMRC/AMIRA P9 ProjectThe P9 Project is the largest and longest-running university-based mineral processing research project in the world. It commenced in1962, supported by 13 Australian mining companies. It is now supported by 38 mining and service companies in five countries.The P9 Project has delivered enormous economic benefits to the mining industry over its 38 years of operation.

Honourable Ment ion:

The Scheduling and Control Group (University of South Australia) and Siemens Ltd

Title: Development of the Siemens Metromiser®

The Siemens Metromiser® is an on-board computer that providesadvice to train drivers of metropolitan trains about energy-efficientdriving strategies. Although the Metromiser® project began in 1982, it was not until 1999 that the Siemens Metromiser® was proposed.The Siemens Metromiser® is now in service in Stuttgart.

Sponsor: Mobil Oil Australia Limited

Winner: Australian Photonics CRC, University of Sydney,University of Melbourne, Australian National University,University of NSW, RMIT University and 23 Industrypartners.

Title: Photonics Research at the Australian Photonics CRCThis partnership involving a CRC with five university partners andnumerous industry and public sector partners, including DSTO, is atruly exceptional achievement. The Centre’s research focuses on fourmajor programs built around a set of closely related technologies:Photonic Integrated Circuits; Novel Photonic Components;Telecommunications Technologies; and Photonic Sensor and SignalProcessing Technologies. The Centre has been very successful in transferring its R&D outcomes to industry and has established 10 spin-off companies over the past five years.

FOR OUTSTANDING ACHIEVEMENT IN INTERNATIONAL COLLABORATIVE R&D

FOR OUTSTANDING ACHIEVEMENT IN COLLABORATIVE R&D INVOLVING A CRC

32

MAJOR SPONSOR AusIndustryINDUSTRY RESEARCH AND DEVELOPMENT BOARD

Ms Linda Wilkins, RMIT University

Ms Raeleen Phillips, University of Sydney

Dr Gary Fitt, Australian Cotton CRC

Turnover less than $50m per annum andProject/Program less than 3 years in train:Made possible by: Philip Morris Australia Limited

Winner: Telstra Corporation and RMIT University

Title: The Telstra Home Team Project at I-CubedThe Telstra Home Team is made up of five doctoral students whoreceive an RMIT scholarship funded by Telstra. In return for the funding, the group undertakes a number of discrete research projectsfor Telstra, which are distinct from their PhD research. The projectscompleted to date have helped Telstra and RMIT achieve a new perspective in terms of the commercial prospects for on-line productsand services. Galaxy Kids, a product investigated for the early childhood education report, has been profitable since inception and is a successful export to the Asian market.

Honourable Ment ion:

Australian Key centre for Microscopy and Microanalysis(University of Sydney), Ford Motor Company of Australia,JEOL (Australasia) Pty Ltd and Leica Microsystems Pty Ltd

Title: Microscopes on the MoveThis is an innovative program designed to make the world ofmicroscopy accessible to school students by bringing advanced electronand optical microscopes into the classroom. This collaboration hasenabled a travelling laboratory with sophisticated equipment and aninteresting and motivational program to be taken into schools inEastern Australia.

Turnover less than $50m per annum andProject/Program more than 3 years in train:

Sponsor: Griffith University

Winner: Australian Cotton CRC, University of New England,CSIRO, NSW Agriculture, Cotton Seed Distributors Ltd,Queensland Cotton Ltd, Qld Dept of Primary Industries,NT Dept of Primary Industries and Fisheries, Agriculture,WA, Cotton Research and Development Corporation,Twynam Cotton Ltd, Western Agricultural Industries Ltdand the University of Sydney

Title: Certificate and Postgraduate Certificate in Rural Science(Cotton Production)

The Cotton CRC “Cotton Production Course” delivered through theUniversity of New England is designed to increase the cotton industry’sskills base by training personnel in the scientific principals and latesttechnologies and practices of sustainable cotton production. About 30cotton researchers from various organisations and 15 industry personneldeliver lectures and update the course notes on a regular basis.

FOR OUTSTANDING ACHIEVEMENT IN COLLABORATION IN EDUCATION AND TRAINING

33

MAJOR SPONSOR AusIndustryINDUSTRY RESEARCH AND DEVELOPMENT BOARD

Dr Greg Leigh, Royal Institute for Deaf andBlind Children

Mr Nara Srinivasan, School of Justice andBusiness Law, Edith Cowan University

Mr Dane Totham, Jockey Australia

Honourable Ment ion:

The University of Newcastle and the Royal Institute forDeaf and Blind Children

Title: Renwick College: Professional Training and Research inthe Education of Children with Sensory Disabilities

The collaboration has created the largest and most comprehensivecentre for professional training in sensory disability in Australia andthe only such centre in NSW. Nationally, the development of this collaboration has reversed a trend of diminishing provision of researchand professional training in this small but highly specialised field andhas created a centre with a growing international reputation.

Turnover more than $50m per annum andProject/Program less than 3 years in train:

Sponsor: Queensland University of Technology

Winner: SATS Security Services, a subsidiary of Singapore Airlinesand Edith Cowan University

Title: Strengthening Aviation Security in an IncreasinglyInterdependent World: The Design and Development ofEducational Programs for Aviation Security Personnel

The flexible training and education program is the first educationalprogram designed for aviation security within the Asia Pacific region.Since its initiation in Singapore the project expanded to Malaysia,Indonesia, Thailand, Nepal, Zambia, Guyana, and discussions areunderway with Emirates Air for similar programs in the Middle Eastand North Africa, and with AVSECO in Hong Kong.

Turnover more than $50m per annum andProject/Program more than 3 years in train:

Sponsor: Shell Australia Limited/P&O Australia Limited

Winner: RMIT Textiles (RMIT University) and Jockey Australia, a division of Pacific Dunlop

Title: Young Essentials Project 2000The students, under the semblance of a fully functional company, are required to market research, design, sample, consumer test, market, cost a product range and finally present to an industry panela range of innovative products at competitive price points that satisfythe requirements of the original brief.

Note in your diary– applications for this year’s Awards will be called in May.

FOR OUTSTANDING ACHIEVEMENT IN COLLABORATION IN EDUCATION AND TRAINING

34

35

Generic Ski l ls

Professor Paul Hager, Faculty of Education, UTS

(Dr David Beckett, Dept of Education Policy &Management, University of Melbourne)

Professor Anne Martin, Deputy Vice-Chancellor, Deakin University

Professor Bill Lovegrove, Deputy Vice-Chancellor,Griffith University

Professor Elizabeth Harman, Deputy Vice-Chancellor,Edith Cowan University

Mr Colin Thatcher, Assistant Director, Business Council of Australia

Greater Involvement byIndustry in Education and Training

Joe Fischer, Group General Manager Human Resources,P&O Australia

Professor Rod Belcher, Faculty of Engineering, UTS

Professor Brian English, Deputy Vice-Chancellor,University of Newcastle

Professor Sandra Harding, Dean, Faculty of Business,Queensland University of Technology

Professor Trevor Cairney, Director of Regional Development & Partnerships,University of Western Sydney, Nepean

Mr Colin Thatcher, Assistant Director, Business Council of Australia

Education Needs of the IT Industry

Mr Rob Stewart, Chairman, Melbourne IT

Professor John Hughes, Faculty of Mathematical & Computing Sciences, UTS

Professor Paul Swatman, Head, School of ManagementInformation Systems, Deakin University

Professor Robin Stanton, Pro-Vice-Chancellor (Academic),Australian National University

Professor Ann Deden, Pro-Vice-Chancellor (Teaching, Learning & Technology), Edith Cowan University

Should Higher Education be Viewed as an Industry?

Professor Mary O’Kane, Vice-Chancellor, University of Adelaide

Professor Don Aitkin, Vice-Chancellor, University of Canberra

Professor Margaret Gardner, Pro-Vice-Chancellor(Business & Equity), Griffith University

Professor Bernard Carey, Deputy Vice-Chancellor,University of Western Sydney, Hawkesbury

The Need for GreaterInvestment in Higher Educationin Austral ia

Professor David Beanland

Professor Denise Bradley, Vice-Chancellor, University of South Australia

Mr Peter Harris, External Affairs & Communications, Shell

On 17 November 1999, BHERT conveneda one-day Higher Education Summit, formembers only, which was attended (allday) by the Hon. Dr David Kemp, MP,Federal Minister for Education, Trainingand Youth Affairs.

The meeting was very successful and feedbackfrom those participating was extremely positive,as was the Minister himself.

The real success will be in the outcomes that flow fromthe meeting. The meeting itself was useful as the commencement of a regular dialogue between BHERTand the Minister. It also highlighted a number of issuesthat needed to be addressed by various stakeholders inhigher education.

Another benefit was that the Minister indicated quiteclearly that he welcomed advice from a variety ofsources, and he saw BHERT as being a valuable potential source of advice.This opens up some new opportunities for BHERT, and it would be remiss of us if we did not grasp the moment.As a consequence we sought volunteers from our membership to establish Task Forces on some keyissues. The objective of a Task Force is to examine an issue and produce a Position Paper for the Ministerthat gives him an option or perhaps several alternativeoptions for addressing that issue.The response was overwhelming. Below is a list of the TaskForces that have been established and their membership.

BHERT HIGHER EDUCATION SUMMIT

36

The Role of RegionalUniversit ies

Professor Hilary Winchester, President,

University Academic Senate, University of Newcastle

Mrs Margie Cole, Assistant Registrar,

Northern Territory University

Professor Andrew Glenn, Pro-Vice-Chancellor (Research),

University of Tasmania

Professor Paul Thomas, Vice-Chancellor,

University of the Sunshine Coast

Professor Kevin Sproats, Professor of Urban & Regional

Governance, University of Western Sydney

What is Needed to Make Austral ia a Truly Learning andKnowledge-Driven Society

Professor Ian Reid, Deputy Vice-Chancellor

(Teaching & Learning), Curtin University

How Should Diversity in the System be Encouraged?

Dr John Clarke, Manager,

Strategic Policy & Planning, University of Southern Qld

Professor Iain Wallace, Vice-Chancellor,

Swinburne University

Professor Paul Thomas, Vice-Chancellor,

University of the Sunshine Coast

Sharing Administrat iveFunctions BetweenUniversit ies at Lower Costs

Kevin Woods, Pro Vice-Chancellor

(Resource Management), Murdoch University

The Importance of the SocialSciences in Policy Developmentat Government Level

Professor John Wood, Pro Vice-Chancellor

(Research & Advancement), Edith Cowan University

Professor James Walter, Pro-Vice-Chancellor (Arts),

Griffith University

Assoc Professor Kerry Carrington,

University of Western Sydney, Hawkesbury

TelecommunicationsInfrastructure

Dr Jeff McDonnell, Director ITS,

University of Southern Qld

(Mr Steve Tanzer, Registrar, USQ)

(Mr Merv Connell, Network Manager, CQU)

Professor Brian Anderson

Director, Research School of Information Sciences &

Engineering, Australian National University

The Crit ical Importance of Li felong Learning

Professor Peter Sheehan, Vice-Chancellor,

Australian Catholic University

Dr Mark Toner, President, BHERT

(Ms Sheila Deane, HR Director, Kvaerner Process)

Professor Marilyn McMeniman, Dean of Education,

Griffith University

Professor Judith Chapman, Director, Centre for Lifelong

Learning, Australian Catholic University

Impact of the Internet onEducation Service Del ivery

David Buckingham, Executive Director,

Business Council of Australia

Ms Helen Hayes, Vice-Principal (Information),

University of Melbourne

Professor John Dearn, Director, Centre for the

Enhancement of Learning, Teaching & Scholarship,

University of Canberra

Professor Brian Platts, Deputy Director, Institute of

Interactive Multimedia, University of Technology, Sydney

Mr Bernie O’Donnell, Pro-Vice-Chancellor

(Planning & Development), Charles Sturt University

Professor Jim Hann, Executive Director Information

Services, Southern Cross University

The effects of the increasing number of pr ivate providers entering higher education

Assoc Professor Roger Alexander, University of NSW

37

As a unique group of leaders in Australian business,higher education and research organisations, theBusiness/Higher Education Round Table (BHERT)sees as part of its responsibility the need to articulateits views on matters of importance germane to its Mission. In recent times it has issued PolicyStatements and Papers – copies of which are available from the BHERT Secretariat.

Position Paper No.1 (July 1998) –Higher Education in Australia:The Global Imperative

Education and training is a key ingredient in growingand developing the Australian economy. The industriesof tomorrow are going to be increasingly knowledge-based. Higher education therefore is critical to thefuture of this country; in creating a “learning society”in which all Australians, of whatever social, cultural and economic background, have access to a post-secondary education of excellent value.Without a national vision and sufficient investment inour higher education system, Australia and today’syoung Australians are likely to be marginalised as theregion moves towards higher welfare standards andmore advanced social and political structures. Our goalis that Australia must develop the expertise of itshuman resources so that it is a significant regionalleader in professional, service, education and technological fields.

Position Paper No. 2 (October 1998) –The Development of Co-operativeResearch Centres

CRCs were established in Australia in 1991 to fosterties between universities, industry and governmentdepartments and research organisations, in order to bring research closer to commercial realities and provide education and training opportunities. The program was established to address a number of specific issues, among which were:1. The need to ensure that advances in science and

technology were linked to applications in varioussectors of the economy.

2. Related to this was the need to improve internationalcompetitiveness. The need to ensure that Australia’sundergraduate and graduate programs in science andtechnology were of world class; specifically involvingresearchers from outside the higher education sectorto ensure better quality and performance.

The CRC Program was to play an important role inensuring that Australia benefited from the strength ofits science and technology resources. Specifically, itwould help ensure that Australian research andresearch training remained at the forefront in thoseareas of specific importance to the country as a whole.

Position Paper No. 3 (April 1999) –The Case for AdditionalInvestment in Basic Research in Australia

In the latter half of this decade many OECD governments,including the US, Japan, Germany, UK and Canada,have recognised public investment in basic research asessential for economic development. Emerging Asianeconomies, despite the setbacks of the recent financialcrisis, are maintaining growth in public investment inR&D including basic research. All these countries haveprovided additional funding for basic research despitecompeting budget priorities.Much of the economic growth in this decade is attributable to the growth of knowledge based industries particularly those associated with information technology and biotechnology.As in the case of the UK, where substantial fundingincreases for research were provided within the contextof a Competitiveness White Paper, Australia needs toensure that additional funding is provided within abroader policy framework. Such a framework shouldensure maximum returns from this investment throughdiffusion of knowledge to industry and community,improving the skills level of the workforce, encouragingorganisational culture change and collaboration, andpromoting competition.

BHERT Policy Statements & Papers

BHERT POSITION PAPER No. 3

The Case for Additional Investment in Basic Researchin AustraliaA Policy Statement

APRIL 1999

HIGHER EDUCATION IN AUSTRALIA: THE GLOBALIMPERATIVE

THE DEVELOPMENT OF CO-OPERATIVE

RESEARCH CENTRES

The Case forAdditional Investment

in Basic Research in Australia

A policy Statement

38

PAPERS

BHERT Paper No. 1 (June 1999) –

R&D Leadership Training: DirectContribution to an EnterpriseBackgroundOne of the biggest issues facing an enterprise is achievingcommercialisation outcomes in the face of unpredictablechange. Nowhere is this more challenging than in thearea of transforming ideas and inventions into fullydeveloped products genuinely valued by the marketplace.Leadership of R&D activities, particularly the developmentphase, and achievement through teams are critical tothe success of an enterprise where many multi-disciplinaryinteractions and complex processes must be orchestratedto achieve desired outcomes.F.H. Faulding & Co. Ltd is a diversified health and personal care company. Faulding’s principal businessesare generic oral and injectable pharmaceuticals, consumerhealth products, the provision of distribution and retailmanagement services to pharmacies and logistics management services to hospitals. Faulding markets its products to, and has representation in, over 70 countries and employs 3,500 people worldwide.The InvestmentThe CSIRO-BHERT R&D Leadership Program wasselected to be the vehicle to assist driving change andimprovements in Faulding’s development processes.Organisational OutcomesAlthough the initial focus was on improved technicaloutcomes, an equally important benefit has been themajor contribution of course participants in helping toresolve operational issues and implement major strategicand organisational change.The team of trained participants has helped reduce totaldevelopment and technology transfer times by 25-30%.A significant increase in the number of parallel activitieshas been achieved with a greater number of projectsand product introductions being handled simultaneously.SummaryIn the context of the enterprise, benefits from the courserequire a significant commitment from management toensure that a “critical mass” of participants is built upas quickly as possible.Based on this experience the critical mass for training isbelieved to be approximately 10% of potential leadersfrom all relevant functions and the return on this investmentin training is at least 10-fold within the first year – (inFaulding’s case this represents a dollar contribution tothe bottom line of $1.5 million in the first year).

BHERT Paper No. 2 (August 1999) –

The Knowledge-Based Economy:– some Facts and FiguresIssue No. 5 (June 1999) of BHERT NEWS focussed on“The Knowledge Economy”. This BHERT Paperextracts a number of statistical indicators from a document published in June 1999 by the Organisationfor Economic Co-operation and Development (OECD),and provides some useful and interesting comparative

data on Australia’s relative global position within thecontext of the knowledge-based economy.

BHERT Paper No. 3 (September 1999) –

BHERT: Survey of Benefits fromCommonwealth GovernmentBusiness ProgramsIn recent times there has been considerable debate onthe level of R&D undertaken by business in Australia,how we compare with other developed nations, and thetrend of business expenditure over recent years.Government programs designed to promote andencourage R&D and innovation obviously play a significant role in this context.Raw statistics, whilst helping to measure and track levelsof expenditure, do little to explain the underlying reasonsfor changes or trends in levels of expenditure.BHERT recognises the fundamental importance ofR&D as the main driver of innovation, and the criticalrole government policy plays in building a supportiveinfrastructure for R&D.In this context BHERT decided to conduct a surveyacross a range of companies to try to better understandthe reasons behind the statistics and the impact variousCommonwealth Government programs were having onbusiness R&D expenditure.The Report identifies what the respondents saw as thecritical issues in R&D support and provides a series ofcompelling short case studies highlighting the experienceof the business community with various governmentbusiness programs in support of R&D.

BHERT Paper No. 4 (February 2001) –

The Critical Importance ofLifelong LearningThis paper aims to establish the significance of lifelonglearning in the Australian context. Drawing on analysesof lifelong learning policies and practices in Australiaand other OECD countries the paper seeks to identify a number of policy priorities for government, particularly in the areas of lifelong learning, businessand higher education.

BHERT PAPER No. 2

R&D LEADERSHIPTRAINING:

Direct Contribution to an Enterprise

THE KNOWLEDGE-BASED ECONOMY:

SOME FACTS AND FIGURES

BHERT: Survey ofbenefits from

CommonwealthGovernment

Business Programs

THE CRITICAL

IMPORTANCE

OF LIFELONG

LEARNING

February, 2001

BHERT

39

The purpose of the Business/Higher Education Round Table(BHERT) is to pursue initiatives that will advance the

goals and improve the performance of both business andhigher education for the benefit of Australian society.

It is a forum where leaders of Australia’s business,research and academic communities can examineimportant issues of mutual interest, to improve theinteraction between Australian business and highereducation institutions, and to guide the futuredirections of higher education.

In pursuing this mission BHERT aims to influence public opinion and both governmentand non-government policy on selected issuesof importance.

BHERT believes that a prerequisite for a moreprosperous and equitable society in Australiais a more highly-educated community. In material terms it fosters economic growthand improved living standards – throughimproved productivity and competitivenesswith other countries. In terms of equity, individual Australians should have the opportunity to realise their full social, cultural,political and economic potential.

The membership of BHERT comprises, by invitation, the chief executives of major Australian

corporations and public research organisations,and the vice-chancellors of Australian universities.

BHERT pursues a number of activities through its Working Groups, State Chapters and active

alliances with relevant organisations both domesticallyand internationally. It publishes a regular newsletter

(BHERT NEWS), reporting on its activities and currentissues of concern relevant to its Mission.

BUSINESS/HIGHER EDUCATION ROUND TABLE A.C.N. 050 207 942 Shell House, 1 Spring Street, Melbourne Victoria 3000 Phone: 61 3 9654 8824 Fax: 61 3 9654 8835 Email: bhert@ozemail.com.au Website: www.bhert.uts.edu.au

Dr Mark Toner

(Chairman)Company Director

Professor Tony Blake AM

Vice-ChancellorUniversity of Technology Sydney

Professor Denise Bradley AO

Vice-ChancellorThe University of South Australia

Professor Gavin Brown

Vice-ChancellorThe University of Sydney

Mr Russell Cooper

Managing DirectorSouth East Water Limited

Mr Richard Hein

Managing DirectorP&O Australia Limited

Professor Michael Osborne

Vice-ChancellorLa Trobe University

Professor Janice Reid AM

Vice-ChancellorUniversity of Western Sydney

Mr Rob Stewart

Company Director

Professor Iain Wallace

Vice-ChancellorSwinburne University of Technology

Professor Roy Webb

Vice-ChancellorGriffith University

Dr Roland Williams CBECompany Director

Executive Director:

Professor Ashley GoldsworthyAO OBE FTSE FCIE

Executive Assistant:Anne Munday

MEMBERS OFTHE BOARD

Mission Statement

40

LEADERSHIP IN INNOVATION COURSEOne of the most exciting initiatives BHERT is involvedin is the unique Leadership in Innovation program.

The program is an intensive three-module live-in training course for prospective R&D managers developed by the CSIRO and the Business/HigherEducation Round Table (a forum of business leadersand university vice-chancellors) with significant inputinto the program from BHP, F H Faulding and TheUniversity of Melbourne.

The Achievement Through Teams – Leadership inInnovation program involves three residential periodsof five days duration (commencing on a Sunday afternoon and finishing Friday lunch time). Module 1 is about Self-Management; Module 2, Team Building;and Module 3, Organisation Culture and the Future of R&D.

The residential courses are held at small, quality conference centres close to capital cities.

The course design is specific to the needs of R&D technical project leaders; brings together participantsfrom across organisations and functions; encouragesintegration of professional behaviour with personalgoals; and encourages leadership through trust, respectfor others and generating enthusiasm for a project.

The program is highly responsive to individual andgroup needs and provides an environment where participants form a strong learning community andongoing networks.

The cost of the course is $10,000, which includesaccommodation and meals, all training, course materials and coaching between modules.

Dates for Achievement Through Teams Courses for2001 are as follows:

DATES

ATT 16

Module 1 18-23 March

Module 2 6-11 May

Module 3 17-22 June

ATT 17

Module 1 20-25 May

Module 2 24-29 June

Module 3 29 July – 3 August

ATT 18

Module 1 26-31 August

Module 2 21-26 October

Module 3 2-7 December

Information: Margaret Redford, Ph: 02 6276 6265 oremail: Margaret.Redford@lctd.csiro.au

PLEASE NOTE THE FOLLOWING DATES FOR

BHERT MEETINGS FOR 2001:

Thursday, 24 May 2001

Melbourne – Sheraton Towers Southgate

Thursday, 15 November 2001

Sydney – ANA Hotel, The Rocks

2.30pm-5pm (inclusive of Annual General Meeting),

followed by Awards dinner.

FUTURE AUSTRAL IA!This unique volume (some 150 pages) incorporates the opinions,attitudes and visions of a group of leadingAustralian thinkers.

Some of Australia’smost influential people give theirinsights on issuesthat will affect thefuture of this country.

These leaders, from all sectors of thecommunity, have written especially for theBusiness/Higher Education Round Table.

They include the Prime Minister of Australia;the Leader of the Federal Opposition; theLieutenant Governor of Victoria; the Premierof Victoria; the President of the BusinessCouncil of Australia; the President of theAustralian Vice-Chancellors’ Committee; leading academics; captains of industry;

senior Cabinet Ministers; University Vice-Chancellors; a Novel Prize winner; an Archbishop; and many more…

The issues they cover lie at the heart of thechallenges facing this country in the NewMillennium; the need for a VigorousInnovation Culture; the state of ScienceEducation and Science Research in Australia.

Over 50 specially written articles by thinkersat the forefront of our society.

This publication is a must for those who see these issues as central to Australia’ssuccess in a global economy and want toknow how we should address them.

It is a must for senior students, schoollibraries, university libraries, municipallibraries, and those who like being well-informed.

AVAILABLE NOW!See order form on next page…

This study, by the Institute for Research into InternationalCompetitiveness atCurtin University ofTechnology in Perth,commissioned by the Business/HigherEducation RoundTable (BHERT), quantifies for the

first time the enormous contribution made by the university sector to the national economy.

The study measures the economic impact of the university sector in three ways –1. The income and employment generated

by teaching and research;2. The enhancement of the nation’s

human capital through its education of university graduates; and

3. The creation of wealth through the spillover effects of its R&D activities.

The Report quantifies each of these impacts separately. It shows that the government gets a positive payback in a number of ways.

It is interesting to note that less than half the total economic impact of the university sector comes from the direct expenditureof universities. Of more significance is the estimate that the total impact is some $22 billion per year.

The Report provides a unique insight into theinformation and methodologies utilised in thestudy. It underlines the importance of highereducation as an “economic good.”In his Foreword to the Report Dr. David Kemp,Minister for Education, Training and YouthAffairs says:

“…it provides a foundation from which to consider the crucial issues of public and private funding of higher education.”And further “...note(s) how valuable theinformation it contains will be for everyoneinterested in higher education issues.”

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✁SIFE LEADERSHIP SEMINARS

SIFE Leadership Seminars have beendeveloped to help students and facultyto develop their SIFE Team or to start a SIFE Team on their campus.Addit ional ly, part ic ipants wi l l : • Meet senior executives from sponsor companies • Discover what it takes to compete at the KPMG SIFE

Australia National Competition for the chance to winup to $4,000 for your team and meet top business executiveson 2 June 2001 in Sydney. *The Arthur Andersen SIFE Australia NationalChampion will also win a travel award to the SIFEWorld Cup in London, England 11-13 July 2001.

• Get a new SIFE Information Handbook• Eat free foodWoolworths SIFE Leadership SeminarSaturday 17 March 2001, BrisbaneHeinz Wattie’s SIFE Leadership SeminarSaturday 24 March 2001, MelbourneKPMG SIFE Leadership SeminarFriday 30 March 2001, Sydney

*If you are unable to attend a SIFE Leadership Seminarin a city near you, please contact Wendy Henrichs on0404 829 022 or SIFEAustralia@sife.org

KPMG SIFE Australia National CompetitionThe KPMG SIFE Australia National Competition is achance for your university SIFE Team to showcase youraccomplishments, network with business executives,learn about work experience and career positions available with sponsor companies. SIFE will also honourstudents, faculty, university administrators and businesspeople who have made extraordinary contributions to SIFE. The Arthur Andersen SIFE Australia NationalChampions will win $4,000 and travel award to represent Australia at the SIFE World Cup in London,England. An additional $3,500 will be awarded to theSIFE Teams placing as 1st and 2nd Runners Up.This all day event will be held Saturday 2 June 2001 atthe Star City Convention Centre in Sydney.

SIFE World CupThe SIFE World Cup is the arena set for competition.National Champions from twenty countries will advanceto the SIFE World Cup being held 11-13 July in London,England.

For More InformationFor more information about SIFE Australia or any of the above activities, phone Wendy Henrichs on 0404 829 022 or E-mail SIFEAustralia@sife.org

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In 1998 BHERT introduced aDistinguished Speaker Series ofaddresses each year featuring eminent“thought leaders” speaking on topics of interest to both the business community and academe.

We are delighted to announce the following Distinguished Speakers for 2001, as follows:

The Rt Hon Sir Alastair Goodlad, British High Commissioner, will deliver

a luncheon address entitled “Britain and Australia Today” in Sydney,

on Monday, 14 May 2001.

Sir Alastair took up his current appointment in Canberra on 18 January 2000.

He was formerly a Member of Parliament (Conservative) for Northwich from February 1974 and for Eddisbury from June 1983 to June 1999.

Sir Alastair has had a wide range of experience during his career including:

- Lord Commissioner of the Treasury (1981-84)- Parliamentary Under-Secretary of State in the Department of Energy (1984-87)- Comptroller of Her Majesty’s Household and Treasurer of Her Majesty’s

Household (Deputy Chief Whip) (1990-92)- Minister of State, Foreign and Commonwealth Office (1992-95)- Government Chief Whip (1995-97)- Shadow Secretary of State for International Development (1997-98)

Dr Robert Dane, Managing Director, Solar Sailor Pty Ltd, will deliver a luncheon

address entitled “Hybrid Power Systems for Marine Applications” on board the Solar

Sailor in Sydney, on Friday, 31 August 2001.

Dr Dane was born and educated in Sydney. He is a medical doctor with a long

history of rowing and sailing on Sydney Harbour and a passion for science and

technology. He ran a successful practice on the NSW South Coast for 10 years

and was chairman of several hospital and medical committees. In 1996 he

conceived and patented the SolarWing, founded Solar Sailor Pty Ltd, raised

capital and project managed the research and development, design and construction

of the highly successful Marjorie K prototype. He then capital raised and gathered

State and Federal government to construct a functioning 100 person commercial

eco-tourism ferry in time for the Sydney Olympics. This having been successfully

completed he has now formed a highly qualified team and with the focus of

commercialising the concept worldwide.

Members are asked to note these dates in their diaries. Further information will be given in due course.

2001Distinguished Speaker Series

To set in motion the changes neededfor an entrepreneurial Australia.

What do we have to do to celebrate entrepreneurial endeavour the same way wecelebrate sporting endeavour?

The Event. Early warning. Note your diary for 30/31 May 2001, in Melbourne, for a major activity to progress the Prime Minister’sInnovation Action Plan announced on 29 January 2001.

E n t r e p r e n e u r i a l A u s t r a l i aF u t u r e A u s t r a l i a

Senator the Hon Nick Minchin, Minister for Industry, Scienceand Resources will be hosting a gala dinner “Backing Australia’s Entrepreneurs”, on the evening of the first day.

The Hon Dr David Kemp, Minister for Education, Training and Youth Affairs will be making the keynote address.

The program will include some of Australia’s outstanding business success stories.

This is not a conference.This is not a seminar.This is not a workshop.

This event is for you … A leader. An opinion maker. An entrepreneur. An activist in government, education, research, business or the media.

Address the major issues facing an Entrepreneurial Australia:

• Education • Lack of Capital

• Regulation and Tax Burden • Short-Term Outlook

• Australia’s Perceived Anti-Entrepreneurial Culture.

TO REGISTER YOUR INTEREST please complete the following and forward to: Business/Higher Education Round Table, Level 5, 1 Spring Street, Melbourne VIC 3000.

• Name • Tel:

• Position • Fax:

• Organisation • Email:

• Address

Post code:

✁For more information check our website www.bhert.comor contact the B-HERT Secretariat on 03 9654 8824.