The corporate culture

 

NIALL FITZGERALD, who has some searing things to say about Irish business culture in today’s Irish Times, cannot be dismissed as a maverick or a begrudger. He is one of the most successful Irish businessmen of his generation, former chairman and chief executive of the giant multinational Unilever and then chairman of the global media agency Reuters. Nor can he be seen as an outsider hostile to this country. Although he has spent most of his career outside Ireland, he is passionately Irish. If his words are harsh, they are nonetheless the words of a friend.

When such an able manager says that he believes he could not have made a business career in Ireland without compromising on his personal principles, we should take notice. And when he suggests that Ireland still has “too many people who have a vested interest in there being no accountability”, he poses a challenge to business, political and institutional leaders to prove him wrong.

Mr Fitzgerald’s track record gives him some authority in these areas. He has a strong international reputation as an advocate for what he calls “corporate citizenship”, and for socially and environmentally sustainable business models. He has consistently opposed the culture of greed in corporations and excessive salaries for executives. He has long argued for – and acted on – the need for independent directors to act as watchdogs rather than lapdogs. He has taken these stances, not in order to undermine capitalism but rather, as he sees it, to sustain the trust that is essential to its survival.

Mr Fitzgerald warns that business leaders must understand the “rage and anger” of the general public and accept the need for personal sacrifices in order to rebuild trust. He punctures the self-regard of those in the banking world who believe they can revert to the old bonus culture. Against the argument that such people have to be paid small fortunes because otherwise they will leave, he raises the question of whether those who behaved so recklessly would be any great loss.

Most importantly for Ireland, Mr Fitzgerald raises the fundamental issue of accountability. It would be nice to be able to dismiss his perception that the Irish elite has little interest in taking responsibility for its actions and inactions. He is, unfortunately, right. There is precious little evidence that those at the top in the banks, in government or in the wider nexus of business and politics really understand the idea of being answerable for the disaster they caused.

Rather than reacting defensively, those in positions of leadership in business and public life in Ireland should welcome Mr Fitzgerald’s willingness to confront the issues that underlie our current malaise. Failure to do so would, in fact, confirm what he has to say about the claustrophobic and excessively intimate world of Irish business in which the courage to criticise is at a premium.

Greater regulation may be part of the solution, but it will be ineffective unless our boardrooms are filled with men and women prepared to ask themselves the simple question that Mr Fitzgerald poses: “Is it right?”