Ethical Performance
inside intelligence for responsible business


Good conduct at the very top sets the tone for the rest of us

July 2008

Only business leaders with self-restraint can steer companies along the right path, says the Dalai Lama

In Buddhism we believe that the reputation of a company depends on whether it operates with a warm and strong heart. A person who has a warm heart is actively concerned with the wellbeing of others, someone who follows what we call 'right conduct'. And good actions are as important for a company as they are for a person; perhaps even more so, since many people are affected by the actions of a company.

Companies that follow right conduct need to have good leaders. Flashy, egocentric chief executives are more likely to prioritize their own interests rather than to act as a good citizen with an interest in the wellbeing of shareholders, employees, and customers. When leaders show tendencies to bad or unwholesome actions they steer their organizations into a position of risk.

When I read about corporate scandals, the main causes appear to be a craving for power, wealth, or fame by the chief executive. This craving leads to dishonesty and law breaking. In the basic principles of Buddhism there are warnings about the suffering that comes about from uncontrolled desire or craving. The leaders involved in these scandals lost control over their minds and have become victims of their own negative tendencies. I consider this a great shame, as many of these leaders no doubt have talent, and are harming themselves and others without any good reason.

In a sense, the system is to blame as well. Take the example of pay disparity. I find it disturbing that the heads of companies are allowed to earn millions of dollars while some of their employees receive salaries that deny them a decent standard of living. I accept that people with great artistic, physical, or entrepreneurial talent can become wealthy, but this is a very small and unique group. The only way truly to solve this problem is for leaders to exercise self-restraint.

Some organizations, oil companies for instance, face difficult ethical dilemmas. It is unrealistic to expect these companies to limit their activities to countries with good governance. They will have to cope with weak governments, poor regulation, insecurity and corruption. They will have to carry out some of the tasks that a government should normally take care of. Given their influence, however, they should take extra effort to make the best of a difficult situation. Once this has been done, the challenge is for business to explain to the public that 'good' companies do exist. Organizations should band together in that effort.

Some time ago I was not sure that companies could act in such a way that they could deserve a thoroughly good reputation. Now I am convinced that they can. The task of business leaders who want to create positive change for all is among the most challenging, and yet rewarding, in the world. If the result is companies with a warm and strong heart, much more satisfaction with life and happiness will be found.

His Holiness the Dalai Lama is the spiritual and political leader of the Tibetan people. His latest book, The leader's way: business, Buddhism and happiness in an interconnected world, is out now, RRP £16.99 Nicholas Brealey Publishing.

Dalai Lama | Global | Business ethics

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