Wednesday, July 13, 2005


Journalists always need a stand-by. The feature piece they can dust off every time they're going through a slow news week, or when their slightly defamatory investigative report on the local MP who supports an underground kiddie-fiddling network gets held up by the lawyers. Normally, these reserve articles are hot-beds of crack-pottedness: interviews with fringe artists and cult religious leaders, theories on the origins of species, or how fat kids are getting fatter because they're too lazy to go and boot a rugby ball around the street.

They're not real stories. We already know about the issues, and just don't frigging care. The solutions are either non-existent, or are so insignificant to our daily lives that the effort involved in turning back the clock seriously outweighs any serious consideration of fixing the problem. Global warming? Apart from the flawed science (which is ignored by the Green liberal lobby), global warming doesn't affect me, and frankly, I don't care. I do care when the Government taxes me more and gives that money to Russia, as a penalty for my economic success. But this is not particularly a rant against Kyoto.

Triple Bottom Line reporting used to be a business journalists' favourite topic: they got to hob-knob with mediocre business people who took a holier-than-thou attitude and did their best to portray themselves as moral crusaders fighting the good war against evil. Triple Bottom Line businesses were kind to their environment, caring to their employees, and benevolent towards charitable causes. We knew all of this because they claimed it was a fundamental part of their business strategy. Seldom did these companies talk about their customers, or, shock horror, their shareholders.

The New Zealand Companies Act 1993 is typical of all legislative regimes within a capitalist society. Directors have duties not to act recklessly, to discontinue trading when there is a potential loss to creditors, to keep accurate accounting records, and to act with diligence and skill. In brief, the role of company directors is to act in the best interests of the company at all times.

This regime recognises that companies create wealth, and that businesses will only attract investors when those investors believe they are going to receive an economic return from that investment. Making money is what businesses are good at. They're not particularly good at distributing wealth--because it is inherently contrary to the interests of the company, and the entire market system. Which is why Triple Bottom Line reporting is flawed: in principle, it doesn't work. If people want to give their money away, they might as well just voluntarily increase their tax payment, or give it to Bob Geldof.

In practice, over the past few years, Triple Bottom Line--despite some touchy-feely proponents such as Dick Hubbard and Stephen Tindall--doesn't work either. TBL companies have been exposed as a con: TBL is a marketing gimmick, often proposed by companies that want to distract from their poor economic performance by claiming they are doing good things for the community.

Take, for example, the treatment of employees. Businesses for Social Responsibility will claim that they have special obligations towards their workers. But this is illogical. In the market system, if my boss is a cocksucker, I will go and work elsewhere. I don't need him to care about me any more than is his legal obligation to pay me for the work I do. Common sense says that bad employers face lower productivity, lower staff retention, and higher costs. As an employer, it's not in my corporate interest to treat my good employee like crap.

Now take my community. If I am exposed as a polluter of my local environment, my customers will get pissed off, and not buy my products anymore. That is not sensible, either. But it has nothing to do with social responsibility. It is all about maximising my commercial value by not acting recklessly against my shareholders, employees, and customers. By acting in ways that are contrary to my commercial interest, I am undermining my brand.

Dick Hubbard proudly stated that he did not spend a single dollar on advertising his cereals at Hubbard Foods. Yes, perhaps. But he did devote a lot of time conning people into believing that he was a nice guy to buy breakfast from. He knew his brand. He went about establishing committees and groups that were dedicated to similar causes as himself. He got substantial media exposure when he took his factory workers--once, eight years ago--on a trip to Samoa. It was a cunning business strategy, designed to maximise his commercial interests. I salute him for such cunning. But companies who claim to be outstandingly more moral than others set themselves up for the ultimate fall.

The loudest proponents of Triple Bottom Line reporting throughout the world have diminished the philosophy, and exposed "social responsibility" as a corporate scam. Cases such as Enron--which trumpeted itself as taking care of its "stakeholders", paraded as one of the ten best companies to work for in the United States, and as an environmentally-responsible corporate--was engaged in the biggest financial collapse and corporate fraud in US history. Enron created an image of friendliness and benevolence--which was unquestioned by the media and the public, as long as they continued to claim that they were nice, warm, fuzzy people and criticised corporate greed.

Since Enron, among other major corporate shysters who distinguish themselves only by being far removed from the accountabilities of delivering shareholder value as their prime objective--we haven't heard much about Triple Bottom Line reporting. And that is a good thing. Whenever you ask a business manager about their profitability, and they attempt to steer the conversation towards how much care they about their communities and their "stakeholders", then you should stab that manager. He is lying to you. And even if he isn't lying, and is being genuinely honest about his personal motives, then you should still stab him, because he is not creating wealth, has lost all connection with his shareholders who believed that he was actually making money for them. If he doesn't feel proud about making money for his shareholders, that business manager is a waste of space.

The new bandwagon that media have been jumping on of late has been the supposed existence of the corporate psychopath: it's an easy story, because we've all worked with people we don't like, and it makes us feel better about our own insecurities to label them as mentally unstable. Australia's publicly-funded ABC Online have even come up with a survey on what constitutes a corporate psychopath, along with the unfounded claim that "one in ten managers is a psychopath".

It's psychobabble, of course. Caught up in the whirlwind of depicting business-people as evil, left-wing reporters who have never had to face the pressures of being successful in a successful organisation, are easy targets for the kind of demented theories that wannabe psychology gurus come up with to get their own names in the paper.

One of the things that struck me at university was the extent to which psychology students were freaks. They were deeply disturbed individuals. The guys were invariably geeky and closeted: the only friends they had were a small coterie of themselves. They didn't actually talk to each other. They talked over each other. About themselves. They played strategy games at the pub. When they did talk to normal people, they'd be constantly trying to assess the other person's mental state.

The chick psychology students were even more crazy. They had no concept of self-control. They studied clinical psychology because they wanted to understand their own mental problems, and felt that was the ideal basis for treating other nutcases. They had no social inhibitions--of which I normally approve--but they were all ugly. I am deeply uncomfortable around obese young women with eating disorders who are constantly trying to get into my pants.

So initially, I am deeply skeptical about assertions about the number of corporate psychopaths in the world today. Because those armchair diagnoses are coming from anti-business journalists with nothing more exciting to write about, and endorsed by second-rate psychologists who are making a name for themselves. But even putting those considerations aside, the analysis itself is shonky. Earlier this week, the Herald asked whether Lions coach Sir Clive Woodward is a psychopath. I'm not one to defend Sir Clive--and I'm not doing so here, but the reasoning used to support that argument is the same that is commonly used with respect to "corporate psychopaths":

"There are eight classic "corporate psychopath" traits as identified by Hare and others, including insincere charm, arrogance, manipulation, pathological lying, a lack of remorse, a limited range of real emotions, callousness and the refusal to accept blame. "

And while, if you don't like Sir Clive, it is easy to diagnose him as having all of those traits, that is a subjective assessment. I say he is arrogant, because I do not like the style in which he presents himself. I believe he has a limited range of real emotions, because all the situations I have seen him in, he only ever displays that limited range of real emotions. Insincere charm? Haven't seen much charm at all from Sir Clive, but if I were to classify it as charm, it would only ever be of the insincere variety. Manipulation? Yes, absolutely. Sir Clive is absolutely manipulative, in every respect except that he's spectacularly unsuccessful at manipulating his audience, so it's not exactly manipulation. Pathological lying? Don't think so. He's merely presenting a view of his team that paints it in the best light.

In short, Sir Clive is doing his job as a coach and key spokesman for his multinational team, among a crowd of enemies. For various reasons, we don't like him, but the main reason for our dislike is that he coaches the enemy. And it's fun to call him a psychopath, because while we don't envy him at the moment, we do kinda envy the success he's had, and would much rather put that success down to deep-seated mental problems.

And so is much of the talk about corporate psychopaths. Disaffected, lack-lustre, mediocre workers who are envious of successful people in their organisation need to resort to a pop-psych reason that they have not succeeded in life.

Sounds like the typical psychological profile of a journalist, just quietly.

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