Ideas & Debate

Value-driven corporates will stand the test of time

board

Corporate Kenya will never be built to last if its values don’t matter. FILE PHOTO | NMG

One of the founding fathers of Hollywood – Samuel Goldwyn – is famously misquoted as saying “a verbal contract isn’t worth the paper it’s written on”. What he did say was: “His verbal contract is worth more than the paper it’s written on.” This he said referring to the trustworthiness of a colleague.

Now, back to the land of reality. The heart of my article today is corporate values: are they worth the paper they’re written on? Do they mean anything? Are they a function of rhetoric rather than a true reflection of corporate behaviour?

Call them what you like; operating values, ethical statements, core values; they all represent the same thing. Here, words like integrity, trustworthiness and service get tossed about. Sadly, for most, stated values and actual practice don’t agree. Today, corporate Kenya looks like a nightmare on greed-street—self-dealing, slush funds, voodoo accounting, kick-backs and under-the-counter deals are part of the scene. It’s business unusual. The triumph of greed over integrity. Profits over principles. And if this hasn’t given you a bad taste already, throw in some copper-laced sugar into the mix.

But who’s to blame? Everybody. And there’s enough of it to go around. First to people like me – business owners – who think a values-driven model is uncool, unprofitable and an unnecessary burden. The ‘greed is good’ culture appears to be fashionable. Fact is corporate Kenya will never be built to last if its values don’t matter.

But who are you to moralise the markets? Well, research proves that values-driven businesses eventually enjoy significant margins in the end. For this reason, it’s time to press the reset button. Start by giving life to our core values. Otherwise, the grand vision counts for nothing.

Another special group here is the consumers. Unfortunately, many end-users don’t care about corporate values. If a firm stands for safe food products, it should make this its singular focus to provide safe food all the time, to all consumers. Anything less, consumers should quickly vote with their wallets.

READ: Directors' greed eroding public confidence in boards

But what if the consumers are ignorant? Well, there is no way to dis-incentivise bad behaviour. Punishing companies not aligned to your own personal values becomes almost impossible. It’s true that consumer inaction perpetuates ill corporate behaviour.

The third group on the list is the board of directors. Its obvious maximising shareholder value has gone too far. Values are being sacrificed on the high altar of more profits. They’ve believed that sustainable profits and shared values are mutually exclusive. Wrong. The two go together like Cheech and Chong.

So let me close this way; in the movie, “Field of Dreams”, a maize farmer hears a voice telling him “if you build it, he will come”. He interprets this as an instruction to build a baseball field in his farm.

After he does, all the dead baseball players emerge from the maize fields to play ball. For our edification today, here’s my own twisted version of this line to end my pitiful moral lesson: If they (corporates) build value-driven businesses, the profits will come.