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Pursuit of China sends wrong message to business

By Martin Barrow

21 October 2015
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These are already challenging times for those trying to make the case that being profitable and ethical are not mutually exclusive. Volkswagen was a standard bearer for corporate citizenship until it emerged it lied about its vehicles emissions for years. Other car manufacturers may be implicated. This weekend it emerged that manufacturers of domestic appliances may not be able to substantiate claims about energy efficiency. Just two weeks ago we were told that Coca-Cola had effectively hijacked swathes of scientific research into nutrition to demonstrate that fizzy drinks are good for you, after all.

Now we must get used to the idea that the UK aspires to be China’s best friend in the West, to quote Chancellor George Osborne. The Chinese Premier, Xi Jinping, is in London for a state visit, promising billions of pounds of investment in our creaking infrastructure. That is, so long as we don’t ask awkward questions about human rights or corruption.

Already China has agreed to take a leading role in the construction of a new generation of nuclear power stations and the British Government hopes Beijing will underwrite the controversial HS2 high speed rail project.

However, the ethics that underpin how they do business are murky. Their flagship investments are made through state-controlled enterprises whose financing is opaque and whose management owes its position to state patronage. Competition must be sanctioned by the state. Employee rights are, at best, a work in progress.

Investment in Britain is to be welcomed, but not at any price. A condition must be the same standards of corporate governance that we demand of our own businesses.

How can we hope to persuade home grown businesses to adopt best practice in corporate social responsibility when we are ready to put out the bunting in the name of economic gain? How do we engage our workforce and embed lofty values into our corporate culture when our own government ministers chide us for not working like the Chinese, who do not enjoy many of the benefits that we take for granted?

However, we also need to stop pretending that we are whiter than white when it comes to living those values ourselves, as it leaves us open to legitimate accusations of hypocrisy.

Any organisation that involves more than one person is never going to be a paragon so should never set itself up as one. A desire to do better allied to tangible action to get better while being open about the bumps along the way is how businesses can communicate their own values and desire for positive change as well as giving legitimacy to call for the same from others.

Businesses need to embrace a new level of maturity about how we engage on meaty issues like this, standing up for the values they have pinned to their own mast while being open about the issues they themselves are having to deal with.

These are challenging times for business, with economic recovery still in the balance and global competition as intense as ever. Swooning at the sight of investment and ushering values out the back door is not the answer to sustainable growth.

Balancing the interests of shareholders with having a positive impact on society is not an optional extra, to be enjoyed during the good times, but a route to long-term and sustainable profitable growth. Investment is, of course, hugely important, but not at any price.

By Martin Barrow, Head of Corporate Communications
@MartinBarrow

Image credit: Amer Ghazzal/Barcroft Media as seen on TheGuardian.com