Ethics = Not Business As Usual
By Debbie Loh
For South African construction magnate Graham Power, 56, it pays to be ethical. The litmus test he applies to his work and personal life is: How would I feel if the decision I've made were to be published in newspapers and if my family were to know about it?
It is a probing question, because the problem is not that people do not know what right and wrong are. Rather, it is more about not getting caught. And not getting caught was what Power and his company, the Power Group, had been ably doing along with everybody else in the industry.
From 1999, following his conversion to born-again Christianity, Power vowed to live and do business based on "ethics, values and clean living".
Power says that he and his company now pay all taxes due when before they did not. They no longer give inducements to curry favour with politicians in exchange for contracts, and no longer join in colluding with other industry players for price- or tender-fixing.
The Power Group's about-turn in 1999 startled other major industry players who were not used to one of their kind turning against them.
Power Group, which Power started when he was 28 with three casual labourers and a second-hand pick-up truck, grew rapidly to become a multi-billion dollar private limited company, one of South Africa's largest in highway construction and property development.
Power, the executive chairperson, currently owns a 70% stake, while 30% belongs to 500 of his longest-serving staff.
Playing by the book meant making major changes to operations and convincing personnel.
Power says it took the company about two-and-a-halfyears to wipe the slate clean. They started declaring all incomes and taxes due honestly.
This also meant enforcement against staff, including himself, from charging personal expenses to the company.
"By then, the business had been running for 16 years. A lot of the tax evasion we had done was history and there was just no way we could go back and calculate all of it to pay back. But we resolved to start paying everything due from then on," he says.
The next task was a gamble. Internally, the Power Group resolved to stop colluding with other construction companies.
Among the things the big players do, Powers says, is to meet over lucrative tenders to agree as to whose turn it was among them to get the contract. The spoils from that bid would then be divided out.
"We indicated to the rest of the industry that we would no longer be a part of this club, and to please stop contacting us for such meetings," Powers says. Word spread quickly, he adds, and "those whom you thought were your friends no longer spoke to you".
"It was a lonely period. Some of the other players tried to retaliate by turning our clients against us. With government officials, they would appear supportive of our position, but you never knew what they were doing behind your back, if they were favouring others instead of you."
To convince his board of directors, Power staked his job on his principles.
"The board was debating the key question, which was, if we don't play dirty, can we still survive? I told them that if the company disagreed to operate on an ethical basis, from then on, I would exit as majority shareholder."
Power left the meeting to let his colleagues debate the matter, and they stood with him.
The Power Group's website now openly states its commitment to "honesty, fairness and integrity" and has an online form and several hotlines for whistleblowers to report foul play within the company.
Was there a price to pay for being ethical? "Initially," Power says. "We looked back after the first two years and could see no measurable setback. Whatever business we lost, we regained and more as people came to know about our position."
Power also suffered negative press when he went public with his ownership of personal property in Spain and an offshore bank account with millions of Rand, which formed his safety net should the earlier apartheid era have caused South Africa's collapse.
These assets had been illegal under national law until 2002 when the government allowed an amnesty for those holding monies outside the country.
A scathing newspaper headline announced him as a Christian businessman who had "raped" the country of millions. Ironically, he says, the bad press prompted more South Africans with overseas assets to own up despite the public stigma.
When there is a mass movement of people who will stand for ethical practices, Power believes, that is when demand is created for corruption-free businesses.
In 2009, he rolled out his ethos in a country-wide campaign called Unashamedly Ethical. To participate, individuals and organisations sign a 10-point pledge to be ethical, are listed in an online directory, and must agree to be accountable to an ombudsperson.
Power is now taking the campaign global. It was introduced in Kuala Lumpur recently at a seminar and roadshow from 1-2 May, 2011.
During the local sessions, Power noted how Malaysia and South Africa were just a 0.1-point score apart from each other on the Transparency International Corruption Perception Index for 2010. Malaysia is ranked 56th and South Africa 54th out of 178 countries.
Forming communities of people who pledge to be ethical is essential for the campaign to work. By building a directory of companies which have signed the pledge, people who only want to collaborate with like-minded companies and individuals can have a network to draw from.
Accountability is also a necessary ingredient of the campaign, or signing the pledge would be meaningless.
The campaign has procedures for signatories to lodge complaints with the ombudsperson against another signatory for unethical behaviour. The ombuds will adjudicate and is empowered to take disciplinary action, such as suspending guilty parties from the list of signatories and the online directory.
Power says there are now Unashamedly Ethical communities in 70 countries since its international launch in June 2010. Communities are formed by signatories according to region for networking and accountability.
In Malaysia, Power estimates that over 2,000 people would have signed the pledge by the end of the roadshow.
It is possible to do business transparently, and to win without cheating. This comes from a man who admits that the early days of his career were spent "chasing the wind" - material wealth and earthly possessions - and who had it all but still felt empty.
"I realised that for all my wealth, I could not take any of it with me when I die. People aren't going to remember you for your bank balance or your material possessions but for the kind of person you were," Power says.
- Courtesy of GoodTimes.my