Thursday, October 1


The realities of life are harsh and discomforting. And there is nothing more discomforting than truth. So we seek refuge in lies. We indulge in denial, because we wish to avoid the pain of facing realities. But the problem is that we can deceive ourselves only for so long, for we cannot ignore the inevitable indefinitely. We may attempt to temporize knowing that we have to face realities eventually.

The current reality is that the world is going through a period of transition and turmoil, which is brought upon us by the economic cycle, a natural phenomenon.  We last experienced such a transition period in 1929, when the global markets crashed and the whole world was thrown into an economic depression. This change (transition) can be described as a rebirth of the system. During transition, old ideologies and modus operandi are discarded and new and acceptable ideas are adopted. This is what we are witnessing now.

Such big changes are almost always driven by global economics. But, there is so much ignorance and denial of truth; even the big businessmen are only beginning to comprehend the current realities. It is obvious that the events of 9/11 have exposed powerful multi-national companies to new risks and they are looking increasingly vulnerable. These businesses, whose annual turnover is at times higher than the annual budget of most third world countries, are finding it increasingly difficult to continue working in the same manner as they have done in the last century (basically looting in the name of higher profits). Multi-national companies in the past have and still continue to concentrate on profits only, and shunning any moral responsibility towards the wider society. William G. Parrett, a former Deloitte Touche Tohmatsu Global CEO, in his new book “The Sentinel CEO: Perspectives on Security, Risk and Leadership in a Post-9/11 World” (John Wiley & Sons, London), has given his assessment of the status quo and argued that, in the future, businesses, in order to survive, must change and become “ethical”.

The idea which Parrett has proposed is quite revolutionary because the plight of communities cannot be continuously ignored for the sake of bigger profits (as this would be another form of looting). Chasing profits and not giving anything back to communities will no longer be an option for multi-national businesses in the future. There is far too much resentment against multi-nationals in the developing world. Parrett argues: “These people want good health, a safe environment, a living wage, and humane working conditions. Most of all, they want a hopeful and secure future for their children. Yet large segments of the world’s population have none of these things and no hope of ever attaining them.  That degree of deprivation can’t help breeding anger and resentment.  That reaction, in turn, is exacerbated when unprincipled economic conduct enriches the wealthy at the expense of the poor.”

Parrett is among a very few senior business leaders and executives who have fully grasped the new realities facing the business world since the events of 9/11. The biggest problem is that 9/11 has proven to multi-national companies that they can no longer rely on governments to protect them or to bully the weaker nations on their behalf. All businesses wish to minimise their exposure to risks, but governments are no longer in a position to provide such assurances. And major multi-nationals no longer see governments as viable partners when it comes to minimising their risks. This is forcing businesses to consider other options as the shortfalls in their ‘return on investment’ (ROI) are beginning to create desperation. While security and other costs are continuously rising, these investments are not bringing the desired ROI. I believe this is the main reason why Parrett decided to ring the alarm bells; after all, he is an accountant.

Regardless, in the past the main job of any government has been protectionism – protecting the business. The governments existed and continue to exist in order to protect their national businesses. But, if the businesses now become “ethical”, then there is no need for governments and no need for borders, and no need for border wars. As far as law and order agencies are concerned, they can work with local authorities based on universal rules and regulations. It is quite likely then that within a few decades we may find ourselves in a world without borders. Abolishing borders and restrictions would increase mobility and this would then obviously help business. The global economy will be boosted by the removal of borders and the establishment of a new welfare system and ethical modus operandi.

Businesses are now seeking new partners to minimise their exposure to risks by approaching communities and offering help by financing local projects. This is intended to decrease the resentment felt against the profiteering multi-nationals. The idea of businesses becoming ethical and giving help and financial support to communities does seem a logical one and would likely be established as the future welfare system. This way the benefits are mutual; when businesses are working for people rather than for-profits, they are then bound to make huge profits.

The people of Asia and Africa are hoping and looking forward to coming out of a life of poverty and misery. But at the same time, there is, in some quarters, fear of this unprecedented change. The authorities are terrified that people will gain freedom. The old power centres have weakened and are obviously collapsing. For the first time, fear now rules over the old guard and establishment. They are feeling powerless and unable to stop the inevitable change. The realities for them are becoming uncomfortable.


It is interesting to consider that when the people in the West became wealthy and literate, they quickly began to abandon the churches. Now, what will the Asians do when they become wealthy and literate?

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