Education Policy | Post Primary | Preschool | Primary | Tertiary | Search

 


Loss of trust in business—what this means for global economy

22 February 2013

Loss of trust in business—and what this means for the global economy

The causes and consequences of decreasing public trust in business, and what this means for societies and the global economy, will be the focus of a public lecture on Monday at the Victoria Business School.

Harvard Professor and Victoria University alumnus Paul Healy will discuss recent cases and research findings that provide insights into the causes of the loss of trust, its ongoing impact, and the changes required to rebuild confidence.

Professor Healy is the James R. Williston Professor of Business Administration and Senior Associate Dean for Research at the Harvard Business School, where he researches and teaches in corporate governance and accountability, strategic financial analysis and financial reporting.

He cites Enron, the Madhoff Ponzi scheme, the global financial crisis and ongoing banking issues in Europe as just a few examples of many events causing public faith in business to decrease.

“People have a sense that the leaders of the firms involved in these scandals took a very narrow approach to management that served their own short-term interests, often at the expense of customers, employers, the company’s reputation and the financial system.

“This loss of trust is twofold: it’s in the individuals that lead corporations and the corporations themselves. That, I think, is the tragedy—as a result of ethical lapses some leaders failed to preserve the reputation of their own organisations and led them to their demise.”

Professor Healy says as a result increased regulation is being placed on business, and while this is appropriate, some laws will likely end up being heavy-handed.

Another consequence is economic growth also slows, along with opportunities to reduce unemployment, as investors move their resources into more secure locations than the stock market. Meanwhile, innovative new businesses find it increasingly difficult to raise capital.

“Many of the challenges in the world today, such as providing affordable health care for ageing populations, or providing energy, water and food in ways that are economically and ecologically sustainable, need to involve business. But the consequences of recent events can lead to less business innovation in approaching these challenges.”

He says in almost all of the scandals he’s observed, the problem can be traced to the company’s values.

“Corporate boards need to take a good look at the organisation’s values and ensure that they are not only rewarding short-term performance. Compliance systems in organisations need to be sufficiently robust and taken seriously, so that lapses are detected before they bring down the company.”

Professor Healy graduated from Victoria University, majoring in accounting and economics, with first class Honours in 1977 and went on to complete his Master’s and PhD studies from the University of Rochester in New York. He spent 14 years at the M.I.T. Sloan School of Management, before joining Harvard Business School.

Media and the public are invited to attend the lecture on Monday 25 February at 5.30pm.

ENDS

© Scoop Media

 
 
 
 
 
Culture Headlines | Health Headlines | Education Headlines

 
Werewolf: Katniss Joins The News Team

From the outset, the Hunger Games series has dwelt obsessively on the ways that media images infiltrate our public and personal lives... From that grim starting point, Mockingjay Part One takes the process a few stages further. There is very little of the film that does not involve the characters (a) being on screens (b) making propaganda footage to be screened and (c) reacting to what other characters have been doing on screens. More>>

ALSO:

Scoop Review Of Books: Ko Witi Te Kaituhituhi

Witi Ihimaera, the distinguished Māori author and the first Māori to publish a book of short stories and a novel, has adopted a new genre with his latest book. But despite its subtitle, this book is a great deal more than a memoir of childhood. More>>

Werewolf: Rescuing Paul Robeson

Would it be any harder these days, for the US government to destroy the career of a famous American entertainer and disappear them from history – purely because of their political beliefs? You would hope so. In 1940, Paul Robeson – a gifted black athlete, singer, film star, Shakespearean actor and orator – was one of the most beloved entertainers on the planet. More>>

ALSO:

"Not A Competition... A Quest": Chapman Tripp Theatre Award Winners

Big winners on the night were Equivocation (Promising Newcomer, Best Costume, Best Director and Production of the Year), Kiss the Fish (Best Music Composition, Outstanding New NZ Play and Best Supporting Actress), and Watch (Best Set, Best Sound Design and Outstanding Performance). More>>

ALSO:

Film Awards: The Dark Horse Scores Big

An inspirational film based on real life Gisborne speed-chess coach An inspirational film based on real life Gisborne speed-chess coach Genesis Potini, made all the right moves to take out top honours along with five other awards at the Rialto Channel New Zealand Film Awards - nicknamed The Moas. More>>

ALSO:

Theatre: Ralph McCubbin Howell Wins 2014 Bruce Mason Award

The Bruce Mason Playwriting Award was presented to Ralph McCubbin Howell at the Playmarket Accolades in Wellington on 23 November 2014. More>>

ALSO:

One Good Tern: Fairy Tern Crowned NZ Seabird Of The Year

The fairy tern and the Fiji petrel traded the lead in the poll several times. But a late surge saw it come out on top with 1882 votes. The Fiji petrel won 1801 votes, and 563 people voted for the little blue penguin. More>>

Music Awards: Lorde Reigns Supreme

Following a hugely successful year locally and internationally, Lorde has done it again taking out no less than six Tuis at the 49th annual Vodafone New Zealand Music Awards. More>>

ALSO:

Get More From Scoop

 
 

LATEST HEADLINES

 
 
 
 
Education
Search Scoop  
 
 
Powered by Vodafone
NZ independent news