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

 

With Hunters & Collectors: The Rolling Stones Announce New Auckland Date

It’s the news New Zealand has been waiting for. The Rolling Stones today confirmed the rescheduled dates and venues for both the Australian and New Zealand legs of their highly anticipated ’14 On Fire’ tour. Now, Frontier Touring is also delighted ... More>>

ALSO:

Flying Things: Conchords, Pretties Help BATS Fly Home

The launch of BATS theatre’s fundraising campaign has taken off – with a bit of help from their friends. And with friends like theirs… An event last night hosted by Te Radar at Wellington’s latest waterfront venue, Shed 6, featured Fly My Pretties and, in a dream-come-true scenario, Flight of the Conchords. More>>

ALSO:

Environment: Zoo’s Own Wētā Workshop Produces Rare Giants For Release

Following unprecedented breeding and rearing success, Auckland Zoo is today releasing 150 of New Zealand’s largest giant wētā, the wētā punga, onto pest-free Motuora Island in the Hauraki Gulf. A further 150 will be released onto Tiritiri Matangi next month. More>>

Girls On Film: Divergent Hits The Big Screen

n January, Catching Fire (the second film in the Hunger Games series) not only became the biggest US box office success of 2013 : it also became the first film starring a female actor (ie. Jennifer Lawrence) to top the annual domestic earnings chart since The Exorcist, 40 years ago. More>>

ALSO:

Wellington.Scoop: No Travel Sanctions For Russian Billionaire’s Superyacht

On the same day that New Zealand announced travel sanctions against selected Russians, a Russian billionaire’s superyacht berthed in Wellington Harbour. More>>

ALSO:

Mental Health: UC Researchers Believe Robots Can Persuade People To Conform

A team of University of Canterbury (UC) researchers and scientists believe robots can persuade people to conform through group pressure... ``Our results showed that robots can induce conformity but to a significantly lesser degree than humans." More>>

NZ On Air: Local Content Holds Steady At 32% Of Television Schedules

Since 1989 NZ On Air has measured local free-to-air television content. The report compares the schedules of the six national free-to-air channels, to observe trends and changes in the local content landscape. More>>

Arts Fest: 2014 New Zealand Festival A Spectacular Celebration

The New Zealand Festival welcomed the world to Wellington over 24 days (21 Feb – 16 Mar) of arts events across the city. “[current figures show] slight increase on the 110,000 tickets issued in 2012. It’s a great result.” More>>

Opera: Happy 70th Birthday Dame Kiri Te Kanawa

Our first lady of song who “feels more like at 15 year old” will celebrate her significant birthday on stage at Covent Garden tomorrow night (Friday morning NZT), performing in the Royal Opera House’s production of La fille du régiment (The Daughter of the Regiment) as La Duchess de Crackentorp. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
Education
Search Scoop  
 
 
Powered by Vodafone
NZ independent news