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

 

Scoop Review Of Books: From Here And There

Being Chinese: A New Zealander’s Story
by Helene Wong.
This is the fascinating story of Helene Wong, born in 1949 in Taihape to Chinese parents: her mother, born soon after her parents migrated here, and her father, born in China but sent to relatives in Taihape at seven to get an education in English. More>>

Chiku: Hamilton Zoo's Baby Chimpanzee Named

Hamilton Zoo has named its three-month-old baby chimpanzee after a month-long public naming competition through the popular zoo’s website. The name chosen is Chiku, a Swahili name for girls meaning "talker" or "one who chatters". More>>

Game Over: Trans-Tasman Netball League To Discontinue

Netball Australia and Netball New Zealand have confirmed that the existing ANZ Championship format will discontinue after the current 2016 season, with both organisations to form national netball leagues in their respective countries. More>>

NZSO Review: Stephen Hough Is Perfection-Plus

He took risks, and leant into the music when required. But you also felt that every moment of his playing made sense in the wider picture of the piece. Playing alongside him, the NZSO were wonderful as ever, and their guest conductor, Gustavo Gimeno, coaxed from them a slightly darker, edgier sound than I’m used to hearing. More>>

ALSO:

Howard Davis Review: King Lear At Circa

In order to celebrate it's 40th birthday, it is perhaps fitting that Circa Theatre should pick a production of 'King Lear,' since it's also somewhat fortuitously Shakespeare's 400th anniversary. If some of the more cerebral poetry is lost in Michael Hurst's streamlined, full throttle production, it's more than made up for by plenty of lascivious violence designed to entertain the groundlings. More>>

Scoop Review Of Books: Tauranga Books Festival

Escape to Tauranga for Queen’s Birthday weekend and an ideas and books-focused festival that includes performance, discussion, story-telling, workshops and an Italian-theme morning tea. More>>

Get More From Scoop

 
 

LATEST HEADLINES

 
 
 
 
Education
Search Scoop  
 
 
Powered by Vodafone
NZ independent news