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

 
Carrie Fisher: Hollywood In-Breeding & The Velocity Of Being - Binoy Kampmark

There was always going to be a good deal of thick drama around Carrie Fisher, by her own confession, a product of Hollywood in-breeding. Her parents, Debbie Reynolds and the crooner Eddie Fisher, provided ample material for the gossip columns in a marriage breakup after Eddie sped away with Elizabeth Taylor. More>>

  • Image: Tracey Nearmy / EPA
  • Gordon Campbell: On The Best Albums Of 2016

    OK, I’m not even going to try and rationalise this surrender to a ‘best of’ listicle. Still…maybe there is an argument for making some semblance of narrative order out of a year that brought us Trump, Brexit and the deaths of Prince, David Bowie, Leonard Cohen and Alan Vega, who I missed just as much as the Big Three. So without further ado….oh, but first a word from the sponsor More>>

    Emojis: World’s First Māori Emoji App Launched

    It’s here - the world’s first Māori emoji app Emotiki has landed just in time for summer roadtrips and santa stockings, with 200 Māori and Kiwi cultural icons for people to share their kiwiana moments with each other and the world. More>>

    Howard Davis: Album Of The Year - Van Morrison's 'Keep Me Singing'

    2016 was a grand year for Van The Man - The Belfast Cowboy turned 71, received a knighthood, and reissued an expanded set of soul-fired live recordings from 1973 ('It's Too Late to Stop Now'). In the game for 53 years now, Morrison's albums consistently open new windows into the heart and soul of one of the most enigmatic figures in modern music. More>>

    Review: The NZSO Performs Handel's Messiah

    Max Rashbrooke: Saturday night's performance took the piece back to something like the way it would have originally been performed when premiered in 1742, with an orchestra of 20-30 players and only a few more singers. More>>

    Culture: Rare Hundertwasser Conservation Posters Found After 40 Years

    When Jan and Arnold Heine put a roll of conservation posters into storage in 1974 they had no idea that 42 years later they would be collectors items. More>>

    Scoop Review Of Books: The Stolen Island: Searching for ‘Ata by Scott Hamilton

    Reviewed by Michael Horowitz
    Located even further south than temperate Noumea, Tonga’s tiny island of ‘Ata might have become the jewel of the kingdom’s burgeoning tourist industry. Imagine a Tongan resort that would not only be mild in winter, but pleasant in summer. More>>

    Scoop Review of Books: Extraordinary Anywhere: Essays On Place From Aotearoa NZ

    The New Zealand landscape undoubtedly is very beautiful, but so is the British one, and my attachment to this country is much more about some particular places, and the memories and emotions that in them combine, than it is about the landscape as a whole. More>>

    Get More From Scoop

     
     

    LATEST HEADLINES

     
     
     
     
    Education
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news