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Hughes Krupica: Making kindness a key business objective

  Bangkok / Boat Lagoon

After one of the most difficult years in recent history for many, reflection on how states, private persons and the most powerful global forces – companies – conduct themselves seems a worthwhile exercise, albeit in this piece a fairly short one. At a time when mental and physical wellbeing, environmental concerns, causal analysis of pandemics, evidence of selfishness, greed and callous regard for human life and safety are rife, a revisit to the potential purposes of our existence beyond primal basics could be helpful to reset or refocus human direction.

Perhaps surprisingly for non-lawyers, ‘law and nature’ are at the heart of an issue that continues to determine a misguided long-term objective of some societal controllers and participants, continuing a belief from the Milton Friedman and business management schools of thought that the almost exclusive, and certainly primary, purpose of a company and its owners should be to make a profit. Companies are undoubtedly the most powerful long-term forces in all of our lives. They work with government to provide essential utilities and services, they produce or provide the food we eat, the transport we use, the digital services and information we consume at an ever-increasingly rapid rate, and are evolving to automate or build in artificial intelligence to many systems of our existence.

In the past, corporations have been rightly vilified for their human rights and environmental abuses, with a great but obviously lens-specific summary provided in Joel Bakan’s ‘The Corporation: The Pathological Pursuit of Profit and Power’, which touches upon many of the issues concerning the lack of accountability and acknowledgment of responsibility that corporations should have for disasters and management of humans. Some laws change in a nod to the issues that arise, attempts are made to foster a sense of ‘global responsibility’ through initiatives such as John Ruggie’s ‘United Nations Guiding Principles’ for corporate responsibility. However, major problems with this are apathy, the effort and resource required to adhere to such wide-ranging principles, their opt-in / opt-out nature and a distance between those that operate companies and the intergovernmental organisations and states that declare approval of such polices.

My basic suggestion for a generic solution is not an original thought by any means. My inspiration for encouraging thought on redefining the purpose of companies emanates from two major sources. First, Colin Mayer’s book ‘Prosperity’ provides modern and deeply-thought-out analysis on how evolutional biological thought can be applied to the treatment and use of corporations in our society. By adopting a co-operative and altruistic approach to operating corporations, a boomerang of kindness will start to resonate through our interactions with corporations, and each other, thereby improving society. Second, both my young children, studying at different schools, have embedded in their early curriculum the concept of ‘kindness’ which is pivotal to their development. They are not alone. However, kindness also ought to be taught in business, economics, law, management and vocational school environments; there should be no ‘on-off’ button for kindness which switches between family/personal life and business life. Shock, horror! But how can anyone still ‘make a profit’, I hear the Friedman followers say…

 

Well, it is possible to set up systems that combine obligations and objectives of kindness with duties to companies and shareholders/owners to make profits. This requires taking the legal form of a corporation, and embedding new legal rules, flexibility, freedom and constraints to execute ‘kindness’.

If directors can choose or make decisions based on a combination of principles of kindness with legal tolerance for certain ‘losses’, or just lower profits, of an organisation, then it might become more fashionable to walk the walk of what are currently characterised as ‘do-good’ activities: Environmental Social Governance and Corporate Social Responsibility.

Although these are good concepts, they fall woefully short of the global directional shift required to radically improve the way we live, treat others and are treated.

 

In setting up a company, it is possible to remain a commercial enterprise not becoming ‘foundational’ or charitable as an overall organisation, but embedding principles of kindness and values in all aspects of conduct which affect external and internal stakeholders. This is a step beyond the ‘Enlightened Shareholder Value’ pluralistic approach to corporate law formulation, and is a stronger move into active prioritised kindness. It is a bold controversial concept, but society – subject to continued material gain, even with the current ‘drip-down effect’ expanding the working to middle class prosperity levels – would surely benefit from additional kindness and not just additional money or capital. Kindness capital has huge value and potentially infinite returns.

Legally, the remits of directors can be defined in their service agreements, but the laws of the country governing their conduct would also have to be reformed to allow emphasis on kindness. This concept already exists – as Colin Mayer points out in ‘Prosperity’ – in Delaware, USA.

So for 2021, please consider if you can reform and rebuild kindness – not just into your personal life and interactions, but firmly and squarely into your business objectives, purpose and operations.

  • It isn’t kind to sell COVID19 masks or vaccines at the highest possible price based on principles of supply and demand and exploiting as much as possible any lack of regulation by states.
  • It isn’t kind to conduct a team-building session for your employees, then – when you leave the car park – cut into the other cars trying to leave, drive in the outside line flashing your lights to try and intimidate cars and humans in front of you, so you can get to your next appointment, or slow walk around a shopping mall, more quickly.
  • It isn’t kind to employ migrants, keep them in disgusting confined quarters, use their labour and resource due to its cheapness – and scarcity of comparably cheap alternatives – and then when they fall sick dump them in a forest and abdicate responsibility for their lives.
  • It isn’t kind to design a societal reaction to a pandemic that allows travel in and out of a country’s airport and then repeatedly ‘lockdown’ the afflicted because of the lack of authority exerted at the outset.
  • It isn’t kind to trade with high margins, continually acquire assets and then charge the assets by extracting rent at the highest prices from those that can least afford it but can’t obtain finance from banks who tighten credit and increase profits in times of economic distress.
  • It isn’t kind for a bank or lender to treat someone who borrowed 1 billion Thai baht and is in default of payment, like a V.I.P, but then treat a small businessperson or farmer as if they are sub-human and give them no leniency or V.I.P. treatment when they walk into the bank to explain their position – whilst they grow food for our tables.

Survival of the fittest is a concept to be confined to literary classics such as ‘Lord of the Flies’, to be shelved in the narrow field of pure biology and science. As a society, in our corporate lives and objectives, we can actively build in a ‘top-line’ for our wealth accumulation based on our actual needs, and do something productive and/or kind with the surplus. It doesn’t have to be communism to be kind. Companies can change, if humans have the will to make them.

I wish you a prosperous and kind Happy New Year for 2021.


By Desmond Hughes, Senior Partner of Hughes Krupica.
Hughes Krupica is a law firm which specialises in Dispute Resolution; Corporate Transnational and Domestic Law; Real Estate; Hospitality; Construction Contract Support; Transnational Structuring and Compliance; Transnational Commercial; and Litigation, operating in Bangkok and Phuket, servicing clients in relation to their business activities in Thailand and in other regions of Asia

GPS coordinate: 7.962140,98.385884

 Contact info:

Hughes Krupica Consulting (Bangkok) Co. Ltd

Phuket Office:
23/123-5 Moo 2, Kohkaew Plaza, 
The Phuket Boat Lagoon, Tambon Kohkaew, Amphoe Muang, Phuket 83000
Tel:+66 76 608 468 

Bangkok Office:
179 Bangkok City Tower, Fifth Floor,
South Sathorn Rd, Sathorn, Bangkok 10120
Tel: +66 2 872 173

[email protected]
www.hugheskrupica.com

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