Leaven of the Business World

Mention business ethics and too many people think only of the great disasters - Bhopal, Exxon Valdez, Robert Maxwell's disappearing pension funds - says Neville Cooper, Chairman of the Top Management Partnership and founding Chairman of the UK' s Institute of Business Ethics. Even business schools and universities tend to focus on the downside. ' When I have taken part in courses, I have not come across a single case study of the positive, beneficial results of companies, like Marks and Spencer, having a strong ethic.'

IBE was launched in the City of London's Mansion House in 1986, with the aim of 'promulgating the best thinking and practice of businesses and their whole contribution to society' , says Cooper. He believes the launch coincided with a sea-change in attitudes towards business conduct. At first press articles implied that 'business ethics' was a contradiction in terms; now there is much less cynicism.

Since then, IBE has produced over a dozen reports highlighting best practice, often through case studies. Subjects range from concern for the environment to health of employees, credit and debt, and company takeovers. One study, for instance, showed that environmental initiatives can actually help companies to reduce costs.

But IBE's biggest contribution, says Cooper, has been to ensure that major UK companies have 'clear and detailed' written codes of ethical conduct. Ten years ago only one in six leading companies had written codes. Now one in two does. Cooper likens codes to a hammer: 'It doesn't build a house, but you don't go far without it.' A code can ensure that ' practice in a company conforms to policy'. Esso, for instance, regularly conducts a review of its ethical policies, involving feedback from its entire workforce.

So how do business ethics apply in practice? Cooper insists that 'the first ethical duty of a businessman is to run his business supremely efficiently and profitably'. Otherwise he has no chance of solving society' s wider problems, such as unemployment or environmental damage. But he also believes that 'doing an effective job and having high ethical values are absolutely reconcilable'.

He tells a story of plant closure when he was Executive Director of Standard Telephones and Cables in the 1970s. The company had to decide when to inform the workforce that a Northern Ireland factory would have to close. ' We had announced that we would be open and honest with employees about employment prospects and share information when we knew it,' says Cooper. 'We knew two or three years ahead that this factory would have to close. We did some heartsearching. It was not necessarily good for morale to be under a sentence of death. There could perhaps be demonstrations and strikes. Should we tell them? The answer was yes: our principle was as valid in bad times as in good. But it had to be applied intelligently.'

After much debate, the employees finally suggested that they should offer themselves as a skilled and efficient workforce to other possible employers. 'If we produced some brochures, would you pay for them?' they asked the manage ment, who agreed. This ensured that productivity remained high and that there were no industrial relations problems. 'It was to all our advantage to be able to demonstrate what an excellent workforce it was,' says Cooper. ' To my astonishment they did succeed and in the end sold themselves to two different companies who between them employed more than we had done.'

Cooper says there is no slick answer to why he went into industry. His father was an inventive Yorkshire engineer and businessman who 'believed in calling a spade a spade'. Cooper himself studied engineering at Oxford. ' My aptitude tended to be for mathematics and science.'

A formative experience came early in his career when he was recruited by a major British company to a new post, 'to transform industrial relations'. He developed 'considerable trust and co-operation' with the trade union leaders. During a complex wage negotiation, Cooper thought he had got Board agreement on the pay offer. He sent a copy to the union in advance of negotiations t o give them time to mull it over. But the Board had not had time to discuss the pay offer and Cooper's boss told him, 'You can't go ahead'. Someone suggested that he buy time by saying that he had flu and must postpone the negotiation.

Instead, Cooper promptly got on the phone to his union counterpart: 'Look, Bill, we've made a hell of a mess of this situation. If you distribute the figures I have sent you I shall be intensely embarrassed. If the Board doesn't authorize it, I can 't make the offer but you will have proof that I thought this was the right offer. Please help me and hold off distributing the figures for a week.' There was silence for a moment, says Cooper, and then Bill replied, 'Of course I will, Neville.' ' That intensified the trust between us so much that many future problems were solved which might not have been otherwise,' says Cooper. The company went on to become an international case study of cooperative change and increased productivity.

Cooper rose to become Vice-President of ITT (UK) and Chairman of European Electronic Systems. Some 25 years ago he launched the Top Management Partnership, a network of chairmen and chief executives who support each other. ' Top business people can often help each other better than management consultants,' he says. The Partnership also dialogues with members of the Cabinet and senior civil servants on issues such as how to make Britain 'even more competitive'.

IBE grew out of the Christian Association of Business Executives of which Cooper was Chairman. CABE had limited resources and there was also a need to broaden the appeal to other faiths. IBE' s patrons include the Chief Rabbi and the Principal of the Muslim College as well as the Archbishop of Canterbury and the Cardinal Archbishop of Westminster. Its council is a rollcall of the best of British business from banks and building societies, oil a nd telecommunications companies, manufacturers and retailers.

Cooper is also a member of the Caux Round Table group of international business executives w ho meet in Switzerland each summer to promote business values. Two years ago, though an Anglican, he was awarded a Papal knighthood of the Order of St Gregory the Great. The citation describes his work as 'the leaven in the dough of the business world'.

Cooper refuses to comment on political issues. But asked about boardroom 'fat cats' who get inflated pay, he replies: ' There should be proper rewards for success and we must remember that envy is another face of greed. But it is an abuse when there is reward for failure, like the golden parachutes which ensure that even if people are kicked out for incompetence they still take a very large amount of money.' Remuneration should be 'clear, transparent and justifiable'.

IBE's next studies will be on the ethics of competition, on information technology, and on international ethical standards. It is also taking an interest in education. ' We are naturally concerned that children coming out of school are competent in the three Rs,' says Cooper. 'It is also vital that they have an appreciation of the other three Rs - responsibility, relationships and respect.' IBE is supporting a move to get a study programme known as The Other 3Rs into every secondary school in Britain, for use in PSE (personal and social education) classes. IBE has also been asked by the Jewish Association of Business Ethics to help promote a drama and discussion programme on money and morals for sixth formers.

'There is a major problem for society when young people do not acquire values by which to run their lives,' says Cooper. ' This is not to say that all schools are doing a bad job. But too high a proportion of young people are being let down by society as a whole.' Industry, he adds, can play a positive role by helping to give young people ' a sense of purpose and values to live by'.

Cooper enjoys entertaining children too. He has been performing magic tricks since he was seven years old and has been a member of the Magic Circle for over 40 years. 'So is it more difficult to hoodwink your audience o r to get businessmen to be ethical?' I ask. He is unequivocal: 'Oh, undoubtedly bamboozling the audience. I have a high regard for my business colleagues, the majority of whom, I believe, are among the most ethical elements of our society.' He could name other sectors where the standards of ethics are infinitely worse. He is too polite to do so, but as I am a journalist we share a laugh.