Money, power and greed. . . The triplet that destroys businesses

08 Nov, 2015 - 00:11 0 Views
Money, power and greed. . . The triplet that destroys businesses

The Sunday Mail

DESPITE the calamities that have been visited on the United States of America by greed and avarice, Washington still prides itself as a capitalist nation.

American businesses are usually all about money, power and greed.

Till today, the Enron scandal, where Enron Corporation – at that time considered to be one of the biggest energy companies based in Houston, Texas – was forced to file for bankruptcy in 2001 after executives tried to conceal bad deals with the connivance of audit firm Aurthur Anderson, is perhaps the most common global example of how greed-fuelled corporate misgovernance can ultimately lead to corporate failure.

American Mike DuBose, who is a graduate of the University of South Carolina and also the president of US-based Research Associate, Columbia Conference Center, and The Evaluation Group, once noted that the Enron scandal demonstrated how money, power, and the accompanying greed can grow exponentially once we allow ourselves to start down that slippery slope.

He noted that through greed our judgment becomes impaired, ethics compromised, and our management style becomes blinded with ambition.

There has, of course, been research to try and understand what drives powerful people to continue being greedy.

Obviously, business leaders are not immune to lusting for power.

In a book titled Good to Great: Why Some Companies Make the Leap published in 2001, Jim Collins indicated that the most successful leaders do not intentionally seek power or recognition.

In fact, he describes them as humble.

Servant leaders earn recognition and power and lead with care, respect and ethical behaviour.

As Government increasingly looks at the health of the local economy, it has been discovering weevils that have been eating at the core of most companies, public enterprises included.

In 2015 alone, there were reported scandals at ZIFA scandals, ZBC, Air Zimbabwe and PSMAS that were linked to fraud and bad corporate governance practice.

More recently, there have also been reports on allegations of malpractice by NSSA bosses.

By their very nature, public enterprises are supposed to serve the people, but it seems that it is the people who are serving public enterprises.

Far from making state-owned enterprises deliver on Government’s mandate, it seems top executives of some of the SOEs are making them convenient outposts of enriching themselves.

Suffice to say, greed, power and the love of money has ruined many companies, and with them their owners.

Blinded by their lust for more power and money, many executives have been forced to push the self-destruction button.

Well, if you’re the captain of the ship and greed and power are steering you towards an iceberg, change course!
Some say the scenery may be a little nicer on the other route, but you may find that you’ll be just as content taking a slower-paced journey.

Clearly, standards cannot be sacrificed on the altar of riches; equally, inner peace and contentment cannot be sacrificed for the same reasons.

It seems that Zimbabwe is still lax when it comes to white collar crimes in Zimbabwe as many executives walk scot free even after fleecing organisations of large sums of money.

There are a lot of gray areas where executives can be criminally negligent but escape the clutches of the law on various technicalities.

The law has to be changed in order to adapt to changing circumstances.

Amendments to the Banking Act, which in essence will make bank executives criminally liable for some of their actions, will definitely be welcome.

Also the Code of Corporate Governance Bill will be helpful, particularly in SOEs.

Undoubtedly, Zimbabwe has well educated people, but it is greed that needs to be exorcised.

Executives need to act with the highest standard of integrity.

Even though some may argue that this demon has been in existence for a long time, what needs to be acknowledged is our ability to fight it.

Zimbabwe still ranked lowly on the ease of doing business rankings by the World Bank.

By eliminating greed and avarice and having business leaders with high morals and ethics, it can be possible to improve the country’s doing business ranking.

Greed often leads to destruction.

It is not only business that is suffering because of such malpractice.

Churches, it seems, have joined the bandwagon.

There are selling all manner of products with the promise that the buyers will receive divine protection and favour.

Zimbabweans need to work hard to build businesses and the nation.

Going back to the Enron case mentioned earlier.

Enron was an energy sector leader that started to dabble in e-commerce and exotic investment areas, such as weather futures.

In 2001, Enron, once valued at $90 billion and the 7th largest company in the United States, went bankrupt.
It took jobs, investor savings, retiree futures and even some lives with it.

In following years, it emerged that they shredded documents, started partnerships with their own shell companies, and engaged in massive inside trading.

Enron is now synonymous with the business outcomes of galloping greed.
This great example should be a lesson to us Zimbabweans.
Most of our companies are in huge debts and most of these debts are as a result of imprudent investment decisions.

We can control and manage most of these situations.
The three demons should not be the reason for our downfall.
We must be content with what we have and live within our means.
Good corporate governance should not just be on paper but it should be practiced.
It is possible.

Taurai Changwa is an Articled Accountant and ACCA finalist. He is the managing director of SAFIC Consultancy. He writes in his personal capacity and can be contacted at [email protected] or visit our Facebook page SAFIC Consultancy or whatsapp on 0772374784.

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