The universalization of irresponsibility.

The recent scandal of the so called Panama Papers has once again shown that social irresponsibility does not know about cultures or backgrounds.

It will be a long time until all documents are investigated, the tangle of companies and individuals come apart, and all data is published. But today we can say without fear of contradiction that the Panama Papers have been to date the biggest disclosure of information about hiding money in tax havens, usually with the intention not to show their origin and avoid to the maximum paying taxes or reduce the amount.

Reviewing the known people involved in the scandal we can see there are diverse ideology politicians, heads of state, business leaders, celebrities, athletes or people related to art or finance, among others.

If we try to find a common denominator among those involved in the Panama Papers, probably the only one that can be found, besides the lack of ethics in most of them, is having a significant amount of money or property they want to hide from the tax authorities and society in general.

Perhaps the thing the has surprised me the most about this issue is the varied professions or activities of the compromised people, and especially their varied nationalities and cultures.

We often identify bribery, fraud, social irresponsibility and widespread corruptionin any social level of society and both in the functioning of government and business and in the daily life of citizens, with developing countries or in process of development and/or rapid growth.

On the contrary, we tend to think that there are some countries and cultures that act much righteously, in which its citizens and therefore their organizations and governments act based on ethical values.

But unfortunately irresponsibility not only occurs in the first group of “undeveloped” countries but also happens in those that we would take for exemplary in many ways, as we see more and more every day in the media.

The report “12th Global Fraud Survey Growing Beyond: a place for integrity”recently published by Ernst & Young indicates that this issue is much more serious than perhaps we may think.

To begin with, according to the study of 1,758 workers of the largest companies in forty-three countries on five continents, 39% of respondents believe that bribery and corruption practices often occur in their countries.

While it is true that respondents from China, Brazil, India and African countries and Eastern Europe replied that their negative perception in these areas was greater than 39%, the average global study was that. So clear and so direct.

I do not recall seeing any publication containing an annual report of cases of corruption, corporate social irresponsibility and fraud quantified by country (I beg if any reader know of any to let me know, although I doubt it exists) to judge and check with numbers in hand how alike are the countries and cultures when it comes to be corrupted, and if accountability and lack of corruption is aligned with how responsible and demanding a country is perceived.

Anyway, that rating, if existed, surely would be rather sweetened since it would consist of only those cases that had been discovered, leaving many cases covered forever or until they come to light. According to the report “Oekom Corporate Responsibility Review 2015”, experts estimate that the proportion of unreported cases of corruption is very high and that only 20% of cases are detected. Corruption tends to grow in areas where governments are the main customers, such as the weapons sector or major infrastructure projects.

Corruption and fraud vs. values: the Japanese case.

It has always caught my attention the Japanese culture regarding their values. These include respect, work, seriousness, honesty, patience, order, discipline, hierarchy or honor.

Apparently a country with such values should be an “oil raft” in terms of scandals, corruption and social irresponsibility from its agencies, politicians and businesses. But no, unfortunately it is not.

This April it has come to light a new case of fraud in a Japanese company. Mitsubishi has also been caught in a new case of data distortion in the automotive industry with 625,000 affected vehicles without discarding that there are other models with the same problem. That is, it begins much like the Volkswagen dieselgate and we’ll see how it ends.

Previously, and also in the automotive industry, Toyota also had problems with technical faults in their vehicles. The company, which was aware of these failures, underestimated the first customer complaints, and instead of studying the problem and communicating it putting in front to future problems and acting as a responsible company, it chose to remain silent with the hope that nothing happened.

Another example can be found in the multibillion-dollar accounting fraud that Toshiba conducted for seven years and that was uncovered in 2015. This irresponsibility ended with the largest fine to date imposed by Japan’s financial regulator and a headcount reduction that could be around 10,000 workers.

Surely we all remember some of the leaders of these companies on television making the “japanese greeting” with varying degrees of inclination according to their repentance. At other times maybe someone would have made the hara-kiri, but in modern times it seems that repentance and honor no longer have these consequences in the country of the rising sun.

Which are the causes of the normalization of social irresponsibility?

First of all, and although not a direct cause itself it is a facilitating cause of irresponsible and/or unethical behavior, we must mention the legislative laxity on these issues.

Many of the actions and activities that we can find often fall in legislative gaps that make them alegal rather than ilegal actions, for example (and without going further) those that allow large companies pay taxes in countries where they are not carrying out its operations.

And when the activities are ilegal, people and companies end up having quite reduced sentences, so those involved often prefer to take the risk and act that way.

We are in a very competitive, globalized and interconnected world in which it is accepted in many companies the unethical behavior in pursuit of the enrichment and the “if we don’t do it our competitors anywhere in the world will, if they are not already doing it now, and they will finish us”.

In addition, the EY report indicates that “driven by market uncertainties and declining economic growth forecasts, companies are struggling to maintain margins. With less remaining opportunities to reduce costs, many companies are now focusing on opportunities in fast-growing markets” and it is in these new markets where there are more opportunities or facilities to act irresponsibly.

Another reason to act irresponsibly is the shortsightedness of many organizations that see fraud and irresponsibility a faster way to have economic benefits than just acting in an ethical and socially responsible behavior. Short-termism, the lack of importance given by many companies to managing business risks and how little is learned from previous cases are the ideal breeding ground for the same mistakes to be repeated at any time and place in the world.

Finally and as a reflexion, I would also like introduce the idea of the loss of personal values suffered by part of the citizenship, partly because of these unethical actions that we see daily that make some of us think “if they do it, why I will not do?”.

And that “average citizen” is the one that can behave exactly the same way within the organization in which he or she works.

Note: This article was first published in spanish and can be found here.