The Golden Rule as Good Business

05 Jun 2017

The First International Conference of Humanist Economics, held in April in Madrid, encouraged businesses to get ‘Back to Basics,’ and apply the golden rule within the corporate environment for the benefit of all.

STI Experts

Everyone knows the golden rule – do unto others as you would have them do unto you.  Yet we sometimes lose sight of it as we pursue even worthy goals. The First International Conference of Humanist Economics, held in April in Madrid, encouraged businesses to get ‘Back to Basics,’ and apply the golden rule within the corporate environment for the benefit of all.

Many have laid the blame for the economic crisis on the market economy, demanding more State intervention. But if we want the market economy to function at its best, both in economic and in ethical terms, the solution does not lie in simply restricting it, but rather in improving the value system and the cultural, legal and institutional frameworks in which it functions.

The conference participants advocated for putting people (not only shareholders but also employees, clients, suppliers and other interested parties) at the center of decision making, and managing with a long-term mindset in order to respond to the challenge of creating an economy closer to people, in which business leaders endeavor to benefit society as a whole.

Presentations titled “Managing Companies, Managing People,” and “Economics as if Ethics Mattered,” and the roundtables “The Person at the Center of the Organization: Implications for Management,” and “Managing with High Beam Headlights” considered how these ideas play out in management, in reporting procedures, in payment scales, etc.

Javier Cremades, president of the Madrid Vivo Foundation, which organized the event, said that because people blame business for many of society’s ills, “we must improve, so that companies aren’t the problem but the solution.  We have to connect businesses with what society wants from them so we can share value and create benefits for all.” He further pointed out that “the civic side of capitalism is an instrument for the common good.”

Joan Fontrodona, director of the Business Ethics department at IESE, summed it up by stating “businesses do not exist only to make money; they have an economic end and a social end.”

How to achieve these social ends? By remembering that “companies are communities of people, who cooperate to give and receive goods and values,” as IESE Economics Professor Antonio Argandoña pointed out in his presentation.

Argandoña went on to insist that “the receptionist is as important as the CEO, because each person is irreplaceable.” Working in this manner creates “trust, loyalty and reciprocity,” he said, which disposes people to do their best and to put the legitimate interests of others ahead of their own when necessary. In a climate of trust, people look beyond mere rules to the shared values on which they are based.

Argandoña gave specific suggestions as to how to create a people-first work environment by truly going back to the basics, beginning with the golden rule.  This includes involving people in shared goal setting rather than imposing goals, and fighting against errors but not against the people who make them.

Several directors of large Spanish companies agreed that in practice, the economy must turn towards people.

Eduardo Serra, VP of Everis, pointed out that the main factor of production was for centuries land.  Then it became capital.  But in the future it will be talent, meaning people. “The new business climate will give power to those who are able to group together talent, rather than merely capital,” he said. 

“The leadership of the future will be what it always should have been,” opined Tomás Pascual, President of Grupo Pascual, “Keep a long-term perspective to build something great, take care of the details, and put people first.”

Antonio Argandoña quoted Whole Foods founder John Mackay explaining the virtuous cycle of a business whereby managers take care of employees, employees take care of clients, and satisfied clients take care of shareholders.  Putting others first is a win-win situation for everyone.

The conference was organized by the Madrid Vivo Foundation, which supports social, cultural and educational initiatives that promote values fundamental for society. The foundation hopes to hold semiannual meetings to encourage businesses to function ethically and provide practical ideas as to how to do so. Further, a website is being created as a platform for sharing articles, opinion, and interviews about business ethics.  See the Twitter hashtag #peoplecentric.