Visión crítica de la actual situación del sector del TMC

Eight directors placed significance on mutual trust around the board table. According to Solomon (2004) the virtue of trust creates a certain type of relationship whose viability depends on the excellent character of both of the parties. And in fact some of the directors in the following quotes make the ‘bestowing of trust’ dependent on the integrity of the other person. Four quotes are set out below.

The first quote shows how a director cannot and is not willing to work with directors he cannot trust. To be able to trust the other directors seems to be essential for the proper functioning of a board.

I suppose an ethical problem I had was when I was actually chair of YYY. Where suddenly the CEO was in court for using taxi chits from the previous employment he got. He was still using them after he had left the job and he was caught. What do you do? And because he was not named, and he got fined, it was a private matter. I looked at that and I said well I have a problem here, so I quietly gave notice that I will be retiring in a couple of month’s time…..I know it was before the end of my term, but I had other things I had taken on and I made sure, you know they have the right person in its chair after me.

R: So what ethical principle made you get you off that board?

Well because how could I trust the CEO again? [Transcript Fifteen p4]

This next quote explains why trust is so important - because being a director is being part of a team and imposes a shared responsibility.

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Although we had reached a consensus the chairman of the company would change it a little bit so that it was more the way he thought you know. So restating the facts all the time, you just can’t have that, and you know might happen once, might be a mistake; second time maybe a bit more scrutiny and so on. But there was a series of those points, where I had lost trust and confidence with people around the table and so I wasn’t going to be part of that. and so it is, it is a team effort you know…… you have to have trust in all the others, you can’t just sit there and say these are my views, these are my values, but nobody else has them so what. It has to be a shared

responsibility. [Transcript Three p9-10]

In the following quote the director views trust as the essential quality to help the board function.

I still have to think about the vast, vast, vast majority of people that I sit around the table with about which I have never had a question; and in truth the most important one for directors is honesty and integrity with each other. We don’t do deals; we don’t go and negotiate in back rooms; we don’t sell things; we don’t buy things; we don’t set up advertising

campaigns. We provide governance oversight to the management to do it. What we want to know is that they conduct themselves honestly,

straightforwardly and with proper respect for everybody they deal with. So that leaves me sitting in a board table with half a dozen or so others, what I need to know is when someone says something that is what they mean, what they tell me I can trust, they don’t walk out of the room afterwards and say I just said that because the rest of the board wanted me to say that, or

actually I don’t really believe it. That’s just, that’s all I need probably, or it’s largely what I need. [Transcript Ten p5-6]

This next quote shows that the first sign of untrustworthiness is a sufficient reason ‘to walk’.

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I know a guy on the YYY board called XXX and in the very early days was on the Nathan’s board (a finance company which recently collapsed and directors sent to jail), and he resigned because he did not trust the board running the company; he got out of there as soon as he could. You know he said, that was his judgement call, because he couldn’t trust some of the people around the table. [Transcript Nine p7]

As will be discussed below it can be seen how excellence of character is indispensable to be able to operate as a board; personal integrity is essential for trusting relationships and therefore fruitful board dynamics.

From the above quotes in this section the following themes characterised directors’ understanding of good governance: being informed; a healthy debate; beyond profit maximisation; putting the company before self; and trust. What follows is a discussion on how these ways of approaching governance can be characterised as virtues in the Aristotelian sense. The Aristotelian approach presents ethics in a very positive way (Solomon, 1993, 1999). Ethics should not and does not consist of a set of prohibitive external principles but is an intrinsic part and driving force for one’s whole life; it is a life well lived which includes fulfilling one’s professional role excellently or virtuously (Solomon, 1992a). Solomon (1992a) argues that Aristotelian ethics is a colourful, multifaceted appreciation and engagement with other people in the world. Solomon’s business virtues encapsulate specific types of ideal behaviour important for achieving excellence in business. Honesty is a virtue because it represents the ideal of straight dealing, fair play and open inquiry. Fairness, meaning to give and receive something of equivalent value, is absolutely required if one expects to engage in the relationship again. Integrity (honour) is not so much a virtue but is a sum of

the virtues, one’s character as a virtuous person. Honour or reputation is the basis of trust (Solomon, 1992a). Toughness is having a vision and persevering in the long term plans and strategies necessary to achieve that vision. Its opposite is incompetence. It is neither opposed to integrity as toughness is a proper sense of

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purpose, insulated against greed as well as weakness. Sometimes this is called moral courage (Solomon, 1992a).

Moore (2005), exploring the work of Alasdair MacIntyre, explains this in a different way. The goods of excellence (treating people well and work well done) are derived from the exercise of virtue and the goods of effectiveness (prestige, status, money) are not at odds with one another. They are not mutually exclusive but the good life (in the Aristotelian sense) requires that the former be privileged over the latter. If excellence is the main motive of the action and not just self- interest, this renders the act ethical.

The above themes ((a) - (e)) to a certain extent reflect behaviours described as virtue by Solomon. Being informed or having a thorough understanding of the issues and the business itself: this corresponds to the virtue of ‘toughness’ - putting in the necessary work and implementing the appropriate strategies to achieve the company goals. This would include making sure one is up to speed with the business and related issues and would revile incompetence which has been a common problem in New Zealand corporate governance failures.

Contributing to a healthy debate: This behaviour could be classified as a

combination of ‘honesty’ and ‘toughness’. To be able to make a useful contribution one needs to be informed but also one need to give their honest opinion and be open to others’ views. This whole process has to be fair and should not involve the wheeling and dealing characteristic of politics.

The goal of the company is broader than just maximising profit: directors gave a

lot of importance to people and according to Solomon this is an intrinsic aspect of virtue; ultimately a good life is about how we treat people whether at home or work.

Putting the company ahead of self: this reflects the virtue of ‘toughness’,

particularly being strong in the face of threats and temptations. It is a proper sense of purpose, insulated against greed and weakness.

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Being trustworthy and being able to trust other directors: This relates to the virtue

of ‘integrity’ and ‘trust’ itself. Integrity is more like a product of having many virtues and is akin to having a good character. Such a person is faithful to their responsibilities and will not be swayed from carrying them out. A trusting relationship depends on the character of both parties but being able to trust is a basic human virtue and a basic human need. This does not just refer to trusting someone to do/not do something specific but a general trust that they will act with integrity in all matters. A person of good character needs to choose the company they keep especially when having to work in a team which bears collective responsibility for the money of others.

So from the above we can say that directors’ perceptions of ideal corporate governance behaviours are not dissimilar to Aristotelian virtues as developed by Solomon for the business context. In this sense directors understand ethics and good corporate governance to be inseparable.