Ethix Forum – Issue 36

What is government’s proper role in legislating ethical behavior for business?

“The role of government ought to be like the role of a referee in boxing, keeping the big guys from killing the little guys.”

Ted Turner
CNN Founder
… as quoted in The Straits Times, (Singapore, August 6, 2004)

The government has a very important role to play in business ethics, but perhaps in a different way here than in some other parts of the world. Let me explain.

Malaysia is a “so called” emerging nation. I have the advantage of having worked in the U.K. for five years. I learned people in the U.K. try to follow the rules–basic rules like obeying the traffic lights, for example. Whereas here, most people, when they face an obstacle try to take a shortcut, and if they are caught they go see somebody who can reverse a decision against them. This kind of attitude toward the law, and influence peddling, must change if we are going to progress. I feel very strongly about this which is why I drive a poor car rather than the latest Mercedes Benz. I want to send a very clear message that I cannot be bought.

To show the challenge we face, let me describe a particular case. Long ago, the people of Malaysia were not allowed to use their EPF [the government retirement fund similar to Social Security in the U.S.] until retirement. The government decided to relax this a bit for housing down payments and related special circumstances. Because of the IT push within Malaysia in recent years, the government decided to allow people to use up to 5000 Ringgits (about US$1400) from their EPF account to buy a computer for their home. The government did this with good intentions, but what did most people do? We found that 85 percent of the people who withdrew money to buy a computer had an understanding with the computer vendor, but did not buy the computer at all.

So we see that legislation is one thing the government can do, but we have to try to change people’s minds toward obeying laws already on the books. For business ethics, one must find a way to restore people’s pride in their work.

When I was in the U.K., the pay for a doctor was about the same as the policeman or bus driver, but people were very proud of what they did. They would say, “I want to be the best road sweeper (or policeman or doctor) in the whole world. Pay was not the major issue. That is not the case in Asia, so we have a long way to go.”

Y.B Dr. Tan Kee Wong
Member of Parliament
Deputy Minister of Land and Cooperatives
Kuala Lumpur, Malaysia

To my understanding, the proper role for a government should be always to assure that individual, personal rights are not overcome by “business” rights, i.e. employees being forced to work longer hours to increase profit and the like. The moment you break the barrier of individual rights, anything can happen.

Roberto Valbuena
Madrid, Spain

Governments don’t know all the details of business, and would prefer that businesses manage what they know. Government intervention is the last resort. But when businesses don’t act, governments can’t remain inactive. However, governments should not be the first mover.

The key issue for a business is not rules of ethics, but principles and values. A company should not have to hire a person and then hire someone to watch everything he does, or create rules about everything he does. They should hire the preson with the right values so he doesn’t need supervision.

At the Ministry of Law, we have established four values for governing our own work. They are:

  1. Having a purpose for what I do that is higher than myself
  2. Integrity and professionalism
  3. Innovation and freedom
  4. Valuing people

Liew Heng San
Permanent Secretary for the Ministry of Law