“DO YOU know any billionaires who are moral?” He looked like he could play nose guard for the Hamilton Tiger Cats but he was actually a commerce student at the Mississauga campus of the University of Toronto. We had just finished an interfaith seminar on the economic crisis.
“What you’re really asking is whether it is possible to be both rich and ethical,” I replied.
“Yeah. That’s right.” My mind was immediately flooded with images of people I knew who had become rich through indifference to the welfare of those on the other end of their commercial dealings but I knew that’s not what the student wanted to hear.
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He wanted a role model, someone he could look up to and hold onto. I told him the story of Bob Stollery.
Bob was an engineer who led a management buyout of Poole Construction Ltd. in 1977 when all the management consultants told him he was crazy to do so. He then proceeded to build up the renamed PCL Ltd. into the largest construction company in Canada and one of the 10 largest in North America.
Having transformed the company, Bob proceeded to sell his ownership stake over time through an employee share ownership plan. As part of his personal succession planning, he put his wealth into a family foundation as a way of teaching his children how to be philanthropists.
After the destruction of 9/11, I said to him in passing, “Oh, you must be pretty busy now, bidding on all those construction projects in New York City.”
“No, not busy at all,” he replied.
“Why not?”
“Well, we decided a long time ago that there was too much corruption in the building industry in the American north-east. If we entered that market, it would change the culture of our company. So we decided we just wouldn’t go there.”
I almost fell over. This man had built his company into one of the largest construction companies in North America without competing in what must surely be one of the largest single markets, and on moral grounds. I thought Bob would be a great role model for the aspiring Islamic billionaire before me.
It was a good and necessary answer but it was also insufficient. The students in the seminar knew there was a connection between the failure of our economic system and the failure of our morality but they kept wanting to interpret the problem as a failure of personal morality.
If only we had had honest, moral people in charge, instead of liars and thieves, they seemed to be thinking, we wouldn’t have gotten into this mess. Well, actually, I don’t think that’s true.
There is a difference between personal morality and social ethics. Personal morality has to do with the decisions made by individuals and social ethics has to do with the cultures of organizations and the behaviour of corporate and social systems.
Many of these thoughtful and upstanding students will be hired by Canada’s banks and they should have prosperous careers in front of them. However, if shareholders continue to judge bank performance only by the rise in share price each quarter, the CEO will be forced to ratchet up the pressure on each division to increase profit. Eventually that trickles down to the 30-year-old loans officer, who is pressured to shift a farmer into a variable rate loan or increase the interest rate on a line of credit to a small business owner.
When increased profit is the only criteria by which we judge all of economic life, social ethics disappear and only personal morality remains.
Our current economic crisis has been precipitated by reckless and unethical behaviour in the investment banking sector and by the shadow banking sector – insurance companies like AIG operating as if they were investment banks.
This behaviour could only succeed if good people were kept silent on a continuing basis. They can be silenced by organizational cultures that reward deceit and punish truth telling.
Bob Stollery is a good role model not just because he was rich and moral at the same time. He is also a role model because he understood that corporations generate and maintain cultures that can promote ethical or unethical behaviour and these cultures are more powerful than any one individual.
Among his many gifts to the community, he was instrumental in building the Stollery Children’s Hospital in his hometown of Edmonton.
Stollery died in 2007.
Christopher Lind has published widely in the area of ethics and economics. He is a Senior Fellow at Massey College, University of Toronto.
