Why do these business leaders apologise and to whom? Apologies are actually a personal sentiment between two individuals. The CEO of one of the world’s biggest businesses in making an apology in a public forum to the world in general is simply mouthing a few words that are meaningless and insincere. They are worthless. Why do they do it?
They do it because they know that in doing so, they get out of their current predicament and allow them back to their business with the current scandal over. They act rationally. It is the media that should do better in exposing bad corporate behaviour. (Forget the regulators – business regulators everywhere are worse than useless; they actually entrench bad behaviour by enforcing oligopolies wherever they go with barriers to entry such that competition is strangled.) Where is the public exposure via the media?
Seemingly too many investigative journalists’ work output today relies on following the latest ‘twitterstorm’ and baying at the perceived miscreant until that person is humiliated and apologises. At that point, the story is over. Until it repeats with a new twitterstorm over some new bad behaviour and a new apology will be extracted. Nothing actually changes.
The twittersphere, shorthand label for social media generally, is filled with primary school students that have never grown up. Their early training in the playground has carried through into adulthood. At a perceived slight in the playground, tears erupt and the teacher rushes over to demand the offender apologise to our precious offendee. The tears dry up and they move on. That behaviour is now commonplace in adults. Apologies have become meaningless.
The best regulation against bad business behaviour is a strong moral fibre and an ethical framework that has, at its heart, do no harm to others. This, together with consequences, is the best way to minimise harmful behaviour. There are still individuals with morals and ethics. What is disappearing are the consequences. True criminal activity will sometimes be detected with real consequences but the legal system itself has problems, is excessively expensive and can only deal with the most egregious cases. There is much bad behaviour going on that will never be brought to court, nor should it – our society could no longer function if we relied solely on the legal system to enforce ‘good’ behaviour.
I don’t expect much to change in the life of the CEOs who apologised last week. They know that there are no consequences. Real consequences would result in losses not profits. Real consequences would see customers turn away and use alternatives. Real consequences would see job losses. This is where the regulation and regulators fail us. Governments do not want firms to fail because they fear the political damage. That is why large businesses are bailed out by taxpayers all the time. They are bailed out with direct subsidies, tariffs or constraints on competitors, interest free loans, grants, elaborate barriers to entry for new competition, stifled innovation, enforced public ownership, cronyism and corruption. Despite this menu of techniques, if some firm does happen to fail, then public money is used to pay compensation to the unfortunate employees out of work. There are no consequences anymore. The media in the main, does not investigate and report on this because too many are looking for the next twitterstorm. CEOs of small firms generally lobby for less regulation. CEOs of large firms lobby for more regulation. It’s easy to see why.
We witness the gradual outsourcing of responsibility for our own lives. With that comes the natural blame game. The political class has taken over the decision-making responsibility for individuals and the arbitration of grievances. Consequences have become disconnected from behaviour. No wonder the CEOs apologise and carry on business as usual – that’s the way of the world.