PROFIT WITH HONOR

Businessweek came out recently with a special edition entitled "25 Ideas for a Changing World". The issue is very interesting so I was quick to get my copy and read the pages with the thought that the thing can give me enough material to blog about for the next few weeks. Unfortunately, the website edition is gone. So I can’t link to it.

Nevertheless, Idea No. 1 is called, "After Enron: The Ideal Corporation" written by John A. Byrne. According to the article, with the Enron fall out, corporations will go back to the values of trust, transparency and accountability. Corporations will acknowledge that a company's viability now depends less on making the numbers at any cost and more on the integrity and trustworthiness of its practices.

Well, frankly speaking, I didn't know that this is a new idea. The Enron culture was and will always be considered an anomaly in corporate governance and investor relations. The values have always been there, except that unscrupulous individuals have gotten away with messing up with it for a few years. But now that the law caught up with them, we are quite happy to know that values have been affirmed. For indeed, what every corporation boils down to is that other people's money are entrusted to certain people in order that they can make it grow. In every relationship involving that sort of transaction, we are talking about not just making that money grow but also doing it with the knowledge that it should be done with the values of trust, accountability and transparency.

I didn't go through business school (my college degree is one for philosophy and my law degree is not exactly a business degree although now I only practice mostly commercial law). However, I imagine that every business course should have a course on Business Ethics -- and I am not just talking about how not to pirate business.

Business Ethics should always be grounded on the maxim "Profit with Honor." In the Philippines, sadly only one company used to live this ethos -- San Miguel Corporation in the time of the late Andres Soriano, Jr. During his time, San Miguel Corporation was never involved in any tax case and it did not have labor problems. Its investors were happy - in fact too happy that it was too hard for the late strongman Ferdinand Marcos not to resist to acquire it through a forcible takeover during martial law.

Profit with Honor. That means money through honorable means. No deception. No misrepresentation. Full disclosure. No cheating on your workers. No cheating on your investors. No cheating on your consumers. What's so new about that?

What lawyerly yours does when he is not lawyer


It's from a picture I took of the Monastery of the OSB Sisters of Or. Mindoro. I enhanced it with Photoshop 7.0 using watercolor filter then made the firetree more orange and the grass greener. Copyright 2002. All rights reserved.

Rx for hiding your wealth

1. Why?

A. You're afraid of the taxman.
B. You don't want your spouse to know.
C. You don't want your creditors to know.
D. You've got many cases filed in court.
E. You don't want kidnappers to know.
E. Some of the above.
F. All of the above.

2. How?

A. Put your wealth in a friend's name -- Efficiency rating: Ok. Risk rating: Poor. Your friend can die on you. Also, your friend can forget about you.

B. Put your wealth in a relative's name. Ratings: same as above. Additional disadvantage, you can't sue your mom.

C. Establish a holding company. Ratings: Your best bet. No risk. You are your holding company. Corporations can outlive you. No loss of efficiency. You sign your company's checks. Creditors at your door? Just sign your endorsement at the back of the stocks, enter in the books and its free from credit vultures.

Recommendation: Personal holding company

Do it yourself: www.sec.gov.ph