Caux Round Table Publishes Very Timely and Important Book on Integrity and Leadership in Business

I am very excited to announce that the Caux Round Table has just published on Amazon a new book, Integrity in Business and Society, authored by our colleague, Klaus Leisinger.  We are especially honored that Klaus gave us permission to publish his book.  Integrity in Business and Society is one of the very best books I have read on business ethics.  It provides an intellectually astute and experientially confirmed theoretical foundation for moral capitalism.

To make Klaus’ ideas available to readers around the world, especially students in business programs and line managers, we have priced it at $15.00 (USD), while the Kindle version is $9.99 (USD).  Most business books and especially academic books on ethics are much more expensive.  I am trusting that many potential readers are price sensitive and so will be eager to buy Klaus’s book.

You can buy the book here.

Since the age of 14, Klaus has worked, first as an unskilled helper in a mail-order house and later as an unskilled laborer in a house building.  He later worked in soap production and road construction and then as a truck driver.  It was all heavy and partly dirty work and always poorly paid.  But then, how else could he pay his way in life?

Klaus told me he learned one important lesson: whenever a supervisor was kind and respected the dignity of the employees and workmen, they were happier doing their work and time passed faster than under conditions where the bosses were rude, abusing their power to press out the last drop of energy.

Later, when a student, Klaus, by chance, met Samuel Koechlin, the CEO of Geigy.  Koechlin was an enlightened, open-minded person and asked that Klaus come by his office.  Koechlin told him that a good company needs unorthodox thinking and gave him the task for his next semester holidays to write a business policy for Africa.  Next, Koechlin asked Klaus to write a corporate policy for the developing world.  In 1974, the board of the now-merged Ciba-Geigy, accepted a “third world policy” stipulating a special responsibility of those who have broader shoulders and deeper knowledge.

For Ciba-Geigy, Klaus chose pharmaceuticals and spent 4 years as CEO of the regional pharma office in Nairobi, being responsible for Ethiopia, Somalia, Kenya, Uganda, Tanzania, Zambia, Malawi and Mauritius.  Daily, he confronted absolute poverty, unnecessary sickness and human misery, but also the absolute necessity to earn a profit for his employer.  Working under those conditions taught Klaus that business enterprises can do much more than being financially successful if and when corporate leaders want to.  Businesses can be a force for good for the poorest half of the world’s population and for sustainable development.

With some emotion, Klaus once told me that if there is a will of enlightened business leaders to use corporate knowledge, skills, as well as products and services also for those being left behind, if those leaders are willing to build bridges across to people of goodwill closeted in other societal silos, then business can help solve complex problems we are faced with.

Here are my thoughts on why you should buy Klaus’ book:

Klaus Leisinger’s book is for you, personally.  Klaus makes operational high concepts and deep wisdom.  Perhaps his most important contribution to our finding success and meaning in life is “Where there’s a will, there’s a way.”  As Shakespeare put it: “The fault, dear Brutus, is not in our stars, but in ourselves, that ….”

Here is what you can learn from his book:

Chapter 1: Trust

Lack of trust leads to troubles and losses.  Building trust leads to success and well-being.  Creating trust is how you stand up to volatility, uncertainty, complexity and ambiguity (VUCA).

Chapter 2: Semantic Clarity

Where do morals start and ethics begin?   Morality can be mapped as the norms we follow or don’t follow.  What are the norms of your communities: family, religious congregation, workplace, political party, ethnic heritage, nation?

Ethics is how we think about norms – indifferently, badly, or with excellence. And who does your thinking about ethics – you or those you follow?
And where are values?  What are the specific ideas and ideals which guide your behaviors and shape decisions?

Chapter 3: The Question of Ethics

This chapter is one-stop shopping to learn about ethics.

Ethics is the bridge between the ideal and the real.  It demands knowledge of facts, good judgment about the future and an understanding of causation – what will happen if I do “x?”

Great thinkers have given advice on how to cross this bridge and unite the real with an ideal – Aristotle; Immanuel Kant; Adam Smith; the Catholic Church in its social teachings; Karl Jaspers; Hans Kung; Jurgen Habermas; John Rawls; and Dietrich Bonhoeffer.

There are bridge crossings seeking to do one’s duty or seeking to make the world better, arising from our personal character or just trying to be a good person, responding to the immediate, in all its complexity and uncertainty.

We need ethics at the level of action – do it now – and at the level of order – systems and institutions – that attempt to screen out the unethical and draw their members closer to the ethical.

The best way forward is for you to get to the heart of the matter: treat others decently, respectfully and mindfully, just as you expect to be treated by them.

Chapter 4: Division of Labor

Think intentionally about who has what responsibilities, rights and duties.  An organization is an arrangement of offices – positions of trust, not a gaggle of self-seeking opportunists.  Every office has ethical responsibilities.  What you might ask is is the “office” of a company or of the state?  Do individuals, by the way, have their own “offices?”  Fairness in the creation and arrangement of offices leads to greater success in collaboration and getting good results.  This is where governance has its place.

Chapter 5: Levels of Responsibility

Priorities must be set – some things are more important than others.  Some things “must” be done.  Others “should” be done and still other matters “can” be done if we really want to or just act on a whim or with very good intentions to go above and beyond the call of duty. Achievement must follow from purpose and some purposes are better than others.  You need a warm heart and a cool head.

Chapter 6: Relationships with Stakeholders

Dialogue ethics and discourse drive win/win relationships with stakeholders.  Enlightened people talk with others about differing perceptions of reality, different value hierarchies and different interests.  Dialogue and engagement provide intelligence as to what the future has in store for you.  Who are your primary stakeholders?  Who is secondary?  Who is tertiary?  Are claimants for company attention and solicitude legitimate stakeholders or are they just making waves?

Chapter 7: Character and Personality

People decide what is right, so the character of those who hold office drives the course of events. Character is the arena wherein ethics lives or dies.  The character of being able to trust and, in turn, of being trustworthy; the character to assume responsibility and not pass the buck; and the character to care and show respect brings ethics into its proper place in decision-making and policy.  Character builds culture and culture builds character.  You can’t have one without the other.

Chapter 8: The Business Case

Go beyond the legal minimum.  Think big and reach out to others.  Show goodwill.  In business, being good does not bring market success if it is not aware of and responsive to conditions and to reality.  Integrity is holistic.  Its ethical stance finds a fitness for good intentions with the environment.  However, raising the ethical quality of business decisions does, on the whole, have positive effects on sales and profits; scandals are avoided; returns are reliable.  Employee commitment seems directly correlated to the company’s ethical culture, its purpose and the values it rewards.

Please buy Klaus’s book and then, after you’ve read it, let Klaus and I know what you think.

Again, you can purchase it here.

Is the World Turning Towards Nuclear Power at Last?

One of the surprises to me about the otherwise predictable and pedestrian meeting of leaders to “save” the world from global warming was the emergence of a new alternative or rather, the coming in from the cold of a well-known, but controversial technology for generating electricity.

As I have written, humanity’s mastery of technological innovation to generate power has brought about our current climate challenge and so reverse technological innovation is needed to get us out of the difficulties we are in, so I’m open to consideration of all new technologies, even those using nuclear fission.

Dan Byers, Vice President for Policy at the U.S. Chamber of Commerce’s Global Energy Institute, recently wrote for the Real Clear Energy website:

Walking the halls of COP26, one can’t go far without bumping into young activists in bright blue shirts emblazoned with a simple request: “Let’s Talk About Nuclear.”  Their accompanying social media hashtag—#NetZeroNeedsNuclear—speaks for itself and is indisputable: achieving net-zero global emissions is simply not realistic without significant deployment of expanded nuclear generation.  The activists and their allies seem to be getting their message across.  As the conference winds down and we take stock of the most meaningful outcomes, strengthened support for nuclear energy is likely to emerge as a major COP26 success story.

This stands in sharp contrast to prior meetings, where nuclear has long been ostracized, despite its role as the world’s leading source of emissions-free energy.

“This COP is perhaps the first where nuclear energy has a chair at the table, where it has been considered and has been able to exchange without the ideological burden that existed before,” according to Rafael Mariano Grossi, the head of the International Atomic Energy Agency, a U.N.-affiliated body responsible for promoting nuclear generation and safety.  Just two years ago in Madrid, Grossi attended the annual COP (Conference of the Parties) “in spite of the general assumption that nuclear would not be welcome,” but now he says the tide is clearly turning.

Enthusiastic support from the Biden Administration has provided a major boost.  Here in Glasgow, Energy Secretary Jennifer Granholm has evangelized for nuclear at event after event, describing nuclear as a “holy grail” climate solution thanks to its ability to provide dispatchable, clean power around the clock.

The bullish rhetoric has been accompanied by numerous announcements, such as the Nuclear Futures Package, under which the State Department will partner with Poland, Kenya, Ukraine, Brazil, Indonesia and other countries to support capacity building for expansion of nuclear power.  

In another important announcement, Oregon-based NuScale signed an agreement with Romania’s Nuclearelectrica to help deploy the first small modular reactors (SMR) in Europe.  The State Department hailed the agreement as a “pioneering step” that “will build significant momentum for reducing emissions across Europe.”  They continued, “with 30 coal power plants in the region, including seven in Romania, SMRs are ideally suited to replace this baseload power and employ many of the same workforce.”

In addition, on November 9th, the U.K. awarded Rolls Royce 210 million pounds to pursue design and regulatory approval of SMRs in the U.K.  SMRs offer unique features and design advantages relative to traditional multi-billion-dollar, gigawatt-plus size light water reactors and efforts by the U.S. and U.K. governments to promote the technology represent the next step in the intensifying global race to deploy nuclear to advance climate and energy goals. Competition from Russia and China is significant—both have numerous SMR facilities under development, while China has announced plans to build at least 150 new reactors (both large and small) in the next 15 years—more than the rest of the world has built in the past 35 years, according to Bloomberg.

Elsewhere in Europe, a coalition of 12 countries are calling for nuclear to receive a “green” designation under the continent’s forthcoming sustainable finance taxonomy, thereby enabling cheaper build costs and E.U. economic support.

While Germany continues to oppose the designation as it inexplicably works to close its remaining reactors over the next year, advocates remain optimistic.  An E.U. industry representative recently commented that … “we have more and more member states recognizing that, in order to achieve the decarbonization goals, we need nuclear in the mix…But also [because of] the recent energy crisis, I think more and more people are starting to recognize the risk of depending on imports.”

Add it all up and the conclusion is clear: while the case for nuclear power has always been strong, growing political support from governments, businesses and environmental interests alike is making it stronger.  To reach our ambitious global climate objectives, we need every tool in the toolbox to reduce emissions and including nuclear energy needs to be a priority.  Of course, COP26 is just a brief moment in time and momentum will need to be sustained.  So, pass it on: #NetZeroNeedsNuclear. 

His report deserves our attention.

Please Join Us December 2nd for A Zoom Round Table with the American Institute for Economic Research

With sustainability, climate change and asking that companies have a “purpose,” which is not simply the making of profits, the narratives of ethics and morality predominate in many discussions of capitalism.

Yet, is it not true that systems are complex and multiple action domains each contribute separately to the outcomes, whatever they may be?

It would be salutary, therefore, to bring into our considerations of capitalist enterprise economics. The American Institute for Economic Research (AIER) concentrates on economic realities and thinking. They see themselves in the intellectual tradition of Frederic Bastiat, who noticed the power of “opportunity cost” in our thinking about prices and spending.

At 9:00 am (CST) on Thursday, December 2, we invite you to join us in a webinar over Zoom to learn more about AIER from Brad DeVos, its interim President.

Brad DeVos joined AIER in 2017. He earned a B.S. in economics and a B.A. in urban studies from the College of Charleston, as well as an associates degree in computer aided design and drafting. Brad is a member of the historic Mont Pelerin Society, a L.E.E.D. Accredited Professional, a graduate of the Atlas Think Tank Leadership Academy and a member of the Foundation for Economic Education’s Faculty Network.
Through the Bastiat Society program, AIER makes the ideas that enable peaceful trade and human flourishing available to the everyday business person. They are the only international network of business people committed to advancing peaceful trade and human flourishing.

AIER’s Bastiat Society is geared for the business community—a highly leveraged, influential, and engaged audience. Apart from being active in the society, their members and attendees are also involved in various local issues, civic groups, trade associations and fraternal organizations.

The problem is—of all potential audiences for academic ideas—the business community is among the hardest to reach. They have companies to run, employees to take care of and families who deserve their attention.

The typical business person has limited spare time and is reluctant to take on additional commitments. Yet, these people also have the most to lose if capitalism is undermined and economic freedom is replaced by central planning and more government intervention.

The event is free and will last about an hour.

Please register here.

The Zoom link will be emailed to registrants the day before the event.

Steve Young, Global Executive Director of the Caux Round Table, will moderate.

To learn more about AIER, please visit their website at: www.aier.org

AI and Socially Responsible Business

Henry Kissinger, along with Eric Schmidt, who was then the Executive Chairman of Google, have teamed up with the Dean of the MIT Schwarzman College of Computing, Daniel Huttenlocher, to write a trending new book, The Age of AI.

Belinda Luscombe of TIME Magazine writes: “The book argues that artificial intelligence processes have become so powerful, so seamlessly enmeshed in human affairs and so unpredictable, that without some forethought and management, the kind of “epoch-making transformations” they will deliver may send human history in a dangerous direction.”

Thus, the negotiator, the tech tycoon and the professor make the point that AI needs ethics.

Last year, the Caux Round Table asked around for inputs to a set of principles for AI, seeing that there was not yet a general set of guidelines for use of that technology.

You may read our proposed principles here.

Please let me know your thoughts on this draft.

Give to the Max Day in Minnesota: Financially Support the Caux Round Table

The work of the Caux Round Table on moral capitalism and moral government is global, but with impacts on national and local communities everywhere.  We all struggle every day to earn our daily bread and manage the materialism of our existential imperatives and our personal desires; with living rightly or wrongly; with challenges of governance – personal, family, communal and national.

With climate change upon us and a peaceful international order seemingly receding day by day, we need a reliable compass for our decision-making.

The global network of the Caux Round Table seeks to provide reliable and relevant comments and recommendations on getting the best we can from wealth creation and public governance.

Our monthly newsletter, Pegasus, and our regular commentaries are the platform which distributes our thinking and links our network together in common purpose.

Please support our work with a donation via the Give to the Max website here in Minnesota.

You can also contribute by PayPal, check or wire transfer.  Our mailing address is 75 West Fifth Street, Suite 219, St. Paul, MN 55102.  To donate by wire transfer, please respond to this message for instructions.

We are grateful for your interest, for sending to us your ideas, concerns and reflections and we are thankful for your financial assistance.

Social and Human Capitals Pay Real Dividends

The Caux Round Table has recently tried to draw more attention to the contributions of social and human capitals to the success of wealth accumulation of individuals, firms and communities.

The most recent issue of the Harvard Business Review, by coincidence, has several articles which substantiate that thesis.

One article proposes that success in business negotiations is enhanced by certain human capital skills: the ability to recognize that “the gains to be shared are the additional value the agreement creates over and above the sum of the two sides’ best alternatives.  This negotiation pie should be divided equally because both sides are equally essential to creating it.”

A second article proposes that innovation is enhanced by the application of decision-making skills.  “Businesses need to strengthen and speed up their creative decision-making processes by including diverse perspectives, clarifying decision rights, matching the cadence of decisions to the pace of learning and encouraging candid, robust, conflict in service of a better experience for the end consumer.”  Such a decision-making process is a form of social capital, resting on specific human capital skills and dispositions.

On the individual level, a third article points out that people who transition to new roles in the organization or in a new organization often have a hard time doing so successfully.  Successful transitions employ five ‘fast mover’ practices: surge rapidly into a broad network, generate “pull” by energizing new connections, identify how to add value and who can help them fill skills gaps, use the network to expand impact and prioritize relationships that enhance their workplace experience.”

A fourth article proposes that innovation can be enhanced by avoiding certain psychological traps that arise from fear: “consult your future self; use red flags as teaching moments to refine your ideas; dissect causes of failure after setbacks; reframe rejections – focus on what was not negative or left unsaid; don’t get distracted when the time for action arrives; do what you are good at and leave the rest to others.”

Capitalism and the State

Three news items in yesterday’s paper bring to mind the ever-present question of the relationship of capitalism to the state.

One is the decision of the U.S. Department of Justice, in line with the Biden Administration’s concern for the concentration of market power in fewer and fewer hands, to prevent Penguin Random House from buying Simon & Schuster publishers.  The resulting merged company would have unprecedented control and outsized influence on what books would be published and how much authors would get paid for their works.

The market power of such a merged company would limit the ability of authors to get books published and bargain for their share of sales revenue.  The limitation of competition could also bring about censorship of works which the publishing staff did not like and so limit public understandings and discussions.

Of course, with the advent of new technologies for self-publishing on Amazon and the use of social media to promote books, there still is some room for authors disfavored by a major house to sell their books.  But self-publishing is a lonely enterprise, with no marketing support to attract buyers or place printed books in bookstores.

Secondly, the Dow index closed at over 36,000 for the first time.

Now, please ask yourself if that could have happened without governments creating trillions of dollars of liquidity in the global economy in recent years.

Thirdly, Yahoo is pulling out of China, leaving a huge market and customers, foregoing profits because of obstacles in serving customers created by the Chinese Communist Party and its government with policies and laws regulating social media.  Microsoft’s LinkedIn had previously ceased business operations in China.

October Pegasus Now Available!

Here’s the October edition of Pegasus.

In this issue, we include excerpts of an article on the Japanese concept of kyosei, written by Ryuzaburo Kaku, former Chairman of Canon and one of our participants, and how it relates to employees.

Secondly, we include our reaction to a recent article in the New York Times on black capitalism.

Lastly, we close with a piece on how moral capitalism could help alleviate the suffering of future pandemics.

I would be most interested in your thoughts and feedback.