This article first appeared in Cooperativa.cl on February 14, 2016
Consumers are more attentive, more punishing, and more demanding. It is no longer just a good product that we are looking for, but the behavior and ethics of the company to which I give my purchasing power.
Last year, more than ever, cases of corporate malpractice were uncovered. Although each “uncovering” has caused real scandals in their respective industries, it is clear that today there is greater awareness of these issues, which is undoubtedly positive. We must be aware that almost nothing of what was uncovered in 2015 was still being done: they were past events.
This year, we Chileans opened our eyes to the reality in which the country was living, which has prompted a more alert and aware attitude that not necessarily all public actors act well and within the legal or ethical framework.
Undoubtedly, these cases have affected different market players and industries in general, but there are several lessons to be learned.
At the board level, compliance, controls, and good practices are now much more openly discussed. All board members are aware that they are responsible as a whole, and individually, for the decisions taken or not taken in the companies.
In the case of the latter, the concept of a company has begun to be understood as more than just a building, but as a set of actions taken by the people who work in it, including its board of directors. In other words, a “firm” is capable of making decisions that also harm the market and directly affect free competition.
Likewise, executives and workers are much more empowered. If before a boss’s instruction was the law, today it is different, since they are much more questioning of decisions. They are no longer willing to pay with their capital for bad decisions, or even to go to jail for committing bad practices that benefit the company in the short term, but which they know will harm them in the long run.
Finally, consumers are more attentive, more punitive, and more demanding. It is no longer just a good product that we are looking for, but the behavior and ethics of the company to which I give my purchasing power.
Even so, it is still essential to continue analyzing and studying how to prevent cases of collusion from happening again, and here all stakeholders, society, and, of course, the company itself play a special role, establishing adequate controls so that bad practices do not occur.
By Susana Sierra