In recent years, we had several corporate scandals, involving accounting irregularities. The accounting firms were appointed by the management of these companies. These professional firms received large fees and were suspected of not doing their work diligently in discovering the irregularities.
In more recent years, we have the subprime crisis. The rating agencies were appointed by the issuers of the collateralised debt obligations. They are now suspected of having a conflict of interest in giving a favourable rating to these complex structures.
Consultants are appointed by management to give advice on business strategy. These consultants are likey to be selected to give advice that are favourable to the management's thinking.
There must be a better way to have access to independent professional advice, especially on matters involving the public interest. The current approach is not working well. As the saying goes, "He who pays the piper calls the tune".
What is a better way to protect the public interest?
Not just the corporate world but also in the political arena, especially in matters relating to the independence of the judiciary. We have seen examples of these. The implications are more profound than corporate ones.
ReplyDeleteWhat is the sign of a set back of the public interest?
ReplyDelete2500 years ago, Mr Lao Zhi said:
反者道之动 the law of nature is operate in such a way when an extreme occured it would counteract by nature.
What is the better way to protect public interest?
Avoid extremism of policy. Take a look at formal NKF under last leadership who want to be Number 1 Charity. What is the outcome now of both ex-Chairman and ex-CEO?
Confucian Ethic:天视之,民视之the nature is watching, the peoples are watching! 良知Conscience must be an element in any decision making process. Conscience has written under the Human Right Declaration, UN, since 1950's beside religion ethic.
When anti-communist regime General Zhang Xue Liang张学良 was asked why don't destroy a bridge to cut China communist tail along? He said: "the bridge belong to the peoples of China ", public interest come first during civic war in 1900's!
Unforunately, all kind of decision maker may not interested with it.
In free market system, No 1 is the ultimate goal. To get rid of competitor is a must. Any profession with Conscience would never be rewarded.
Who has the power to fine tune the system and reduce extrimist? It may be impossible until the next storm arrive at his/her door step!
Ex-PM Thaksin is a good case study.
This policy of He who pays the piper calls the tune is being practised selectively. It is certainly not true in the case of policyholders who pay and pay but hears no tune that he likes. The one who collects the money in this case, NTUC Income, is calling the tune, much to the anguish and dismay of its customers who pay.
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