Are professionals and associations really ‘professional’?

Tuesday, 6 September 2011 00:00 -     - {{hitsCtrl.values.hits}}

‘Professionals’ are described in the Webster’s Dictionary as those “engaged in one of the learned professions and characterised by or conforming to the technical or ethical standards of a profession, exhibiting a courteous, conscientious, and generally businesslike manner in the workplace”.

Wikipedia describes a “professional association” (also called a professional body, professional organisation, or professional society) ‘is usually a non-profit organisation seeking to further a particular profession, the interests of individuals engaged in that profession, and the public interest.

The roles of these professional associations have been variously defined: “A group of people in a learned occupation who are entrusted with maintaining control or oversight of the legitimate practice of the occupation;” also a body acting “to safeguard the public interest;” organisations which “represent the interest of the professional practitioners,” and so “act to maintain their own privileged and powerful position as a controlling body”.

‘Such bodies generally strive to achieve a balance between these two often conflicting mandates. Though professional bodies often act to protect the public by maintaining and enforcing standards of training and ethics in their profession, they often also act like a cartel or a labour union (trade union) for the members of the profession, though this description is commonly rejected by the body concerned. Therefore, in certain dispute situations the balance between these two aims may get tipped more in favour of protecting and defending the professionals than in protecting the public.’

Professionals with accountability to society

In the Sri Lankan context the civil society brands, the Chambers and the Institute of Directors representing the business sector, the Bar Association, Institute of Chartered Accountants, GMOA, Bankers Association, Institute of Engineers, etc., and the Organization of Professional Associations representing professionals; the academic community and research and knowledge development institutions like the Institute of Policy Studies, etc. representing the knowledge sector; media related institutions including the Editors Guild and Free Media Movement, etc., representing the communications sector; good governance committed organisations like Transparency International representing accepted societal values as the key professional associations are expected to uphold and safeguard the public interests and ensure the adherence by the professionals to international best practices, codes of ethics, conduct and good governance.

These bodies as professionals with public interest accountability to society are expected to develop a set of Standards of Ethical Conduct, similar to the “seven principles of public life” developed by the Nolan Committee in UK dealing with selflessness, integrity, objectivity, accountability, openness, honesty and leadership. These codes of ethics and conduct must be upheld with transparency including but not limited to “naming” and “shaming” of violators.

Kite flying through professional associations

Those in governance have now mastered the fine art of “kite flying” through professional associations. They have effectively penetrated these institutions built in the yesteryears as rock sold independent and integrity embedded effective guardians of public interest.

Using “fear” and “reward” tactics, as well as branding of “those with us” and “those not with us” as “patriots” and “traitors” these associations have been held in chains. By introducing and promoting lackeys in to key positions within these professional associations those in governance “kite fly” at will, thus achieving all their dreams. Anyone who had the “courage to be different” paid a severe price personally or at a business level and this has assured more successes with the strategy in its implementation.

Professionals spring surprises

Three cheers to the Chambers! They have taken a firm public position on a societal issue, for the first time in a long, long while. Whether one agrees or not with the position taken by the Chambers on the UN Panel of Experts report is of not the issue. The million dollar question is ‘how’ and ‘what’ led to them to break their long silence on socio-political national issues?

They have remained silent on bigger and more impacting socio-political issues in the past. Surprisingly the recent statement of the joint Chambers comes after them being silent on economic issues directly impacting the private sector; and after the Chambers even failed to debate even within closed doors some key macroeconomic issues of significant direct impact on business!

Civil society puzzled!

A much-respected younger academic of independence and integrity and a clear voice and activist on rights based issues wrote thus, following the joint statement of the Chambers:

“This is interesting. The chambers of commerce that hardly ever take joint public positions on national issues – healthcare, education policy, malnourishment among children, woes of the university system, breakdown of law and order, corruption, etc. – have taken this much of trouble on this one issue. Wonder whether they think that this is part of corporate social responsibility? Puzzled!”

The professional associations over the recent years were mostly silent over the 18th Amendment and consequential collapse of key independent democratic institutions, the lack of a Right to Information legislation, Private Sector Pensions Bill, etc. They never even dared to debate the risks of the private sector competiveness due to the present exchange rate policy, ballooning trade deficit, excessive foreign currency borrowings, mega investments in projects not seen as economically viable in the longer term/projects without stakeholder agreed priority national needs, impact of international relations policy on private sector growth and development, and the status of the Sri Lanka’s fiscal gap.

They watched with crossed arms the silencing and control over media institutions, thuggery and lawlessness led by those in network partnerships with those in governance, scant regard for the rule of law and justice, perceived mega corruption, waste of national resources due to inefficiency, promotion of personal interests and network connections, policy capture corruption.

They ignored the militarisation of the State machinery, the collapse of the law enforcement machinery, interference in freedom of thought and action of academia, unacceptable and unprofessional leadership training for new university entrants, the emergence of ‘grease yakas,’ the plight of the IDPs in the north (especially women and children), wanton environmental and ecological damage, flagrant violation of rights of marginalised segments of society (including those impacting on ethnic and religious sensitivities of communities living in harmony).

Some of them extended support, digging deep in to their pockets, to fund image building/perception management oriented projects and publicity events (including the proposed Commonwealth Games bid). They even clapped and nodded their heads in agreement when massaged and misrepresented economic data and social statistics were presented as benchmarks of economic growth and prosperity of the nation and its people!

Civil society is indeed puzzled. Is there an unseen hand that pressured the Chambers to express these sentiments so openly and so vociferously, when the ‘Voice of Business’ has been so silent on more impactful macro-economic, good governance and nationally impacting societal issues? Were a set of ‘ghost writers’ engaged to write out this position paper? How will this position paper help the private sector business and the country as a whole to step in towards equitable growth and prosperity at a faster pace?

The stakeholders of society await answers on these issues.

Blind to skeletons in own cupboard

Most of the professional associations (including the Chambers and the Directors Institute) have remained silent over the perceived worsening international opacity benchmarks and media ‘exposes’ of mega corruption and policy capture corruption possibly involving influential members of such associations.

Media has asked the pertinent question whether the stock exchange is a goldmine or a graveyard.

Have the professional associations examined, even within closed doors, the following in the context of several recent issues impacting on the profession and practice of directors:

Perceived and apparent regulator undue interference and coercion in the election of directors of listed entities.

The banking regulator engaging indirectly in stock market trading, including dealing in shares of banks and financial institutions supervised and controlled by it.

The issues that arose during and after a recent public presentation on insider dealings.

Public questioning the validity and enforcement of codes of conduct, ethics and practices of directors post financial collapse of public deposit taking institutions and the perceived lack of expected disciplinary action in public interest.

Action that can promote a boardroom environment where boards become “robust social systems: where members know how to ferret out the truth, challenge one another, and even have a good fight now and then and thus foster open dissent”.[i]

When members of some boards have voluntarily committed not to trade in the shares of the company in which they are members or in general refrain from engaging in any form of trading activity on the Colombo Stock Exchange (despite the significant loss of opportunity for personal gains), and whilst members of some other boards have significantly restricted options of trading (i.e. trading allowed only during a 30 day window following 14th day from the public announcement of annual results, declaration of a dividend or announcement of a rights issue/bonus issue, etc., then also only if no other major transactions or price sensitive information not in the public domain are pending public release) should the freedom be given to directors and key officers to freely trade at will in shares of the their companies and shares in companies with which they are in or plan to be in negotiation with for major transactions.

What positive strategic steps should be taken to enhance the best practices of board effectiveness in governance and ethical conduct?

Should this framework of good governance to be introduced also place some restrictions on directors and promoters trading in their shares post a placement of shares of the company as a part of an IPO, (especially in circumstances following promoters and directors having participated in capital issues during a short time before such IPO)?

What positive action steps should be taken in seeking essential legal reforms involving “defamation” laws and other legislation/regulations which at present may negatively impact on and restrict in the “public interest,” the promotion of valid and truthful public critique, intellectual debate, media reporting, investigative journalism, whistle blowing, etc., on issues concerning boardroom effectiveness, transparency, good governance and anti corruption in public companies?

What positive action steps should be taken in preventing any person or persons, who by words spoken, written or by other action, prevent/restrict or attempt to prevent/restrict law enforcement officials and officials of duly empowered regulatory bodies and professional associations from effectively enforcing the rule of law or justice systems as enacted?

Should compounding of offenses under and in violation of the applicable acts and regulations governing stock market operations merely by the imposition of pre agreed fines be allowed to continue? Or should such offenders be prosecuted?

In the interest of ensuring effective conduct of boards, its members and key officials, should a set of standards of ethical conduct of directors similar to the seven principles of public life be developed by the Nolan Committee in UK dealing with selflessness, integrity, objectivity, accountability, openness, honesty and leadership be enforced? Should action be taken (including “naming” and “shaming”) against violators?

[i] Jeffrey A. Sonnenfeld in the classic HBR Review article ‘What Makes Great Boards Great’ stressed that “The best boards know how to have a good fight” and described the idea in brief as:

“The meltdowns of once-great companies like Enron, Tyco, and WorldCom have riveted attention on their boards. Were the directors asleep at the wheel? In cahoots with corrupt management teams? Out-and-out criminals themselves?

“None of the above. And that’s what’s so scary: Like most boards, those of the fallen giants followed all the rules. Members attended meetings regularly, had lots of personal money invested in the company, and weren’t too old, young, or numerous. These boards even had audit committees, compensation committees, and ethics codes. Yet great boards do far more than just follow good-governance rules. They’re robust social systems: Their members know how to ferret out the truth, challenge one another, and even have a good fight now and then. Foster open dissent.

“The willingness to challenge one another’s assumptions and beliefs may be the most important characteristic of great boards — indicating bonds strong enough to withstand clashing viewpoints. Don’t punish dissenters or forbid discussion of any subject. Probe silent board members for their opinions and the thinking behind their positions.

“If you’re asked to join a board, say no if you detect pressure to conform. Blind obedience puts your — and your company’s — wealth and reputation at risk. An ideal board member, Home Depot Chairman Bernie Marcus has said, “I don’t think you want me on your board. I am contentious. I ask a lot of questions, and if I don’t get the answers, I won’t sit down.”

(The writer is a former Chairman of the Ceylon Chamber of Commerce.)

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