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Rewriting the rules of business in the wake of 11 September

by Simon Longstaff

In the aftermath of the terrorist attacks of September 11, much of the discussion about how best to respond to the evolving situation has focused on the role of governments. Quite reasonably, there has been close analysis of complex matters such as: the pros and cons of military action, the need for coalition building, the relative merits of proposed solutions in the Middle East and Kashmir.

Never far from the centre of our concerns, there lies an abiding and simple need to ensure security in these troubled times. While nearly all of the analysis around the question of security has been directed at the implications for government, we should realize that the consequences for business are at least as great. Yet, this part of the story has been overlooked.

I believe that the rules for business were re-written on September 11. Without even registering the immediate change, corporations have been drawn into the task of building global security - a function more or less reserved for governments since the demise of the British East India Company's rule on the subcontinent at the end of the mercantile period of the Eighteenth Century.

Although nothing can justify the recent spate of terrorist attacks, there are certain aspects of the immediate past that help to explain how we have arrived at this state of affairs. Unravelling the complex tapestry of cause and effect is beyond the scope of this piece. However, one thing is clear. In addition to the rise of Islamic fundamentalism and the rejection of Western liberalism (and the modern world more generally), we must surely number among the causes of strife a failure by the global market(s) to ensure a sufficiently fair distribution of the benefits of economic activity.

I do not want to suggest that every poor person in the world is a potential terrorist. However, I would press the point that people living in abject poverty, stripped of their dignity and with literally nothing to lose but their lives, are easily recruited into the ranks of those who would wage war against the affluent West. If not in the name of justice, then perhaps as a matter of self-interest we might come to see that it is essential that the grievances of the least advantaged be redressed.

While economists might be correct to argue that a global market will deliver prosperity for all, I do not believe that we can afford to wait in order to see if their predictions come true. However, governments no longer have the capacity to guarantee the kind of economic and social outcomes that the world needs if our collective security is to be assured. Private corporations have an even greater capacity to change the 'facts on the ground' by altering the way in which they do business around the world.

Labour standards for foreign workers, collusion with corrupt and oppressive regimes, the degradation of the natural and social environment are all issues that businesses have been challenged to address, with increasing frequency, over the past decade. That they do so is no longer simply a matter of being a good corporate citizen or ensuring long-term profitability. Instead, what corporations do in the world needs to be seen as an integral part of our collective response to the task of guaranteeing improved security for all.

Needless to say, there will be many who are troubled by the idea that private corporations should become entangled in a role traditionally reserved for governments. Yet, this is one of the most obvious consequences of corporations 'going global' while the state remains local. Although rarely seeking power for its own sake, many corporations have accumulated a measure of it equal or greater than that possessed by many governments. As has always been the case throughout history, the powerful are looked to in times of trouble - an obligation that the community rarely allows them to evade.

All of this means that people responsible for the conduct of business will need to refine or develop their skill set. Far too many people in charge of businesses operate within the confines of a very narrow focus - often a product of limited capacity rather than deliberate choice. For example, in the recent past, businesses have often been content to prepare themselves better to manage crises. However, the new challenge will be to go beyond 'crisis management' in order to learn how to prevent such crises from occurring in the first place. That is, corporations must, at the very least, ensure that their conduct does not make the world a more dangerous place in which to live. Ideally, the way they work will make it positively safer.

This challenge is not reserved for companies operating in developing countries. We also need to be alive to the risks of letting our vigilance slip at home. No country can afford the level of discontent to build to a point where the merchants of violence can then gain a foothold at home.

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