Good governance includes understanding what went wrong when things do go wrong. If a reputation is dented,a principled organisation will seek out the reasons behind the contravention and identify wether this is due to a need that has not been met (both internally and externally). Needs are good indicators of reputational difficulties.
.

Business is, unfortunately, closely following the example set by our politicians.

An individual corporate eco-system is by nature fragile. The need to stay constantly competitive, and for the executives of the company to constantly perform ahead of their rivals, is highly analogous to our party-political system. It should not surprise us therefore that the temptation to cut corners, lie and cheat that is the single useful currency of our politicians has seeped over time into the boardroom and on down into the executive ranks.

The tendency for executives to pay themselves stratospheric salaries has only one root cause, and it is the same that drives parliamentarian salaries and perks ever higher: they do it because they can.

Somewhere along the line we have lost the plot as a society. We consistently reward bad behaviour so long as we also benefit from it, and unfortunately the performance of our "Captains of Industry" is now inextricably linked with the pensions of the majority of Australians.

So we occasionally grumble over a beer at the pub about the AWB scandal, or OneTel's collapse, or HIH, and in the next breath complain about the venality of our politicians and how out of touch they are with the realities of life, but that is as far as it gets.

And as for reputation, has anybody stopped buying James Hardie products in protest against their treatment of asbestos victims? I suspect not.

We can do two things: find a way to reintroduce honesty into our political classes, and allow that to filter into the business sector; or we can sit back and mutter into our cornflakes about how "somebody should do something".

CEOs and politicians become masters of the same black arts to get where they are and it is a bit unrealistic to expect them to act differently of their own accord once they have the reins of power.

Senior politicians appear on television smug in the knowledge that no-one can 'prove' they have lied or derived personal advantage from their public positions. It transpires that the 'proof' they are talking about would be conviction by a Court, which given the partisanship of Party politics is extremely unlikely to occur.

How can we expect private companies to be good citizens and be aware of long-term community benefit when senior politicians, from the PM down, say outright that 'community benefit' is not the concern of federal departments and public agencies?

However successive federal governments have gone further than that in encouraging 'dog eat dog' business values by refusing to act where it has been patently obvious that business scams were in the making or even in full bloom. We have all witnessed the ease with which developers, real estate agents and lawyers have been able to work scams for years without even a warning whisper from our political masters in Parliament.

While agreeing with the author that 'Values and principles in themselves do not guarantee superior financial performances', it is worthwhile qualifying this by adding that the lack of values and principles will guarantee poor long term performance and loss of assets through senior management fraud.

There is hope on the horizon and it is coming from certain large superannuation funds that are not focussing on longer term results and prefer not to invest in companies that do not have good governance in place.

In the last sentence of my post above I meant to say "..certain large superannuation funds that are focussing on longer term results .."