Can we fight corruption by preventing greed?

By Dr. Henry Wong Meng Yeong | Wednesday, December 19, 2012 at 3:03AM

“We have always known that heedless self interest was bad morals, we now know that it is bad economics.” 

― Franklin D. Roosevelt 

We've explored how remuneration policies can create a conducive environment for fraudulent and corrupt behavior when excessively paid top executives put their own interests above those of the organization. But what then would be the consequences of underpaying?

Confucius proposed moderation. He said to be excessive is as wrong as being parsimonious. Paying employees poorly but with a large component of their income pegged to rewards would also lead them to seeking short term goals (on which their rewards are based), thus promoting unethical corporate behavior.

Where a sense of accountability and responsibility is lacking, employees and executives look after their own interests and not those of the organization. This promotes a culture of blame-shifting when problems arise. Francis Bacon was right when he said that money is a great servant but a bad master.

Confucius taught that it takes a man who is daring, bold and unethical, and who is dissatisfied with being poor, to be insubordinate and corrupt because he will serve his own interests first. The sage did not say that the poor are prone to insubordination and corruption but that those who are discontent and greedy are. Therefore one must not be mistaken to think that the sage implied that the poor have a tendency to be dishonest. He reiterated that if one is not covetous, even if one is paid to steal, one will not. As greed exists in people regardless of their rank in the organization, the tone set has to prevent greed. Confucius taught that one’s faults and misdemeanors are characterized by their rank and status. How true it is that the damage done by one is commensurate with one’s rank in the organizational hierarchy.

Setting the right tone from the top -- emphasizing job satisfaction and pride in an honest day’s work -- is the key to preventing greed and keeping organizations clean and corruption free.

We should heed Socrates' warning that “He who is not contented with what he has, would not be contented with what he would like to have."