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Sagely wisdom on curbing corporate crime: intelligence vs. integrity

By Dr. Henry Wong Meng Yeong | Thursday, January 23, 2014

We continue our discussion on lessons we have learnt (or not learnt) from the increasing incidences of corporate crime. Greed has no correlation to whether or not one is paid well. Not only were the bankers and executives indicted for corporate crimes wealthy individuals but they were also well schooled and had all the right credentials. These robbers were not poor uneducated outsiders but were in fact rich intelligent insiders. One therefore cannot expect integrity by paying employees excessively.

Perhaps it is prudent to examine the manner in which employees are remunerated. History has taught us that it is fallacious to think that paying them well would assuage their greed. Confucius asserts that whilst a man with values is righteous, a knave only looks out for his own interest. Or in today’s parlance it would translate as: What’s in this for me? If one steals from an individual, the theft is transparent whereas if an insider misappropriates funds from an organization, whether it be a country, corporation, church, charity or club, it is termed corporate crime which is often more opaque and easier for one to get away with. In spite of stringent audits, fraudulent practices have caused the collapse of companies like Enron. Hence without a moral compass, it is impossible to curb corporate crime.

Another noteworthy distinction is that there is no correlation between intelligence (the years of schooling) and integrity. To be well schooled (e.g. with diplomas and degrees) in Chinese is 教(jiao) whereas nurturing of moral compass and virtues is termed育 (yü), Together教育 in Chinese means education. One is therefore not deemed educated unless one is schooled and also imbued with values and integrity. Confucius places the importance of being nurtured with virtues and values above being schooled.

If selection of executives and employees is merely based on intellect and experience instead of character and integrity, the recurrent incidences of corporate crime will continue to escalate. “Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you.” Warren Buffet.