One of the vaunted skills Donald Trump was bringing to the US presidency was his business acumen. Unfortunately, along with it has come the typical businessman’s amoral attitude to ethics. We all know that being legal is not necessarily being ethical. Laws are man-made and we often take our own time in regulating what is generally considered unethical to set a legally sanctioned standard. People in business are particularly apathetic when it comes to ethics. ‘Tell me what is legal, and leave me to make the money’ will probably summarise their attitude. Most would argue that bribes ought to be treated as a legitimate business expense and allowed to be deducted. It used to be so on many countries. The new business-oriented Trump administration is teaching us all a few lessons that would require some re-examination of values. I present to you three cases.
First, Trump has been very reluctant to be guided by the need to be perceived as being ethical by virtue of his high office. He dragged his feet about repeated demands that he sever his business ties, quoting that he is legally entitled not to do that. He now claims to have put his businesses in a trust that his children will run. Coming to his family, he has appointed his son-in-law as an advisor, citing a rule that puts the President’s office outside the purview of an anti-nepotism statute. The 1967 statute bars government officials from employing relatives (that includes sons-in-law) in offices over which they have control.
We surely can do better than follow Enron Corp., still the gold standard for unethical corporate behaviour. In a famous incident, often quoted in ethics classes, the Audit Committee of Enron’s board suspended the company’s own code of ethics in order to approve some financial skullduggery, and then re-instated the rule. How convenient!
Second, the US Congress after great difficulty passed a feeble law in 2010 called the Dodd-Frank Act as a way to reform the financial institutions and to try and prevent the recurrence of the 2008 financial crisis when US financial institutions dragged the rest of the world down with their dodgy operations. Now, Trump has issued an executive order to potentially undermine this act, and in particular, to revise the ‘fiduciary’ rule. Under this rule, brokers who manage retirement accounts are supposed to act and advise in their clients’ best interests instead of their own. Previously, driven by commissions, the brokers and advisors were pushing what was good for their firm and not in their clients’ interests. Surprisingly, many financial institutions are cheering this potential reversal of the rule! What part of ethics don’t they understand?
Third, it gets even more hilarious. It turns out that it is not only Trump who made a career building his name and living off it as a brand, but his daughter has learned the right lessons. Ivanka Trump is said to be a fashion clothing designer and recently, Nordstrom, a premium clothing chain, decided not to carry her line of clothing for business reasons. (They weren’t selling well.)
Promptly, the president sent out a tweet to the whole world that the store was treating her ‘unfairly.’ This was followed up by the White House defending the president’s message. Oddly, the mood of the country is such that Nordstrom’s share price went up following the President’s action!
(The writer is a professor at Suffolk University, Boston. The article first appeared in The Hindu BusinessLine.)