According to Le Monde of March 14, the CAC 40 companies (the largest French quoted companies) announce all together around 100 billions of profits. The shareholders will get roughly 38 billions of that. I don't want to comment on a 2 billions profit for a public (state owned) energy supplier (GDF) or another 5 billions for EDF (Electricity company). It just recalls me the Enron scenes.
Yes indeed, not everybody wants to see the Enron movie, since it asks some interesting questions. On the top of the shareholder-value boom, companies felt it went wrong if the growth of the profit did not increase every year. We are talking here about a second derivitave. It is no longer the profit, no longer the growth of the profit; no, it is the growth of the growth. By the way, yes, it is certainly no longer about managing the business.
Out of these days date the flourishing practice of options. The stock values don't have to increase any longer, in order to make profits. With options (and the like) one can even make money on loss making companies and shares. (As a side remark, some banks have even tried to make money on the re-packaging of the third world countries debts.) Stock trading becomes a business in itself, completely disconnected from the so called "intrinsic values" of the company. Don't we create the fuel to burn the stable? Of course there is probably no way to stop this anymore, and maybe we shouldn't even. However knowing that behind options on stocks, there are companies, people, consumers, etc. is and remains an ethical choice.
We have made a casino out of business. And of course, I do not refer to Enron's practice to voluntary close down power plants, in order to raise artificially the energy prices (that in turn would make the electricity companies revenues skyrocket). I am almost sure we all agree that this is criminal.
But the Enron movie clearly asks the question: did no trader ever questioned himself that what was happening there was unethical (not to say illegal)?
Years ago researchers have undertaken a remarkable experiment, that is described in the book "Obedience to authority" (mentioned in the Enron movie). In the correct context (a pseudo scientific environment) a majority of just "normal" people was willling to give electro shocks TO DEATH, just since the scientific research (so called) asked it. The test people gave away all ownership of their free decision, but at the same time of their ethical reflection.
In the middle of the presidential elections in France, with the announcement of the 100 billions of profit (with as only use to renumerate the shareholders for taking their gambling risks), I miss some of this "social responsibility". Social responsibility is not just another course in a business school (though I am proud that we make this a real issue in our school); it is a reality of our daily business practice and our political engagement.
Longing to see more of it.