Let me put the title of this week’s contribution into a context. In Malta we have been placing more emphasis on respecting the rule of law, strengthening governance, abiding by the rules. I am certainly not advocating breaking such rules.
What triggered this title has been a number of developments in the business environment that make me wonder whether things have changed so much that we need to rewrite the rules. In general, society has become more democratic over the last decades. However, we should not take democracy as something for granted. Up to a hundred years ago many countries still had no formal democratic system of government. Since then, dictatorships have come and gone, and new ones have been installed.
Democracy in a work environment is still a concept that is very difficult to accept. Over the centuries, the business world (and business has existed ever since man has existed) has been based on a leadership style where power is what keeps it ticking. The rules were never made with us in mind but were made for those few who sat at the top and dictated to those below.
In recent years, we have made a number of attempts to limit the use of power in business and to rely more on influence. This explains why today we speak of employee and customer engagement, learning and development, motivation and the like. However, we still tend to equate leadership with power and this is reflected in some of the jargon we use.
For example, we speak of “human capital” to refer to human persons, as if people were just another form of machinery. Instead of transforming labour into the most important factor of production, we relegated it to the level of machinery.
Democracy in a work environment is still a concept that is very difficult to accept
Another example is the wave of mergers and acquisitions as global companies became larger and small- and medium-sized ones were gobbled up.
We can also mention how governments expected businesses to regulate themselves with the result that some have caused untold harm to the environment, others were embroiled in corporate scandals to the detriment of their shareholders, while others have cheated customers through bad service and faulty products. The unwritten rule has been that the strong have become stronger and a system got created whereby their exclusive interests were served.
This unwritten rule has led to elements such as income inequalities, social injustice and gender-related pay gaps. As such it is this rule that needs to be broken. Trade unions have played an important part in trying to make the business environment more democratic. However, that covered only one aspect – employer-employee relations.
Recent attempts to regulate businesses have also sought to break the unwritten rule. The promotion of the ESG concept is the most recent example of this. Events external to the business world have served as a wake-up call. I am referring to the protests on climate change or taking the knee at the start of football matches.
We now need a cadre of young rebellious business leaders who are willing to challenge the status quo where the strong get stronger and income inequalities and gender-related pay gaps are taken as given. Without such leaders, who are willing to break the rules, we may not be able to implement ESG policies.