“The business of business is business”, a classical depiction of the corporate profit maximization objective is arguable amidst the current economic problems embroiling corporations across the globe and the demands of other corporate stakeholders for their mutual well-being, survival, social responsibility and sustainability.
Free market enterprise has spawned voracious appetite for profits that many times resulted in economic inequities and social turmoil in societies.
The unbridled quest for value for money of corporate managers and professionals, while understandable as rewards for their risk-taking when taken to extremes without regard to the interests of the other stakeholders, may in the long-run deflate the effective achievement of more value for the corporation and negate the exercise of corporate social conscience that businesses and professions must face up to as a fundamental mooring for long-term sustainability prospects.
The profit norm (shareholder value) is designed to compensate the owners of capital for their risk-taking in a free market world. Managers are mandated to maximize profit for the benefit of the shareholders. It is somehow considered as the most important and compelling metric in gauging the performance of the business. When this metric becomes
the ultimate end, the temptation to cut corners to “increase profit at all cost” would be so strong as to entice managers to commit unethical and foul means to show “massaged” and deceptive figures in violation of social conscience.
In today’s environment, this “value for money” mindset cannot be the stand-alone trajectory. The business activity does not operate in isolation from its various environments and other important stakeholders such as customers, employees, suppliers, and community. That is why profit making must take account of its effects on other stakeholders’ value interests. Operating a business with a conscience and with a consideration for social and sustainable environment, is a critical enabler and contributor of higher long-term value for money for the owners of capital.
Thus a need for a paradigm shift, not to dismiss the norm of the financial metric altogether, but looking at value creation from a different lens and compass.
If at all, human values or core values are not anathema or a hindrance to money value creation.
This year, PICPA the national organization of CPAs has for its theme “Beyond numbers: the changing role of CPAs’ spearheaded by President, Atty. Randy Blanza, a colleague and a friend. Indeed, there is something greater and more crucial in the practice of CPAs beyond the numbers. Surely, the numbers churned out by accountants present a riveting
story of why and what the business has achieved, why and what it is doing, and what it might become in the future. The competence to diagnose what happened, evaluate performance, and predict potential outcomes is necessary to present a timely, accurate, and reliable financial story. But that is not all. There is something greater than the debited
and credited numbers.
Starting next fiscal year in July this year, the incoming PICPA President, Atty. Roland Pondoc will mount his theme titled “Values above all.” It is an intriguing juxtaposition or sugue to the theme “Beyond numbers” that creates an interesting continuum and combination. The CPA’s built-in skill at numbers-crunching is alone insufficient. “Values
above all” provides the altruistic sufficiency that underpins the exercise of competence and expertise to become integral. Beyond numbers but values above all.
Is this to be viewed as a hierarchical arrangement where values must precede competence to become a CPA with “integrity?”
Human values or core values such as truth, honesty, integrity, loyalty, peace, are at the core of being human. No human life is possible without values. CPAs, no matter how competent they are, fail miserably in life and in their practice when they live and operate without values. That makes them “wala silang kuwenta,” a very apt but painful alliteration of value in colloquial terminology.
But there is something amiss about values and competence taken alone together by themselves. What lacks is the answer to the question “for what is value and competence for?” The answer to this question is the purpose by which a person lives by for what and for whom. CPAs exercise their values and competence in the service of others, for the
profession, for the nation. It is service that is the ultimate purpose of human value and competence exercised in tandem.
Let me synthesize values, competence, and service this way: Values without competence is ineffectual; competence without values is arrogant; and values and competence without service is pointless, purposeless, and futile.
This period of Lent, it is worth to remember what is important in life. “Remember” connotes that as we progress more in life, there are more things to look back to how our lives have been. But it is also time to “re-member” and become part of others’ lives again in forgiveness, love and service. A blessed Holy Week ahead of you.
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Dr Cesar Azurin Mansibang is the President/CEO and Chairman of the Board of United Graphic Expression Corporation, a long-time graduate school professor, leadership and management practitioner and consultant.