Morality at work
business ethics
Should Rabobank provide financial services to companies which alter the
genetic structure of animals for commercial use? And what about customers
whose money was made through the arms trade, gambling or other activities
many people would condemn? How do the ethical principals we claim to have
as a cooperative, responsible organization affect how we handle, say, fiscal
engineering? These are just a few of the difficult issues under discussion by
our organization-wide ethics committee (EC).
Setting standards
Common ideals
Taxing decisions
Biological issues
6 Wh at S NewS Issue 8 Aug/Sept 1999
organization must work
within a uniform ethical
framework worldwide.'
And in fact, the
committee comprises
many members with
responsibilities in both RI
and Rabobank Nederland
(RN): Rik van
Slingelandt, chair; Fred
Horbeek, head of security
coordination; Willem
L.ageweg, head of
cooperative development;
Evert van der Stroom,
director of audit and
compliance; and Dick Schijf, director of
legal and fiscal affairs. To ensure ethics
are not primarily a head office staff unit
activity, the committee comprises
managers of the main business
units in both the local bank
area, Pieter van der Weijden
and Henk van der Kerk from
RN - member bank division,
and from RI, Maarten
Hulshoff and Jaap Slotema.
As an advisory body to the
executive board and other Iine
management, the EC's
objective is to suggest an
ethical framework for policy
decision-making. Says Frans de
Jong, 'some people see being
ethical as staying within the law,
however, for Rabobank this is not
enough. We should not only adhere to
the law, but also develop our own values
in terms of good and bad, not from a
publicity perspective, but internally,
defining how we want to do business.
We aim to adapt values which are above
Looking at our ethics - Frans de Jong and Adriaan Kukler
Business ethics is fast becoming a hot
issue as society increasingly holds
corporations accountable for the
outcome of their actions on, for
example, human rights and the
environment. And even away from the
public eye, businesses are constantly
trying to find ways to function in that
grey area on the edge of legal and other
regulatory borders. A perceived need to
create a forum for discussion over such
issues led Rik van Slingelandt to
propose the formation of the ethics
committee (EC) for Rabobank
International (RI) in April 1998.
Originally focused on issues surrounding
credit risk, such as tax structures and
balance sheet disclosure, the workings of
the committee have expanded to include
a myriad of ethical dilemmas faced by
the organization as a whole.
EC-member Adriaan Kukler of
international credit explains: 'it would
not make sense for RI to have a diffe
rent set of values than the rest of the
Rabobank Group. The whole
average in the industry.' Kukler adds,
'recently there was a code of integrity
released by the Netherlands Association
of Bankers which we feit should be
taken a bit farther. We want to set moral
standards well above the average for the
financial sector, while not going as far as
Triodos (a 'green' bank in which
Rabobank has a 5% stake) or the UK's
Cooperative Bank which claim to be
oriented exclusively towards ethical
banking.'
An issue recently examined by the com
mittee concerned a proposed deal - for le
gal reasons, we cannot go into further de
tail here - between Rabobank and
another counterparty in which Rabobank
stood to earn major fee income in a few
days. 'The transaction was deemed uneth-
ical by the EC because it clearly added no
economie value,' says De Jong. 'And be
cause there was no customer benefit or
economie rationale, it was decided this
was a step too far and we should not go
for it. I would like to add here that this
recommendation was fully endorsed by
the executive board.
Ongoing discussions by the EC concern
the ethics involved in genetic modifieation
(GM) applied to micro-organisms, plants,
animals or humans in the food
agri/pharmaceutical
industry or life-
sciences. Because
such issues can be so
wide in scope, the
committee organizes
all discussions along
Standard lines, eare-
ful to distinguish be
tween ethical argu-
ments and business
arguments. Says de
Jong, 'we find that by
focusing on a specific
case, we often formu-
late opinions that
have broader appliea
tions. Regarding RI involvement in GM,
we support activities which relate to the
greater good, such as better yields and
food or making better medicine, under
strict conditions. Such conditions as trans
parency serve to mitigate the risks of GM
- the clients must disclose exactly what
they are doing.'
Behind the new forum
- Rik van Slingelandt
