Passionate about investing

Corruption: Business Ethics

19 February 2013

How much we all here in Broadgate love Thailand and what it has to offer, you have to agree it is not the most ethical country to do business. Although there are far worse “unethical” countries, especially in this region of the world, Thailand does not perform really well globally. Corruption (the act of fraudulent behavior) is a serious problem ranking 88 of the world in the 2012 corruption perception index (meaning there are 87 less corrupt countries than Thailand).

On the field of human rights, Thailand does not score extremely bad, but still there is a lot of room for improvement. Especially in the Southern regions dominated by a Muslim population, a lot of human rights are being violated. Luckily in the field of environmental protection Thailand scores far from bad. Although Thailand’s economic growth has come at significant environmental costs, Thailand has put considerable effort in conservation which is being awarded a spot on the 34th place in 2012 Yale’s environmental performance index.

Recently, I attended a seminar about achieving success for business codes of ethics in an unethical environment. The organizers of this seminar and I were surprised by the little attention this seminar attracted concluding the relatively few people showing up.   A reason given for this absence was the topic would not have been of direct personal interest for business people – that is simply money making.

As David Lyman (Chairman and Chief Values Officer of Tilleke & Gibbins) explained, first there is a positive relation between age and how much one cares. The more you mature, the more you start caring about ethics.  However, at a certain point this relation changes negative: the older you become, the less you are interested in ethics. Only the moment of this turning point when you start caring less differs between people.


While at first it would seem not directly of interest for companies to act ethically, as our plantation support officer Max Schuetzeberg mentioned in his report Importance of Investment in Sustainable Development for plantation, reputational factors and the public demand to publish sustainable reports might force companies to pay more attention to their ethics of business.

In a relatively “unethical” and less regulated environment as Thailand this remains hard however, especially for smaller companies to which less of the public’s attention has been focused. They enjoy less monitoring and less reputational risk of bad behavior, since institutions and the rule of law are  not developed as much. There is less incentive to act responsibly and therefore not to opt for the easy way.

How does this apply to Broadgate? Out of our three core values under which we operate, two deal with ethics: Sustainability and Transparency. How does this appear in Broadgate’s operations? It is very easy to put something down like this and most companies’ core values will look similar in some way: assuring they are ethically responsible, that they care or whatsoever.

We are absolutely dedicated to operate legally and transparently reflecting Broadgate Advisory is one of the relatively few investment research companies in Thailand that is fully licensed by the Ministry of Finance and regulated by the Thai Securities and Exchange Commission.

The rule of law is less established here in Thailand than in developed countries in Europe, North America or closer to home in Hong Kong and Singapore. It would have been easy to remain in the shade, not being regulated and required to be transparent such as the majority of our competitors that operate beyond the law. Broadgate is devoted to keep its business transparent and legal.

While we will never deny that also Broadgate is founded with the intention to make money, this is encompassed with the commitment to do this in a ethically responsible and sustainable way. There has been a lot of negative attention around (palm) plantations: appropriation of local possessions, environmental destruction and suppression of local people are examples of this.

While there is no strong presence of the rule of law in a country as Cambodia, where Broadgate Plantations is predominantly active, we are committed not to disadvantage the local Khmer people and make them even benefitfrom our projects as well. For one of our latest projects in Cambodia, we choose land that has been virtually unused – the few local people will be compensated or employed – and where the environmental impact will be as less as possible (land that already has been stripped years ago to minimize the destruction of new forest). We are not expelling villagers and burning down their livelihood.

This is not just out of a commercial belief, but also out of a personal belief of the people within Broadgate.

“My biggest problem with modernity may lie in the growing separation of the ethical and the legal”  
Nassim Nicholas Taleb, The Bed of Procrustes: Philosophical and Practical Aphorisms

 Nathan Koekoek
Support Officer

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official position of The Broadgate Financial Group.