Leading Article: Good business is good business

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The Independent Online
Many of the plots of Hollywood light comedies feature the machinations of the ethically challenged company. This is the large corporation that is determined to take over or drive out of business another, smaller and rather heroic firm. A good recent example is Miracle on 34th Street (just out on video), in which the Shopper's Express chain, alarmed at the commercial success of a rival department store's Father Christmas, contrives a street encounter so as to discredit him. Needless to say, the ploy ultimately fails, for he is the real Santa - bells ring, children smile, grown men go misty-eyed.

Such outcomes are not guaranteed. Which is why "dirty tricks" campaigns happen not just in American fantasy but also in true-life British business. For Shopper's Express read British Airways or, it seems, advisers working for British Gas; and for Santa read Richard Branson or (even less credibly) the gas industry regulator, Clare Spottiswoode. In both cases, senior public relations executives engaged in whispering against people regarded as corporate enemies.

In many ways, the accusations and observations made by the British Gas PR consultant about Ms Spottiswoode are in themselves unexceptionable. She is supposed to be friendly with a number of people who, in turn, are described as being hostile to the corporation. The inference is that she is being intellectually influenced by such folk and thus that her tough regulatory stance is less neutral than it should be.

Had Cedric Brown or the company's public affairs director, Peter Sanguinetti, called a press conference and said these things openly, then there would have been little fuss. It would have been just another skirmish in the war between the regulator and the regulated. Ms Spottiswoode could have replied and the rest of us could have made our judgements on the basis of the arguments and their proponents. British Gas has engaged in an open debate with Ofgas, and there have been rows. Allegations in an anonymous briefing paper are slightly different. The whole business reeks of cloak- and-dagger and shenanigans.

For three years, many companies have been signing up to what are known as the Cadbury Rules on business ethics and corporate governance. Constructed in the wake of a number of commercial scandals, the Rules encourage proper and ethical behaviour in the worlds of commerce and finance. Their objective was to stop thehaemorrhaging of public trust in business, and they cover areas as diffuse as the publication of proper accounts and the procedure for claiming personal expenses.

General though the Cadbury approach is, it has left large questions unanswered. Would it be legitimate - if that is what has happened in this case - for a large company to pay a PR consultant anonymously to bad-mouth the opposition? And the test to be applied is a simple one: would the ordinary person in the street believe that would be an acceptable or a fair way to go about things?

If the popular morality of Hollywood films is anything to go by, the answer would be no, we do not think this is the right way to behave.

Today such feelings are commercially significant. Recent incidents in which corporations have been exposed to unwelcome publicity - including Shell in Nigeria, the non-dumping of the Brent Spar in the North Atlantic (Shell again), British Gas's own tribulations over executive pay, and many more - have shown that companies ignore public judgements of their behaviour at their peril.

The cut-throat, market-driven, profit-at-all-cost ethos of the Eighties has been tempered. Companies should take note that - increasingly - good business is good business.

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