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The other week, Richard Murphy who is a colleague that writes about ‘tax justice’ and I penned a reply to an article that appeared in the January 3rd issue of the FT. The title of the original piece was: Accountants face up to the moral maze. Our response is here (it is behind the FT paywall) but you can see the full text at my personal weblog. 

The thrust of the FT argument was that training solves ethical problems. Our response was that there has been a marked shift in the ethical compass among professional accountants and that this needs addressing before concerns around training. In short, we were taking on the big guns and calling them to account. 

Regardless of the various arguments, this exchange opens an interesting question that anyone managing GRC or CSR projects needs to consider. To what extent should ‘we’ take notice of the fact there are diametrically opposed opinions about a topic area? 

This can be tricky, especially when you’re looking at topics as delicate and emotive as taxation.  Both Richard and I share strident views that frequently run counter to the mainstream but that doesn’t make them any less valid. As a source on issues around the impact of tax corruption for instance, our views are seen as arcane in many quarters. In my opinion, the fact Richard has recently been funded to undertake a two year research project on this topic speaks for itself.

What should we do? What is the position of those who are advancing the CSR agenda in the context of a company that sells software? For me the answer is simple. Being aware of the  fact that people like Richard are respected for the views they hold, we should seek to help customers understand the potential risks. In the tax arena, my work indicates there is often a disconnect between provisions made in reported accounts, amounts paid and the consequent deferred tax. This is what Richard refers to as the Tax Gap. I see it as indicative of process failure.

By thinking about how business processes feed not only into the determination of the various numbers but the audit and compliance work that should accompany these figures, we are providing a non-judgmental way of approaching the problem. I believe this helps the customer decide for themselves the risks they face across what are often multiple jurisdictions.

In considering how CSR and GRC initiatives are fed between business, process and technical development people, I believe we pave the way for developing sustainable solutions with broad appeal.

I have used a tough issue as illustrative of the difficulties people face when trying to wrestle with GRC issues. That should not frighten us away. It should encourage us to develop solutions that will be welcomed as not only groundbreaking but of lasting value. 

Of one thing we can be sure. As the GRC/CSR agenda unfolds, there will be many such scenarios. Are those of us who truly care about these issues ready to face what I belive are some of the most interesting business challenges? As the title says: where do we draw the line?

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  1. Marilyn Pratt
    Dennis, I find the problems you describe here and most especially the example embedded in the FT article which challenges us to consider “where do you draw the line” hitting home on so many levels.  Thanks for surfacing this content for us and sharing both the original article and your responses.  In light of the fact that we would like to evolve a CSR/GRC/Accountability set of collaterals and contents on the BPX website in the CSR wiki this accentuates that there is much work to be done before creating any content of value and it also makes it painfully clear the difficulty in creating a legend/key/map/compass with which to help navigate the moral maze.  You seem to believe that the stories (case studies) or micro-issue examples would be nothing more than hypothetical or anecdotal illustrations that won’t really provide the real service of powerful auditing tools if we leave them as mere stories.  If I am understanding you correctly you are suggesting that if we really want to explore audit accountability and have performance indicators, it would seem that there are no shortcuts or quickfix templates.

    Of course I still remain a firm believer in the power of storytelling to heighten awareness of an issue and illustrate a point.  As a personal aside,  I really connected to the story in FT that describes the Vietnamese accountant worrying about the morality of reading an illegal copy of Harry Potter as I’ve just returned from Vietnam and Cambodia, and interestingly was confronted by the same illicit trade in pirated literature.  In Cambodia I went to purchase some biographies of survivors of the Pol Pot regime.  After discovering the books I innocently bought myself and son were photocopied versions I did a bit of soul-searching about whether I was committing a crime in not returning them to the vendor and, I must admit, rationalized my purchase as my intent was to educate my son and myself to the dangers of a corrupt political ideology and to be better informed about the genocide that had occurred in Cambodia.  I chose to ignore the inconsistency in my behavior.   Here I was receiving “stolen goods” with the purpose of heightening our moral consciousness.  Not very logical
     
    When I read the article and your response I also recognized the opportunity we have here in the context of the CSR/GRC wiki space to declare it a zone of accountability to society and wider social obligation.  It’s an exciting opportunity and through the stewardship of community one that could actually be unique to our own software industry and the myriad of industries our customers engage in.

    Thanks for the “call to arms”.  Are we up to it?  Who indeed needs CSR?

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    1. Dennis Howlett Post author
      I’d like to address a couple of points I think are relevant:

      “You seem to believe that the stories (case studies) or micro-issue examples would be nothing more than hypothetical or anecdotal illustrations that won’t really provide the real service of powerful auditing tools if we leave them as mere stories.”

      This is always problematic because we each use stories as our way of ‘spinning ‘ a position. In many cases it is clear cut but often there are higher order debates about cause and effect where the story gets subsumed. That’s where folk like Richard and I sit on the fault lines. We tell stories about how we believe these issues impact lives so I hope we’re doing the right thing.

      “…you are suggesting that if we really want to explore audit accountability and have performance indicators, it would seem that there are no shortcuts or quickfix templates.”

      In the world of CSR there are no quick fixes. At Transparency International for example I learned that some of their people work under incredible duress and threat, something I had not hitherto given a second thought towards. So while we can template, a good level of flexibility is required to cater for differences. Those could be regional or by industry.

      Another way the community can be seen to be taking steps is to respond in public. It’s always a hit and miss affair and in our case we were taking a clear position that contradicts mainstream awareness.

      But imagine if SAPs CSR efforts became a recognized authoritative source? How valuable might that be to those working in this area?

      I think there is much to look forward to but let’s not minimize the effort required or the risks to be taken.

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