Foreword from Professor Powell
Buffeted by a global financial crisis the like of which has not been seen since the Great Depression of the 1930s, people around the world are wondering what has happened to economic growth and prosperity. Not only has the world, both east and west, seen stock and share markets fall in spectacular fashion but also clear demonstrations of corporate and individual greed, reckless borrowing and sale of credit, packaging and onselling of worthless debt, gargantuan executive salaries and heavily leveraged and excessively costly takeovers that have pushed banks and financial institutions over the edge. While financial institutions have been at the epicentre of the crisis, entire economies and nation states have been pushed to the brink of collapse.
Quite rightly people are asking why? Who’s responsible for this disastrous turn of events? Who is to blame? The experts provide different slants to similar answers: excessive borrowing, wrong incentive schemes, worthless debt, over-leveraging, and plain, simple human greed. Some are questioning capitalism itself suggesting that it inevitably leads to such excesses. Corporate social responsibility as we have traditionally known appears as having had little impact on the big picture, to have been a fringe activity when the core business model with its short termism, quarterly results, incentive schemes and self-regulation seems to have been at fault.
These questions are explored in some depth in this year’s review from Lifeworth. One evident outcome of the Global Financial Crisis is increased borrowing by western nation states to fund stimulus packages, bank bailouts and Keynesian public works. Deficits have increased exponentially, and this public debt is being funded by the savings and wealth of the “East”, that is the huge sovereign funds and investment capability of Asia, especially China, and the Middle East. In this sense, the current crisis has sharply accentuated the “Eastern Turn” in the world order, indicated in the title of this review. in the world order.
Thus the focus of the 2008 Lifeworth Review on “The Eastern Turn in Responsible Enterprise” is timely and important. In addition, of course, the Middle East and Asia have become major growth engines for the global economy with all that entails, including significantly increasing emissions and impact on global warming. It is entirely appropriate that the East, as defined in this report, step up to the mark in terms of driving responsible enterprise development so that corporate responsibility is not viewed as a Western initiative driven by countries that “have made it” and can now afford it. There is every indication that is happening as corporate responsibility activities and initiatives in Asia expand rapidly. No fewer than 30 business schools in the “East” have signed on to the UN Principles of Responsible Management Education and that number is growing all the time. It is increasingly clear that many people in Asia see the need for a focus on responsible enterprise and will increasingly lead the way in responsible business development. That is what this 2008 Review points to.
Griffith Business School, Griffith University, is pleased to be a sponsor of the Lifeworth Review of 2008 as it reflects our dual commitment to responsible business education and development, and to Asia. While having a long-term commitment to Asian research and education, as reflected in the Griffith Asia Institute, Griffith Business School brings this together with its commitment to sustainable and responsible business in the new Asia-Pacific Centre for Sustainable Enterprise launched in May 2009 in Brisbane, Australia. The commitment is to accentuate and support the “Eastern Turn in Responsible Enterprise” with relevant research, development and education programs in partnership with government and industry throughout the region. Notwithstanding the economic downturn, we are optimistic about the growth and development of responsible enterprise throughout the region. Indeed, the Global Financial Crisis has sharpened our awareness of core issues in the western business model that need addressing and changing. Business schools recognise increasingly that they should be key players in bringing about these changes towards sustainable and responsible enterprises that create value for all not just for some.
Professor Michael Powell
Pro Vice Chancellor (Business)
Griffith Business School