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Exactly a month ago I was married in St Andrew’s Church, Didling, in front of a vicar, family and friends. It was divine. As a Hitchens-grade atheist, however, I had to stifle the odd hypocritical pang.
Thankfully, banking taught me how. Inconsistency and self-delusion were integral to the job. Bosses would lie to my face and we both knew it. Dots weren’t joined and nothing was taken at face value. Everyone worked on regardless.
Hypocrisy is ubiquitous, of course. But whereas in politics it is said voters don’t mind lies (it’s the saying one thing and doing another that appals), in business we can seemingly cope with the dissonance required of hypocrisy.
How else to explain Jay Monahan’s straight face on Tuesday when announcing that the PGA Tour he runs is now in bed with Saudi Arabia? Only last June, when asked about the kingdom’s alleged connections to 9/11, he replied. “I have two families that are close to me that lost loved ones.”
Likewise, no one at the CBI — whose website calls for a “dynamic, competitive” UK — appeared embarrassed this week when crying foul at the announcement of a new rival lobby group.
Other recent examples abound. Those US start-ups who brag of breaking things but demanded their deposits were repaid by taxpayers when Silicon Valley Bank, er, broke. Or global tech firms calling employees “family” for decades — and then firing almost a quarter of a million of them this year.
The United Arab Emirates — a third of whose GDP comes from oil and gas — is hosting COP28 in November. And few companies in free-market America are refusing any of President Joe Biden’s trillion-plus dollars of clean energy handouts.
What explains our toleration of hypocrisy in business and finance? Why was Boris Johnson forced to resign as UK prime minister after being accused of throwing parties during lockdown, yet the boss of Philip Morris International can claim without blushing that the tobacco maker is almost an ESG stock?
The major reason is money. Trading and modern economies are predicated on hypocrisy. Middlemen convince buyers and sellers they both have the better deal. Bankers earn a fortune telling corporates they are listing at a high price and investors they are getting a bargain.
Hypocrisy also drives the conflict between short and long-run goals. For example, it is common for bosses to wax on about the future while loading up a company with debt and awarding themselves huge dividends.
Likewise ESG assets have boomed over the past decade, supposedly as more investors think long-term. But following 18 months of underperformance, ESG funds in the UK are now seeing outflows for the first time ever (not including one month during the Covid meltdown).
Those running the money are no less hypocritical A recent paper by the Swiss Finance Institute compared the ESG scores of US mutual funds with how much of a manager’s own money was invested in the fund. More skin in the game equalled less ESG exposure.
A second explanation for our tolerance of hypocrisy is that companies are good at fooling everyone. Billions are spent on promoting their worthiness, irrespective of harm caused by the core business. In Shell’s annual report, the word “renewable” appears five times more than “hydrocarbon”.
Another corporate ploy is the widespread use of euphemisms to avoid being labelled a hypocrite — the subject of a paper by Joakim Kromann and Anders la Cour. It sounds far nicer to be “bridging East and West” than “winning contracts in Beijing”. Selling arms is “defence”.
And don’t forget the diversity, equity and inclusion initiatives, the net zero promises by 2050 or the philanthropy. According to Giving USA data, American firms give $21bn annually to charitable causes. If such reputation-washing didn’t work, Coca-Cola wouldn’t support youth sport (distracting us from the obesity pandemic) nor would oil major BP have chosen a lovely green sunflower as its logo.
Ultimately though, maybe we don’t care too much if businesses deal with, say, Saudi Arabia because we are all sometimes hypocritical in similar ways. Hating our employer but loving the pay. Criticising bosses behind their backs.
Philosophers link hypocrisy to the ethics of blame. A fear of being called a hypocrite keeps our urge to blame others in check. This is healthy. But it also lets some wrongdoing business off the hook.
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