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Can profits and ethics coexist?

The right thing may also be the smart thing, argues a researcher known for his studies of baby boomers.

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Now and then a new book comes along in which nearly every sentence deserves underlining. Such books are short, essential, and wise. Pursuing a single bright line of clear argument, they depend less on footnoted research than on the author's credibility. They don't come along often, because they take a lifetime to write.

Profit with Honor is such a book. In it, Daniel Yankelovich brings decades of work – as one of the world's most respected social science survey researchers and as a member of numerous corporate boards – to bear on the issue of values and ethics. His subtitle, "The New Stage of Market Capitalism," explains accurately if drably what he's after: How businesses can combine ethics and profitmaking. Had I been his editor, I'd have plumped for a more in-your-face subtitle – like, "Is Corporate Ethics an Oxymoron, and If Not, What the Heck Can We Do About It?"

Even if you're not in business, this question matters. It finds us today facing what Yankelovich calls a "third wave of mistrust of business and other institutions," following two earlier waves around the time of the Great Depression and again in the late 1960s.

Yankelovich argues that the current mistrust, while fed by scandals at Enron, Tyco, WorldCom, and elsewhere, springs from a convergence of three deeper trends:

• The deregulation of the 1980s and 1990s that "transformed the gatekeepers – the accounting firms, the investment bankers, the business law firms, the regulatory agencies – into enablers." •The excesses of CEO pay, which tied it to "the vagaries of the stock market" and "sorely tempted" CEOs to "take questionable shortcuts, or even cheat." • The importing into business of bad cultural norms that include winning at all costs and gaming the system.

Fighting such trends with laws and compliance structures isn't enough. "If you want positive results," he writes, "you need to give people a positive basis for trust and respect and an ethical vision to live by, not merely severe punishment for misdeeds."

Fair enough. But how? Unlike many laments about corporate malfeasance that are awash with diagnoses but scant on prescriptions, this book steers directly toward a concept that Yankelovich describes as "stewardship ethics." He sees it as "a new stage of enlightened self-interest" that brings social norms together with business imperatives, focuses on community, and "emphasizes the conscious effort required to reconcile profitability with social good."

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