Home' New Zealand Printer Magazine : June 2013 Contents 44
Ethics and ethical behaviour
business and or
it to mind now
was the sudden
publicity about the
building contractor Mainzeal Limited
and its collapse into receivership. It
seems the subcontractors were told the
December payments were delayed but
would be up to date again in January,
the directors resigned and the receivers
were called in.
In time, the truth will be known
about Mainzeal but, meanwhile, the
series of events leaves some lingering
doubts about the business and personal
ethical behaviour of all involved.
I presume the basic problem
behind all ethical failures is that so
many people in positions of leadership
do not want to accept that wrong
decisions have been made and to accept
responsibility for the consequences.
They forget that it is not always possible
to be right. Let me refer to some
examples, which will show what I mean.
In the frst example, a building
project was planned for an occupied
site. The professional developer was all
sweetness and light. When it did not
go as planned, the gullibles who had
vacated the premises and gone along
with all the assurances, were left with
no premises, no business and no funds.
The case went to court and the $100
company doing the promotion lost and
was ordered to pay. Of course it could
not do so and went into liquidation with
a total loss for the successful claimants.
The legal expenses for the $100
company would not have been less then
$25,000 and would have been paid by
the professional promoter, who is still in
the business of developing deals.
Subheading: The buck stops where?
THE second example also involved
a development being undertaken for
a major corporation. I was consulted
long after the problems had arisen
and I asked why they had not closed
the site down until the paper work
was under control and liability for the
unauthorised work had been settled.
The explanation was that they were
dealing with good responsible people
working to a tight timetable and who
had assured them that all would be well.
The dispute dragged on and, some
two years later, when it had fnally got
to mediation, my clients had run out of
funds and had to accept a settlement
that barely covered their legal costs,
while contributing nothing towards
their massive fnancial loss.
What this should teach business
people is to make sure exactly who
is responsible for what and if there
is any uncertainty then cease work
until matters have been clarifed. That
applies regardless of the industry you
Ask the right questions
IT also pays to know your customer or
client. It is another unfortunate fact of
business that some people are happy
and easy to deal with until it is time to
pay the account. That is when all the
faults and problems arise in an effort to
avoid or reduce the payment required
and previously agreed.
When I am asked to do something
for a new client I always ask why
they are coming to me and on whose
recommendation. I then check the
referral. I still get caught but not often.
Not everyone is up to no good and
a recent personal experience is an
excellent example. We were due to have
some work done and, before accepting
the quote, I checked on the company.
It had been going for some years but
had a $100 capital base. A 50 per cent
deposit was part of the deal and, when I
queried this with the company owners,
they confrmed their terms and gave
personal guarantees. I immediately
paid the 50 per cent deposit, the work
was done in the agreed time frame, and
the job was frst class.
One conclusion has to be that many
small business people do what they
say they will. On the other hand, big
business is suspect. It is easier for a
managing director to justify the high
legal costs for protecting the company
from a claimant than it is to admit the
whole project was a disaster, which
should never have been started, and
that the managing director is to blame.
I guess the lesson is to trust the
people you are dealing with but only
after you have made full inquiries and
satisfed yourself about their ethics
and integrity. To do any less than this
puts your business at risk especially
if it involves a lot of your hard earned
capital. Do not be afraid to ask
questions and at the frst sign of trouble
get it sorted out.
Looking forward is an excellent habit
to adopt even if you sometimes get it
wrong. Hindsight is a wonderful thing
that is usually right but too late. Learn
David Underwood says you can't
simply assume that new people
you deal with will behave in an
ethical manner. You need to take
action to avoid becoming the
victim of unethical practices
Exposed: the collapse of building giant Mainzeal has shown how unsecured creditors like
subcontractors (or printers) need to ask the right questions from the start
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