Guler Sabancı's Remarks at the Ethics and Reputation Conference

15.02.2011

Dear Colleagues, Dear Guests,

guler_sabanci_100528_orjinal.jpgI would like to thank all the members of the Ethics and Reputation Society, especially Dr. Metin CAKMAKCI, for inviting me to this very important summit entitled "The Effect of Ethical Management on Organizational Performance".

"Ethic" takes its root from the Greek word "ethika". 

Ethics, morality, and the investigation of reputation go back to the times of the classic Greek philosophers. 

Philosophers such as Democritus, Socrates and Aristotle argued with their masters and students for hours about ethics and the nature of ethics.  This means that ethics is as old as human civilization.

Since the end of Cold War, we have been speaking of something called the New World Order. 

We have talked about globalization, about the elimination of borders, and about the establishment of global villages.

However, the actual realization of these started to occur in the late 1990s as the internet became common. 

The internet is everywhere now.  Twenty, thirty years ago we used to have to wait in line to get a home telephone and now we are able to make video calls to our relatives living on other continents.

Communication has acquired both an instant and a global dimension.

Over the recent years, the changing dimensions of communication have been evolving with the second phase of the internet, Web 2.0. 

During this period, developments in interaction and on sharing sites collectively referred to as the social media, sites such as Facebook, Twitter and Reddit, have increased the importance of the rules of ethics and transparency. 

This transparency highlights fundamental levels of integrity, honesty and sincerity.

In this new world, we can see that companies' primary values should include transparency and sincerity in all their business processes and relationships.

They need to be attentive, to be clear, open and honest in their relationships with employees and with all their stakeholders.

The new normal for companies is for them to now conduct their activities and their ways of doing things in the most ethical, sustainable and transparent ways. 

Because, now even one single e-mail can change the world. 

A company's approach to its ethics, its sincerity, its openness and its transparency each directly affect its reputation, and thus its business results as well.

2010 was marked by an accelerated march towards hyperconnectivity.

The number of Internet users surged to two billion, almost half of them in Asia.

Facebook's online community grew by 250 million people to more than 600 million.

It is now equivalent to the third largest country on Earth.

Twitter doubled in size. Now it boasts 190 million users, the population of Brazil.

The amount of content disseminated across these platforms is astonishing.

Perceptions of companies are now shaped by the collective opinion of millions, rather than by a handful of opinion-leaders and a decent-sized media budget. 

Consumers are now fed by many channels. They then make the best judgment, as they know best.

When purchasing a book from Amazon, the reviews of readers draw more attention than those of professionals. 

If customers want healthy, reliable and natural products, then they go to the Good-guide on the Internet and get all the details they need.

The web has become an information-seeking and social medium: A vast schoolyard where corporate reputations are earned, re-earned and evolved every day.

It is no exaggeration to say that companies now find themselves operating in this ‘new normal'.

However, in the new normal, there is a concept as old as the human civilization.  The concept is moral.  It is ethics, and it is gaining more importance and becoming more prominent.

The public face of business has changed forever.  Corporations who fail to recognize this risk having their reputations, often lovingly built up over generations, damaged in an instant.

The internet has afforded consumers the tools to cross-examine the claims of Corporate Social Responsibility made by businesses. 

Now consumers can search on Google what companies have done. They personally research these projects and draw their own conclusions.

Corporations that, instead, adapt to this "new normal" improve their reputations.

For instance, before the very eyes of the consumer, the economic crisis that we have been through became an ethical crisis rather than a financial one. 

Comprehending this perception directly, Goldman Sachs launched a 500 million dollar fund for small businesses.

At a time when the reputation of the financial sector has been catastrophically damaged, that company has undoubtedly out-performed its category.  Goldman has been able to uphold its reputation as an intelligent, positive force in society.  In other words, they chose Main Street instead of Wall Street.

Now, it is very important how corporations build up their reputations, protect them, and how they use the Internet. In the past firms were able to hide some of their faults.

However, in the Internet age, a corporation's employee, customer or rival can announce any of its faults to the world with a single click.

Of course, there is positive information about firms on the Internet too. Yet, research has shown that negative information spreads much faster.

A decade ago it would be almost unthinkable that a home-made video could ever spark a global crisis for the reputation of any multi-national company.

But, in the con­nected age, such an event is the norm. 

In 2010, 270 million smart phones were sold and 40% of the updates on Twitter were sent by mobile devices.

In the new normal, corporate brands and product brands are expected to play the "game" by the same rules.

Today's consumers make their purchase decisions with respect to how these, the product and the corporate brand, refer to each other. 

Procter & Gamble understands this and launched an enormous brand campaign at Vancouver Olympic Games. Unilever understands this and is now using its corporate logo in every product advertisement.  Companies now support their product identities with their corporate identities.

Because today's consumers want to be able to rely on a brand; they identify the corporate brand with the product's brands. 

We, as the Sabancı Group, have been performing in this way for years. 

The Sabancı brand is our greatest value.

It is the proof of how much the Sabancı family and its stakeholders embrace our brand. 

Our SA band is seen in each one of our company's advertisement, through each communication channel. 

Because we have accepted the responsibility, with our customers, of the Sabancı name.

As part of its core values: modesty, human respect and community interaction, the Sabancı Group accepts acting with full social responsibility, consciously and as one of the main and permanent components of its management's mentality.

In this context, we expect all of the corporations that constitute Sabancı Group to manage the economic, social and environmental effects of their activities with a sense of social responsibility and to contribute to the development of their community.

We do not see the scope of our sense of social responsibility as being limited to our business activities and their effects.

We define our sense of social responsibility and our priorities in this regard by considering what is best for our community and for the environment.

We put our effort into taking a leading part in activities that aim to protect human rights and the environment.

We strictly adhere to our legal responsibilities.  But we know that our responsibilities are not limited to these.

We ensure that we achieve the sustainable, social responsibilities that are expected of us our business partners, our rivals, our community and by the name Sabancı.

We put our Ethic Rules into writing in 2004 with SA-ETHICS. 

The holding company's board of directors and the boards of directors of all of its companies approved this document.  But this was not an enforced document.  We just put our current applications, attitudes and behaviors into writing. 

We did not experience any internalization problems.

There are four basic questions we need to take into consideration, according to the rules of our work ethics. 

First: " Is this activity or behavior proper, given the law, rules and accepted traditions?"  In answer to this question, we come to understand whether the work that we do is proper, to professional standards, and in compliance with the law. 

If everybody acts in accordance with the law and accepted rules, then the standard of living of each of us will change.

The Second question is "Is this activity or behavior balanced and fair? Would we feel disturbed, if a competing firm or somebody else did it?" 

Here, we set as criteria for justice by empathizing. We measure the correctness of our own behavior ourselves.

Our third question: "If we had to share all of the decisions we made, and all of our activities, publicly, would our stakeholders feel disturbed by them?"  And further, we try to predict, who, other than ourselves, would be affected by our behaviour.

Last, before we undertake any business, we ask ourselves to what extent the perceived truth matches the objective truth. 

We try to predict what a reasonable person would think about it.  We feel responsible for this.

At each of our companies, we have an Ethics Rules Consultant to whom we can refer to, if necessary, when trying to find out whether an action that we intend to make is in compliance with the accepted rules of ethical.

Furthermore, to enable all of our employees to be able to freely report any unethical situation that they face in their professional life, private communication channels are always open, 24 hours a day.

All the notifications are thoroughly analyzed by an Ethics Board, authorized by the Board of Directors.

The Board makes and implements decisions, and is not influenced by anybody.

Those who report to Ethics Board do not face any oppression or discrimination as a result of any report they make to the board. 

They are protected by our Ethics Board.

As Sabancı Holding, we are very clearly seeing the results of our approach in regards to Ethics. 

Thus, a reliable environment and emotional climate is created for our colleagues.  Research has shown that such a climate is a very important factor in work life. 

Very large positive effects of such a climate on the comfort, efficiency and innovation of employees have been seen.  It also affects each employee's performance and the results of their work.

In short, the word "ethics" is not merely a word at Sabancı.  Our approach is systematic and it is based on scientific methods. 

In order to maintain our reputation, we even risk losing business.

Research that we have conducted into our reputation has shown that the community is very aware of this fact.

Society has given us a big responsibility.  For so many years now the people have considered us to be the most esteemed company in Turkey. 

We are aware of this responsibility.  Underlying this trust, there is - surely - the respect, sympathy and trust of our community in the leaders who were in charge before me. 

As the Sabancı Community, we are approaching the diverse economic and social issues of our country always with honesty, and with the aim of solving these problems.  We respect the law and its rules.

We try to do our best to help our country to develop.  Whenever necessary, we courageously advocate for change in our country. 

Not only with regards to our business results, but also with our works of social responsibility, our foundation and our university, we are working in the belief that our society deserves the best. 

We are constantly trying to be a foundation that makes a difference for the community.

The Reputation Institute, with its headquarters in New York, is one of the most prominent reputation consulting companies in the world. The institute annually issues its Global Pulse Reputation Reports.

According to the results published in 2010, Sabancı Holding was the most esteemed company in Turkey. 

Seven companies from Turkey took part in the research, and Sabancı Holding was ranked in first place by scoring 76.08 points.

This Reputation Institute research has proven that Sabancı Holding is the most esteemed company in Turkey. 

As Sabancı Holding, we will continue to work with the great effort in regards of ethics and reputation.

We will act in accordance with the principles that the late Sakip Sabancı listed among the "golden rules of success":  

"Respecting the community",

"Keeping our name clean", and

"Always being reliable".

To conclude my talk, I want to thank the Ethics and Reputation Society for inviting me to this valuable conference, and I salute you.