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Summer 2012


5 Ethical Investments

And Screening Services By Elisa Giraldi

Via degli Aldobrandeschi 190, Rome, 00165, Italy Tel. ++39 06 6654 3707

Editorial Committee

8 Ethical


By Valentina Facciponte & Elisa Giraldi

10 Together for Europe

Vicente Arancón Editor in Chief

Christopher Oleson Rafael García Pavón Michael Augros José Ángel Agejas Junior Analysts Israel Camarillo César Garduño Rubén Sánchez FIDELIS ETHICS REVIEW is a quarterly publication of Fidelis International Institute, distributed directly by this organization with the address: Ave. Lomas Anáhuac S/N 7º piso, Col. Lomas Anáhuac, Huixquilucan, Estado de Mexico, Mexico. Phone ++52 55 5950 0160, ext. 2061

24 “Ethics and Law, Even

More Related in Public Businesses” By Paola Severino

26 Working Ethics and Educational Ethics

By Matteo Smacchi

27 Law is Open to Human 29 Summary of the Ethics,

14 On Ethics and the Bottom Line

By Albert Chan King Tat

15 “Charity and Truth in

Business, the Philosophical perspective By Daniel K. Finn

16 When Economy Divorces From Fraternity: The Message Of “Caritas In Veritate” By Stefano Zammagni

Law & Best Practices Course By Maurizio Marchetti

31 Why is Ethics different than Law and Law different than Ethics? By Carlo Simeone

33 The Relationship between Ethics and Law By Vittoria Guglielmi

34 Banking Crisis in Spain – A Commentary from the Stand Point of Ethics By José Ángel Agejas

36 Can Ethics be Taught? By Cristiana Zelli


38 “Doing good is in your

Webpage: Publisher: Vicente Arancón

and Ethics?

By David Parker

Ricardo Sánchez Executive Director

Senior Analysts

23 Fine Arts Investments


Michael Ryan President

Research Staff:


21 Survival Economy and Human Dignity By Piero Rusconi

own hands”, helping reinforce a Microfinance Bank mission. By Vicente Arancón

Certificado de Reserva de Derechos al Uso Exclusivo del Título: En trámite. Número de Certificado de Licitud de Título: En trámite. Número de Certificado de Licitud de Contenido: En trámite. Design by: César García Pavón. Printed by Grupo Infagon, Alcaiceria No 8, Col Zona Norte Central de Abastos, Iztapalapa, México D.F, C.P. 09040, Phone: (55) 56 40 92 65 Ext 115. The articles represent the personal views of their authors, which does not necessarily match , those of the publisher. The liability is limited to the amount the acquirer paid for the magazine. This journal is published with the support of its sponsors.

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and thankful to have received this important invitation and we share with you this joy. In this edition of the Review you will also find the summary of a course that Fidelis has organized together with the Italian Bar Association called Ethics, Law and Best Practices. This was the first time that Fidelis worked with a large group of lawyers to address the question of how ethics and law interconnect, and how these disciplines illuminate the business world. One of the central issues under discussion was: is a legal act, automatically, because it is legal, ethical as well? We debated around the convergence and divergence of a legal action and an ethical behavior. You will find here some reflections on the matter, together with the essays of some of the participants to the course who have kindly submitted their papers for publication.

Photo by Giulio Riotta

Dear Reader, We are glad to present you the Summer 2012 edition of the Fidelis Ethics Review. The issue you have now in your hands is the fruit of the hard work of a fantastic group of people from multiple backgrounds and from all corners of the world who share with you one very important interest: the conviction that a business world grounded on ethics would be a much better place to live in. On the cover of the Review, you find the equestrian statue of Marcus Aurelius, in the middle of Piazza del Campidoglio in Rome. In this square, the Eternal City was founded more than 2000 years ago. This is where Romulo and Remo are supposed to have been fed by the she-wolf. In this same square, Fidelis has been invited to talk about the importance of ethics for the world of finance. This event was part of a continental event called “Together for Europe.” You will find the details of it inside. We are excited

Also in this issue, you will be introduced to some of our Junior Analysts who conduct Ethical Screening. The work of these young professionals has now turned out a portfolio of analyzed companies that surpass 1,300 enterprises quoted in all major stock exchanges in the world. We invite you to meet them and to learn more about the details of why ethical investing is important.

Ethical Investments And Screening Services by Elisa Giraldi

When was ethical finance born? Modern ethical finance goes back to the early 1970s, when, mainly due to the Vietnam War, many investors wondered whether it was appropriate and consistent with their values to continue to invest their savings in companies that were somehow related to war. The issue was felt particularly strongly by large institutional investors in the United States, especially the great religious bodies that funded their work by investing part of their patrimony in the stock market. The first experiences of ethical funds didn’t arrive to Europe until the mid 80s, precisely in the United Kingdom, which for years had been the European country with the largest variety of ethical investment products (now surpassed by France). In the far European north, the Norwegian government’s pension fund, which receives substantial income from the oil extraction, speaks for itself. It is also an

ethical fund that invests and especially disinvests under the responsibility of the Norwegian Ministry of Finance, according to a number of typically socially responsible criteria. You can agree or disagree with the fund’s guidelines and mode of operation, which has also been severely criticized, but one thing catches your attention: this fund responds to the origins of ethical finance, which came about to implement the investors’ values even to finances, without being too picky. This sends clear signals and gives meaning to the activity of investment, even beyond its economic and financial dimensions. What happens then when a private or institutional investor or bank wants to be sure that its investments money is supporting activities consistent with their ethical principles and do not run the risk of financing illicit activities? In order to make clear decisions about their own investments, they refer to a screening service. To begin with, what is a screening service? It is a service that several institutions, including Fidelis, offer principally to banks and investors: it consists

Finally, you will read on these pages some of the last papers fruit of the Summit on Ethics that we held in Vatican City last year. These documents complete the series of important speeches presented at that flagship event. We hope you find the materials useful and enriching. We hope that after reading this issue of the Fidelis Ethics Review, your interest in business ethics is strengthened and your horizon of possibilities in which Fidelis can be useful to you is enlarged as well. Thank you!

Ricardo Sánchez Serrano Executive Director

Photo by Fidelis International Institute

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Photo by Fidelis International Institute

Some of the cases whose discoveries during research have struck them the most are related to banks that invest in armaments, as well as the case of a famous family-oriented amusement park that turned out to favor abortion and that of a well-known food company that exploits children to harvest cacao.

of an analysis of companies listed on stock exchanges around the world, performed on the basis of ethical criteria – which, in the case of Fidelis is a precise methodology that follows Catholic principles – with the aim of creating a better world. Ethical screening is not limited to the sole interest of the investor; everyone who chooses it is laying his brick to build change, which is just and necessary to bring economics and finances back to the service of humanity. But what is this based on? Who is building the foundations of this change? At the base there must be the dedication and passion of people who truly believe that this change is possible and who make their commitment to serving a good cause. César, Rubén and Israel are three junior analysts who form part of the Fidelis team, and they have analyzed and created reports on the companies since the birth of the screening service project. These impartial judges study and analyze the companies in depth to discover what lies behind the appearances, following the screening method of Fidelis and its four guiding principles: natural law, the common good, the family and human dignity. From these are derived the nine ethical criteria that range from respect for the rights of workers to

environmental protection, from avoiding collaboration with totalitarian governments to defending the family, from the appreciation of women in the working world to the fight against the production of cluster weapons. Based on these criteria, Fidelis evaluates the companies in order to recommend them to investors interested in ethical investments. From their experience they affirm that the most difficult criterion to identify is the ninth, “Government complicity with injustice”, because the governments that commit crimes and illegal activities tend to hide this information, making them untraceable; this is especially true in countries involved in civil wars, and also for firms based in the East. The most often violated criteria are the seventh (“Fraud, money laundering, corruption and other illegal activities”) and the second (“Workers’ rights violations”). Some companies, such as those that work in the field of energetic materials and the extraction of oil and other minerals, tend to violate the criteria because they do not take into account the environmental damage they cause; banks are often excluded because they invest in unethical activities such as arms.

Obviously this type of research requires a lot of attention and commitment, which is the reason that the junior analysts confer with the senior analysts, who review the reports, and the rest of the team, whose members are spread out all over the world: Rome, Los Angeles, Madrid, Mexico City and Hong Kong. The benefit of a worldwide team is that they generate a more global view based on the different cultures, and long-distance communication is no longer a problem. In light of what has been said, investing ethically is certainly a possibility that already exists and helps

to reconcile one’s own values ​​and principles with his investments. 82% of the companies analyzed so far are ethically sound, and this is a valuable aid to the screening service, which is not an attempt to launch a witch hunt against unethical companies, but which seeks to help investors. “Collaborating with an international, multi-cultural team allows me to understand ethical problems with a truly global perspective.” César “My screening specializes in the energy industry, which faces tremendous ethical challenges these days.” Israel “I was surprised to find that this well-known consumer goods company employs children to collect cocoa beans in Africa.” Rubén

Photo by Fidelis International Institute


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Compared to the ISO certifications, with which it shares the formal structure, the SA-8000 standard, aims to involve the entire company, its impact and the depth to which it requires attention and participation by all stakeholders in the company from top management to front-line employees, from suppliers to clients, and so forth.

Photo by Giulio Riotta

Some other issues typically covered by ethical certifications include: the promotion of health and workplace safety standards, the degree of freedom of association and collective bargaining rights of its employees, the avoidance of using (preventing the use of) child labor at their factories, the eradication (elimination) of discriminatory practices, and many others.

By Valentina Facciponte & Elisa Giraldi Valentina and Elisa are Fidelis’ Junior Consultants.

As part of the course “Ethics, Law and Best Practices” organized by Fidelis during May and June of this year, we had the visit of professor Auretta Benedetti, who came to the seminars to speak about ethical certifications. Benedetti is Associate Professor of Administrative Law at the University of Milan Bicocca, where she teaches Administrative Law, Public Law, Public Law of the Economy. Consumers pay increasing attention to the products and services they acquire, as well as to the production processes of the organizations behind them. This is one of the reasons why companies

True commitment to the principles that are the basis of an ethical certification is an imperative for its success. Avoiding that these certifications are used as a marketing tool or a PR instrument by the company is a must. To learn more about how your company can assess its ethical behavior, please contact Fidelis or visit our website:

should make their own ethical choices visible, clear and recognizable from the outside. One effective way to make this possible is through an ethical certification. These certifications allow the company to establish a relationship of trust, credibility and transparency with its stakeholders. Benedetti explained that after examining the subject in detail, they have found that among the different ethical certifications available, maybe the SA-8000 Social Accountability Certification is the only truly international standard. This evaluation is prepared by CEPAA (Council of Economical Priorities Accreditation Agency) that recognizes to the company a responsible behavior in the field of social ethics. This certification aims to recognize compliance with specific criteria in the enterprise management system. Some examples of the criteria used include: respect for human rights, respect for labor rights, protection against exploitation of children, the guarantees of safety and health at work.

Vicente Arancón, Ethical Screening and Country Manager Mexico, Fidelis International Institute.

Photo by Fidelis International Institute

Ethical Certifications

As of December 31, 2011 there were 2919 companies in the world (from 62 different countries) certified with SA-8000. This is a voluntary certification issued by an accredited external organization that recognizes

the company a responsible behavior in the field of social ethics and this is a critical point of ethical certification. The process of certification itself and the controls related to the certification are important elements in assessing the seriousness (no me convence esta palabra, tal vez “thoughtfulness”?) of the certification. Understanding to what extent the organization is free to deliver results is very important.

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Cover Story

Together for Europe

Photo by Dreamstime


Each movement retains its charisma and activities, but together they want to show and live this communion together, which is the root of all these Christian movements, because Europe certainly needs to find hope for its future in this communion. 50 years after the 2nd Vatican Council, we must oppose every culture of individualism because if we make our journey together, in a spirit of communion, ours can and must be the season of hope, for reconciliation, peace and brotherhood, for a better Europe. The heart of the event is in Brussels, but other initiatives and manifestations involve more than 130 European cities. Brussels, the source of all decisions affecting the lives of European citizens, is a “pluralistic city”, where souls who differ by language and culture live together in friendship and great benefit. Friendship is in fact the key word of this important initiative because it is precisely when the crisis draws us away from our neighbor that we have to strengthen our relationship, founding it on the Gospel, because no initiative has priority over the people who live and share it. Similarly, we should found not only our personal relationships, but also our public and economic ones, on the values of the Gospel and ethics.

The economic crisis that has hit the world in recent years has also been felt in Europe, bringing some of the countries of the European Union to their knees and putting the single currency, the Euro, into doubt. Europeans find themselves sharing the same concerns for the future, mainly due to a general instability of work and a significant rise in unemployment. The difficulties that Europe is experiencing can

be overcome if the countries and their citizens are united, since a future of peace, justice and prosperity will only become reality by exchange and cooperation. In this regard, May 12th, 2012 was another step on the path of communion among ecclesial movements and new communities to the construction of a new “Europe of the Spirit”.

“Insieme per l’Europa” (“Together for Europe”) – a network created in the year 2000 which now has the membership of over 300 movements belonging to various churches and communities in the Catholic Church, as well as in the Anglican, Protestant and Orthodox Churches – was born precisely of an invitation to communion, made by John Paul II as a prophesy of hope.

How do we do this? Pope Benedictus XVI, in “Caritas in veritate”, has given us very clear and precise guidelines – economic ones as well as religious – since the economy is not only made of money, but also of fellowship and the exchange of goods; this exchange is much stronger if it comes about through mutual self-giving rather than merely by one’s self-interest. “Together for Europe” tries to show that despite the crisis, ethics is actively present in the modern economy, and it is making headway with initiatives aimed at the finance and business world. A concrete example of this, explained during the event, is “Economy of Communion”, a project born of an idea of Chiara Lubich. In the early 90’s, during a trip to Brazil, she felt the desire and need to do

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Photos by Giulio Riotta

something concrete involving companies for the poorest. Economy of Communion stems from this, combining economy and community, efficiency and solidarity. The companies that freely join in this project divide their income three ways: for the development and support of their own company; to form “renewed people” and to spread the “culture of giving” and mutual help, without which an Economy of Community is impossible; and to constitute a special fund of solidarity to provide for the basic needs of the underprivileged. The speaker for Economy of Communion on the stage of Together for Europe was Nicola Blundo, who works as a financial director in the pharmaceutical sector and who worked for a multinational company in the past; he concluded his intervention by saying, “In a world in a full crisis of the economy and of values, our fellowship and inclusion among the poor could be one of the most appropriate responses to our difficult times.” We also represented Fidelis at the event and shared our project with everyone; Ricardo Sánchez Serrano, executive director of Fidelis International Institute, spoke from his experience in the business world. The last sector he had worked in was private equity, and precisely because of a particular incident in this area, he had to look elsewhere for what he was hoping for. “They were bending or breaking all the laws, rules and fundamental principles. I saw a bit of everything […] destruction of values, offenses

against human dignity […].” This led him to leave the private equity world and begin a new adventure in Fidelis, a young institute of ethics. The purpose of Fidelis is to do research promoting ethics in the world of business and banking by means of several projects and initiatives, such as the ethical conferences that reached more than 11,000 people last year and hopefully even more this year, and our ethical screening services that assure asset managers and private bankers that their investments match their moral values. To do this, Fidelis studies a group of over 1000 companies quoted on the international stock exchanges: New York, London, Frankfurt, etc. These studies have shown that 82% of these companies are ethical, based on Fidelis’ precise methodology. We believe that if 82% of companies can be both ethical and profitable, the other 18% should be stopped from making their profit by damaging society and violating human dignity with the excuse that “business is business”. It is possible to make a profit and to take care of the human person at the same time, and we are convinced that companies that place ethics at the center of their daily operations will be more fruitful and profitable in the long run. At the end of this day of sharing, the message each one of us received was that Europe, the cradle of

humanism and philosophical ideals, has great traditions, Christian traditions above all. This was brought out by Gianni Alemanno, the mayor of Rome, in the interview he gave us during the event: “The Christian soul of Europe is new because we must discover it, but it is also old. It is the true soul of Europe because there if there is a truly unifying identity in Europe, it is the Christian one. I believe that is fundamental because the characteristic of Europe is a great attention to the human person and solidarity. Often this tendency is unconscious, and people do not know why this is, but Christian ethics, the value of the Christian faith, gives a true reason to this love for the human person, for humanity and for communities, also in the sense of business communities.” 1) Alemanno: “It is truly important for us that solidarity and business are not on opposite sides, but that these two realities are closely linked. This is based on reflecting on the company, a community.” 2) Mrs. Franca: “Everyone has within himself a desire for fraternity, justice, truth and purity, both in one’s personal and public life. However, this desire does not become concrete in daily life, neither in the life of the states nor in the lives of people. We hope that this event can contribute to revitalize these values.”

3) Marco Viola: “The more work is animated by the Christian faith, as I have seen, the more fruit it will certainly bear for the others. In my opinion, we need to take the focus off profit for its own sake in order to see it in a new, transformed and healthier way. I think it is essential to go back to our origins and to base growth on them.” 4) A sister of the order of the Pious Disciples of the Divine Master: “I think the fundamental dimension is the rediscovery of one’s transcendent dimension, in the sense that we do not make ourselves, but we exist within a much bigger project. If we accept our part in this project, we begin from a discourse of faith and are projected in hope; then we will be able to construct a reality of charity, love, solidarity and fraternity… I think the law has a fundamental role, but only as the guardian of ethics.” 5) Ricardo Sánchez Serrano: “Fidelis hopes that companies will become aware of their importance regarding their impact on society, the family and the human person….and that [they] give their “yes” to life, a fair economy and solidarity.” 6) Nicola Blundo: “That is how our project was born: sharing the dream of a better world, the dream of companies that live communion.”

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On Ethics and the Bottom Line By Albert Chan King Tat Albert Chan King Tat currently is VC, Investment Management Committee, Ping An Insurance Group Ltd

The Bottom Line In accounting terms Bottom Line equates to profit. Bottom Line should extend to other stakeholders: shareholders, customers, suppliers, staff, society & environment. I Now Focus On Staff And Customers Staff (A) Successfully turned PA Securities from a second tier investment bank to top tier market practitioner by installing right values and practicing them: transparency, justice and fairness, trust. End result: high staff morale and better profit. (B) Factory owners’ attitude towards workers rights Factory A : exploiting workers to raise profit. Factory B: respecting workers’ rights in execution. Impacts on recent labour tight supply Factory A: losing labour, shortage of labour, disruption of production, orders lost. Factory B: low labour turnover, saving training cost,

Photo by Giulio Riotta


better quality-control of goods, high staff morale. End result: factory B is a more respectable and profitable enterprise than A. Customers: Food Safety In China Manufacturers’ mentality: - make quick money at the expense of consumers’ health and safety. - Cover up evil deeds. End result of a live case of contaminated milk by Sanlu Milk Power Co, the company went bankrupt and the CEO was sentenced to death. Those who respect consumers’ rights gain market loyalty, market share and uplift the bottom line. The World is Changing The world is flat: Internet accelerates information flow: On behaviour of a corporation, on public opinion, on sharing of values. In China, a younger generation born after 1980 behaves differently from their parents because of: A better education, Internet, better exposure to the outside world through work or overseas visits.

“Charity and Truth in Business, the Philosophical perspective By Daniel K. Finn Daniel K. Finn is Professor of Theology and Clemens Professor of Economics, Saint John’s University, Collegeville Minessota

Photo by Giulio Riotta

Catholic social thought requires the proper structuring of four distinct dimensions of economic life, what we might call the moral context, or “moral ecology,” of markets. Business ethics is an essential part of the required morality of individuals and organizations. But it is also necessary that markets be well structured by law to prevent the worst abuses that self-interest in markets would otherwise generate (what Pope John Paul II called “the juridical framework”), that the needs of all be met (with direct assistance to those who are unable to meet their own needs), and that civil society organizations play a vibrant role in society. This is the foundation for a Catholic moral endorsement (a conditional endorsement) of profit-seeking by business firms – when it is part of a broader system that serves the common good. The Catholic tradition has never endorsed the simple seeking of private profit in every context. In Caritas in veritate, Pope Benedict XVI has said more about the character of the ethic that should characterize the business firm when he spoke about gratuitousness. Some on the political right have looked skeptically on the role of gratuitousness in the analysis of markets as if it were only a utopian dream. The Pope’s own focus on what he called “hybrid firms”

– businesses that make a profit but invest a sizeable portion of that profit in good causes outside the firm – has said little about how gratuitousness does and should characterize the ordinary “for-profit” business firm. His notion of reciprocity is the key; it is a regular part of the internal culture of the all ethical organizations. Reciprocity is a mix of contract and gift. In a contract, party A is legally obliged to do particular things for party B, and vice versa. In a pure gift, A transfers something to B without any expectation of something in return. In reciprocity, A does something for B, who is under no strict obligation to reciprocate, but B faces a cultural expectation to reciprocate someday – whether to A directly or to someone else. Strong ties of reciprocity – among co-workers and between managers and subordinates – characterize the internal culture of highly ethical business firms. For example, a manager asks a shop foreman for a favor – to get his crew to work overtime this week – and eventually the manager will be asked to return the favor. Reciprocity builds trust over time, and the stock of trust built up is called “social capital” – which is both a moral and an economic asset, both for the firm and for the economy as a whole.

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When Economy Divorces From Fraternity: The Message Of “Caritas In Veritate” Part 1

By Stefano Zammagni Stefano Zammagni is Professor of Economics, University of Bologna and Adjunct professor of International Political Economy, Johns Hopkins University, Bologna Center.

After a synthetic description of the main features of the papal encyclical, the paper defends the thesis that Caritas in Veritate contains an interpretation of the present financial crisis as an entropic crisis and not simply as a dialectical one – as it was the 1929 crisis. At the bottom of this entropic crisis one finds a triple divorce which started taking place in the last few decades: the separation between the economic and the social spheres, the a separation between labour and the origin of wealth; the separation between market and democracy. The paper concludes by commenting on the ways out of the crisis and the ways ahead for future research suggested by pope Benedict XVI.

Photo by Giulio Riotta

collective (i.e. neo-marxism or neo-structuralism) and those which, on the contrary, glorified subjectivity, thus reducing the social to a mere aggregation of individual preferences. (This is what individualism, in its extreme interpretations, results in because it confuses sociality, which are found in animals as well, with sociability which is, indeed, a typically human trait).

1. Benedict XVI’s encyclical Caritas in Veritate, now offered for the meditation of all those, believers and not, who are coherently interested in integral human development – in the acceptation of the term given in the personalism of Mounier and Maritain and, in their wake, Paul VI’s Populorum Progressio (1967) – is a beautiful example of a literary genre which moves freely and fertilely, like an amphibian, among the fields of study dealing with human action in all its multiple forms. Among all the open questions that the modern age bequeathed us, one is the unresolved dispute between the schools of thought which, in order to shed light upon important dynamics of our society, ended up dissolving subjectivity into the

The great merit of Caritas in Veritate is to cr­ eate a welding between these two poles. How? By placing the principle of gift as gratuitousness at the centre of practical knowledge, Benedict XVI shows, persuasively, that in today’s historical situation, interpreting the terms of the couples independence-affiliation, freedom-justice, efficiencyfairness, self-interest-solidarity as irreducible alternatives is wrong. In other words, it is wrong to think that any strengthening of the sense of belonging must be interpreted as a limitation of the independence of the individual; any progress on the front of efficiency as a threat to fairness; any improvement of individual interest as a weakening of solidarity. That this is not a insignificant or selfevident cultural operation, we know from the fact that gratuitousness is attacked today both by free marketeers and by the neo-statalists, albeit with diametrically opposite intent. The former appeal to the maximum possible extension of the exercise of gift as donation (munus) to underpin the idea of “compassionate conservatorism” in order to grant a minimum level of social services to the poorest groups of the population who, with the dismantling of the welfare state that these conservatives advocate, would otherwise be left with no assistance whatsoever. This is not, however, the proper sense of the principle of gift, as we can see when we consider that attention to the needy is not objectual but personal. The humiliation of being treated as an “object”, even if the object of philanthropy or of compassionate attention, is the most severe limitation of the neo-liberal point of view. The attack by the neo-statalist conception is not that different. Assuming that there is strong solidarity among the citizens to achieve their so-called citizenship rights, the State makes some types of behaviour compulsory. In so doing, however, it displaces the principle of gratuitousness,

practically denying, within the public sphere, any scope for principles other than solidarity. But a society which glorifies gratuitousness in words but then does not acknowledge its value in the most varied places of need is a society that sooner or later will fall into contradiction with itself. If we admit that the gift has a prophetic function or, proverbially, that it “is more blessed to give than to receive,” but do not allow this function to be manifest in the public sphere, because everyone and everything is taken care of by the State, it is clear that that civic virtue par excellence, i.e. the spirit of gift, will slowly atrophy. Assistance which is exclusive to the State tends to produce subjects who are, indeed, assisted but who are not respected, as it cannot but fall into the trap of “reproduced dependency”. It is most singular that people cannot see how neo-statalism is similar to market fundamentalism in identifying the space in which to place gratuitousness. Both schools of thought, as a matter of fact, consign gratuitousness to the private sphere, expelling it from the public sphere: the neoliberal matrix by claiming that welfare can be achieved by means of contracts, incentives and clearly established (and enforced) rules of the game alone; neo-statalism by maintaining that solidarity can be realized in practice by the Welfare State alone, which can, indeed, appeal to justice but certainly not to gratuitousness. The challenge that Caritas in Veritate invites us to take up is to fight to bring the principle of gratuitousness back into the public sphere, i.e. to find the ways to apply fraternity. Genuine gift, by asserting the primacy of relationship over its cancellation, of the intersubjective bond over the object given, of personal identity over utility, must be able to find a way to express itself everywhere, in every field of human action, including the economy. Above all in the economy, indeed, where it is of the utmost urgency to create and protect places where gratuity can be borne witness to, that is to say acted. Let us now apply this thought to interpreting the current global crisis. 2. In the history of our societies, broadly speaking we can identify two types of crisis: dialectical and

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entropic. A dialectical crisis arises out of a fundamental conflict within a given society that the society is unable to solve for one reason or another. The basic feature of dialectical crisis is that it contrains within it the germs or forces whereby it can be transcended. (It goes without saying that the overcoming of the crisis does not necessarily represent progress vis-à-vis the previous situation.) The great, historic instances of dialectical crisis are the American Revolution, the French Revolution, the October Revolution in Russia in 1917. An entropic crisis, by contrast, is one that tends to drive the system to collapse, to implode, without changing it. This kind of crisis occurs whenever a society loses its sense of direction, its sense of purpose. History also offers a good many examples of such crisis: the decline and fall of the Roman Empire, the transition from feudalism to the modern age, the collapse of the Soviet empire and the Berlin wall. Why is the distinction important? Because the proper strategies for getting out of the two types of crisis are different. You can’t resolve an entropic crisis with technical adjustments or merely legislative and regulatory measures – necessary though these are – but only by taking the bull by the horns and resolving the question of the sense of purpose. This is why prophetic minorities are indispensable to point society in a new direction, by means of a supplement of thought and above all the testimony of works. Thus is was when Saint Benedict, with his celebrated motto “ora et labora,” inaugurated a new era, the age of the medieval cathedrals. The revolutionary social and economic impact of the Benedictine conceptual framework and charisma can never be overstated. Work, for centuries considered typical of slavery, in this mindset becomes the high road to liberty: it is in order to be free that we must work. What is more, in this slogan labour is raised up, put on a part with prayer. As Saint Francis would later say, woe to us if we were to separate laborantes and contemplantes: in each person, prayer and labour must proceed together. Well, today’s severe economic and financial crisis, is basically entropic in nature. So it is not connect, save in merely quantitative terms, to compare it with the crisis of 1929, which was essentially dialectical. It was due, in fact, to human errors committed above all

aphorism that “a rising tide lifts all boats” and its corollary, the “trickle-down” effect, according to which wealth, like rain, eventually benefits all, even the poorest. Yet the famous French economist Leon Walras had warned, already in 1873: “When you set out to share the pie you cannot repair the injustices committed in making it larger.” The present crisis offers the saddest possible confirmation of this thought.

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by the authorities responsible for overseeing economic and financial transactions, as a consequence of their lack of understanding of the way the capitalistic market works. Indeed, it took the “genius” of John Maynard Keynes to make this knowledge available to everyone and especially to economic authorities. Just think of the role of Keynesian thought in the design of Roosevelt’s New Deal. To be sure, there have been human errors in the present crisis as well – as is shown in Zamagni (2009) – but they are not the consequence of lack of knowledge but of the failure of sense of direction, of purpose, that has infected Western society since the epochal onset of globalization. 3. The obvious question that spontaneously emerges is: where is this crisis of sense mainly manifested itself? My answer is that it lies in a threefold separation: the separation of the economic and the social spheres; the separation of labour and the creation of wealth; and the separation of market and democracy. Let me now briefly explicate these concepts. One of our definitely un-positive legacies from modernity is the belief that the only eligible members of the “economic club” are those who are profit-seekers.

This is tantamount to affirming that if you do not pursue exclusively the maximization of profit, you cannot be considered a real entrepreneur. You must resign yourself to belonging to the social sphere, with its “social” enterprises, cooperatives, foundations, and so on. This absurd conceptualization – itself the offspring of the theoretical error that confuses the market economy, which is the genus, with one of its component species, namely the capitalist system – ultimately defines the economy as the locus of the production of wealth (a place whose governing principle is efficiency) and considers the social sphere as the locus of its redistribution, where solidarity and/or charity (public or private) are the fundamental canons of behaviour. We have seen, and are still seeing, the consequences of this separation. As the well known economic historian Angus Maddison (2004) has shown, in the last thirty years the indicators of social inequality, both between and within nations, have risen to scandalously high levels, even in countries where the welfare state administers a substantial share of resources. Yet hordes of economists and political philosophers long believed that Kant’s recipe – make the pie bigger and then share it fairly – was the definitive solution to the problem of equity. Here, we must recall the expressive power of the neo-con

Pope Benedict XVI’s encyclical Caritas in Veritate makes it clear that the solution to this problem consists in putting back together what has been astutely separated. Endorsing the conception of the market typical of the civil tradition of thought of economy, namely that social bonds cannot be reduced to the mere “cash nexus,” the Pope suggests that we can fully experience human sociability within normal economic life, not outside it as it happens in the dichotomous model of the social order. The challenge to accept is that of Plato’s second type of navigation: neither to see the economy as in endemic, ontological confict with the good life, because it is the locus of exploitation and alienation, nor to view it is the place to look to solve all the problems of society, as the anarco-neoliberal school would have it. 4. Let me go on to the second type of separation. For centuries humankind held to the idea that the origin of wealth lay in human labour – one kind of labour or another, it didn’t matter. In fact, Book I of Adam Smith’s Wealth of Nations (1776) is devoted precisely “the improvement of the productive powers of labour.” What novelty has the financialization of the economy that began about three decades ago ultimately brought? – the idea that speculative finance creates much more wealth, and much faster, than work. Countless episodes confirm this thesis. In Britain – the birthplace of the industrial revolution – manufacturing now accounts for a modest 12 percent of GDP. Until 2008 the sector counted over 6 million employees (half of them are now out of work). In the past few decades the world’s greatest universities have seen the explosive growth of business studies in terms of faculty and research, crowding out and impoverishing other fields of study. Just consider the distribution of funds by research area, or the choices

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Nina Vacca, CEO, The Pinnacle Group


Photo by Giulio Riotta


of major on the part of economics students. And so on. The spread of the financial ethos, with the complicity of the media, has helped establish the belief that getting rich does not take work – better to fly high, gamble, and above all eschew moral scruples. The consequences of this cultural pseudo-revolution are now glaringly evident. One is the maladroit attempt to displace the figure of worker within the social order in favour of that of citizens-consumers. Today, for instance, we no longer have a broadly shared notion of labour that can help us understand the transformations under way. We know that starting with the commercial revolution of the eleventh century the idea of craft work gradually gained ascendancy, with its combination of knowledge and activity, of production process and mestiere – a term which itself refers to the mastery of the master craftsman. With the advent of the industrial revolution and then of the Ford-tayloristic mode of production, what gained currency was the idea of “tasks” (the mark of parcellized labour) and not craft and

with it the central notion of freedom from work as emancipation from the “realm of necessity”. Today, in the post-Fordist era, what idea do we have of labour? Some propose the idea of skill in terms of professional capabilities, but they are unaware of the perilous implications, signally the confusion of meritocracy with meritoriousness, as if these terms were synonyms. Western civilization is based on a powerful idea, the idea of the “good life,” whence the right-cum-duty of each person to plan his or her life with a view to civil happiness. But what possible starting point towards this objective can there be, if not labour as the locus of the good existence? The flowering of the human spirit – Artisotle’s eudaimonia – must not be sought after work, as it used to be, because men and women encounter their human condition while they are working. Hence the urgent need to elaborate on the concept of eudaimonia at work, a concept that on the one hand overcomes the hypertrophy of labour typical of our times (work filling an expanding anthropological void) and on the other declines the idea of liberty at work (the freedom to choose those activities that can enrich the heart and mind of the person engaged in work). Clearly, the acceptance of the eudaimonic paradigm implies that the purpose of an enterprise – whatever its legal form – cannot be reduced to profit alone, though of course not excluding profit. That is, accepting this paradigm implies the possible birth and development of enterprises with a civil vocation, capable of transcending self-referentiality and thereby expanding the scope for people’s effective ability to choose their type of work. Let us not forget that choosing the best of a “bad” bunch of options in no way implies that the individual deserves what he/ she has chosen. Freedom of choice is the foundation of consent only if the person choosing is in a position to take part in selecting the set of alternatives from which to choose. Our having forgotten that no human society is sustainable where everything is reduced, on the one hand, to improving transactions based on the principle of exchange of equivalents and, on the other, to increasing public assistentialistic transfers explains why it is so hard to advance from the notion of labour as activity to that of labour as work (opus).

Survival Economy and Human Dignity By Piero Rusconi Piero Rusconi is the President of Ecofast Italia

First of all let me express my pleasure in attending this prestigious summit. Being an owner of a small company, highly specialized in his field, I thought my contribution can be to tell you few topics coming from my working experience. In 1995 I sold the previous family business to an American company.

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the company cost, to strongly fight against the competitors (possibly wiping out them from the market though a purchase or pushing them to the closure). Beside the fact that these actions are economically understandable, but not probably ethically, it seems to me that they bring the world to a situation extremely critical.

But beside this there was also a pervasive feeling in my heart and brain that at the base of this decision there was a general situation in the Business World that I resume in two words: “ survival economy”.

If the economy is the organized activity of the Human Kind to satisfy the needs supplying goods and services and if in the decades after the second World War the developed countries have clearly identified these goods and services (like it’s today for the emerging countries China, India, Brazil etc), it seems to me that now a days there is instead a lack of motivations in our Countries.

This came from the remark that the main target in a today business respond to these general strategies: is imperative to push the sales growth, to reduce

It seems to me in other words that if I sell a dishwasher which will last for 5-7 years or a mobile phone I satisfy a human need, if I urge to buy 2 or 3 phones

The main reason was the classical one for the SME companies. I resume it with a paraphrased sentence “ too small to compete”.

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I asked my self if there was a possible solution to this conflictual situation between my entrepreneurial and ethical feeling. Effectively the question was: “there are still needs which can be satisfied thanks to an activity less dependent on what previously described?” In the last 10 years I focused my activity in a new business area the so called “green economy” studying and developing new innovative machines for the selective collection of the food waste in order to recover energy and fertilizer. That is the typical situation when the Human Kind can learn from the Nature how to solve a problem in a sustainable manner. I strongly believe that a contribution to recover sources from what we usually throw away can be an ethic and economical activity, in other word the green economy could contain lot of ideals. Naturally green economy means a lot of other chances, and beside the green economy other fields of the scientific and technological human knowledge can give opportunities. I remember that when Mr Wagoneer, the CEO of GM was removed by president Obama in 2008, Obama in few words said “ This decision has been taken not because you are unfit, but because you didn’t understand which are the targets we want for the company which we must fund ”. President Obama, a man for sure capable of visions, was thinking to the potential conversion of the 177 millions of car running on the American streets powered in the future by new engines with less polluting emissions. Fiat I believe succeeded in Chrysler deal both; thanks to the workers participation and the innovation in the engines design. The victory of this challenge maybe is also related to the positive answer to the following question: is it more valuable for the customers to buy a low

consuming hybrid car, or they still prefer a roaring SUV or powerful sport car? What we have done to educate them to a sustainable consumption vision at school or thanks to a wise advertising? As sometime happens I strongly believe that a crisis can bring solution and new welfare if we are capable not to succumb. Tanks to new ideals and to an enlightened policy.

November 8, 2012, Florence, Italy

Minister Tremonti once said “This is not the end of the World, may be is the end of a world”. Considerations following the Summit During the workshop on Friday 17th I heard a lot of discussions and ideas on ethics in business. The people attending the meeting were high level managers, owners, professors leading multinational enterprises or important Universities, but it seems to me that behind the words everybody was expressing a sense of guiltiness. In ancient Hebrew language I learned that the word sin has a meaning of “loss of target” and this could be true when we consider that the economy is the human activity created to satisfy “needs”. Today a lot of business leaders seems to express a sense “loss of target” or a responsibility to have brought their companies toward “false targets” or “target not responding to real needs”, copying the Past without asking them selves sufficiently on the Future The present crisis which has hit dramatically the USA, the “locomotive of the economy”, asks everybody to contribute to define new “needs” complying with the human dignity. Ethics have been always considered in business, but today the problem became dramatic because of the industrial and financial crisis.

Fine Arts Investments and Ethics? Italy’s most important cultural event, the Biennale della Cultura “Florens 2012” will take place in the fascinating city of Dante next November. Fidelis has been invited by Florens 2012 Organizational Committee to coordinate a congress at the Biennale to reflect upon the connection between an investment in fine art and ethics. Since its inception, Fidelis has advised ethically responsible investors as to how can they invest their money while respecting their own moral and ethical principles. But, when it comes to making a big investment in art, does this have any particular ethical component?

If in India a mobile phone is a tool to reach a better standard of life, in Italy the abuse of mobile phones it seems to me to create rather a highly stressed life or life styles often dramatically poor for the young generations!

Is an investment in fine art ethically different from an investment in securities in the stock exchange? Why is this so? When investors pour millions of dollars in a painting or a sculpture, are they being moved by ethics as well? Can an investment in art be considered an ethical investment? Are there any ethical considerations that an investor takes into account when acquiring art?

I don’t want to divert the responsibility from the human being to the tools of which he abuse, but Jesus teach us in Pater Noster “ et non inducat nos in tentationem….”

What’s the ethical role of an art patron or sponsor? When an investor acquires fine art, what other stakeholders that get benefited by this investment? Does an investment in art make the investor a

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or to change the dishwasher every two years, through a pervasive advertising campaign, maybe my focus is the economical profit of my company, not so the respect of the dignity of the human being.


more noble person? Why? Do you believe investing millions of dollars in art contribute to the wellbeing of humankind? What is the essence of that contribution? What is the ultimate goal of the art investor? Does an investment in art make you transcend yourself? Why? If you are a serious fine art investor, make sure you don’t miss this interesting Fidelis conference. If you just love art and you think you know how ethics and art connect, do not hesitate to contact us. To learn more about this exciting event, please visit our site or contact us anytime. The Florens Foundation The Foundation was created to give continuity to the Florens 2010 International Week of Culture and Environment, and be a permanent laboratory of cultural and environmental efforts to demonstrate how important investment is in culture, and how it can contribute to the development of the economy and help reconfigure Italy’s manufacturing base. For more information on this even, please contact Ricardo Sánchez Serrano:

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Initiatives and meetings like the one today, with such illustrious speakers and a young and receptive audience, are encouraging for me, since I have dealt with penal-economic issues for quite some time.

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It is thus with great pleasure that I have accepted the invitation of President Donato Bruno and the organizers of this event, to intervene, to give a brief welcome and to offer a few reflections on the relationship between ethics, law and business, and on the theme of the lesson.

“Ethics and Law, Even More Related in Public Businesses” Speech delivered by Paola Severino at the Ethics and Law Course. Paola Severino is Italy’s Minister of Justice

The Nobel Prize winner for economy, Amartya Sen, said, “Economics is a motor; you can know all its parts. But it doesn’t run by itself. It’s a question of responsibility. It’s a question of choices. It’s a question of guidance.” Today, more than ten years after the financial collapses of Enron and Worldcom in the United States and Parmalat in Italy, the question of ethics in the business world and its relationship with law is still a very current one. The lesson of the Indian economist seems to be this: economics, the business world and law cannot survive without a guide, a beacon able to direct human action according to reason, even in “economic” behavior: this is ethics.

The actors in the economic world now seem to be aware of the fundamental role of moral values in the development of a more equal and loyal system. Today’s reality shows how a perfect distribution of resources according to criteria of efficiency is often a pipe dream in the business world and the market. On the contrary, the markets often show signs of informative asymmetry and inefficiency that favor wastefulness and dispersion of resources rather than the maximization of economic results. It is precisely to counter these phenomena that certain and binding juridical rules are put in place. The Legislator, referee of the interests in play – in addition to being the object of constitutional protection because of the importance these interests have for the collectivity (savings, property, economic initiative) – is called on to give an answer to different requests, searching for the right balance among the interests. Law plays a fundamental role in the mechanism when it comes to the aid of praxis, when it becomes a norm vested with the force of precept. ­ ut the objective cannot be pursued if we ignore B the ethical request that makes the rule, norm and system of protection shared and accepted – and thus “stronger”. Ethics make the objective concrete as it transforms it into common patrimony. In my readings on the topic, I have perceived how vast and multi-dimensional the idea of ethics is, and how, on a semantic level, the expression is used to indicate diverse phenomena; on one hand, it can indicate the conformity or correctness of behavior regarding rules established by external subjects (society or the market, for example); on the other,

it can be the flywheel that moves one to make decisions of an “altruistic” type, so to speak, or of a constant and reasoned relationship with the reality around us. In the second sense, ethics – the search for criteria that allow the individual to use one’s freedom adequately out of respect for the others – allows us to determine what is right by making human action responsible. This is even truer in the business world, where it is necessary to instill ethical principles at the top, in the so-called “top management” of society, in order to favor a “trickledown effect” to the last employee in the company pyramid. In the face of this progressive recovery of shared values, business cannot be considered a simple economic agent whose only objective is the maximization of profit; it should rather be seen as a social institution that, beyond the interest of the providers of its financial capital, seeks the protection of interests of other subjects, in order to achieve its business objectives over the long run. Therefore, policies of social and environmental protection, and policies of the respect for the rights of all interested parties in general, should be valued. Obviously, the execution of such policies is not a substitute for the customary processes that lead to economic results, but is integrated with these processes in order to make them as compatible as possible with the demands of the entire community’s development. The “positive” fruit of this virtuous synergy between economy and law under the aegis of ethics, the shared principles and values necessary for the survival of any social group, is double. On one hand, there is the phenomenon of natural assimilation, on the part of business workgroups, of the values that form the best business culture in the context of work and production by the redaction and diffusion of so-called Ethical Codes, touching on the two meanings of “ethics” that I mentioned earlier. On the other hand, the regulations constantly reinforce the principles of control set down for the correct development of economic and business activity. The key word is thus “responsibility”: on the part of the juridical persons (as laid out in Decree 231/2001 with emphasis on the predisposition of the models of organization, management and control), on the part of the financial intermediaries (regulated

principally in the T.U.F. by the specific sanctions against market abuses), and on the part of the other agents of the market. Finally, I would like to make a brief mention about today’s lesson: “Ethics and Law, Even More Related in Public Businesses”, as the program says. It is about one maxim that our Constitution, from the very beginning, held as proper and necessary for a State that aspired to be a regulator and “social”, that is, constantly at the forefront in order to reach the well-being of its citizens. The State that renders services to the collectivity, in reality, considers more stringent the false “ethics” that permeate the action of public societies’ leaders regarding the management of the “public sector” in terms of absolute transparency and efficiency in the eyes of its users/citizens. The greater and higher the standards of management of the State’s service, the more the citizens see that service as their own. In this regard I am pressed to emphasize that a system founded on contracts needs reciprocal trust in economic relations in order to work in a credible and efficient way. Ethics, that movement of the spirit that pushes us to behave according to justice, “is convenient”: it should influence, and if necessary, integrate the decisions of the Legislator, whose work is fundamental and necessary to guarantee the rules of play in the market, especially competition. For its part, the economic system should found a regulatory framework that has as its finality an efficient organization able to assure an adequate level of information, transparency and possibility of access to operations: in a word, efficient transactions. Only the constant affirmation of an individual behavioral ethic at the top of the active subjects in the market, who transmit those precepts that are perceived as imperative for society and its fabric of values, will permit the group of stakeholders to enjoy the widespread well-being, not just mere profit, the product of the business.

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Law is Open to Human Development

Working Ethics and Educational Ethics

By David Parker

Law can be understood as a norm that regulates behavior in society. It most cases, it carries with it a negative connotation of regulation and “no’s”. What if one was to think of law not as a constricting element, but as an element of man’s common good and the integral development?

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By Matteo Smacchi

Pope Benedict’s reflection at the Reichstag on September 22, 2011 speaks on the foundations of law, especially upon its nature for the common good of man. Although Pope Benedict makes reference to the work of politicians, he makes the argument that laws are not simply regulatory but are a means for development. His first argument is that law is not simply a function of reason. Laws must not only be made rationally but made upon the foundation of human nature. Any separation of these two facets makes a law untenable and possibly unjust. Any law that refuses to follow what is natural to man but simply expedient can

The word “ethic”, in a law firm, has several different meanings: there is an “ethics with client”, that means giving a legal advice according to the applicable law and all ethic rules involved; there is an “ethics with colleagues”, focusing on keep good relations with other lawyer, respecting any single member of the team and emphasizing any single talent. Law trainee and stagiaire are always supporting by their seniors in daily activities and, doing so, any fresher feel himself as part

of a strong working team. Moreover, there is an “ethics with competitors”, that means respecting any competitors, counterparties and their lawyers, establishing friendly relations while they are working with one another. Usually, international law firms pay a lot of attention to infuse all the different aspects of ethics abovementioned to the new entries, in particular with sibling and mentoring programs, as well as inviting them to join internal committee of the firm. Another element that clearly shows how “working ethics” is today one of the cornerstone of any law firms, it is the so called “educational ethics”. International law firms usually offer seminar and conference to their lawyers, helping them to be updated with all legal news; educational ethics is here connected with the law firm’s will that doesn’t want “only wellprepared lawyers”, but “well prepared lawyer open to their bar association and educational community”. Moreover, educational ethics is related to law trainee and stagiaire, because of the possibility given by the law firm to pursuing an LL.M. (Master of Law) abroad, a visiting researcher program or a Ph.D.

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Today, the relationship between “Ethics & Law” is becoming fundamental in any law firm. Both in national and international patterns, “business ethic rules” for law firms are now not only moral criteria that lawyers have to respect, but real standard where law firms are ranked. Legal market is changing its perspectives: during the 90’s, main characteristics for a good law firm were efficiency, speed, timeliness and results while resolving legal questions; today new elements are added to consider a law firm as a “good law firm”, such as pro-bono, social activities, legal support helping the community, a high quality of working environment, non-discrimination (even gender discrimination). All this addictions are part of a new generation of “Working Ethics”.

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easily be in conflict with man’s nature and his ability to live out that law, most often to his detriment. Such conflicts are very much apparent in today’s world where the exigency of a “rational” law is separated from that which follows the “nature” of man. Several examples come to mind as of late: laws requiring one to act against one’s conscience, the over-regulation of the markets (because of an economic crisis) that simply mandates rather than foster good behavior, etc. How can it be that the law can cause conflict? Simply stated, if a law does not follow human nature, it is therefore not rational and impossible to enforce and execute. Positivism’s Influence in Law Today Our current concept of to law is not “natural law” proposed by Catholics, which was long ago downplayed as irrelevant by Positivists. Natural law says there is a link is between the “is” of being and the “ought” that follows being such a being. Being a human being implies moral actions, actions that, depending if he does good or does evil, also affect him and his development. Therefore, according to natural law, laws should be made to reinforce good behavior proper to being a man. Positivism does not see a correlation between law and man’s being: how man ought to act according to his nature. Positivism reduces the force of law and the nature of man to the purely functional or expedient and therefore is “incapable of producing any bridge to ethics and law, but once again only yielding functional answers.” Since ethics and religion do not fall within what is verifiable or falsifiable, they no longer belong in the realm of reason, and therefore do not belong in the formulation of law. When Positivism becomes the only basis for law-making, it “reduc[es] all other insights and values of our culture to the level of subculture.” As Pope Benedict responds, this new rationality apart from nature is truly “irrational”, lest we forget that in order for man to be “rational”, it must first come from his nature of being a man. If, then, a law is “irrational”, it cannot be properly enforced nor help man toward his integral development.


The “Ecology of Man” and Law So is there a solution for creating just laws and applying those laws to society? Pope Benedict points out that just as we place importance on ecology, we must not forget that man has “ecology” of his own, “…a nature that he must respect and that he cannot manipulate at will”. “[Man] is intellect and will, but he is also nature, and his will is rightly ordered if he respects his nature, listens to it, and accepts himself for who he is, as one who did not create himself. In this way, and in no other, is true human freedom fulfilled.” Man must acknowledge that his nature is from a Creator God, and therefore, in the formulation of law, must account for his utter dependence upon the One who created Him. When law is based upon this truth, not only is it rational, but also gives rise to equal treatment of all, since man’s dignity and equality are derived directly from being created by God in his image and likeness. Law can contribute to the preservation and development of man because of his dignity, helping man to be aware of his basic responsibilities to society and making him responsible for his actions, especially public actions. “In the awareness of man’s responsibility before God and in the acknowledgement of the inviolable dignity of every single human person, it has established criteria of law: it is these criteria that we are called to defend at this moment in our history.” Ultimately, such criteria for law are not enough. Human action is not reduced to the formulation of law, for such a formulation would be impossible. Each human enterprise, be it by an individual or by a group, is called to live out their work determined to act according to his human nature and reason. Then his work benefits his development and benefits the development of the common good of society. He therefore works to preserve, protect, and promote the true human ecology – for himself and others. Law, formulated by the foundation of man’s nature and reason, directs man in his integral development and the common good of society as a whole.

Summary of the Ethics, Law & Best Practices Course by Maurizio Marchetti

On Thursday, June 17th we concluded the highereducation course Ethics, Law & Best Practices organized by Fidelis International Institute in collaboration with the Pontifical Athenaeum Regina Apostolorum, the Italian Bar Association of Lawyers, and the Italiaetica organization. More than 50 students received their participation diplomas as we closed this first initiative that brought together professionals from the fields of ethics and law to reflect upon the interaction of these two important disciplines and to analyze how this interaction, in turn, touches the world of business.

The initiative, which we plan to continue developing over the next months, was strongly promoted by Fidelis in Italy. Being devoted to the continuous search for ways to apply ethics with a practical approach to the problems of our professional lives, Fidelis was interested in involving top professionals of law together with our experts in ethics to generate fruitful discussions and analyze how these two disciplines can interact and enrich each other. Not surprisingly, the course attracted participants from the most prestigious graduate programs in Italy, who were co-involved right from the start of the course and were actively invited to reflection and creative work. The course was also enriched by the presence of various seminarians, who attended the lessons and contributed with their unique faith-based intellectual approach.

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The participants of this course have been invited to present research papers to be considered for publication in the Fidelis Ethics Review. We shall select the most prominent essays for publication in our next issues. The Evaluation Committee shall also select the best essay presented, and the winner will be invited to the next Summit on Ethics to take place in Vatican City next year. This is a moment where the globalized economy is in deep crisis and when all paradigms of capitalism are being questioned as this crisis touches every one of us around the world. We have considered appropriate to devote this seminar to analyze what the right equilibrium that could help community and economy work in a more orchestrated way could be. In this respect, we have concluded that ethics and law, even when they belong to two different disciplinary environments, they both share the same ultimate goal: the common good of mankind. Ethics makes reference to the behavior of the individual, to the capacity of humans to aspire towards good. This aspiration is achieved in freedom. Ethics is not possible without freedom. Ethics cannot depend on law to make its statements. Ethics in itself, and by itself, looks for the common good and the triumph of truth. This is the role of ethics: to pursue the common good, and it acts in the light of truth. Law, in turn, must intervene to regulate relationships and interactions inside the community. Law must rely on criteria that aim at fairness and equilibrium amongst the members of the community it intends to regulate. Law is intended for regulation of those members in the best interest of society, that is, with the common good always in mind. The five sessions of the Ethics, Law & Best Practices course started on May 17th with the introduction made by Fr. Pedro Barrajón, L.C. , President of the Pontifical Athenaeum Regina Apostolorum. Among the distinguished speakers we counted with the presence of Fr. Michael Ryan, L.C., president of Fidelis, and the lawyers Guido Alpa, President of the Italian Bar Association, and Prof. On. Donato Bruno, president of the Commission of Constitutional Affairs of the Italian Government. We were also honored by


For Ethics it would be too easy to make use of Law to solve the problems that are grounded on the indifference that prevails in our world today. Ethics could simply try to make use of Law to deal with these issues by force and imposition, by penalty and reclusion. Nevertheless, an Ethics that would search to impose itself by obligation, making use of penalty and sanction to achieve its own objectives would not be truly Ethics. Shall Ethics operate in this way, it would be renouncing to its most precious asset: the freewill of the human being that has its basis on conscience.

the presence of Prof. Giampaolo Rossi and Prof. Pietro Grassi, both from the University of Rome, and Prof. Auretta Benedetti from the University of Milan. Adding a more spiritual content to the question of how ethics and law interact, we had two noted speakers discussing these matters: Fr. Gonzalo Miranda L.C. and Fr. Jesús Villagrasa L.C., both of them from the Pontifical Athenaeum Regina Apostolorum. All seminars were moderated by Fidelis Executive Director, Ricardo Sanchez Serrano and were also enriched by the collaboration of Prof. Carlo Simeone, President of Italiaetica. All the speakers, each in a different way, continuously invited students to reflect how the basic definitions and the key lessons of ethics impact society in general, and the business world in particular. Participants were actively asked to discuss how ethics influences the responsibility of the individual vis-à-vis his/her acts. Participants were questioned as to how ethics can be a change factor in society, in business, and in their professional lives as lawyers. The Italian Minister for Justice, Paola Severino, was also one of our noted speakers. She presented her view on how ethics is relevant for the statecontrolled enterprises and for all government institutions. Severino’s speech was particularly interesting in the context of the important reforms that the government is trying to get passed in Italy. (Please find the Minister’s complete speech for more detail in this magazine.) The course Ethics, Law & Best Practices was also enriched by two extra curricular activities. The participants had the possibility to listen to the Choir of the Legionaries who sang beautifully a capella in one of the sessions. Also, as we closed the course, all students were invited to join a guided tour of the Holy Shroud exhibition, which is part of the cultural heritage of the Athenaeum Regina Apostolorum, where the course took place. For more information on this specific course, or to request copies of the essays, please visit our website or contact Fidelis directly.

Ethics requires the existence of freedom in its acting. Freedom which continuously questions everyone’s conscience. What am I supposed to do? What am I allowed to do? What is the fair thing to do in any given situation?

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Why is Ethics different than Law and Law different than Ethics? By Carlo Simeone Carlo Simeone is President of Italiaetica.

Ethics and Law appear to us as a safe duet, an almost perfect duet. What could we expect from the combination of good behavior and a legislative order that aims for a harmonic society? It seems so simple, and yet, it is indeed quite the opposite. First of all we need to see that, although both disciplines pursue the common good of society, they both operate in two very different spheres of action; they both move in different pathways. They do however share the centrality of the human being, since they both need to be cultivated through study and application, relying on the conscience of the human person.

Plenty of daily-life problems could be avoided if people would only ask themselves these questions, and if this questioning became a constant habit. This is more so, given that each of us has, with his/her own actions, infinite possibilities to impact others, infinite possibilities to make a difference in the world with his/her own actions. From the very personal sphere, to the more extended field of working relations, to the even larger arena of the community and of society. With our own actions, and with the behavior with which we approach things determine in the scope of family life a sense of harmony, serenity, functionality or just the opposite. On the workplace, the way we act and the attitude that we assume towards the daily endeavors we face determine how we impact this sphere. On the workplace, the others represent the sounding board of these actions that we undertake. It is on others that our acts might have impacts and consequences. Our acting can result in all sorts of problems as well as in all kind of positive things. We shall never forget that the relationships that we have with others are animated by our actions. In the case of large corporations, the impact of the actions undertaken by its CEO will touch not only all those working in that company, but further beyond, will have implications on the families of all its employees, and on the future of those families.

Summer 2012

Summer 2012


A corporation has also its culture, its own history, and an important knowledge richness that it has accumulated over time.This is why Ethics calls for a continuous awareness and conscience, permanent reflection and self-questioning. From this standpoint, Law alone cannot do much. Shall we pretend that a society can be ruled with Law only, and without Ethics, then we would be making a big mistake. Such a society would be surrendering up front, one of its most valuable assets: human being’s freedom. Such a society would give up on its freewill, its curiosity, its creativity, its own destiny and would be limiting thought and rational thinking from the outset. Although we have many examples in history of good intended movements towards the building of perfect society, time has proven them all to be unsuccessful. Some examples of unsuccessful models of perfect societies can be found in Plato’s “Republic”, in Campanella’s “The Sun City” or even in Moore’s “Utopia”. Not only has history shown these models are unreal moreover it has sadly shown us how horrendous consequences they can have.


This is why Ethics cannot simply base itself on the application of law. Ethics needs to go beyond enforcement. Law can best apply its knowledge not by trying to impose ethical principles or ethical behaviors, but by ruling correctly and orderly what needs to be regulated. Law is about balance, justice and equilibrium. Ethics is about conscience and freedom of action. Ethics regards more the person as the human being that it is. Law is more concerned with ruling how those human beings interact with each other in the frame of a community.

The Relationship between Ethics and Law

To recognize and to obey the law is of course recommended, needed, and required, but it is certainly not enough. The action that Law desires to generate should have its ignition in the most intimate of a free, conscious, highly aware, human being. From a continuous relationship of collaboration between these two disciplines, Ethics and Law can suggest good behaviors, best practices, not only inside the corporations, but in the much wider arena that they act: the society and the communities where these corporations operate.

By Vittoria Guglielmi

This was a higher-education course, but also a course for higher-reflection at the most personal level. We established a climate of continuous dialogue, which took place in a multi-cultural, multi-disciplinary environment. This is how I would define the course “Ethics, Law and Best Practices” organized by Fidelis Institute and the Pontifical Athenaeum Regina Apostolorum during the months of May and June 2012.

Photo by Giulio Riotta

We started out with a very direct question: What is ethics? Participants gave plenty of answers; we selected one: “ethics is a set of lessons that we receive from some model of perfection. A model that we recognize as something superior to human nature, something that transcends human nature.” We went then beyond this definition and asked ourselves: “how does ethics interact with law?”

After several rich discussions, we identified that ethics inspires the norm. Laws, rules, and regulations are enriched by ethics. But more importantly, ethics interacts with law in the sense that it helps law in the interpretation of law, particularly, in front of the vacuum that norms and rules often encounter. On the other end of the spectrum, law requires consensus, social approval. Law needs consensus to be efficient and to make the possibility of justice more reachable, more attainable.

The required step to apply ethics and to connect it with the business world is a short one. A voice of authority confirms this when it says: “every economic decision has a moral consequence” (Caritas in Veritate, HH. Pope Benedict XVI, 2009). There is no confrontation between positive law and ethics, as there might be between ethics and social development in some cases. Different voices of authority, professors, and professionals of the fields of law and ethics have enriched us with their knowledge and their valuable experience on the question of the role of justice connecting truth and gratuity. The previously agreed objective was at all times clear: We learn ethics to become better human beings; we reflect upon ethics to become better citizens and better members of the community, acting in our own professional sphere. Aristotle used to say: “ethics is a good thing for those of us who want to be good people” (Nicomachean Ethics). Our quest for happiness in our lives is an endeavor that shall never be stopped, nor limited. In this difficult time of economic crisis and uncertainty, could we have a better message and a better reflection than one that suggests hope and optimism towards the future?

Summer 2012

Summer 2012



Banking Crisis in Spain – A Commentary from the Stand Point of Ethics by José Ángel Agejas

To get some understanding of the financial crisis that is affecting the banking industry in Spain these days, we should take a step back and get some perspective first. We should distinguish the two main sectors in which the Spanish banking system is divided. On the one side, we find the commercial banking sector, well established, well funded, efficient and with the needed solvency. This sector is mainly represented by two, multi-national, well-known institutions, with presence in many countries, namely: Santander and BBVA. On the other side, we find the traditional saving banks (Cajas de Ahorro) deeply sunk into crisis. The Spanish banking crisis has its origins, essentially, on an even deeper lack of ethics that has affected the sector dramatically. The business model conceived for the Cajas was created more than 3 centuries ago, partly as an initiative of the Catholic Church aimed at supporting the small and mid-size entrepreneur as well as to help the small and mid-size investor who wanted to save some money. With a similar structure to that of the modern micro-finance institutions, the Cajas were financial institutions operated to a large extent by their own legislation. The Cajas used to

Photo by Giulio Riotta

impact has been so dramatic. There are four main reasons for this sad reality. As we shall see, all these four root causes have more to do with a moral crisis and deviations from an ethical behavior, rather than mismanagement.

have no shareholders, nor commitments to anyone, and traditionally, they were strongly linked to the region or county in which they operated. Since they had no shareholders to whom they needed to report or pay dividends, the Cajas’s profits were automatically reinvested in the social and development projects of the community in which they operated. Ultimately, the Cajas’s profits were intended for the wellbeing of the people who inhabited those communities. As it is evident now, the international financial crisis has also affected the Spanish banking industry drastically. The savings and the reserves of big banks have been substantially reduced, mainly to re-capitalize themselves and to create provisions for the ailing real-estate portfolio that overloaded their books when the crisis hit them. To a large extent, Spanish banks have been forced to re-capitalize and to create these provisions in order to face defaults that were the fruit of high levels of indebtedness of the public administration, of both regional and national governments, corporations and families. This phenomenon has affected both, the commercial banks and the Cajas, but is in the latter that the

The first root cause: a lack of concrete owners. To completely understand the scene of the banking map, and to better assess what is happening today, we need to mention that the more than fifty Cajas all over Spain, were lacking a clear ownership structure. Or more precisely, that is to say that they were lacking specific, concrete shareholders during the time of political transition at the end of the Franco age. This absence of clear ownership of the Cajas resulted in an unfortunate power division of their control boards that was eventually divided between politicians and unions pursuing their own agendas. The lack of ethics that prevailed in this power struggle is undeniable. This is probably the first real root-cause reason beneath the problems facing the Spanish banking sector today. A second phenomenon that factors in into this complicated scene was the political division of the different territories in Spain that ended up with the formation of the autonomic regions, or Autonomías. The fact that the Cajas were linked to particular regions or counties in which they operated, and due to their model of automatic re-investment of profits in their respective regions made possible for some controlling politicians to use them as de facto money printing institutions, allowing themselves to finance their own political interests. The original, honorable, community-oriented, financing missions of the Cajas were diverted into mere means to finance politicians and their own agendas. The Cajas turned slowly into commercial banks, competing effectively with those bank-- for clients, resources, and markets. Instead of serving their true shareholders and their missions, the Cajas ended up financing the interests of political parties all over Spain. This was the second point of departure from ethics in the Spanish banking sector, and the second root-cause for the issues we face today. Add to the aforementioned problems the fact that the Cajas were loaded with real-estate loans when the crisis hit in. To some extent, these loans were

serving in fact, as under-the-water financing instruments for, once again, political parties and other hidden interests. Many urban projects were approved with poor or no due-diligence process receiving big loans exacerbating the situation even further. The Cajas were being effectively used to serve the interests of a minority. This minority was in fact benefiting big time, while the original Cajas’s stakeholders now have to pay the price. The last political solution that was implemented in an attempt to solve the situation has actually made things worse: various underperforming Cajas were pooled into newly created “banks”. Various Cajas were merged with confusion and haste, pooling together their balance sheets and their income statements that were neither clear, nor comparable, and were simply melted into one big thing to try to hide the dust under the rug. The naïve argument was that: bigger size would facilitate the needed clean-up. This of course, has proven false in only a few months. The dramatic result has effectively been the destruction of a financial system that used to be aimed at the development of the community, the small local environment, the individuals and families who saved their money with sacrifice, and honest business people who earned their income with enormous efforts. There are still some small and efficient Cajas out there in Spain. Some of them still accomplish their mission of making finance a development tool for business and savers. The brave managers behind these Cajas have not compromised their ideals and have not let individual interests prevail over their missions. Not surprisingly, these small Cajas are today, the most financially sound institutions in the Spanish banking sector, with clean portfolios of healthy loans and loyal clients. “Small is beautiful - economics as if people mattered” was the title of economist E. F. Schumacher’s book of 1973. When economy and finance are truly linked to people they become more human and less financial. The last wrong step to take could be to change the goal of the social savings institutions. The last potential mistake could be to turn into banks social assets that have already been destroyed and undercapitalized.

Summer 2012

Summer 2012



professors and speakers that Fidelis had lined up to staff the course, I immediately decided to participate and make a personal effort to learn everything I could about ethics. I was convinced that I would learn a lot, but more importantly, that what I would learn could be applicable to my daily life. I was eager to find out whether I could listen, understand, and apply theory to my life at work on a practical basis. Most particularly, I was interested in understanding the real meaning of the world “ethics” that we use so frequently these days, and that yet we ignore so much about. At the end of the course I indeed confirmed that we do know little about the real meaning of this ancient concept. What is indeed ethics? Cristiana Zelli

Can Ethics be Taught? By Cristiana Zelli

Let me introduce myself. My name is Cristiana Zelli, I’m 41 years old, and I work in the family business. Together with my husband and his relatives, we’re all active in the construction business in Italy. We have one son, and what you are about to read, definitively regards him as well. Earlier this year I received the invitation to participate at Fidelis Seminar “Ethics, Law & Best Practices” that took place during May and June in Rome, Italy. Having received an honorary scholarship from Fidelis International, and given the fact that I was highly attracted by the subject, I did not hesitate one second to get enrolled in the course. The course was mainly addressed to lawyers, judges, and people from the discipline of law, and I am not. I was informed that the course could contain some theoretical subjects that could be arid or complicated for people outside this walk of life. Having seen the names of the different

After this experience, which I can define educational and comprehensively knowledge building, in fact, the questions that I ask myself have indeed grown bigger and more become more frequent, instead of being diminished! After this course I find myself asking me more questions with regards to ethics. During the second day of these seminars, I could not longer hold my doubts and questioned directly to the speakers: is ethics something that can be truly taught? I now realize that my question, rather than a question in itself, was more of an affirmation. I was deeply questioning myself whether the discipline of ethics is, in the first place, something that we can study and learn! Deep in my mind one single thought was evolving: ethics should by all means be taught! Ethics should be reintroduced in all educational curricula right from the school level making it part of all required courses. I wonder whether someone somewhere is pushing such an initiative? If someone is, he or she should receive all kind of supports and promotion! During the course I had the feeling that I was learning so much and yet it was a relatively short series of seminaries. Imagine all that could be learned, if only ethics be taught more frequently and if it were centered in more specific industries and geographies, touching all walks of life and impacting our lives.

Among the various valuable things I learned during the course is how non-profit institutions like Fidelis study publicly traded companies from the perspective of ethics, ranking them according their ethical criteria. If only we all would know which companies act in an ethical way and which don’t, we would be highly encouraged to promote those enterprises over the other ones. More often than not we buy products and services from one company, we contract it, we hire their services, and we don’t know that they might be acting in an unethical manner! Without knowing how companies comport themselves towards society, we cannot be sure we’re not supporting them, be it via our investments, or via our consumption. One of the practical examples I have learned at the course is that of some commercial banks (very highly known institutions) lend big loans to weapon manufacturers that develop cluster-munition arms. Cluster-munition weapons kill thousands of people worldwide every year in the most dramatic manner. Most of these victims are children, and most of the people they kill are civilians who lose their lives years after the war conflict is over because clustermunitions remain active for years. How can we be supporting such banking institutions? Many of these banks know about their financing of weapon manufacturers and yet continue to lend them money; this is a very lucrative operation! Should we not at least teach them Ethics 101? Would you open a bank account at an assassin’s business? You certainly will not!

nasty surprises await me. As a mother, I dream for my child and for other kids that they can learn the lessons of ethics. I dream of a world, that learns ethics, and evolves to become a more healthy and honest world. The rules of ethics could be, and in fact are, simple. With their application, we can aim at a better, cleaner, more honest world. We live a particularly difficult moment. Most of governments and leaders have not given the right example to the societies their rule. Many of them have shown us dishonesty and we are all in fact factors of this crisis of worldwide dimensions, a lack of ethics being at the cornerstone of the problem. This is why the lessons that ethics offers us are our daily bread. May I suggest an interesting web link that I would like to propose to you as further reading on this matter: I finally would like to thank Fidelis for their invitation and their scholarship, in particular to its Executive Director, Ricardo Sanchez Serrano who motivated me to enroll in the seminars and to participate actively in this higher-education course.

It is not my duty to define you what ethics is. Masters of all times have made their own contributions and I’m not up to the task. But leaving all definitions behind, I do think we need to focus on the applications, on the practical ways in which we can make ethics alive. What we really need is materials that we can turn into concrete, real-life, self-improvement actions. We have textbooks from which we can learn. There are professors that can teach us. The resulting difference of how we acquire this knowledge could be substantial. As a working professional I dream of a world of business that is clean and where no

Summer 2012


Photo by Fidelis International Institute

“Doing good is in your own hands”, helping reinforce a Microfinance Bank mission. By Vicente Arancón Vicente Arancón is Fidelis Mexico’s Country Manager

One of the main areas in which Fidelis International Institute promotes business Ethics in the business world is through academic activities, helping corporations reinforce their core values and ideals. These activities include courses, conferences and symposia. A clear example of these activities is the collaboration that Fidelis and Compartamos Banco, have had for the last three years. During this period of time, Fidelis has given 210 talks to the bank’s sales force, in order to help the bank achieve its ethical training goals. From May to July, 2012, Fidelis imparted 54 talks to more than 13,000 employees covering almost all

of the Mexican territory, from highly interconnected cities like Mexico City, Cancún, Guadalajara and Monterrey to smaller cities that have limited accessibility, like Aguascalientes, Guaymas and Poza Rica. The main topic of this year’s talks was “Doing good is in your own hands”. With a team of 6 speakers specialized in the field of Ethics, Fidelis delivered this message through an hour and a half talks using a simple, easy to understand language and practical exercises to ensure proper comprehension by the audience. Although the main topic of the talks was “As Doing as much Good as possible” other ideas important to our client were reinforced: how acting with integrity leads to have an honest behavior, how the search of good leads to happiness, how being a generous person leaves a memorable trace in other people, how respect for one’s work and others’ work leads to a job well done, thus, having a positive impact in Mexican society. Everything we do on our jobs on a daily basis has an impact in our societies, and doing the right thing, always, is the best way to do as much good as possible.

Fidelis Ethics Review  

In this edition, we feature our participation in the Together for Europe Event and publish several articles from the participants of our Eth...

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