Editorial: It might pay to do the decent thing

In the week since the collapse of Qantas New Zealand, there has been a profound silence from those who could be expected to speak for a company, notably its chairman and chief executive. In any company collapse there are questions that interested people - creditors, suppliers and employees in particular - would like to ask. They are questions the principals might prefer not to face in a public forum.

But the invisibility of the former Qantas directors has raised a larger question of public responsibility that has put the spokesmen of two business organisations at loggerheads in recent days. The chief executive of the Auckland Chamber of Commerce, Michael Barnett, has gone so far as to suggest that the prominent shareholders of the failed airline ought to go beyond legal liability and pay some of its debts from their own reputed wealth.

The chief executive of the Northern Employers and Manufacturers Association, Alisdair Thompson, objected to the suggestion, pointing out that it undermined the principle of limited liability without which people might not invest money in any enterprise carrying the slightest risk. It hardly needs to be explained what damage that would do to any country's ability to attract investment capital.

Mr Barnett replied in the Business Herald yesterday that he was not challenging the legal principle of limited liability. He was suggesting that there were ethical or social obligations that business leaders ought to acknowledge. He did not define them, but they should not need defining. Ethics in any activity means doing the right thing.

It ought to have occurred to those who lost their money in the Qantas NZ collapse that somebody ought to say something to the public at large. This was an airline, not an obscure business of no particular public impact. It was the reincarnation of the airline that had brought competition to the main domestic routes and had taken great pains to work its way into the affections of New Zealanders.

When suddenly everything is no longer ka pai, common decency would have demanded that somebody come forward publicly, explain the problems, offer sympathy to those depending on the business and field any criticism with grace. Chances are, the reception would have been favourable. The public has known that Ansett NZ, as it was, made no profit for most of its years here. It was clearly a marginal proposition even before a crippling pilots' strike when it lowered its costs in preparation for sale.

Those who put up money to keep it in the air last year deserved the country's gratitude then, and do not deserve any opprobrium now. Indeed, their foresight in securing a big brand franchise may yet ensure even greater domestic competition. If they or their representatives allowed the airline to continue operating when it was insolvent, the law would have to determine whether they did so in genuine hope of recovery. In the court of public opinion nobody should hold it against them for trying to keep the business and its jobs alive for as long as possible.

But public opinion in this country is not always fair to successful businesspeople. That goes a long way towards explaining their reluctance to do the decent thing on occasions such as this week's collapse. When you have lost a considerable sum, as those shareholders have, why go out front to add insult to your injury?

It is a sad state of affairs, which can probably be repaired only by business leaders fronting up, fielding the flak as best they can and hoping that their willingness to do so eventually generates a more mature view of wealth and investment. Attitudes could change if they do the decent thing.