Welcome to the Official page of the Presidency of the Portuguese Republic

Your Eminence Cardinal of Lisbon,
President of the European Commission,
Chancellor of the Portuguese Catholic University,
President and Vice-President of ACEGE,
Entrepreneurs,

The ethical and social responsibility of corporations, entrepreneurs and managers is an issue which has been acquiring growing relevance, and should be recognized and dealt with as one of the main components of any development process.

It is thus correct to applaud the opportunity of this 4th National Conference of the Christian Association of Entrepreneurs and Managers, as well as the work that ACEGE has been developing. The promotion and adoption of high ethical standards in company management are vitally important for the economic and social progress of our country.

It is now certain that the infringement of ethical standards and the type of risks taken that adversely impacted the financial system and the well being of the people were not duly considered, and have weighed heavily in the origin of the financial and economical crisis which the world is facing.

Apart from lack of wisdom and even incompetence shown in the assessment and taking of risks, many were the financial managers who, very simply, lost their sense of decency, as was recently stated by the President of the German Republic.

Underwriting disproportionate risks and the lack of transparency of the financial system were encouraged by insufficient regulation, by deficient supervision and by a short term view of economic and entrepreneurial success and individual achievement.

An exuberant environment was thus created objectively unattached to reality and incapable of anticipating the social costs of an eventual collapse of the system.

Behind the statistics and graphs that identify the crisis are employees who lost their jobs and investors who lost their life savings and whose projects and ambitions were quickly destroyed.

When the benefits are exclusive to a few but the consideration is a probable socialization of losses, very strict conditions must be imposed in risk taking and particularly rigorous supervision must be applied to the management of such risks – by the regulators of course, but also by the financial institutions themselves.

I believe there was a lack of political and economic will to question the path that was being followed and which had long entertained many doubts.

It is thus legitimate to state that the absence of values in the markets, in politics and in the financial institutions will have been one of the main causes which could explain this crisis.

This diagnosis immediately implies that the allocation of the costs of the current economic situation should place the ethical dimension at the forefront. Only thus will we be able to consider the past as responsible and safeguard the future.

This is, anyway, a permanent demand in the actions of the political decision makers. But it gains yet greater relevance in the current state of the economy: the values of justice, fairness, social responsibility and cohesion must always be present in the financial or economic solutions which may come to be chosen.

It would be a grievous mistake and really intolerable that, in the anxiety to acquire more favourable economic statistics and to hide the truth, strategies should be chosen to combat the crisis that would enhance the perpetuation of the already existing social imbalances or that would mortgage the possibilities of future development and the rights of the younger generations.

This is an effective risk. Many of the operators that benefited from the status quo – and who performed an active role in this financial crisis – continue being capable of conditioning public policies, either due to economic size or to their proximity to the political powers.

But there is more: in a scenario of difficulties, and under the pressure of the urgent need to take action, decisions are at times not duly weighted, and will end by laying to waste public resources or by concentrating such resources in the hands of a few, precisely those who already have greater influence with the decision makers.

It is vital, for the balance of social relations and for the future of the market economy system, to prevent this coming about.

It would be a mistake, however, to believe that the duty of safeguarding the principles of justice, fairness and cohesion only falls on the political decision makers. It is in the corporations and in the dialogue between them and within them that this responsibility starts.

In the last few years many developed countries have shown a growing weakness in their social tissue, as a result of an enormous complacency in the face of inequalities of income and rights and of the disproportionate earnings of highly placed corporate executives. This is an untenable picture that must be urgently changed. It would be politically and socially dangerous and ethically inappropriate that the crisis should be used to emphasize that weakness, with the costs of the current economic situation rebounding on the unprotected.

On the contrary, this moment must be taken as a turning point. The perception and the judgement of the people regarding those that have the command of politics, the economy and of finance have changed. Without a clear leadership in the projection and defence of a system of values it will be very difficult to recover the confidence required to conquer the crisis.

Courage is required to start anew in various fields.

It is urgent that the decision makers readjust their priorities and correct the injustices and the errors unmasked by the crisis. And they must do so with humility.

It is urgent to place on top of the agenda, on the same basis as freedom, responsibility, solidarity and social cohesion, and understand the importance that truth, transparency and ethical principles have in the good performance of an economy and in the development of a society.

Values such as humanism, justice, generosity and public spirit were the bases of the pioneering economic thinking of Adam Smith. At this time it is vital that entrepreneurs and managers, the prime beneficiaries of this thought, do not forget its lesson.

Entrepreneurs
Ladies and Gentlemen

We are all aware that the Portuguese economy is facing very serious economic and structural challenges.

In the short term it is essential to stabilize and restore confidence in the financial sector, preferably in the context of a greater cooperation in the area of the European Union and in the Euro zone. But it is equally essential that this process is accompanied by the defence of employment and by a quick and effective answer to social issues.

It is not a question of governing for numbers, or for statistics. At issue are definite social problems which generate despairing situations and grievously affect the unprotected. Problems whose solutions are a political responsibility but, more than that, an essential condition for the stability of our democracy.

Together with the worsening of unemployment and excessive indebtedness, there is an increase in situations of lack of food, of families who can no longer support the cost of educating their children, of institutions of solidarity which are lacking resources to answer the new cases of social emergency which knock at their door.

Only those who ignore what is happening in the country, who are not in contact with the consequences of the crisis, do not perceive the spreading of the new risks of poverty and do not understand the dimension of the social cost to the Country of the policies that favour the weakening of family bonds.

This is a time when greater activism is asked from the State.

This is not, however, the time for populist intervention or nonsensical volunteerism. The resources of the Country are scarce and there is still much to be done. It is necessary that maximum transparency is given to the use of public funds. Primarily as a question of respect for the taxpayers.

We cannot waste resources in answers that only leave everything as it was or even narrow the path of our future development.

On the contrary, it is crucial that public intervention be weighted and strict, with a clear view to resolve definite issues and the preparation for future challenges.

This is also a time when what is demanded from Portuguese corporations is economic strictness, strategic vision and equally, social clairvoyance.

It is important that corporate responsibility does not end in the specific business area and includes the promotion of justice, fairness and human enhancement.

The potential of dialogue between managers and employees must be used in order to promote common reactions to the crisis and to take maximum advantage from the available human resources.

This message is particularly apt for exporting companies. The advantages gained by these companies in export markets which are now lost may not be easily recoverable. For this reason I believe that the responsibilities of these companies is still greater due to the effort which must be taken to cohesively face current challenges, starting now to prepare for the post recession period.

It would also be unacceptable that answers to the crisis could lead to a worsening of the structural problems which Portugal is facing: excessive foreign indebtedness, deficit in public accounts, low productivity, weakness in terms of external competition and a continuing deviation to the European average.

The route must include the provision of aid to those that most suffer with the crisis, but equally the preparation of the Portugal we want for the future.

We must act on the factors which are critical for our future growth and prepare the Country so that it places itself in the top echelon in the recovery of world economy. This demands correct public policies, but equally a responsible and competent attitude from the corporations.

Recessions, however deep and painful, are not a threat to the survival of the economy. It is nevertheless fundamental to know how to exercise rigorous management principles during the recessive periods, carefully preparing the opportunities which will appear when the economic perspectives commence improving.

The worst that could happen would be that the crisis should enhance the trend, so harmful for the Country, of some corporations seeking the protection or benefits from the State to carry out their business.

Entrepreneurs and managers subservient to the political powers are not generally entrepreneurs and managers with competitive nerve and innovating spirit. They prefer to accommodate themselves in areas of business protected from competition with guaranteed results.

It is crucial that entrepreneurs and managers understand that their autonomy relative to the political powers is, in the medium term, decisive for their success and guarantees that their corporations are innovative on a global scale and not just taking advantages of the opportunities provided by the Portuguese market.

I am confident of the capabilities of the great majority of national entrepreneurs and managers. I have full confidence in the Portuguese.
But we must not deceive ourselves: the coming months will be difficult and 2010 will not be easy.

I do not ignore that Portugal may have to face a period of economic abatement or stagnation and a lengthier period of increase in unemployment than many envisaged when the crisis began. This is a possibility for which we must be prepared and that demands an alertness from entrepreneurs, managers and public operators much greater than just corporate or personal achievement.

This is above all, an ethical challenge which is now much more demanding.

Corporate social responsibility cannot be an empty concept or a convenient strategy. It is in the interiorizing and in the application of this thought, together with the strengthening of values in public life, that lays the answer to the current challenges and the building of the future of Portugal.