Ethics - the professions and business - who do people trust ?

Extract Table from Governance Institute Ethics Index 2016

The release of research commissioned by the Governance Institute of Australia confirms the distrust which the wider community have with a number of key sectors of society. Overall, according to the survey sample, 84% rate ethics as important to a well functioning society however Australian society was rated as being only 'somewhat ethical' showing that there is an perceived ethical deficit.

The survey had a number of key findings of note -

• The ethical score by broad sector is shown in the extract Table (above) demonstrating a high level of confidence in health and education while at the opposite end of the measurement, a very low confidence in the ethical behaviour of large corporations and the media.
• Within the key business sectors, real estate agents have the lowest ethical score with 1 in every 2 people stating that they are unethical. In contrast farmers and agricultural businesses are perceived as being the most ethical.
• Australians rate the ABC as the most ethical media platform.
• The banking, finance and insurance sector has the lowest ethics score amongst all sectors with a particular focus on executive salaries and bonuses, followed by bribery/corruption and poor treatment of customers.
• The top 5 ethical issues in business were rated as: corruption (69%), company tax avoidance (61%), misleading and deceptive advertising (59%), workplace bullying (50%) and discrimination and executive pay (both at 49%).

How was this sample constructed ? 

• n= 1,001
• Gender: 50% male and 50% female
• Work status: 15% were students, 59% working, 9% home duties, 9% retired, 6% not employed
• Location:  21% from Sydney, 19% from Melbourne, 10% from Brisbane, 8% from Perth, 6% from Adelaide with the rest from around Australia
• Age: mainly 22-35yrs: 22%, 36-45 yrs: 22%, 46-55 yrs: 22%, 56-65 yrs: 18%,
• Education: mainly trade certificate: 28%, Bachelor degree: 23% and Post graduate: 11% 
• Household status: mainly single 35% couple with children: 25%  couple without children: 25%  

This survey dovetails with similar research by the Lowy Institute which rates public perception about the professions - on a consistent annual basis it shows an almost identical set of results. The fact that there is a continuing trend of distrust with the same sectors year-by-year should send a clear message that change is needed. Yet, none appears to occur.

An executive summary of the Governance Institute's research can be found at this link:

Governance Institute of NSW - Ethics Index

Blockchain - coming to a database near you

Blockchain is the latest development in secure database and transaction systems, operating on the principle that the recording and storage of every transaction only occurs through a consensus mechanism across the connected computer network. Blockchain is best described as a distributed database system in contrast to the conventional, centralised systems with which we, the consumers, are generally aware.  In simple terms blockchain operates as follows -

• data, for example a single transaction, is encrypted as it is stored,
• access to that data is also encrypted,
• each block within the system is only generated once multiple parties (best described as nodes) reach a consensus and validate the data, 
• as a distributed database, multiple copies of data exist across multiple computer systems which together create the peer-to-peer network,
• the loss of one node means that Blockchain can survive as the master copy is shared via its distributed design,
• it is impossible to alter historical records meaning the data points are immutable. This is one of the strengths of the system as its means that in order to attack the ledger, simultaneous attacks would need to be launched on all copies.

Blockchain's development has been centred on a consortium called R3 which comprises 45 banks including J.P. Morgan and Goldman Sachs. Other major non-banking corporations now involved include, not surprisingly, Microsoft, American Express, Visa, Mastercard, NASDAQ, NYSE. At the moment blockchain is used for making international financial transfers however the intention is to use it for online transactions. Apps are already being trialled for music distribution, sports betting and a new type of financial auditing. Proposed expansion of the platform will include services such as smart contracts, crowdfunding and auctions.

So what are the weaknesses of this system ? There are quite a few, for example in the legal and regulatory sphere, data privacy (being a foremost one), cyber security (albeit the possibility of breaching the network if not able to corrupt it) and cost-benefits are not fully established. The very fact that large banks like the system, is perhaps reason enough for the wider community to be wary.

Antibiotic resistance - the continuing threat to human health remains potent

Research from The Economist rates the most common biological threats

The 20th Century was a period of considerable advancement in medical science, not the least due to the development of effective treatment regimes of antibiotics to both treat disease and to provide a range of protective measures as a almost routine part of surgical procedures. In the 21st Century, this appears to be progressively unravelling.

Increasingly multi-drug resistant and extensively drug resistant  strains of  bacteria are materialising outside of the hospital systems where they already pose a direct threat to patient health and safety. In the United States, the Centres for Disease Control (CDC) produced a list of 18 of the drug-resistant microbes which threaten human health three years ago (as displayed above). Yet progress with new forms of drugs to counteract this threat is painfully slow.  Commonly referred to as 'superbugs', these new generation bacteria pose a threat for surgical procedures such as hip replacements and increasingly for patients with suppressed immune systems due to cancer chemotherapies or organ transplants. The risk is also tangible for Caesarean sections in childbirth. 

The impact of drug resistant bacteria is measurably high. Cases of sepsis in the United States almost doubled from 2000 to 2008  due to the emergence of MRSA, a variety of  Staphyloccus aureas. It cannot be killed by methicillin, one of the most potent current versions of penicillin. MRSA is a major  problem in Australian hospitals and can be just as lethal. Neisseria gonorrhoeae is another bacteria which has now developed resistance to penicillin, tetracyclines, fluoroquinolones, cephalosporins. The only treatment option necessitates the use of a combination of ceftriaxone, a cephalospoorin and an azaline to have any effect.

So what are the causes of superbugs ? The primary reasons are twofold: overprescription or inappropriate prescription of drugs for patients who have a condition which either does not require this level of intervention or will not respond to it (poor use of the drugs by not following the required regime is a related problem); and misuse of antibiotics by farmers for animal husbandry which eventually leads to the drugs entering watercourses and into the soil.

The solutions are simple involving predominantly changes in practice and behaviour both in the health sector (clinicians and patients) and in primary industries for the animal husbandry methods used by farmers. Old habits remain hard to break but without resolute action at this point and the time taken to find new therapies, the medium to long future is looking much bleaker.

Australia has made considerable progress with managing the use of antibiotics in animals than elsewhere in the world. A report from Adelaide University in June 2016 found that  Australian pets and livestock had low rates of resistance to critically important drugs compared with higher rates around the world. This particularly refers to drugs used to treat serious or complicated infections. The Adelaide University study was based on isolettes obtained from veterinary diagnostic laboratories from across Australia providing a very solid base of evidence.

The link to the article is below:

The Economist - When the drugs don't work

Should directors of boards own shares in their companies ?

Investors and credit lenders have often raised concerns about the level of commitment and decision-making acumen when members of  company boards do not have any personal investment in the companies they are collectively directing. Often referred to as 'skin-in-the-game', there is now a stronger focus on directors own shareholdings in their companies. The Australian Shareholders Association (ASA) believe that non-executive directors and key management personnel should have sufficient 'skin-in-the game' to ensure greater alignment with shareholders' interests. While noting that more companies in recent years have been introducing minimum shareholding  guidelines, there are many who refuse to place a requirement in writing. The Australian Council of Superannuation Investors (ACSI) has a similar perspective to the ASA and believes that any well governed board requires their directors to hold equity in the company.  Yet ACSI's research has found that 11 per cent of the ASX 200 directors own no shares in the the companies they govern and many of these directors have been on their boards for over 10 years.  

Not surprisingly perhaps, the Australian Institute of Company Directors (AICD) while professing to have no set policy position cites all the reasons not to require directors to own shares - including discouraging potential candidates from accepting board positions; causing more caution and a short term focus for directors who do own shares; or potentially compromising a director's independence if they own more 5 per cent or more. These are weak arguments and not surprising given AICD's protective view which often seeks to minimise the level of guidance and compliance on directors from outside parties. It does not however resolve the question and the ASA and ASCI positions sit in stark contrast to AICD.

The Archibald Prize 2016 - Preview

Barry Humphries by Louise Hearman

The clink of champagne flutes, the swish of food trays and the furtive and not-so-furtive chatter of viewers heralded the first private viewing of the 2016 Archibald Prize before it opens to the general public on 16 July. Now in its 95th year (it was first awarded in 1921) and as popular as ever with hopeful artists (and often their subjects too) there is always that level of anticipation to see whom has been selected for the final cut and who were the subjects of their portraits. From well in excess of 2,000 entries, some 51 finalists were chosen to be hung this year with a smattering of regular entrants and some much newer artists appearing for the first time.

There were the usual swag of self protraits by artists Natasha Walsh, Nick Mourtzakis, Tsering Hannaford and one by Yvette Coppersmith where she envisaged herself as actress, Rose Byrne. Various politicians of current note - Woollahra Mayor, Toni Zeltzer (by artist Sinead Davies), Troy Grant, NSW Deputy Premier and Minister for the Arts (by artist Mark Horton) and Federal Liberal Minister for Energy and Resources, Josh Frydenberg (by artist Camillo De Luca). The well-known established and perennial favourites are there such as Imants Tillers, Guan Wei, Nick Stathopoulos, Nicholas Harding who all have entries although none are really so striking as to be controversial. Some of the portraits are almost naive in their structure and texture such as the portrait of art gallery owner, Roslyn Oxley (by artist, Sally Ross) or Dinosaur Designs co-founder, Louise Olsen (by artist, Belynda Henry).

The selected finalists this year are something of a staid collection - vanilla, pedestrian and acceptable but nothing that would frighten the horses. Perhaps when its all said and done, the Archibald has reached gentrification and like the gallery in which it resides, merely sits in the realm of the comfortable, the obvious and the commercially unsurprising. 

1985 Archibald winner, Guy Warren by Danelle Bergstrom

UPATE: Artist Louise Hearman has won the 2016 Archibald Prize for her portrait of Barry Humphries (top of this posting)

2016 Australian Federal Election - The count goes on

The 2016 Federal election is now over and the citizens of Australia can ponder the reasons for the inconclusive result which eventuated from the ballot count. The current Liberal /National Party Coalition Government under the leadership of the Prime Minister, Malcolm Turnbull, was not immediately returned to office and  will have to wait for a further two days to establish how many seats in the House of Representatives it has won.

The Australian Labor Party (ALP) under the leadership of Opposition Leader, Bill Shorten, likewise did not achieve enough seats to immediately claim victory in the election either however their recovery of seats in previous lost heartland electorates has given them considerable hope that they are close. ALP members and campaign support staff had predicted the Liberal/National Government would be returned to office but with a slender 2 to 3 seat majority only. Given the uncertainty of many seats and the need to count a large number of postal votes that may or may not be the case. A national-wide average swing of 3.68% away from the Coalition and to the ALP was recorded with some seats showing margins of over 7%.

The real winners initially are the independents or minor parties (referred to in Parliamentary terms as the 'cross bench'). In the Upper House, the Australian Senate, the number of cross bench members was 18 members prior to the election. Senate voting reforms passed this year were due to reduce this number but the converse has occured as a result of the double dissolution election. On present trends, there are likely to be more cross bench members not less.

The current ballot count shows the Liberal/National Parties [LNP] have 70 seats, the Australian Labor Party [ALP] with 71 seats, the Greens with 1 seat, 4 seats to other Independents and 4 seats still undecided. In order to take Government, 76 seats are needed. The possibility of a minority Government remains strong.

UPDATE - 6 July 2016
Amusing to see how confusing the tally count has been going: the ABC has the LNP on 70, the ALP on 67, Independents on 5 with the remaining seats undecided. The Australian Electoral Commission  has the LNP on 68, the ALP on 68, Independents with 5 with the remaining seats undecided.

Sydney Film Festival 2016 - Film Review - Maggie's Plan

Ethan Hawke and Greta Gerwig - Maggie's Plan

Director and screenwriter, Rebecca Miller has created a somewhat off-beat comedy film with Maggie's Plan.  What is this film about  and what is its focus ? Is it a satire on the New York intellectual elite? Is it a comment on the nature of modern relationships ? Is it an observation on women and the need for children ? Or simply a meandering muddle through all of the above.

The plot for this film follows the romantic misadventure of career adviser Maggie (Greta Gerwig) and her desire to become a mother. As no particular romantic interest has materialised Maggie decides to go it alone through artificial insemination. Maggie is no Bridget Jones and in the course of her travels runs across writer, John (Ethan Hawke) who falls for her. One problem she must face is John's wife, career academic, Georgette (Julianne Moore). Maggie gets the guy but decides that she would like to hand him back to his ex-wife and so the film plods on.

What is it with the roles taken by Ethan Hawke in recent years? They almost all now appear to be introspective and narcissistic. In Maggie's Plan it is no different and his character in this film can be compared to the insufferable Beyond Midnight  in 2013. Greta Gerwig in the principal role as Maggie is little more than a vague almost dithering air-head - perhaps the contrast is intended to be a counterpoint to the intense Julianne Moore (who has been given an impossibly silly foreign accent for her character). This is no portrayal of New York communities, Woody Allen style. The film lacks the black noir of Allen and the sharp dialogue often associated with East Coast films set in New York. Its pleasant enough but little else.