It must be the season for apologies. Travelling in Peru during the summer, I found several tour guides narrating in a matter-of-fact manner the considerable harm done to the indigenous people and the environment during the time of the Spanish colonisation. And Pope Francis, an Argentinian, on a tour of South America at the same time took the radical step of apologising for the crimes and sins of the Catholic Church against the indigenous people.

Businesses do not easily make apologies. An apology means admitting a mistake and that can bring a lawsuit seeking compensation. Moreover, there are enough people involved in the decision making process in an organisation that it is easy to hide and individuals can easily shirk responsibility. Karl Hayes, the Citigroup banker in London who was accused of helping to rig the Libor interest rate admitted to prosecutors during the investigation that he had acted dishonestly.

Yet, he denied it in the recently concluded trial when he took the stand in his defense. He said what he did was accepted practice. No apologies here. The court awarded him a 14 year sentence.

The ignition problem

Newspapers proclaimed mid-September that General Motors’ CEO, Mary Barra, apologised to the company employees for GM’s ‘slow response to the faulty ignition switch’ problem. I watched the video and along the way she does say ‘we have apologised.’ Does that count for an apology? Let’s just accept it, although it falls far short of some of the other apologies we have heard recently.

Barra admitted GM had failed to recall vehicles for over a decade, of concealing information and making misleading statements. The ignition problem has been linked to over 100 deaths and scores of injuries. About 15 executives are said to have been fired as a result of internal investigations. Companies in the US often sign settlements and avoid guilty pleas.

They do it differently in Japan. In July this year, three top Toshiba officials, the CEO, Chairman and Executive Director bowed low in a press conference and took responsibility for a $1.2 billion accounting scandal that led to restating results for over five years. The CEO and others also resigned. A few centuries ago, they may have thrust a sword into their stomach in a ritual harakiri!

Lawsuits or not, it does help to say you’re sorry. It draws a line in the sand and shows your commitment to do things differently from now onwards. If you can keep the lawyers at bay, it can also be cathartic for the company to sound human and admit faults.

Just say it

You would think it would come easier when your apology does not carry a monetary tag. Mitsubishi Materials, a Japanese company, recently apologised to US prisoners of war for having forced them to work in mines owned by Mitsubishi during World War II. Yet, it took them about 70 years to make the apology, but they made it, and the few remaining survivors among the POWs were pleased. There are other Japanese and German companies who are charged with exploitation and conniving with the crooked during the war and we have to see if they become emboldened now.

Newspaper reports about GM’s settlement notes that the company ‘admitted to criminal wrong doing,’ and agreed to pay a fine but in the same breath the papers also note the company ‘avoided a guilty plea.’ So, you admit wrong doing, but you are not guilty. Legalese aside, the apology is still welcome.

The writer is a professor of Jindal Global Business School, Delhi NCR, and of Suffolk University, Boston

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