Q&A with: Businessman and Author Christos Papoutsy

By Jack Kenny
Friday, June 20, 2008

Now rather actively semi-retired, Rye resident Christos Papoutsy was the founder of Hollis Engineering in Nashua and later purchased the electronics division of Cooper Industries. He has written and lectured on the subject of business ethics and is author of a new book, “Ethics, CSR and Sustainability,” in which he examines current issues in business ethics and corporate social responsibility as they relate to classical Greek philosophy, particularly Aristotle’s concept of “eudaimonia.” He and his wife Mary have endowed The Papoutsy Distinguished Chair in Ethics at Southern New Hampshire University.

Q. When did you become interested in an intellectual way with the concept of corporate social responsibility?

A. Well, of course, the onslaught of Enron, WorldCom and Arthur Andersen, the Sarbanes-Oxley Act — these have been very hot subjects.

(Photo by Jodie Andruskevich)
Christos Papoutsy, a semi-retired businessman,
author and lecturer on business ethics, says
businesses should follow the teachings of
Aristotle: ‘What’s best for the whole community
is what’s best for every citizen.’

The corporations I ran were always institutionalized. I always gave up control to a board of directors that truly ran the corporation. And during those 25 years of running those companies, there were thousands of employees and thousands of customers worldwide and we never had a lawsuit. Nobody ever sued us, we never sued anybody. There were disputes, and we solved them. It always dawned on me, how did this happen that we never had any problem of that nature? And it was the best of excellence in management — not only by myself, but a lot of good people. A solid board of directors, not a rubber stamp.

Q. What is a corporation’s social responsibility?

A. CSR — corporate social responsibility — is where the corporation shares its wealth and profit and talent with the entire community. You can do that in many ways, by donating money or by lending employees to participate in volunteer work.

Way back, 30, 40 years ago, we had programs. We were assisting families that were having mental and medical problems, alcoholism — I think we were ahead of our time.

Q. Do you find that companies today are trying to be lean and cost-effective and are cutting back on some of these things?

A. I think what has happened today versus 30 years ago or 20 years ago gets to the question of the root of greed. I believe the biggest bait for greed is the stock exchange. Today there are several thousand companies on the New York Stock Exchange with a market value of about $6 trillion and a book value of about half a trillion dollars. Ten, 15, 20 years ago, a whole new cadre of managers came into the field and they were armed with MBAs. And they were highly trained, highly scientific managers, and they were now the folks running these corporations — non-owner managers.

The invisible hand that Adam Smith talked about was supposed to keep everybody very ethical and tied to the community, because the invisible hand is the local community that’s watching. The invisible hand is no longer there. It’s now a global economical world, and it’s being run by highly trained, highly efficient MBA graduates.

Q. What about the free trade versus fair trade debate and the outsourcing of jobs to low-wage countries?

A. Overall, I believe that globalization is good. But I think it’s being improperly implemented, and I think a lot of harm is being done worldwide by this globalization era.

We had a forum recently at Southern New Hampshire University where we talked about Google being in China now and all the restrictions. The folks in China are plugged into Google, but there are a lot of things they can’t log on to. The net result is more good is being done because you have more information flowing from Google to the Chinese population. But again, Google is there for one reason and one reason only, and that is to make a profit and they want the price of their stock to keep going up quarter after quarter after quarter.

Q. How does the idea of a sustainable planet fit into all of this?

A. Everybody keeps talking about global warming. I do believe in global warming. I believe there will be changes and improvements made. But I also talk in this book about how well we are sustaining ourselves so far.

I researched and found that life span has increased dramatically, that the number of AIDS cases in the world are declining, that there’s more solar energy being used, there’s more wind energy being used, there are fewer folks smoking and the rate of increased cancer is going down. So there are a lot of good things happening that will help us sustain ourselves.

Q. How does the concept of “eudaimonia” tie in with business ethics?

A. “Eudaimonia” was what Aristotle was advocating at that time — that what’s best for the whole community is what’s best for every citizen and for the corporation even of that time. It’s been around for thousands of years and still stands strong and tall.

I’m not a philosopher or an historian or an academic. I only know what worked for me, and in this book I have written, I don’t just talk about Aristotle and Plato. I talk about good, solid procedures with oversight and transparency. They’re all procedures and policies that we had installed in our corporations.

This is a great way to stop corruption, to have not just one quote but 50 quotes, to get the best price and the best quality without any bribes being involved.

Our employees could see that when we were making this equipment, we had quality control set up. And if someone said, “Let’s forget about these last three quality checks, and let’s just ship them out the door,” we never did that. Because if we did that, the equipment probably wouldn’t have worked right. And more importantly, our employees would see that we were short-cutting quality on equipment going to customers, so they would lose respect. There’s a great connection between respect for management, for themselves and ethical behavior and sustainability and the entire subject of ethics and CSR.

Q. Are you still going out and giving lectures?

A. I do. One of the lectures I give is, “What if Aristotle ran your company?” I have a one-hour Power Point presentation on this book, which covers all the key points. I went to Oxford and gave a lecture there. I’ve lectured at the Whittemore School of Business, I’ve lectured in Athens, Greece, at Holy Cross.

Again, I am not an academic as such. I’m a semi-retired businessman that’s got some good experience. And I really pride myself that over all those years, I’ve never been sued and I never sued anybody. All the customers were happy and there was a lot of hard work by a lot of good people to make sure that happened.

(Posting date 2 July 2008)

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