The Right Thing Or The Loving Thing

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What is the right thing to do in any situation is easier to decide if you have an absolute rulebook which spells out everything clearly.

For example, if you are God-fearing and abide by the Bible, the ten commandments would be examples of some do’s and don’ts.

However, knowing the rules does not mean automatically following them, but it is a start. You may still experience great difficulty to follow the rules and it is certainly not easy to resist temptation.

But you can abide by the rulebook but do it grudgingly and unwillingly, or even have wrong or ulterior motives for fulfilling the rules.

If you are not God-fearing, you may still fear being caught by the law and having to face the consequences. In this case, you are more concerned about not being caught rather than the rightness of the action.

Some will point to a higher law than just the rulebook and the laws of the state. This is the royal law of love, that whatever we do must be loving, not just right. The question we ask then is not “what is the right thing to do”, but “what is the loving thing to do?”

Is the royal law of love applicable to business or just social behaviour? If we practice love, can we succeed in business or will we be trampled upon and taken advantage of?

Business is said to be based on contracts and governed by the law of contract. Contractual rights and obligations which are mutually agreed may be said to be fair, although there are some manifestly unfair contracts. I have always thought the agency contract is somewhat unfair because the Principal has the right to terminate the contract without giving any reason, and usually the agent stands to lose monetarily.

Employment contracts also give both the employers and employees the right to terminate by giving the required period of notice, and employers have been known to exercise it. Employment contracts now even state the period of employment. When there is “wrongful termination”, the aggrieved party can seek remedies but this has to be proved, and employers can protect themselves by taking certain protective action and in the final result, get insurance cover.

Insurance companies which refuse to insure those who are medically unfit have been accused of cherry picking. Guaranteed renewability is also something which not all policies offer, and its absence means that the insurer can refuse to renew medical insurance policies for people who have made claims.

Some insurers do not refuse renewal, but offer exorbitant premiums which is a nice way of telling the insured to go elsewhere.

Applying “love” in the business world means that “one-sided” contracts would have to be changed. Terms must at least be fair to both parties.

A travel agent friend says some big companies take 90 days to pay their bills, even though the margin is so small and the interest incurred in financing these big bullies can wipe out whatever small profit there is. You may ask “why then continue doing business with them?” The answer is that it still helps to keep the company going and surviving on other smaller customers.

But the question is why should the big corporations take advantage of their strength and drive down prices until they are being subsidised by the smaller firms?

Some contracts contain terms which look pretty good, but will they be fulfilled? For example, I hear from certain advisers that although their previous FA firms have “vesting rights” in their contract, they are not assured that these fees and commissions for the investment and insurance contracts which they have sold during their stay with the firm, would be paid to them. The catch is that these amounts may not exceed $10,000 and it would be relatively costly to press for legal payment. The story goes that if the Representatives make a fuss, they would be paid a portion of what is due them.

These are just some examples of business practices which are based on power play, delay tactics, deception, etc.

The old adage is that honesty is the best policy. A twist to it is that honesty is not the best policy – it is the only policy.

Honesty, integrity, righteousness, fairness, equality – these are virtues that are still highly valued but are hard to find.

A very rich and powerful man instructed his assistant to lie to a man who called and wanted to speak to him, that he was not there. The assistant refused and told him politely to tell the man himself. He said that if he can lie for his boss, he would soon lie to his boss. It was no surprise that his wise boss promptly promoted him because honesty is essential to building trust.

I remember an interview I gave to a friend who wanted to join the insurance industry. I gave him honest and direct answers to all his questions, making sure not to exaggerate or make statements or promises which were not true. Since my firm was only a year old then, it was small and not too flattering. He went for an interview with a manager of another firm (a tied agency), and was told all kinds of things and promises. A year later, I asked him whether all the things he was told were true, and his answer was, “No”, but he was doing well enough and the loss of renewal commissions was painful if he were to leave. It seems fishermen are not the only ones using bait to hook their prey.

You see, his agency contract spelt out that if an agent were to leave, he would forfeit his right to all the remaining commissions. This agency termination terms have remained unchanged till today.

Being one of the pioneer life insurance broker in the 80’s, we implemented vesting rights in the 90’s, but subject to the Representatives serving a certain number of years and they apply only if the Representatives do not leave to join a competitor. This was an improvement but still restricted the Representatives’ rights.

Today, we have found that the loving thing is to grant vesting rights immediately and without any condition.

The proof that this sits well with Representatives is that it has strengthened the relationship between Representatives and the firm. They now look at each other as equals, as associates rather than master-servant or principal-agent.

Companies fulfill the royal law of love when they treat their employees and associates with respect and integrity. “Clients’ interest first” applies to them as well. The most beautiful thing is that if clients, staff and associates exercise this royal law also in response.

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