20140509 【CVCHEN@NCCU/AAPBS】Ethics Today, Law Tomorrow

Ethics Today
Law Tomorrow
Dr. C.V. Chen
9 May 2014

1
calligraphy by Admiral Liu Ho-chian

The concept of Datong, or Great Communion, comes
from the chapter Conveyance of Rites of the Book of Rites, a
classic text of Confucianism.
Datong describes an ideal state of human existence and
society where
love and cooperation are practiced freely,
peace and prosperity are enjoyed by all, and
prejudice and war have long been abandoned.
This state is called the World of Great Communion.
In the modern context, Datong encompasses political,
economical, technological, and cultural unity.
L&L's vision for the World of Great Communion
It is Dr. C.V. Chen's belief that the "Rule of Law" illuminates
the path to justice and harmony.
2

3
1949
Came to Taiwan.
Father died in battle
1949
Came to Taiwan.
Father died in battle
1967
Graduated
from NTU
1969 LL.M.
University of British Columbia.
1970 1972
Harvard
LL.M. S.J.D.
1971
Taiwan lost
U.N. membership
2009
Cancer
About Me
Married
1944
Birth
1963
National Taiwan
University
1972
Returned to Taiwan
Began teaching &
private practice.
*Law professor
*Private practice
*Straits Exchange
Foundation
*Red Cross
2012
Received Order of
Brilliant Star
with Grand Cordon
2000-2012
Stepped down as
President of R.O.C.
Red Cross
Daughter married
2003
SD/Fox
Incident
1989
Received Order of
Resplendent Banner with
Special Cravat
2004 Mother Passed Away1974 Daughter Born
1982
Son Born (severely mentally
handicapped)

Outline
II
• Staring into an Abyss : A Story
costing US$100 Million
IIII
• Ethics Today, Law Tomorrow
and the Day after Tomorrow?
IIIIII
• Can Ethics(Law) Be Taught?

US$100 Million
13 October 2003
Photo/ Flickr.CC/Ervins Strauhmanis
https://www.flickr.com/photos/ervins_strauhmanis/9544847065/

Facts
San Disk held 127.8 mm shares in its OEM, United
Microelectronics Corporation.
L&L was SD's attorney authorized to file investment
applications with TW Govt.
SD paid US$83 mm for those shares.
US$106 mm was their worth on the market in Sept 2003.
Liu, an assistant, went on unpaid leave on the pretext
of the upcoming bar exam.
In October 2003, Liu forged documents to withdraw all
shares of SD from brokerage agency, sold the shares ,
and fled Taiwan on a fake passport.
He took off with US$92 million.

The Abyss
US$83 million~US$106 million
In 2003
Lee and Li was 38 years old
• Had 14 Partners
• 500 Staff
• 12,000 Clients Worldwide

The DilemmaThe Dilemma
Bargain with
SanDisk?
Dodge the
Responsibility?
Will staff
abandon
ship?
Photo/ flickr.CC/ Nathan Siemers
https://www.flickr.com/photos/nosha/2980362505/

The Settlement: US$86 million
US$20 million
2003 down payment
US$48 million
Over 4 years L/C
~2007
US$18 million
1 m/year
Legal Fees
Pro bono
~2021
Photo/ flickr.CC/ SalFalko

2004~2021 US$1,000,000 /year
To defray
Legal fees
Public interest initiatives
Charity work
Photo/ flickr.CC/ SalFalko

Traumatized L&L
Emerged as an Iridescent Pearl
An explanation of the settlement reached between L&L and SD
SD VP & General Counsel:
"We do not believe that
the acts of a single rogue
employee should alter the
40+year solid reputation of
one of the region‘s premiere
law firms."
Economic Daily News 17 Nov 2003
A satisfactory and productive settlement
One Thanksgiving: SanDisk's Trust
One Lesson: As you sow so shall you reap
One Reflection: No Lee & Li without Trust
Support from Society Sustains Lee & Li
圓滿且具建設性的協議
One Thanksgiving 一個感謝
One Lesson 一個感想
One Reflection 一個反思
社會支持理律永續的動力

L&L and SD Honored CSR
Despite Grave Predicament
Commercial Times 18 Nov 2003

Considerations
behind Decision Making
Photo/ flickr.CC/ Nathan Siemers

Business School Case Studies
Kellogg-HKUST & Ivey-NCCU
How did
L&L handle
SD Crisis?
How did L&L
demonstrate
ethical
leadership？
How can
loyalty and
commitment
be fostered?
The
role of
corporate
culture?
On the
Settlement?
Photo. Flickr CC/ PromoMadrid
https://www.flickr.com/photos/promomadrid

There Was No "I" But "We"
A law firm is a group of people
24 Dec 2004
Photo/Flickr,CC/ Pablo Twose Valls
https://www.flickr.com/photos/twose/887903401/

We
Care
關懷
We
Excel
卓越
We
Serve
服務
L&L CORE STRENGTH--
OUR PEOPLE!

The Way 道道道道
The river is tranquil and yet dynamic.
It parts around a boulder and yet erodes it.
There is action in inaction.
There is force in non-force.
Jeffrey Hsu, L&L

(ABA Journal / December 2000)
Volunteerism
Long-Term Supporter of Red Cross
Legal Education—Both Sides of
Taiwan Strait
*including teaching and L&L Moot Court
project
1999 L&L Educational Foundation
—promotes rule of law education.
Created with endowment from L&L
and continues to be funded by the
L&L partnership
1965~2003 Pro Bono

(ABA Journal / December 2000)
2001 L&L
honored with
Pro Bono Law Firm
Award
2008 Dr. C.V. Chen
honored with
Pro Bono Lawyer
Award
1965~2003 Pro Bono

Excellence in Legal Practice/ KM
Judicial Reform Efforts
Drafted Bills to Boost
Taiwan's Socioeconomic Growth
Named Honest Taxpayer 3 times
(Recognition given out only between 1983~1985)
1965~2003 Excellence & Integrity
( Spring 2005)

Lesson Learned:
Lee & Li Is Founded on Trust
• 2004 Partnership restructured, pro bono
commitment reduced to writing in new
partnership agreement.
No less than 2% profit
earmarked for
public interest & employee benefits
Embedding Public Interest in L&L's DNA

• 2013 L&L Educational Foundation launched
the Lee & Li Classroom
a series of lectures on law that is free to the
public.
Lesson Learned:
Lee & Li Is Founded on Trust
2014 50th Anniversary
Past, Present, & FUTURE

Lee & Li after Baptism of Fire
Ethics/Law—Help Us
Do the Right Things Right
Law serves to keep us from
wrong—Is that enough?
• Start with legislative intent
• Cultivate strong FIRM culture
• Pursue specialization, integrity, and
trust
Ethics pushes us beyond legal minimum

Ethics & Law: What's the Connection?
Harmonization of Laws (Ethics included)
II. Ethics Today, Law Tomorrow
Business, Laws, Ethics
A Reflection on Teaching in Law/Business Schools

Shang
C.1750-C.1040 B.C.
Xia
C.2200-C.1750 B.C. Wang Hai (ancestor of founder of Shang
Dynasty) – 1
st
businessman in China
Ended Xia Dynasty by outperforming in trade
Sping & Autumn Period
Warring States Period
Western Zhou
C, 1100-771B.C.
Many famous businessmen: Tse-Gung, Confucius's
disciple; Fan Li, officer-turned-business tycoon of the
state of Yue; Bai Kuei, a politician and business tycoon
of the Warring States Period
From Qin (221-206 B.C.)
onwards
Inferiority of businessmen in the social
hierarchy of scholars, farmers, craftsmen and
businessmen
Late Qing Dyansty to the early
Republic
Break through of capitalism; rise of
commercialism
Establishment
of P.R.C.
Surpression of
private business
Relocation of
the Republic
Government
to Taiwan
Planned
economy
Free
economy
Policy reforms/
liberalization rising
social status of
businessmen
Rising
Social
Status
of
business
-men
Business in China (including Mainland China & Taiwan)

Socialism
Planned Economy
Business
15-16th
14-16th Renaissance 文藝復興
16-17th Protestant Reformation宗教改革
Rise of the middle class
【【【【新教新教新教新教 Ethics】】】】Protestant Ethics
15-17th Age of Discovery/Maritime exploration
new ocean routes; trade expansion 貿易
16-18th Mercantilism 重商主義
18th Industrial Revolution
Scholars
Farmers
Craftsmen
Merchants
Clergymen 教士
Nobles 貴族
Knights 騎士
Freemen 平民
Peasants/Serfs
農奴
China
(including Mainland China & Taiwan)
The West
15th Zheng He's Expedition
Commerce and Trade Flourished
鄭和下西洋、經濟商業繁榮
Scholars become merchants
【【【【Confucius's Ethics】】】】 Rise of
Merchants
Global
Economy
18th Qing Dynasty
Closed-door policy鎖國
Ban on maritime trade海禁
19th末 Late Qing Dynasty
Rise of commercialism
Capitalism
Market Economy
Merchants
Merchants
Merchants
20-21th
the social hierarchy

How Rule of Law Came to Be
Ethics
alone no
longer
adequate
West
Social issues arose
after industrial
revolution
East
Agricultural
↓↓↓↓
Industrial
Photo.Flickr,CC,John Cooper,
http://www.flickr.com/photos/atomicshed/311082285/

• Bringing order to human relationships.
Ethics in Chinese
• The morals of a culture that often
influence laws.
Ethics in English
Ethics
Person +Books/Order人= =條理
Wheel
Human pic, http://www.fantizi5.com/jiaguwen/view/232.html
Book Photo, from wikipedia.org

• The original form of the Chinese character for
law consist of symbols representing water and a
mythical unicorn capable of identifying people
whose integrity is questionable.
• The even surface of a body of water symbolizes
fairness, impartiality. .
Law in Chinese
• A body of rules of action or conduct prescribed
by controlling authority, having binding legal
force.
Law as defined by Black's Law
Dictionary—6th edition
® ®
Water 水水水水=
=去去去去 get rid of
_Pixelmaniac_,http://www.flickr.com/photos/_pixelmaniac_/4569185046/

According to Yassa, scouts who returned
with bad tidings shall be beheaded.
Business operators often dismiss legal
advice that is not pleasing to the ear.
Photo/ Flickr.CC/ Ludovic Hirlimann
https://www.flickr.com/photos/lhirlimann/6076981200/

Law Cannot and Should Not
Be Dismissed in Business.
Individuals have personalities.
But under the law, corporations have fictitious
personalities and are considered legal persons.

Ethics
Law
Ethics
6 Functions
of
Enterprises
Production
Marketing
Finance & Investment
Human
Resources
R&D
Information
Management
Laws on Environmental
Protection, Waste Disposal,
Pollution, etc.
Laws on Banking, Securities,
Accounting, Insurance,
Offshore Listing, etc.
Laws on Protection and
Confidentiality of
Personal / Corporate Data, etc.
Patent Law, Trademark Law,
Copyright Law, etc.
Labor Law, Employment Act,
etc.
Consumer
Protection Law, Fair Trade
Law, etc.
Thoughts
of the
Management
Establishment and
Governance of Enterprises
Company Act, M&A Act, etc.
Sound Knowledge of
Domestic Law
Fairness
Clients
Employees
Business
partnersNature
Community
Society
Business & Laws—Domestic
Corporate Ethics

World-class business: Legal advice should be sought to
make a proper business judgment; otherwise, a misjudgment
will cause the company to suffer loss or the management to
bear personal liability.
In-house Legal
Counsel
Outside
Legal Counsel
Providing Legal
Consultation Providing Legal Consultation
Providing Legal Consultation
Convergence of
legal advice and
business
judgment
Duty
Set up support
system for regular
information
Set up
international
support system
for special
information
Role
Normal situation
Decision-ma
king
process
Emergency
Crisis
Management
process
Business
Judgment
Business
Manager/CEO/
Board
Role
Decision-Making Must Include Legal
Considerations

Ethics & Law: What's the Connection?
Harmonization of Laws (Ethics included)
II. Ethics Today, Law Tomorrow
Business, Laws, Ethics

Morality
Norm System
Dynamic Wheel
Ethics & Law: What's the connection?
Photo/Flickr.CC/ Carl Jones(Cut Part)
https://www.flickr.com/photos/_belial/4881763904/

Morality
Ethics
Norm System
Dynamic WheelPhoto/Flickr.CC/ Carl Jones(Cut Part)

Morality
Ethics
Law
Norm System
Dynamic WheelPhoto/Flickr.CC/ Carl Jones(Cut Part)

Law and Ethics are
Complementary
and Interdependent
Law Ethics
Law
Ethics

Law's Inherent Inadequacy
Today's Law Is Obsolete Tomorrow
Lester Thurow (MIT)
• New laws are like generals fighting the
previous war.
• New laws cannot prevent fraud because
loopholes in the new laws could be exploited.
Andrew Fastow (Enron)
• Rules versus Principles: How the ambiguity and
complexity of laws and regulations breeds opportunity
for problematic decisions.
• "Not only follow the rules, but also uphold the
principles behind them."
(Photo)Fastow, by Washington Post
Thurow, from http://web.mit.edu

Law's Acquired Inadequacy
Three Branches of Govt. May Fail
Unrestrained
Executive
Idle Legislature
Reactive
Judiciary
• Inherent adequacies
can be remedied. But
human failings lead to
acquired inadequacies. ，
• Those practicing law
should study ethics,
which includes
understanding
legislative intent and
policy with
CONSCIENCE.

Eternal Wisdom
"If the People be led by laws, and uniformity sought to be given them by
punishments, they will try to avoid the punishments, but have no sense of
shame." 導之以政，齊之以刑，民免而無恥
"If they be led by virtue, and uniformity sought to be given them by the rules of
propriety, they will behave with the sense of shame, and moreover will become
good." –Confucius, BC 500. 導之以德，齊之以禮，有恥且格
Photo/ wikimedia.org

Ethics
Law
Ethics
6 Functions
of
Enterprises
Production
Marketing
Finance & Investment
Human
Resources
R&D
Information
Management
Laws on Environmental
Protection, Waste Disposal,
Pollution, etc.
Laws on Banking, Securities,
Accounting, Insurance,
Offshore Listing, etc.
Laws on Protection and
Confidentiality of
Personal / Corporate Data, etc.
Patent Law, Trademark Law,
Copyright Law, etc.
Labor Law, Employment Act,
etc.
Consumer
Protection Law, Fair Trade
Law, etc.
Thoughts
of the
Management
Establishment and
Governance of Enterprises
Company Act, M&A Act, etc.
Sound Knowledge of
Domestic Law
Fairness
Clien
ts
Employe
es
Busine
ss
partne
rs
Nature
Commun
ity
Society
Business & Laws—Domestic

Business & Laws—Transnational
An enterprise should have sound knowledge of the domestic
laws of a country when doing business in that country, and if
applicable, have knowledge of transnational law.
Think globally and act locally
- understanding the regulations related to corporate governance
and the 6 major functions of business management of the
country concerned.

Space Axis: Accelerating Globalization
Ethics Today, Law Tomorrow
Ethics
Law
Ethics
Time Axis: Ethics
Becoming Law
Business & Law

Globalization Spurs
Harmonization of Law
Post-WW II
Institutionalized multilateral cooperation regimes
Multilateral covenants
Universal values in form of Law (ethics included)
Ethics
LAW
Ethics
Law
Ethics
Ethics
LAW

Developed Nations
Rule of Law Taken Root
Developing Nations
Immature Rule of Law
Incompatibility
in Transnational Law Setting
Pic,by(Tony Auth)
http://creartivism.com/cartoons-about-nike-sweatshops/#2

Example 1
Code of Ethics
of Multinational Corporations
‧Market Economy
‧Fairness
‧Anticorruption
‧Worker
‧Consumers
‧Air
‧Water
Competition People Environment
Respect for competition, as a crucial instrument for the
development of the economic system.
PRADA's Code of Ethics: The Value of . . .

Example 2
Labor Is Not a Commodity
U.N. ILO
Covenants
Labor-Related
Legislation
Child Labor
L&L Practice
1998-2014
Slave Labor
Labor Law…

Example 3
Fair Competition Laws
Fairness: Core of corporate ethics
19th century U.S.—Antitrust Act
End of 20th century Taiwan: Fair Trade Act
(2009 Case) Asia LCD Price-Fixing
Prevent
inappropriate
concerted
action to fix
prices
Antitrust
Act
Impact on
other
nations'
legislation

Ethics
1976 Lockheed Corporation
Ethics
1976 Lockheed Corporation
Law
1977 U.S. FCPA
Law
1977 U.S. FCPA
Transnational Impact
1988 OECD Members
Transnational Impact
1988 OECD Members
Global Harmonization
2003U.N. Convention against Corruption
Global Harmonization
2003U.N. Convention against Corruption
Example 4
Foreign Corrupt Practices Act

Example 5
Environmental Protection
Environmental Protection
Carbon
Trading
Kyoto
Protocol
RoHS

Corporate Social Responsibility
Law
‧Obligations
‧Sanctions
Ethics
‧Social Responsibility
‧No Sanctions
(Media/consumers/NGOs)
Non-binding Today,
May Be Binding Tomorrow
Breach of ethics may trigger
penalties in law
Through a free press, the
people see everywhere.

The Day after Tomorrow
Ethics ? Law
An Inconvenient Truth . . .
or
Convenient Fiction?
Photo, Flickr, CC, Patrick Hoesly
https://www.flickr.com/photos/zooboing/5426098861/

Ethics ≒≒≒≒ Law
An Inconvenient Truth . . .
or
Key to Sustainable Development?
E
L
EL
E
L
Photo, Flickr, CC, Patrick Hoesly
https://www.flickr.com/photos/zooboing/5426098861/

2006.Set-Oct
Can Ethics Be Taught?
Baker Foundation Professor
Harvard Business School
III
Students have a strong sense of positive values, but
have not yet had an opportunity to apply those
values in an organization.
Allen S. Grossman, LCA faculty
(Leadership and Corporate Accountability, Harvard Business School)
Thomas R. Piper

12 May 2007
• “Many agreed with one commentator that the only way
to solve the ethical problems of corporate America was to
fire everyone under 35 with an MBA. ”
• Because they were not taught business ethics.
“As business schools start
to teach more ethics and
practical skills, enrolments
are climbing again.”

April 30, 2014
Schools Try Philosophy
to Get B-School Students
Thinking Beyond the Bottom Line

. . . But People Never Learn
• 2001 Enron
• 2002 WorldCom
• 2005 AIG Inflated assets
– American International Group
• 2008
– Siemens AG (800 mm) Foreign Corruption
– Bernie Madoff Ponzi scheme
– Three Deer Toxic baby milk
• 2011 IBM, GlaxoSmithKline . . . Foreign Corruption
• 2014 AVON . . . Foreign Corruption
What next?

SUMMARY
Observation 1
Seeing Ethics and Law
in a Different Light
"Ethics Today, Law Tomorrow""Ethics Today, Law Tomorrow"
the Day after Tomorrow
"Ethics ≒ Law"
the Day after Tomorrow
"Ethics ≒ Law"
Law Requires Ethics at Its
Core to Operate
Law Requires Ethics at Its
Core to Operate

Connect
• Universal values need to be backed by law.
• Harmonizing ethics into law to produce "universal
values in form of law."
Integrate
• Interdisciplinary cooperation (theology, science,
medicine, business management, etc.)
• Businesspeople have greatly elevated their social
stature.
• Lawyers played an instrumental role.
Educate
• Ethics and law, in equal measure, need to be taught
and learned.
• The wheel: Conscience is the hub, ethics are the
spokes, and law is the rim.
Observation 2
Harmonization of
Transnational Laws

World-class business: Legal advice should be sought to
make a proper business judgment; otherwise, a
misjudgment will cause the company to suffer loss or
the management to bear personal liability.
In-house Legal
Counsel
Outside
Legal Counsel
Providing Legal
Consultation
Providing Legal
Consultation
Providing Legal Consultation
Convergence of legal
advice and business
judgment
Duty
Set up support
system for regular
information
Set up
international
support system
for special
information
Role
Normal situation
Decision-making
process
Emergency
Crisis
Management
process
Business
Judgment
Business
Manager/CEO/
Board
Role
Observation 3
An Inconvenient Truth May Be the Key to
Sustainable Development

What Is a World-Class Business?
Chaos & Disasters
Benchmark of Enterprise Value
Separation
Utility
Convergence
New Model of World-Class Business
Enhanced by
Law
Enhanced by Self-discipline
Consumer
Consciousness
Profit
Utility Profit

Ethics ≒ Law
Modern Way to Great Communion?

20140509 【CVCHEN@NCCU/AAPBS】Ethics Today, Law Tomorrow

Recomendados

Recomendados

Más contenido relacionado

Similar a 20140509 【CVCHEN@NCCU/AAPBS】Ethics Today, Law Tomorrow

Similar a 20140509 【CVCHEN@NCCU/AAPBS】Ethics Today, Law Tomorrow (20)

Más de cvchen

Más de cvchen (8)

Último

Último (20)

20140509 【CVCHEN@NCCU/AAPBS】Ethics Today, Law Tomorrow