• Sat
  • Dec 20, 2014
  • Updated: 12:50am
The View
PUBLISHED : Wednesday, 23 July, 2014, 10:05am
UPDATED : Thursday, 24 July, 2014, 12:57am

At MTR Corp, the buck stops anywhere but the top

Those at the top who don't accept responsibility for what happens on their watch are not doing their job properly, and won't do so in future

It's really simple - if you are going to claim credit for things going well on your watch, you obviously need to accept blame for when things are not going so well.

Moreover, if you are going to be paid far more than people lower down the line, it is only reasonable that you will incur greater risks in performing and keeping your job.

Even the man in the T-shirt running a dai pai dong understands this. That person will be especially sensitive to the notion of risk, because he has his own money at stake and knows that if things go belly up, there will be no point blaming someone else.

You can leverage up this awareness to include practically everyone else who runs a business, with the significant exception of the very grand folk charged with overseeing large public corporations.

The most weasel-like thing a boss can do is to blame subordinates

There are no prizes for guessing that this is a preamble to some reflections on the fallout from the MTR Corporation's cost overrun and delay scandal, which seems to be doing its best to prove there is irony in the words "high speed" when combined with "rail link".

The overspending at the MTR is running into big numbers and the delay into years, yet when questions were asked, and they were frequently asked about the high-speed rail project, the public was repeatedly assured that everything was on track.

Now we know the truth, and in the fallout Jay Walder, chief executive of the MTR Corp, is being forced out, and Chew Tai-chong, the corporation's former director of projects, has already fallen on his sword.

Chairman Raymond Chien Kuo-fung sees no reason to follow suit, nor do other members of the board, while Anthony Cheung Bing-leung, the policy secretary responsible for this project, has hinted that, if any real evidence of his negligence comes to light, he might go.

A paper-thin "independent" inquiry into this debacle led by Frederick Ma Si-hang, part of the government's insider clique and no stranger to accusations of incompetence during his time in office, conveniently backed up the non-resigners.

The concept of "the buck stops here" seems not to have had an impact on any of these gentlemen.

Instead, almost unbelievably, they are playing the card of ignorance. Ignoring the obvious question of why they never looked more carefully into the progress of this massive project.

The evidence that there were problems seems to have been ignored, and those responsible are keen to blame subordinates for misleading them.

Anyone with experience of running a company knows that the most weasel-like thing a boss can do is to blame subordinates for things going wrong without acknowledging their own supervisory shortcomings.

In smaller businesses, the consequences of bad decisions can be brutal, resulting in considerable loss of money and loss of livelihood. In well-governed public companies, accountability is a given, and there is far less hesitation in ensuring that the bosses are first in line to accept the consequences.

However, in Hong Kong, when it comes to one of the biggest listed companies, where the public retains a majority of the equity, different standards apply.

It is important to understand that taking ultimate responsibility is not merely a matter of revenge or even of punishment but an essential management tool that defines the culture of cohesive corporate entities.

If those at the top will not accept responsibility for what happens on their watch, they are clearly not doing their job and are unlikely to do it properly in the future. If they are secure in the knowledge of limited repercussions for negligence, the incentive to be alert is lacking.

The MTR Corp is emerging as a textbook case of why hybrid public/private companies don't work. On the one hand, most of them, like the MTR, enjoy monopolistic positions in the market. This is enough to encourage complacency, which is further stimulated by the knowledge of a vast cache of other folk's money standing ready to back mega projects of the kind under discussion.

"Normal" companies rarely enjoy market monopolies and most certainly do not have access to the public purse for funding.

The wonderland inhabited by the people at the top of the MTR Corp explains why they seem unaware of their intensely privileged position in the world of commerce. Thus the concept of genuine accountability must be alien to them.

The tragedy is this company employs many highly competent people who run a first-class mass transit system.

However, grafted on top of the professionals who have done such a great job are a motley collection of politically connected appointees and a government eager to initiate fancy and fancier cross-border projects to please its political masters.

Don't hold your breath for lessons to be learned from this debacle.

Stephen Vines runs companies in the food sector and moonlights as a journalist and broadcaster

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This article is now closed to comments

chaz_hen
HK high ups take responsibility? Man up? Fall on their own sword? Hahahahahahahahaha...
ASIA'S WORLD CITY!!
xiaoblueleaf
The names Raymond Chien & Fred Ma kept creeping up as if they are the only "talents" in HK, jumping between government and quasi-government posts drawing fat cat salaries while not taking real responsibility in any. How many boards or directorships they are holding?
jayb
same in US and MORE....
the bankers responsible for the '08 financial meltdown all kept their jobs AND everyone booking hundred million $$$$ bonus.
this has become "universal" value. rich and poor have different "justice"
clc2
Why the MTR would go to the New York MTA for its leadership still beats the hell out of me. The process ought to have gone in reverse, although the benighted MTR exec who landed in NYC would need the services of an insane asylum within a matter of months.
At least HK has modern, air-conditioned, clean train stations and reasonably modern, clean trains.
On the other hand, there's nothing wrong with the down-at-the-heals, fetid, urine soaked MTA that about US$50 billion, labor reform and several centuries wouldn't fix.
53ba0a60-0e20-4b70-bbcb-4c4d0a320968
"It's really simple - if you are going to claim credit for things going well on your watch, you obviously need to accept blame for when things are not going so well." eh from this fiasco, Stephen, it seems when the going gets tough, Raymond showed up in a televised-confession looking really glum, then pressed the HR button and fire away, zero blame.
But yeah man, you must have enjoyed writing this piece when you can say "The tragedy is this company employs many highly competent people who run a first-class mass transit system."
dunndavid
What is described here is similar to how Chinese SOEs run. Monopoly markets, capital expenditures appropriated from the government, no accountability. But Chinese SOEs have the MTR beat with their higher corruption and bizarre business practices. For example a Chinese SOE can find USD 10 Million for a new production line, but can't spend 10,000 to fix the old production line. All of the alternatives to private business never measure up.
allan94
too big to fail. its like if u owe the bank 5m, the bank owns u. if u owe the bank 500m, the bank is your slave.
r6b
"motley collection of politically connected appointees and a government eager to initiate fancy and fancier cross-border projects to please its political masters"
My question is - what did the masters actually request of HK leaders?
Both Guangzhou and Shenzhen, using common sense and good judgement, have created new suburban rail station complexes to help promote growth away from the overcrowded CBD areas.
So - was it really political masters from up north that conceived a hideously expensive Kowloon West Station, or was it really a case of local political vanity and monumental incompetence.
I suspect our officials did have the opportunity of doing what was best for HK, and improve the overall quality of HK's transport infrastructure in a way that would maximize benefit to a majority of HK residents. Its just that HK's political elite are too filled with ego instead of intelligence.
 
 
 
 
 

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