Managers, Ethics and Business Conference

June 17, 2015

A conference organized by Car Server on the occasion of fifteen years since the company's founding was held on November 23, 2009.

Conference intended to be an opportunity to discuss ethical foundations necessary for new development.

Central to this reflection was the need for greater care for people and respect for morality.

We reproduce below Mr. Marco Bedogni's speech on ethics and business:

THE VALUE OF COVENANT COMPLIANCE

The first article of our Constitution reads, "Italy is a democratic republic founded on labor."

This crisis confronts the entrepreneur with the great responsibility of saving enterprise and employment as the essence of a country's social structure.

Today the imperative for our companies therefore is to resist, with tenacity and creativity, trying to create new spaces for themselves in today's and tomorrow's markets.

In the year just ended, the structural problems of our country's system were compounded by the most severe economic situation since the postwar period, which essentially sanctioned the collapse of a system where finance took over the real economy and even before that, politics.

To speak of a crisis now behind us, in my opinion fuels illusions, and if, as noted by many, we fail to improve the system of rules, we will cyclically face the same problems again. Two years ago, according to a survey of a representative sample of 1,000 manufacturing companies with an average of 40 employees, our province held the record as the Italian city with the highest per capita export rate.

These companies now have experienced an average drop in turnover of around 40 percent. Structurally, unfortunately, a slight turnaround in the domestic market will not be enough; instead, in order to resume growth, as everyone hopes, it will be necessary to succeed in scaling distant markets that are often difficult for our small and medium-sized enterprises to penetrate.

In 2009, even in my 40-employee company, although healthy and referenced and which has always honored all commitments to the state, employees and suppliers since its founding, we had to resort to layoffs.

It was a choice that, emotionally, was very hard to deal with on the part of the ownership, because for the first time there was a measure of our near-powerlessness in relation to dynamics that overpowered us.

Reflecting on managers and corporate social responsibility, I want to point out that in SMEs there is a very strong presence of entrepreneurs at the forefront and proportionately less presence of managers who, by definition, are oriented toward maximizing profit in the interest of shareholders.

I believe that social responsibility and an ethical sense of work are inherent in the dna of SMEs, and they are expressed through an often informal and open climate toward employees, relationships that are not only economic between customers and suppliers, a concern for the territory and the environment in which we live personally and where our children grow up, and with an idea of sustainable development that does not compromise the future of the next generations.

Over the past decade, there has been an increasing focus on human resources and training as a strategic development factor, such as an interest in safety as a value for people and the entire organization.

We have also given utmost consideration to the issues of the environment and energy understood as resources to be safeguarded, aware of how the progression of consumption in recent decades is leading the planet toward self-destruction. A drift to which, in our own small way, every day we try to oppose a reversal, thanks to the new technologies brought into play by the green economy.

What role does the state play in determining the context?

All spotlights are on companies and their ability to deal ethically and socially responsible with the crisis, taking into account that the fallout from redundancies weighs heavily on individuals and families.

It is not for me to analyze the historical reasons that led to the multiplication of a number of serious constraints, but I want to point out how we have arrived at an increasingly dramatic disconnect between politics and the real country. First of all, there are 10 times more laws in our country than are necessary, and complying with them by many is not considered a rule, but often the virtuosity of a minority. Then we witness the inefficiency and squandering of public money that is coupled with an inequitable , outdated and cumbersome tax system, which is why the state's accounts have not been adding up for decades. Other aggravating factors are the underground economy, a slow and ineffective justice system and a system that is strong with the weak and weak with the strong. Our prisons are full, but in the face of the most serious financial scandals the perpetrators often go unpunished and do not even do a day in prison.

Shouldn't the state set a good example and have ethical behavior first?

A huge issue is that of payments: state administrations and parastatal companies pay their suppliers with unacceptable times for SMEs. Large principals normally do the same, ignoring Law 192/98, which regulates Subcontracting payment times, which must not exceed 60 days. These data added to the mechanisms of the credit system, inspired by Basel2 logic, risk triggering a vicious and disruptive cycle.

It is necessary that the rules be followed and the banks return to their role of supporting businesses as soon as possible. Another inequity is posed in the VAT collection mechanism, which does not take into account the fact that companies collect in deferred time.

With respect to the injustice of the tax system, operations such as the tax shield, in the terms in which it has been implemented, leap to mind, which, while allowing a small recovery of money with respect to what has essentially been taken from the tax authorities, make all those who have worked and paid taxes honestly cry out for revenge. Finally, I want to address the issue of justice. To a general context where the slowness and costs of justice are already a big problem for companies, especially those that are less structured, have been added measures such as the decriminalization of false accounting that, rather than a rule of law, refer more to an idea of a jungle where only the law of the strongest holds sway. In conclusion, I believe that the challenge of doing business in our country today goes far beyond the problems of the economic situation, heavy as it is. Unfortunately, the basic framework conditions that drive the entrepreneur to embark on a new challenge are being undermined.

I believe that structural issues that have been unresolved for decades need to be tackled vigorously and rigorously and measures implemented that will give breath in the very short term to the economy.

If this does not happen, how will a small, socially responsible and caring company survive in the current environment?

Bear Plast S.r.l

Via Monari, 2 42122 Reggio EmiliaREA RE6563Cap. Soc. 258,000 i.v.Vat No. 00292380359CCIAA 126321

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