Ethics and management rights a contradiction in terms

A lecturer once taught me that ethics was about the difference between right and right.

She thought the difference between right and wrong was comparatively easy for most people but when both options before you are legally right, acting ethically means choosing the one option that is most right for the person you serve.

In building management, or management rights, as the industry is known in Queensland, this issue raises it head everyday. The onsite manager works for the body corporate as caretakers and, at the same time themselves as letting agents. They have statutory duties to act in the best interests of the owners and to be honest and fair and everyday they have to make choices, large and small between these conflicting interests.

A serious question of ethics arises when the resident manager applies to the body corporate for an extension to the long-term contracts for caretaking and letting. These contracts can run for up to 25 years and are worth millions of dollars to the holders who buy and sell these rights like pork belly futures.

In the wrong hands these long-term contracts can seriously devalue property and disadvantage owners simply trying to get fair value for money from a contractor they are lumbered with for decades – imagine not having the right to sack your pool cleaner for 25 years!

The law allows for an incumbent manager to ask for an extension but the law also says the manager must always act in the best interests of the owners. The law does not specifically say that in applying for an extension to the rights the manager should advise the owners to get independent legal and commercial advice about the request they have made, but does this make it right that no such advice should be given?

In these situations owners are lambs to the slaughter. Most owners are disengaged, many are ignorant of their rights and some are concerned about their future income from letting or service standards if they vote against the incumbent or even just ask for a second opinion on the request that has been made of them.

The ethics of the situation are clear to most fair-minded people and me. Ask for the extension by all means but be big enough to say to those who pay your salary that they should get their own advice about what you are putting to them. In the corporate world one would be shot for not doing so – why is it so different in the body corporate world?


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