The following is an excerpt from the remarks by Lopez Group chairman emeritus Oscar M. Lopez (OML) on the lesson Professional Ethics for Strategic Leaders as part of the Art of Command module of the Armed Forces of the Philippines in Camp Aguinaldo, Quezon City. Cedie Lopez Vargas, the voice of the Lopez Values, emailed his speech on February 16, 2012. OML’s audience included 157 student-officers: 64 came from the Philippine Army, 23 from the Philippine Air Force, 32 from the Philippine Navy, 15 from the Technical Administration Service, 16 from the AFP Reserve and seven from the allied countries of Indonesia, Malaysia and South Korea.

In June 12, 1928, the Lopez corporate family first came into being when my father Eugenio Sr., and his brother, Fernando, established E & F Lopez Inc. as a dual proprietorship. For the next 47 years, whatever one brother earned or owned was always split equally with the other. Unusually for family businesses and corporations, the two brothers never argued about money, and remained united until my father passed away in 1975.

The one thing that I would emphasize about him during this period of building his businesses was that my father was intensely nationalistic in believing that Filipinos could own and manage businesses just as competently and as successfully as their American counterparts. He believed that Filipino entrepreneurs should come first in their own country. It was this fire burning inside of him that made him dare to take on the acquisition and management of Manila Electric Company, then the country’s largest business establishment, in 1961.

I will now cite a number of what I consider to be the most important and defining statements that he made in regard to the way his companies should do business.

While celebrating his birthday sometime between 1958 and 1961, my father made the following statement:

“And now we want to restate a principle which we consider inviolable and sacred in our dealings with our employees: that human values are above and far superior to material values; that the right to have and enjoy the fruits of labor is paramount to profits and losses; and that our success should be measured, not by the wealth we can accumulate, but by the amount of happiness we can spread to our employees. This has been our norm of conduct.”

During the Meralco Christmas party in 1962, he said:

“My friends, you must judge us by our actions. You must know us by our deeds.

This is the reason why I very seldom make speeches which I consider useless and a waste of time. And now I want to restate certain basic policies which have always guided us in all our business enterprises. We regard these principles as of paramount importance.

“We maintain that in case of doubt in a controversy arising between labor and management, this doubt must always be resolved in favor of labor. We further maintain that human values are far above and far superior to material values, and a company which does not hold the inviolability of this principle has no right to exist.

“The company that is prosperous and rich while labor lives in misery has neither the right to exist nor the right to claim public support.”

Sometime between 1956 and 1961, my father had this to say on the role of business in modern society:

“The old business tenets have given way to the modern concept which is not based on profits alone but rather on the service it can render and the contribution it can make to the prosperity and progress of the nation as a whole.

“We sincerely believe that a greater proportion of the earnings accrued from business should be returned to the people whether this be in the form of foundations, grants, scholarships, hospitals or any other form of social welfare benefits.”

In his time, my older brother Eugenio Jr. or Geny, who headed the Lopez Group between 1986 and his untimely passing in 1999, also added his thoughts to the practical meaning of wholeness of being in a corporate or business context….:

“For those in business, it is easy to get immersed totally in a culture of profit making, expansion and the personal pursuit of happiness…

“This is not to say that profit is not important. It is, after all, still the primary reason why anyone is in business. But if that is the only reason we are in it, we may miss out on an equally important aspect of being in business—an aspect that brings with it a greater sense of personal fulfillment…

“One of the advantages of being successful in business is the opportunity it presents to render public service without being in public office. That is the reason we look for businesses that touch the everyday lives of as many Filipinos as possible, wherever they may be…

“The spirit or soul of a business is found in the way our activities improve the quality of life of others. We consider that as a very important aspect of our social responsibility…

“Public service—doing well by doing good. It may sound incredible, or worse still, just an ingenious public relations line. But I see it as the single compelling reason I still go to work each day.”

We are always conscious of the values and principles that we have inherited as the most important and lasting legacy of my father, Eugenio Lopez Sr. Periodically, we try to update our value statement to ensure that their interpretations and meanings remain relevant in the present day.

Living our corporate lives in accordance with the Lopez Credo and the Lopez Values is what we have come to coin as the Lopez Way. That must begin with me, as head of the Lopez family, in the way I live my life and conduct myself. In the way I treat our officers and employees. In the way I shape and influence the decisions for our businesses. In the people with whom I associate and transact. No one will take our Credo and Values to heart if they see me living in any manner inconsistent with our values. Those that do, those wonderful, principled employees whom we value so much, would lose heart and may eventually leave if I were to be unfaithful to the Lopez Way. This expectation applies equally to all Lopez family members who have a role to perform in our businesses. No matter how painful it makes us feel, we practice a zero-tolerance policy to any willful violation by any employee of our values.

For the Lopez family, it has never been about the wealth or the money. Rather, it has been about having businesses that will endure and outlast us, businesses able to serve the needs of society in an honest and legitimate way. This is why we are so particular about our value system, our so-called Lopez Way. Without that anchor, without the stabilizing influence of a value system that embodies our history and the legacy of those who have preceded us, we would not be able think long term; we would not be able to think strategically. This, ultimately, is the value of ethical principles to strategic leadership.