By Bert Zethof

The old debate about regulation versus the free market has been inflamed again during the current global financial meltdown. But is this way of framing the debate helping us to get closer to a resolution? I think not. This perspective is obsolete: both aspects need to be present for the healthy functioning of our financial system.

We've had regulation and we will continue to need it. The point is to optimize regulation so it is effective and efficient and then to let the market function.

What's missing for a well-functioning economic system is greater attention to healthy values, ethics and moral authority. Leaders and their employees need to have them and consumers and citizens need to know when the organizations they deal with have them, or, more importantly, when they do not have them.

The challenge for business owners is to create a values-based enterprise that can resist rot and corruption and in so doing attract and keep customers, investors, suppliers, talent, and partners. Having solid values where people do the right thing, even when nobody's watching, is key to long term sustainability. It looks like a number of major financial institutions missed this point.