Tagged
business ethics


Mapping Uncharted Waters

A compelling New Economy policy framework is being framed and developed.

As part of the New Economy 2.0 series

 

By David Korten

I am among those who hoped President Obama, based on his campaign promises, would introduce reforms putting the United States on the path to a New Economy.

Unfortunately, for all the powers of the presidency, any new president, no matter what his intention, quickly learns he is captive to institutional forces that severely limit his ability to set a course for uncharted waters.

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04:36 pm by csrwiretalkback[13 notes]

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The Corporate Social Irresponsibility of The Internship Phenomenon

"This country was built by unpaid interns. And in exchange, I assume they got college credit." - Stephen Colbert

Originally posted on the CSRwire website.

By CSRwire Talkback Managing Editor Francesca Rheannon

All over the U.S. - and abroad - college students are packing up their belongings, vacating student digs and heading out in droves to fill thousands of summer internships. Most internships are unpaid and many entail working long hours. In return, students are expecting to learn something about the careers they want to pursue, make valuable contacts and get some solid experience under their belt.

At least, that’s what’s supposed to happen.

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07:09 pm by csrwiretalkback[30 notes]

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Measuring CSR Commitment

The global economic meltdown has put pressure on fulfilling commitments.

By David Wilcox

In conversations with marketing, communications and CSR leaders at the 36 conferences in which ReachScale participated in 2010, an unusually high number of executives said they are doing a strategic review of their CSR commitments and strategies. One might assume the goal is to be more impactful, to do less harm and do more good.

Instead of assuming, a question needs to be asked: is the purpose of our CSR review to increase impact? The answer is not simple, given the current economic climate.

World leaders are faced with the same challenge as CSR leaders. Every three years the UN Global Compact Leaders Summit assembles the global ecosystem that was built through a commitment to the 10 principles of the Global Compact. (Review the list here.) Much good has come from the Compact and yet at the same time, promises have fallen short. The global economic meltdown has created a kind of schizophrenia in those organizations that committed to goals that appeared reachable in 2007 but seem less so today.

Empowering an ecosystem of leaders to re-envision appropriate responses is a tough challenge. In these circumstances it is no surprise the proceedings of most conferences on CSR are dominated by testimonials of good works completed, of new projects and collaborations being started. But these are being discussed without the goals and measures that Porter and Kramer suggested are essential.

Based on our advocacy efforts and testimonials heard from many conference podiums, we have distilled some simple but core questions for companies who are viewing their commitment to “shared values and principles, which will give a human face to the global market” (the quote that appears on the cover of the Global Compact Annual Review.)

1. Can we identify and focus on a cause or problem whose solution creates shared value?

As you answer this question please consider the following quote from Porter and Kramer:

“No business can solve all of society’s problems or bear the cost of doing so. Instead, each company must select issues that intersect with its particular business. Other social agendas are best left to those companies in other industries, NGOs or government institutions that are better positioned to address them. The essential test that should guide CSR is not whether a cause is worthy but whether it presents an opportunity to create shared value – that is, a meaningful benefit for society that is also valuable to the business.”

2. Are we taking on a problem that our stakeholders would immediately recognize as significant?

For example: No one will argue global banks are reputationally challenged in this post financial crash world. If you are the leader of a global bank and your response to current circumstances is to do exactly what community reinvestment laws require (and only in those countries that currently regulate), then you are working at zero base. On the other hand, you could make a commitment to address the global migration to cities problem, actively build community reinvestment principles and seek innovative partners to address the global slum problem in every country that delivers profit to you. That is an effort that would be clearly recognized as a commitment to a highly significant problem.

3. Is the problem we have chosen core enough to our business that we can ask our experts to apply their knowledge to the problem across multiple functions?

Using global banks as an example once again: virtually every functional group within the organization has talent that can be applied with the appropriate innovation partners to solving this problem in every major city in the developing world in which that bank operates.

4. Is the problem we have chosen important enough that each member of the executive committee could justify spending two days a month (10% of work time) leading the organization and ecosystem in seeking a solution?

The Global Compact is all about commitment. One could argue, for some companies, implementing the 10 principles will take at least that much time from executives at the beginning. As leaders drive the principles deep into the organization’s collective psyche, the muscle strength needed to take on larger opportunities will develop.

5. Is our wisdom, work and investment focused on attracting participants across the value chain?

The behavior of all players must change to achieve real results. Looking to engage multiple innovation sources encourages not just one corporation’s investment but also the commitment of many other companies as well.

Increasingly the ability to create value depends on market mechanisms that attract multiple value chain and investment participants. The social innovation to attract the participants will often come from outside the companies championing the changes. Finding and cultivating these innovations often depends on a problem solving commitment that goes beyond simply serving one company’s goals. The commitment must flow from an understanding that the problem goes beyond what any single company can do; the real work is assembling an ecosystem to solve a problem, which requires a committed company’s best and brightest wisdom and work.

At Sustainable Brands 2010, Jason Saul of Mission Measurement stated the CSR practice of reporting on the checks written and volunteer hours logged will not be an adequate measure going forward. Ben Packard of Starbucks stated very openly Starbucks knows they have not made enough progress in addressing the most significant impact they create as a business – the cup.

Jason Saul and Ben Packard are two examples of leaders asking the right questions about real CSR impact.

About David Wilcox

David Wilcox is the founder of ReachScale, an organization that aligns the social responsibility goals of corporations with high potential social entrepreneurs working in areas of common interest.

Talkback Readers: How can companies ‘get real’ with CSR commitments in tough economic times? Tell us on Talkback!

07:09 pm by csrwiretalkback[14 notes]
Your query didn't return any results. [CSR] [sustainability] [stakeholders] [business ethics] [ReachScale]

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Beyond Optics: Why Board Diversity Really Matters

Why should non-diverse boards set off alarms?

By Lucy P. Marcus

Discussions around diversity in the board room often focus on gender, and indeed women are severely under-represented on boards. Importantly, though, the lack of women on boards is a reflection of a wider problem: it is one of color, age, international perspective and more.

A lack of diversity is not simply a problem of “optics.” It looks skewed not to have a diverse board; but just because in the modern world it looks odd, does it make a difference in real economic terms? Does it actually affect the bottom line? To my mind the answer is a resounding yes. We do not need diversity for diversity’s sake, but because board diversity contributes to the profitability of the business.

There is a fundamental economic reason why diversity is important: diversity of thought, experience, knowledge, understanding, perspective and age means that a board is more capable of seeing and understand risks and coming up with robust solutions to address them. Businesses led by diverse boards that reflect the whole breadth of their stakeholders and business environment will be more successful. They are more in touch with their customers’ demands, investors’ expectations, staff’s concerns and they have a forum inside the board room where these different perspectives come together and successful future proofing business strategies can be devised.

An argument I have heard against actively seeking diversity on the board is a fear that too much diversity and independence of thought can be damaging to the cohesion of the board. Yet, for healthy boards with capable chairs, the very opposite is true. Board cohesion is vital, and everyone needs to be moving in the same direction, but within that agreed direction, the modern board requires open, constructive and dynamic discussion, rooted in respect and regard for the people around the table.

To come to the most robust conclusions, there needs to be rigorous discussion and action drawing on a whole range of stakeholder perspectives, fueled by as much diversity of thought and experience as possible. If everyone on the board is the same, then discussion will be dull, decisions stagnant, and the business will suffer. In my experience the result of a diverse dynamic group is a more capable and better functioning board that can withstand the challenges of an ever-shifting landscape in which the organization it serves operates.

It is not sufficient to have “diversity policies” in place. If a business is not demonstrating in deed that it values diversity, diversity policies are worth less than the paper they are printed on. Diversity is a matter of organizational culture, and significantly this is set through example from the top. A diverse board demonstrates that diversity is a value that the company holds throughout its business—the resulting culture then is not one in which the mentality is one of the lowest common denominator (how little can we get away with?), but one in which diversity is valued as part of building a robust and sustainable business. Diversity then becomes part of very DNA that marks a business out as healthy and ready to face the future.

Diversity is not a static one-time goal boards need to achieve, but one that poses a constant challenge of renewal. Good corporate governance requires “turn over” in the board room so organizations are capable of dealing with the challenges of today and the tomorrow.

In an ever more global business environment, diversity also has an international dimension that extends beyond gender, culture, age, etc. Every board needs to keep a finger on the pulse of what is happening around the world. International diversity broadens a board’s global knowledge and understanding, and how this affects the environment in which the organization it serves operates. International diversity means the best boards will be able to be proactive in instituting these changes, striving to live up to the highest standards of corporate governance from around the world, not simply waiting for the world to force them to do so.

When I see a business with a board that has a preponderance of people with similar, if not identical, profiles, it is a signal it is not a healthy business. It is a canary in a mine that says they are not looking after the fundamentals of the business. Non-diverse boards set my alarm bells ringing because it is good corporate governance and good business sense to have diversity of thought, experience, knowledge, understanding, perspective and age, as well as a reflection of the whole range of a business’ stakeholders: customers, employees, investors and the communities in which they operate. If a board is not diverse, it makes me wonder about the business as a whole.

(Note: This article was posted on The Huffington Post and an extended version of this was originally published on the Marcus Ventures website. Also, Lucy recently gave a TEDx talk on Boardroom Activism.)

About Lucy P. Marcus 

The founder and CEO of Marcus Venture Consulting, Lucy P. Marcus currently serves as the non-executive chair of the Mobius Life Sciences Fund and as a non-executive director and chair of the board audit committee of BioCity Nottingham. She is a fellow at the University of Cambridge’s Judge Business School and a member of the board of IE Business School. She is a prolific writer on global economic trends and best practices for corporate governance, venture capital, entrepreneurship, biotech, cleantech and women in business, and regularly speaks on these topics to diverse audiences around the globe.

Follow Lucy P. Marcus on Twitter: @lucymarcus

Talkback Readers: Why should non-diverse boards set off alarms? Tell us what you think on Talkback!

05:57 pm by csrwiretalkback[18 notes]

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Is Goldman Sachs the Best ‘Scam’ Ever?

Is Goldman Sachs the best ‘scam’ ever?

By Joe Sibilia

Former Reagan Budget Director David Stockman, the architect of ‘trickle down economics’ (the theory that a few guys could make a ton of money and some of it would trickle down to the thirsty masses like drops of water on a hot day), called Goldman Sachs the ‘best scam in economic history’ on a PBS News hour special.

It seems Stockman took offense that Goldman could become a ‘banking holding company’ on a Sunday, borrow fed funds at just about zero interest rate on Monday and buy Treasuries Tuesday at 3% – 4% (with the same money they borrowed) and pocket the spread. He was further incensed that they would take money from the Federal Government (basically, you and me), watch what their clients were buying (or selling) and in split milliseconds in advance of their clients, ‘trade their own account’ and pocket the spread. America the Beautiful.

If a guy like Stockman thinks this is a ‘scam’, we must be making some headway. If your only objective is to make money, without concern for anyone or anything else, you’ll figure out a way. If that means manipulating the rules – fine. If that means taking taxpayer money – fine. If that means profiting from your own customers (at their disadvantage) – fine. People want brands that pay equal attention to business and social concerns and those that do, will thrive today and in the future. I don’t see any social concern being served in the Goldman example when almost 75% of their profits comes from ‘trading’.

What the Goldman Sachs Scam demonstrates is the imperative need to begin formalizing the process of measuring social, economic and governance activities of business (the U.S. SEC is dipping their toes in the conversation, but hasn’t formalized anything yet – even though many other countries are). Goldman’s activities would have been different if the ‘values’ and ‘rules’ were a little different. I want to form another ‘bank holding company’, get money from the taxpayers and just let the dollars flow through the U.S. Treasury, use technology to advance trade on what my clients are doing and make more money. Why does Goldman Sachs have exclusive rights to this scam? Is Goldman Sachs a scam or are they ‘playing the system’ for their own advantage?

About Joe Sibilia

As a visionary of the socially responsible business movement, Joe Sibilia is founder and CEO of Meadowbrook Lane Capital (MBLC), described by the Wall Street Journal as a “socially responsible investment bank” specializing in turning values into valuation.

He is also the CEO of CSRwire.com, the social responsibility newswire service that distributes and archives corporate social responsibility/sustainability news to journalists, analysts, investors, activists, academics, public relations and investor relations professionals worldwide.

Joe also founded the Gasoline Alley Foundation, a 501(c) 3 corporation that has incubated forty-three small businesses since 1985 and teaches inner city and/or underprivileged persons to be successful entrepreneurs using socially responsible/sustainable business practices while revitalizing inner city neighborhoods.

Through MLBC, Joe has worked with a number of Socially Responsible Companies and has been widely recognized for his work in attempting to take Ben & Jerry’s Homemade Ice Cream private, while creating a private stock exchange for CSR companies.  MBLC successfully preserved many of the founders’ social initiatives, and advancing the connection between good corporate citizenship and increased share value.

His long range plan for CSRwire is to establish a “platform for innovative revenue sharing applications advancing the ‘Movement’ towards a more economically just and environmentally sustainable society and away from single bottom line capitalism.”

READERS: What’s your Talkback to the question: Is Goldman Sachs the best ‘scam’ ever? Let us know, and we’ll respond.


05:50 pm by csrwiretalkback[18 notes]

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