Categories
commentary

Those that sell to children should report to them

Sustainability and CSR reports are rarely read – with the exception of those who write them and those who audit them. That doesn’t make them useless. At their best, they provide an anchor point and focus for those within companies trying to manage business impacts.

Still, that is a lot of time and money spent on little return. So what can be done?

One approach would be to address reports about business impacts to the stakeholders affected by the business. Of course that would make for some extra work since the interests of staff, say, are different from those of environmental NGOs. But the reward would not only be reports that are read, but very likely also a far richer and more integrated engagement process with stakeholders.

A good group to start with would be children. Children are an under-served stakeholder, yet one with which many large consumer-facing companies are deeply involved – think of all that advertising. And it is quite possible to write reports that are child-accessible.

So – those that sell to children should report to them.

Categories
commentary

The ebola to come

A worldwide ebola pandemic is looking increasingly likely. This may not be the time to come over apocalyptic, but it probably is time to reflect on why the world is so susceptible to such diseases. And why the consequences could be so devastating to society – and also to the economy.

Physical health risks are the flip side to globalised travel. Just as computer viruses are facilitated by global electronic communications. And it is just one aspect of the fragility of our global systems. The features that make the modern world fun and convenient (provided you have the money, of course) are the same ones that make it so fragile.

What is the role of companies in this fragile world? Well no doubt one part is to plan for the risks to the business that it brings. Just as companies did for SARS and bird flu (and do for computer viruses, for that matter).

But perhaps a more important consequence should be that companies reflect on what part they have had to play in contributing to the fragility in the first place. Especially when it comes to arguing over who should pay for health protection measures.

Categories
commentary

Tesco: capitalism at the end of the road?

Tesco seems to have been cannibalizing not only its own supply chain but also itself – or at least its own accounting practices. Its accounting was designed to push up profits. And that relentless push for profits has also lead to ever-increasing pressure on supermarkets’ supply chains. As a result suppliers pay in every sense to have their products sold in big stores. The awful results of this for small suppliers in the developing world are well-known. Now we are aware of the awful results for Tesco itself.

Of course it is unlikely that Tesco is alone in this. All the big supermarkets tend to treat their suppliers badly. So should we assume that all of them are also indulging in creative accounting? It would not be very surprising if they were.

Tesco’s aggressive accounting culture expresses the hungry logic of unfettered capitalism. And how much future can there be for a capitalism that starts trying to consume itself?

Well, capitalism may not be quite at the end of the road quite yet, but it is certainly at the end of its tether. Tesco’s behaviour is an example of the sort of things companies find themselves doing when capitalism is pushed too far.

Categories
commentary

Do men behaving badly damage business?

American Apparel has been rebuked in the UK for the sixth time in two and a half years over its advertising. Each time for being offensive to women. It seems the corporate culture behind the ads has affected its share price – which has continued to fall over the past five years, while the markets as a whole have risen.

This is not evidence that doing good drives good business so much as that doing badly in ethical terms can affect business badly.

Why is it then, with cautionary tales like this and the considerable research literature on the matter, that it is still so easy to find examples of poor ethics in business?

There’s clearly still money in behaving badly.

Categories
commentary

Is there no accounting for human rights?

There should be! See my blog for the ACCA.

Categories
announcements

If 'social value' is the answer, what's the question?

Here is my blog on the problems with social value and social impact.

Categories
announcements

Can corporate affairs be justified?

Can ‘corporate diplomacy’ ever deliver an enduring social licence to operate? See my review of Witold Henisz’ book on corporate diplomacy here. The review looks at the limitations of the business case for delivering true accountability.

Categories
commentary

Does the World Cup trump corruption?

As the teams battle it out in Brazil, what has happened to the stories of corruption surrounding FIFA?

It is surprisingly difficult to find material related to the recent corruption allegations involving FIFA on FIFA’s own website. You would have thought that there would be something about their internal inquiry into the matter of Qatar’s selection. But you would be wrong.

Yet FIFA is going to have to take the issues seriously, as FIFA derives a lot of income from sponsors – and they are now distancing themselves from FIFA.

Interestingly, FIFA are currently advertising for a CSR Programme Manager – however the focus of the job is to be equality and anti-discrimination. Of course these are both crucial issues in the world of football. But so is corruption.

Categories
commentary

The limits to transparency

Is the end (of the internet) nigh?

The recent EU Court ruling that Google must remove harmful material from its search results is very sensible. This was based on finding Google responsible for its search results and that they were harmful to an individual. But the reaction to the judgement has been somewhat hysterical: will we ever be able to trust the internet again? Will anyone who wants to hide their past be able to deceive the rest of us? And so on.

The answers to these questions are ‘yes’ and ‘no’ – yes, we will be able to trust the internet. After all in how many cases will this sort of ruling apply? And we will also be able to trust the internet to do less harm. And no, this won’t apply to anyone at all, but only where a greater harm is caused by unfettered access to information than by its concealment.

So the principle that transparency should be the default assumption, unless it causes more harm than good still stands (as I argued some time ago in Corporate Truth).

The interesting questions are about how it will be done, if it is needed on any scale. First of all there is the question of the process for deciding the balance of harms. At the moment that process is the court system, which is likely to slow things down to altogether imperceptible. But no doubt internet companies and Information Commissioners will come up with something a little more streamlined – eventually.

Then there are the technical issues. If you are trying to monitor the data collected about a person, how can you find all of it? You can’t just type their name in the search box, as anyone who shares their name with anyone else on earth will have found. So the ruling is likely to stimulate some serious innovation in how the internet works – maybe we will have an internet of people before we have an internet of things.

So in the end the response to the ruling will benefit all of us, not just those with something that should be concealed.

Categories
commentary

What attitude should companies take to Russia?

Russia has annexed Crimea – what is a company to do about it? Russia has ignored due process in annexing the Crimea, yet the level of popular support for Russia in the Crimea seems very high. And Ukraine is clearly split – but then it has been tossed between higher powers, like so much of Europe, for much of the past millennium.

No doubt there will be some companies that are instructed to implement the sanctions that the US and EU have agreed – but what about all the others? Should they show solidarity with the West in some way? Should that follow the precedent of the sanctions – effectively  harassing Russian citizens? Would it mean avoiding business with Russia? Should energy companies seek alternative supplies of gas, for example? And perhaps those companies with ties to Russia should do the reverse? Should Russian-owned football clubs stage pro-Russia events?

That would simply inflame the situation.

In reaction, some will say that companies have no business in politics and want to get on with business as usual, avoiding politics altogether. Yet it is probably just the same companies that are busy lobbying governments hard behind the scenes to legislate in their interest. Isn’t that political?

And there are some political situations that are so horrific that action by companies seems entirely justified: the apartheid era in South Africa was one. Yet even in this case there was considerable debate about whether the sanctions hurt the very people they were designed to help. Of course in such cases much will depend on what the people affected actually want to happen.

There are a few lessons here:

  1. political situations by their nature are extremely complex and always different – so there are no general rules for action, or for inaction
  2. the fact that there are no rules does not mean that companies can just ignore such issues; they have a moral duty to work out what their attitude should be
  3. it is reasonable to ask any company (for which the Russian situation is relevant) just what their attitude towards Russia may be.