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News and Views
August 30, 2007
Big Governments and corporate responsibility - some reasons to be interested
- Corporate citizenship is all about the voluntary actions of business. So what are G8 and other governments up to by making statements about the subject, and should business and NGOs be concerned? Paul Hohnen analyses
(EthicalCorp)
August 27, 2007
Christianity and the Rise of the Investor Left
- For most of this decade the Left has been riding a wave of popular discontent over highly-publicized corporate corruption, rarely wasting an opportunity to point out scandals at Enron, Tyco, WorldCom and other major companies. That more than once their officials have been carted away to federal prison confirms the progressives' conviction that capitalism desperately needs moral therapy.
Much of this opposition is informed by a set of anti-business teachings that are explicitly religious, and from a Christian perspective. A website, Sunshine for Women (www.pinn.net), features a homily, "What Would Jesus Do?" The sermon reads in part: "Jesus Would NOT be on the Board of Directors of a Fortune 500 corporation....Jesus Would NOT lobby politicians on behalf of wealthy corporations. Jesus Would NOT be a Wall Street trader, a banker for a large national or international banking conglomerate, or participate in the World Bank or the International Monetary Fund (IMF)."
Such sentiments are hardly new. In Europe, Catholic anti-capitalism has a centuries-long pedigree. Long after the passing of Medievalism, many have subscribed to the view that business dulls our noble religious impulses. The Christian Socialist Movement emerged in the early-19th century as a response to what its adherents viewed as the destructive consequences of the Industrial Revolution. From the early-20th century onward, the British Labour Party, more than commonly imagined, has been Christian in character; Tony Blair, far from negating this legacy, shrewdly adapted it to contemporary reality.
(Carl Horowitz, Townhall)
August 24, 2007
Green
with shame - It is a familiar sensation to feel guilty about things that
do not matter a jot: leaving the lawn uncut, having a coffee stain on one's
blouse or a shaving nick on one's cheek. Far worse is the moral embarrassment
engendered by the hijacking of the word "ethical".
Ethical now means green or environmental. As we report
today, more than half the
population thinks unethical living is as much of a social taboo as drink
driving. Since, at the same time, we forget to reduce carbon consumption, we are
becoming a nation of hypocrites.
It has sharply been observed that if Pol Pot had made his killing fields
organic, then the new morality would call him ethical. Ethics must be about
right and wrong, for heaven's sake, about love and hate - not about turning off
the television from standby. (London Telegraph)
August 23, 2007
Blowing the Whistle on Sarbox
- In the five years since the passage of Sarbanes-Oxley, most of the controversy has focused on its costly accounting and auditing burden. But its protections to employees who call attention to violations of securities law or accounting fraud have also been the subject of congressional hearings this spring, particularly on the question of whether these protections are strong enough.
Sarbox's whistleblower provisions were intended "to prevent recurrences of the Enron debacle and similar threats to the nation's financial markets" by protecting those who report fraudulent activity that could damage innocent investors. That was the intent, at least. The reality is something else.
About 1,000 whistleblowing claims have been filed under Sarbox. Only 17 were determined after federal investigation to have merit and only six of this group have kept their wins after full evidentiary hearings before administrative law judges.
Nevertheless, the plaintiffs bar and others have ready answers for this extremely poor batting average. Critics assert that the 90-day statute of limitation for filing whistleblower claims is too short, the burden of proof placed on complaining employees is too high, that judges are reading the law too narrowly, or even that, as one law professor testified, the whistleblower provisions have "has failed to protect the vast majority of employees who file a Sarbanes-Oxley claim" because they rarely win.
None of these criticisms measure up. Sarbox whistleblowers rarely win because most claimants are using, or some might say, misusing, the law as a club in garden-variety workplace disputes. The examples are legion.
(Michel Delikat, Wall Street Journal)
August 15, 2007
Wishful thinking... Corporate social responsibility on the up, but government still lags behind
- Thanks to recent summits, CSR is enjoying a good summer. But greater government and business interest will need to be followed through on if the benefits are to be realised, argues Paul Hohnen
Mark Twain once said that "reports of my death are greatly exaggerated". He might well have been referring to corporate social responsibility (CSR), which, far from being a burst bubble, is currently enjoying something of summer of love.
However one chooses to describe what CSR should be called – "corporate citizenship" being among the many candidates – support for the idea that business should do more than what is mandated is gathering momentum."
(EthicalCorp.com)
... or attempted self-promotion? Either way, the business of business shall
always be business and anything else a distraction.
August 13, 2007
Hmm... Resolved:
Public Corporations Shall Take Us Seriously - Will Sister Patricia Daly
and other shareholder activists get ExxonMobil to do something about global
warming? (New York Times)
... alright, let's take them seriously, for a moment. What could or should
ExxonMobil do about the phantom menace? Only one economically feasible and
potentially physically plausible path would seem open to fuel suppliers and
that is to make all fuel with say a 100ppb sulfur blend. This will relatively
quickly and relatively affordably provide sufficient sulfate particulates to
reduce the amount of solar short wave energy reaching the surface, reduce
Earth's long wave emission and thus the greenhouse potential of the
atmosphere. This further has the advantage of being readily adjustable (by
adjusting the sulfur content of fuels) and automatically increases its
anti-warming sulfate production with increasing fossil fuel use. Certainly
doable, probably the only viable means of addressing the phantom menace and
something we most assuredly do not want done.
They're right, the climate change scam has certainly
become an industry: Mapping
the climate change industry - A new report by ClimateChangeCorp.com and
Ethical Corporation examines the growth of a new and rapidly expanding climate
change industry
Mapping the Climate Change Industry, an Ethical Corporation special report, is
scheduled for release in October 2007.
Climate change has gone from being a marginal issue to being at the forefront of
business leaders’ minds. As a result, procurement of climate friendly
resources and services is fast on the rise. We set out to find who's who in this
lucrative new sector.
This 60-80 page special report will look in-depth at the global climate change
industry. (Ethical Corporation Press Release)
Is
the CR reporting revolution raising quality? Or are corporate reporters simply
ticking boxes and “playing the game?” - With two-thirds of the
world’s leading public companies now producing a CR report, and Europe leading
the way with a cumulative output of 6,800 reports predicted by the end of this
year, the impressive uptake of CR reporting isn’t in doubt.
However, even though the Institute of Business Ethics claims that ethical
companies in the FTSE 350 have outperformed rivals in three out of four
financial measures (MVA, EVA, and P/E), there’s still debate about whether the
quantity of reports being produced equates to recognizable improvements in the
quality of corporate performance. (Ethical Corporation Press Release)
The
OECD Guidelines for Multinational Enterprises: A modest proposal - The
current OECD Guidelines for Multinational Enterprises, an important corporate
responsibility document, are not being implemented effectively by companies. Tim
Steinweg and Joris Oldenziel propose a new model" (EthicalCorp.com)
August 10, 2007
The social
responsibility revolution - It's not just about PR anymore. Firms see
big profits in green solutions. (The Christian Science Monitor)
Except that this is merely an exercise in mislabeling - economy of input
for maximized output is efficiency and simply good business practice -
pretending this has anything to do with Gaia worship is a nonsense and leads
to misapplication of effort and misplaced priorities.
August 9, 2007
Do Good -- or Else
- Adam Smith once warned against people who "affected to trade for the public good," but apparently Indonesia never got the message. The President is expected to sign a bill this month requiring companies to spend money on "corporate social responsibility" programs. It would be the first instance we know of world-wide that CSR is mandated by law.
If you're not sure what corporate social responsibility is, well, neither are we. The World Business Council for Sustainable Development says it's "the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large."
CSRwire.com, a business that makes money off the fad, defines it as "the integration of business operations and values, whereby the interests of all stakeholders including investors, customers, employees, the community and the environment are reflected in the company's policies and actions." In other words, CSR is just about anything that interest groups, minority activists or now, in the case of Indonesia, regulators, say it is."
(Wall Street Journal)
August 7, 2007
Renewable
energy: Business must see beyond the biofuels bonanza - The craze for
the biofuel buck will likely burn itself out before too long. But the
destructive frenzy can leave irreparable losses unless businesses see the
contradictions in this renewable energy, and pick the opportunities with great
care, argues Chandran Nair (EthicalCorp.com)
August 1, 2007
Friedman's Legacy
- Today, in cities across America, events are being held to celebrate the ideas, vision and influence of the late, great economist and Nobel prize-winner Milton Friedman. This would have been his 95th birthday.
The occasion gives us a chance to look back on many of the questions Friedman contemplated during the course of his productive career. In particular, why do people in some countries prosper, while those in other countries live in poverty? Is it luck? Is it something that their governments do? Or perhaps it's something that their governments don't do?
Friedman knew that the answers depended on the extent to which governments supported personal freedom, political freedom and economic freedom. And thanks to his advocacy, many countries around the world have come to see the connection between freedom and prosperity.
(Thomas F Siems, Wall Street Journal)
Shareholder
activism and corporate governance: Time for new terminology - Peter
Kinder begins a new regular online column for Ethical Corporation by arguing for
a new way of looking at shareholder activists and corporate governance
“Precatory proposals”. This phrase from Purgatory has quickly entered the
lexicon of those defending access to non-binding shareholder resolutions. Its
users should wash their spell checkers out with soap. (EthicalCorp.com)
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