CSR Conversations About Good and Evil -Or; BP, Apple and Us

Ever since large corporations such as Nike, Shell and Monsanto began facing increased scrutiny from civil society – mostly for putting short-term profits far ahead of environmental responsibility and job security- an industry has ballooned to help these companies respond. It seems clear, however, that many in the corporate world remain utterly convinced that all they have is a `messaging problem’ one that can be neatly solved by settling on the right, socially minded brand identity.

It turns out that’s the last thing they need. British Petroleum found this out the hard way when it was forced to distance itself from its own outrageous rebranding campaign, Beyond Petroleum. Understandably, many consumers interpreted the new slogan to mean the company was moving away from fossil fuels in response to climate change. Human rights and environmental activists, after seeing no evidence that BP was actually changing its policies, brought up embarrassing details at the company’s annual general meeting about BP’s participation in a controversial new pipeline through sensitive areas of Tibet, as well as its decision to drill in the Alaska National Wildlife Refuge. With the new slogan being parodied on the Net as Beyond Preposterous, BP officials moved to abandon the Beyond Petroleum brand, though they have so far stuck with the new green flower logo.
 
As evidence of the state of corporate confusion, I frequently find myself asked to give presentation to individual corporations. Fearing that my words will end up in some gooey ad campaign, I always refuse. But I can offer this advice without reservation: nothing will change until corporations realize that they don’t have a communications problem. They have a reality problem.
 
This was written eight years ago by Naomi Klein  and is excerpted from her book : Fences and Windows – Dispatches from the front line of the globalization debate.  .  Before we get to the gist of the issue consider these more contemporary news pieces.
 
Apple computers is now the world’s most valuable computer tech company surpassing Microsoft and now has a market capitalization of approx $120 B. This coincides with Steve Jobs touting the release of the new iPhone – that caused one tweeter to note that the new phone has a soul. This is comedic in some ways, tragic in others – when one considers that Apples 2010 supplier responsibility progress report indicates that only 46%  of the suppliers agree to the code of conduct limiting worker hours to 60 per week, and of those only 60% were compliant with standards around minimum wage and benefits.  (It begs the question, how can the phone have soul, but the company is void). This adds fuel to fire of the speculation of the cause of deaths by suicide at an Apple parts manufacturing plant in China.  Yet, despite the widely touted advantages of the net, the ability to fact check and have this story go viral – from my vantage point has anything occurred to slow down the massive rush for iPads and now iPhone 4’s? – Not that I know of.
 
The number of tweets breathlessly anticipating the arrival of the new technology is staggering, with over 100 tweets in two minutes. To get 100 hits on the #CSR hashtag –took 4.5 hours. This is a simple, non-scientific was to illustrate that as a society we love our bright shiny things, and will evidently will turn a blind eye, a deaf ear or simply tune out bad news from companies that deliver something to us that we want. BP is rightly the poster boy of the month for public floggings, but let’s be real clear…the disconnect between BP stated values and their behavior was identified years ago – yet in our hunger for the oil are we not complicit in allowing their destructive practices to continue? And similarly are we not complicit now in allowing Apple to flaunt basic employment codes and the almost inherent need to set, establish and print CSR targets?
 
CSR has shifted from being predominantly philanthropic (which met the needs of the company) to being more strategic, yet as was pointed out by Warren Levy in CSRwire talkback, “ CSR is an activity yardstick, a leading indicator of contributions that, though positive, can co-exist with unsustainable behavior that eventually will overwhelm any good that’s done.” He goes on to argue that the standard for behavior should be shifting from the “’no tomorrow” behavior or BP and perhaps Apple and instead consider the self- explanatory “grandchildren standard I like bright shiny things too, but let’s be clear of our responsibility and yes, our hypocrisy as we flog some companies and flaunt others. I really hope, that in ten years we are not cursing ourselves for supporting Mr. Jobs – and wondering “how the hell did that happen” as we respond to another social or environmental calamity.
 

The Acacia Group’s mission is to offer transformative and unique leadership development for organizations seeking to live out their global citizenship. To do this we blend knowledge from Corporate Social Responsibility, Community Development and Leadership Development and Learning to emerge new opportunities for excellence for our clients.

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Atlas Shrinks

Once upon a time in a far off land of sea monsters and fairies, there was a man named Adam. Now Adam was not the First Man. He was, however, the first man in his society to write down his ideas of man controlling his own economic destiny without the heavy hand of kings. Adam was a moral man and wrote that one’s “enlightened self-interest” and innate moral code should guide him in all matters of money and commerce.

Yet man is a funny beast, Adam knew, and in case of a lapse in reason a guiding hand, “The Invisible Hand,” existed to override his less intelligent and unjust impulses. He put all of his fine words and moral sentiments down in a book that changed the western world. The Wealth of Nations was birthed in the same year of 1776 that a little rebel nation was born of its empirical British mother. America and Adam Smith’s free market capitalism grew up together.

Fairy tales inevitably have happy endings. Due to their simplistic nature, these tales usually close with, “And they lived happily ever after,” yet fail to finish the story. Adam Smith’s theory of “enlightened self-interest” presupposed an inner morality by its actors. Something many people simply don’t possess. His treatise was a tale of an idyllic world where the real story was yet to be written over the next two centuries.

Smith had a deep belief in a supreme intelligence that guided all things human and natural. When human reason failed, God or the Hand would intervene. Free markets according to laissez-faire capitalism’s father were dependant on a firm foundation of ethics. Smith wrote, “Markets could not flourish without a strong underlying moral culture, animated by empathy and fellow-feeling, by our ability to understand our common bond as human beings and to recognize the needs of others.”

Taking the “underlying” morality out of capitalism, Smith’s vision is unrecognizable. Without empathy, capitalism becomes the grotesque distortion revealed through the financial depravity of 21st century mortgage markets.

Two centuries after Smith’s theory went through bumps and starts, rejections and debate, it was embraced with gusto in another fairytale called, Atlas Shrugged, written by former Hollywood screenwriter Ayn Rand. In Rand’s lengthy and outdated sci-fi novel, protagonist John Galt is brutally electrocuted by the rulers of the “collective” hoping he will renounce his staunch belief in individualism over altruism. No matter what painful tortures he endures, he never fails to claim the moral superiority of self-interest.

The 1957 novel stirred up controversy between FDR adherents who believed economies and governments should serve the common good and materialists who believed as Rand did, that “selfishness” was a rational moral code to live by.

Rand’s radical theory was not so radical after all when seen in the big picture of American industrialism. Carnegie, Gould, Frick, Vanderbilt, Morgan and other 19th century moguls, dubbed Robber Barons, subscribed to a Darwinian theory of economy. The cream of money makers would inevitably rise to the top was their guiding principle. Near total anarchy dictated early industrial finance. Bribery, brutality and generally amoral conduct ruled the corporate roosts of the day. Yet despite this proven track record of destructive dog-eat-dog capitalism, Rand named it “virtuous.”

“Ayn Rand rejects altruism, the view that self-sacrifice is the moral ideal. She argues that the ultimate moral value, for each human individual, is his or her own well-being.”

Defining morality as “fundamental principles of right conduct“, Rands’ distorted understanding borders on sociopathic. Her complete lack of empathy and social obligation or conscience defies the modern view of “doing well by doing good.” So who really cares in the five decades since “Atlas Shrugged” for this clearly antiquated and hollow view? Why should any “enlightened” post-crisis citizen be concerned with an obviously flawed perspective? As remarkable as it may seem, everyone alive in America today is paying the price for this empty morality, simply because it was embodied in the High Priest of the Federal Reserve, Rand friend and student, Alan Greenspan.

In “Capitalism: The Unknown Ideal,” a collection of rants from Rand and her lovers, Greenspan writes, “It is precisely the ‘greed’ of the businessman, or more appropriately his profit-seeking, which is the unexcelled protector of the consumer. What collectivists refused to understand is that it is in the ‘self-interest’ of every businessman to have a reputation of honest dealings and quality products” that regulates the markets.

Sadly, the two decade Fed Chief did not see the “fundamental flaw” in his model until after the financial system collapsed in the fall of 2008. “I made a mistake,” he told a stupefied Congress.

Rand, who personally experienced the Bolshevik Revolution and savage Soviet rule, believed the only way man could survive was to rule over himself. Greenspan bought the concept hook, line, and sinker, and did nothing as the competing self-interests of market moguls collided in a cataclysmic explosion heard round the world. We are still paying for his “mistake” and the unfortunate indoctrination of his belief in “self-interest” as sole market regulator. Too bad for America and the world that Alan Greenspan, with his naïve view of the innate genius of selfishness, was pulling the purse strings in the early 21st century.

The trouble with theories is that while they may be poetic on paper, in practice they often fail miserably. The Great Collapse of the U.S. financial system beginning with the government “sale” of Bear Stearns to rival JPMorgan and the 24 months of bailouts since prove that Rand’s theory of self-interest is inherently flawed. In October 2008 as former free market cheerleader U.S. Treasury Secretary Paulson orchestrated the greatest government bailout in history, it was clear that capitalism was dead on arrival. Paulson’s request for $700bn (now growing into the trillions) was in effect a “do-not-resuscitate order” for Smith’s doctrine.

How did we get here, free marketers ask? What went so terribly wrong that self-preservation turned into the ugly face of self-destruction?

Leaving God or Divine Providence out of Smith’s theory, the treatise does not stand. It becomes the “survival-of-the-fittest anything goes” economic system that we know all too well. Smith’s theories were embraced by self-confessed atheists Milton Friedman, Rand, and Greenspan. With the absence of a higher power (the Hand) the theory is flat and requires expertise in behavioral psychology rather than economics.

Smith was brilliant for his time. All was new and exciting in 18th century Scotland, but two-hundred-year- old theories need adjustment for our times. Pure self-interest in reality is a dangerous beast capable of enslaving free people and impoverishing whole nations with impunity. The Protestant value system of Smith’s underlying morality is sadly missing in any modern practice of self-interested capitalism. Honor no longer has value in modern finance, nor does reputation matter enough to prevent deplorable acts of legal theft. Self-sacrifice as taught through the world’s religions is laughed at and ridiculed as unnecessary, even “evil,” by Rand and Greenspan. No one needs to sacrifice any of their personal needs or wants, proselytized Rand. The greedy took her words as the green light they had been waiting for. Aha! They thought, now we can climb our way ruthlessly to the top and name it virtue.

“Reason” was Rand’s God; only reason is not a thing set in stone, it is merely subjective to the individual. I can reason one thing and you another. We can be locked in a debate of rational thinking and remain worlds apart. Rand’s hero Galt declares, “To think is an act of choice. The key to what you so recklessly call ‘human nature,’ the open secret you live with, yet dread to name, is the fact that man is a being of volitional consciousness…the connections of logic are not made by instinct.” No, they are indeed not instinctual. Logic is the product of the human mind. Human beings can rationalize anything- holocausts, suicide bombings, ethnic cleansing, slavery, child abuse, women’s subjugation, and economic tsunamis. Modern  minds need to recognize that if we harm others in our society, we are in fact harming ourselves too. That “logic” was left out of the economic tsunami that killed America capitalism.

Leaving emotions and morality out of social structures like our economy defies our very humanness. The mind leads us in the world, yet it betrays us too. In our quest for perfect freedom, we forgot the fact that as humans we are far from perfection. We need a socially conscience legal framework to protect us from the destructive blind spots in our own logic.

Self-interest has to include a reasonable empathy for the greater society we operate in. If our theories don’t establish the necessity as Smith wrote to “understand our common bond as human beings and to recognize the needs of others,” they are not worth the paper they are printed on.
Fairy tales are nice, but they are after all only real for fairies.

 

Monika Mitchell is the Executive Director and Editor-in-chief of Good Business International, Inc. (GoodB). She writes regularly for the Good-B Blog.
 

Kids, Soccer Balls and the Unintended Consequences of Good Decisions

Several years ago, I attended a forum in Washington, DC on supply chain responsibility.  At the time, I was managing corporate social and environmental responsibility communications for two different clients, both with vast, global supply chains.  Supplier responsibility was an area of constant focus and opportunity for these companies.
 
The forum was a quiet, routine affair as these things go, and polite.  I saw a few participants looking a bit sleepy at the end of one session in particular – where representatives from three Fortune 500 multi-nationals spent the better part of an hour outlining the steps their companies had taken to eliminate child labor from their supply chains (the inspections and audits, on the ground partnerships, tracking and reporting).
 
Everything changed when, during the Q&A period, a young woman in the audience stood up and posed a question to the panelists.  She worked for a small NGO with operations in India, and noted that many families there desperately rely on the income of all family members – parents, grandparents, and yes, children.  She spoke briefly but compellingly, painting a picture of poverty and need that most in the room couldn’t comprehend.  The panelists look puzzled, and there were murmurs of surprise and disbelief throughout the audience.
 
I remember being at first repelled by her comments, to being puzzled (can child labor ever be okay?), to being unsure about the whole thing.  In my college sociology classes, I learned to appreciate cultural relativism.  It’s important to value and respect other cultures and their norms, but in my heart, I know that some things (like kids working in factories) are just plain wrong.  This woman, however, had a firsthand perspective and a better informed point of view on the issue of child labor in India than I could claim, so how could I argue with her?
 
I was reminded of all of this recently when I read an excellent piece by Hasnain Kazim in Spiegel Online.  He writes about the football stitchers of Sialkot in Pakistan, who produce millions of hand-stitched soccer balls each year.  The city has become the world leader in the manufacture of high quality soccer balls, and several companies that export them around the world bring jobs and opportunity to thousands of Sialkot’s people.  Tens of thousands more benefit from this work indirectly through the stability, economic development and related employment that come with the material suppliers, subcontractors, shipping and packaging firms, and the shops, restaurants and other businesses that cater to the workers.
 
For years, before greater attention was paid to the issue of child labor and before global companies like Nike and Adidas began cracking down on it, children as young as 10 worked in the factories stitching balls together.  In his article, Kazim quotes a stitching center manager who notes that these kids fared reasonably well there, learning a trade that guaranteed them income for life.  Now, the parents of many of these children, desperate for the income that their work can bring, are sending them to toil in the local brickworks and in metalworking factories – places far more dangerous and far more damaging to little bodies than the stitching centers.
 
As the father of two children under 10, the true cost of child labor is becoming increasingly relatable and ever more disturbing to me.  When I see pictures of children in factories or fields or behind market stalls… it’s difficult to absorb and impossible not to be moved.
 
The decisions we make—even the obvious and unquestionably good and right ones—have ramifications, good and bad.  And the longer I work in the area of corporate responsibility, the more I see that the principles and policies that once seemed so black and white, are every shade of gray.
 
In a perfect and just world, 10 year olds should be playing with soccer balls… not making them.  But I am constantly reminded that we don’t live in a perfect world.

 

Chad Tragakis, Senior Vice President, Hill & Knowlton, Washington D.C, and writer for the Hill & Knowlton Blog, ResponsAbility.

Financial Crisis Inspires Doing Well by Doing Good

Nothing has put the mandate for doing well by doing good more front and center than the financial collapse one year ago. For three decades, Greed has been Good! Better than good, it was great!

In America in the 1930s, a chicken in every pot was the social goal. People in the Great Depression were literally starving. Anyone with parents or grandparents who lived through those times is familiar with stories of struggle and strife. In the 1940s, defending our freedom was the call of duty for every citizen. War brides dreaded the sight of uniformed men at the door and mothers prayed for their sons to return home alive. Honor and freedom were the goals citizen’s strove for on both sides of the Atlantic. In the 1950s, a safe and secure life climbing up the corporate ladder was all any family could want. Moms stayed at home baking apple pie and dads worked to put two cars in the garage. Father’s Knew Best, kids were respectful, and a common morality ruled.

In the 1960s, things got a bit more real again. A throwback to the 1940s, principles of right and wrong, justice and injustice threw the nation into a state of turmoil. We didn’t always believe the same thing, but at least we had beliefs. The 1970s brought with it a new restlessness in post-war America. There was no cause to fight for anymore. The apathy led to the Culture of Greed.

Oliver Stone made a movie ironically intended to expose the superficiality of the world of finance. Instead the Hollywood version of the money machine made Greed a Star. Gordon Gekko became an American idol and profit at any cost became glamorous.

It didn’t matter how you made money anymore, just that you made it. You could beg, borrow, and steal to get to the top and it was all acceptable. It was simply “good” business…

Now a new kind of good business is breaking through to the other side. No longer a fringe idea for those outside of society, the Business of Good is one of the biggest industries in the New Economy.

The Wall Street Journal, one of the Greed culture’s loudest voices, reported this week on the move of talented college grads out of finance and into “doing good” professions. A MIT graduate student who originally intended to go to Lehman Brothers switched his plan to engineering and solar-power technology. New grads are flocking in droves to social entrepreneurship careers, social advocacy start-ups, better world businesses, and environmentally sound green business endeavors.

Phew! More proof that there is silver lining in every dark cloud. And it only took a major economic catastrophe to do it!

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Study finds women missing out on agricultural boards

ABC Rural

A new study suggests country women are the silent slaves in rural life.

A report by the Rural Research and Development Corporation has found while women do about half the work on farms and in rural communities, they are not represented on agricultural boards.

The President of Australian Women in Agriculture, Patricia Hamilton, says women are held back by their responsibilities.

“First of all women have a lot of personal constraints, they have their own life cycle and life cycle of the family and the farm,” she says.

“In the past, they’ve been told they can’t go onto boards because they haven’t got the skills and knowledge.”

But the Federal Agriculture Minister Tony Burke says the study doesn’t take into account the changes he’s made in the last 18 months.

He says he’s told the research and development boards that applicants shouldn’t need previous board experience.

“In the 18 months we’ve gone from around 20 per cent mark of female represenation, on the RDCs, Research and Development Corporations, to around 40 per cent women, by insisting on merit based selection.”

via abc.net.au