CSR: We will be overcome

Six years on... and still scratching...

Reminiscent the good old time of CSR-postings on this blog, here’s a must-add: Ed Freeman on “the world has changed” and so has business. Interjecting the blogger before this: yep, the net has changed, too. Googling around for a photograph of Ed to accompany the post, the first ten hits relate to Ed “too tall” Freeman, some soldier with a glorious history of being a helicopter pilot in Vietnam.

Ed starts with the problem of the “S” in CSR - and that the distinction between social and economic in reality portrays the problem of a system that prevents change, thus becoming part of the problem. It’s a “very western idea” that there is a rift and therefore a connection to be build between social and economic.

He’s nicely linking up to his work on Corporate Stakeholder Responsibility with Hicks (2007), and of course re-introduces Miles Davis’ “So what?”. Which is what his intro leaves me with - with just being an “intro”.

But I’d never say I’d be a bit disappointed with what he’s saying. He’s just too cool jazz. And maybe it’s just that he wants to set an agenda towards “make capitalism better”?


links for 2009-07-17


links for 2009-06-21


links for 2009-05-28


links for 2009-05-21


links for 2009-05-18


links for 2009-03-23


links for 2009-03-22


links for 2009-03-19


links for 2009-01-30


Finance after the Turmoil: Markets, regulation and Bruce Almighty

The rather optimistic title of this forum (… after the Turmoil) says it all: Host Ackermann sees “the dust settling”. What is the response to crisis, how can this lead to an “optimal system”?

The main challenges, according to Axel Weber, President of Deutsche Bundesbank are institution-specific approaches and all the mistakes that have been made. To the EU, this is even more pressing than to any other: we have to prevent happenings such as Lehman, *and* deal with the ones that happen in the US - including “fire sales”. The German response was a systemic approach, recapitalisation is within the remit of governments. In crisis, banks have much higher capital demands. You need to raise capital buffers, and this can only be done through the government.

Ackermann asks: Should there be one global accounting standard? Quick answer from Cerberus (apart from that this was that doggy in front of Hades, where these not the guys highly involved in M&A a la KKR?) Senior Advisor Cees Maas: Yes. Every country feels it has its own structure and therefore have their own interpretation. That is not helpful, so that within 3-4 years we might be there. Sounds like Lafontaine’s intimus Flasbeck speaking. Nice.

Thunell, CEO IFC, assumes that by spring, “we might be at an employment crisis including political tension”. It would therefore be essential to focus on the safety net for the very poor. So, Ackermann follows up with a question on if there should be an Early Warning System - distant from the aim of making money and who could this be (I had always thought that this is the role of central banks? Never mind). Weber takes this up with that there probably is “too much hope in EWS indicators” and if these would be successful, the people developing them would no longer be in academia (a bit telling, this statement from former Prof. Weber, or is it not?)

To put it politely: it probably rings true from all of the above that things in this forum were not really all to substantial. Another Erkenntnis was that Banks have departmentalised and thus minimised their risks even before the crisis, and, basically as Weber says “Banks are not Bruce Almighty” (well, bankers certainly thought about themselves in these terms, or did they not?).

Does this speak against accountability? I would say so, but then: I am not a banker. It certainly does not speak for the quality of this forum, hosted by the guy who had only six month ago the goal of reaching a 25% yield on its equity. I would have another thought here: If this is the summit of top European bankers, it’s a pretty low one. Certainly not Mount Everest. More like Kleiner Feldberg

They seem to feel this too: Ackermanns final apercu (accompanied by the famous Ackermann grin) ironically mentions Reagan’s statement “I think we should keep the grain and export the farmers”. You got it, man.


The role of the IMF

The basis of this discussion is that Mervin King suggested the IMF should become a non-resident board, IMF might be in charge of lending decisions, but the management should be much more independent. Thomas Mirow, President of ERDB, recommends to be cautious. “All that is decided, has daily impact on the people.” To think “the people will just be doing fine” would be naive (err… that’s an Erkenntnis, innit?) - regards Bretton Woods II that means that it would not be recommendable to spend too much time in creating novel institutions, more important is cooperation, regional integration. “We should not think that a college of wise man would be in a situation to govern the world.” (Laughter or jewellery rattling from the audience) Thanks for acknowledging.

On the other hand, Werder di Mauro sees that the advantages to more independence in banking supervision - towards accountability - would be logical to extend this to international institutions. I’d say she probably wants to be one of those wise women. Global vs regional coordination, it seems.

Jong-Wha Lee from South Korea sees the fundamental problem in governance and accountability. How do EU-countries report? They seem to be calling the shots. And, at the same time, a number of them are debtors. Why are Asian countries not included in decisionmaking of IMF? At the same time, “we support the increase of the financial importance, but IMF its not a regulator: without private capital influx, this will not be successful.”

Mirow makes another point towards his regional approach: A lot of banks think about leaving economies where they have made a lot of money: they should stick to them, because fundamentally they are good, and politically it would be a catastrophy. This is, what Köhler just earlier meant with  “Anstand”, making a plea to responsibility.

Seems they got the picture - or at least they are debating it?


links for 2008-09-08


On the Ruggie-Report

As the smoke seems to have cleared by now, I thought it would be good to sum up the major developments about the Ruggie-Report on Business and Human Rights. Here is the report as well as the collated comments - a fascinating and in my opinion quite convincing example of multi-stakeholder statements.

In a nutshell: Business and government must adhere to three principles - the state duty to protect against human rights abuses by third parties; the corporate responsibility to respect human rights; and develop more effective access to remedies, when human rights abuses have occured. Currently, business conduct produces what the report calls “governance gaps”, refering to differences of corporate behavior overseas and back home. These gaps and legal loopholes provide “the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation”.

However, according to the Global Policy Forum and Misereor (download), the report does not have global governance solutions to the global governance gaps it notes. Instead, it is limited to what its author deems politically achievable. This above all includes incremental steps, such as Bilateral Investment Treaties (BITs) and export promoting via Export Credit Agencies (ECAs). On a positive note (made by Oxfam Australia), Ruggie is in favor of strengthening judicial capacities to hear complaints and enforce remedies against corporations, thus demanding a stronger role for government. Even stronger, Ruggie states the opportunity and in fact necessity that corporate misconduct should be dealt within criminal courts such as the ICC - a primer in regards to business responsibilities. Still, Ruggie categorically rejects the UN Norms or any other global legal instrument to establish a fixed framework of human rights duties of corporations.

A critical look by Ethical Corporations’ Peter Davis led to a raging response by Professor Ruggie. So maybe the smoke has not cleared after all - which might not be such a bad thing in any case, as it will at least ensure that - and this is on what most stakeholders agree - the work goes on …




links for 2008-04-15


Is there life after work in China?

clock.jpgCSR-asia.com - probably the most comprehensive source on CSR-issues as they emerge within Asia - ran a research on work-life balance that got prominent coverage by a number of chinese newspapers. After CSR-asia had reported about serious lack of work culture regards w/l in 2004 and called again for it in 2007, a significant improvement have seems to have happened since. And it did not go down unnoticed: Not only that South China Morning Post ran a big report (scanned in, as not linkable), so did Wen Wei Po, The Oriental Daily, Macao Daily News, and Metro Hong Kong. Other unlinkable sources include Other unlinkable sources that carried reports are the Hong Kong Economic Times and The Sun.

The blog of CSR-Asia comments: “Even though the research is excellent and the issue is topical, I am still surprised at the depth of coverage it’s received; editors clearly think that work-life balance is an issue people want to read about.”


links for 2008-04-09


Don’t break my China?

china-oil.jpgA couple of weeks ago, the pension fund of the MEP (Members of European Parliament) divested from Petrochina, China’s state-run oil firm and Sudan’s largest oil partner. The move followed after one of Europe’s largest pension fund PGGM divested. PGGM made the decision only after extensive efforts to have Petrochina engaging over Sudan.

Other large pension funds which have divested from companies because of Darfur include Berkshire Hathaway (Warren Buffett – USA), Fidelity Investments (USA) and CalPers (USA). However, Petrochina still is a participant in the UN’s Global Compact.

On another note, I wonder if it’s just another case of Fausts “Two souls, alas, are swelling in my breast”, as the concept of the “Harmonious Society” was enshrined as one of the party’s mainstream ideologies at the 17th National Congress (2007):

Guided by the scientific outlook of development, the whole country, from the top authorities on down, is on board for building a harmonious society.

(Please read the entire article in the Voice-of-China’s “China’s Daily” - and let us know if you think that there’s some condescending note buried in there).

Maybe it’s the shiny happy people concept that instigated the membership - only that the top-dogs rather cash in as long as they can. Sounds familiar? Think Enron and Co., just on a slightly larger scale and with a few more casualty. Just a few.


IBM - Leveling the playing field

kugelkopf_seite_web.jpgIBM and National Geographic invites you to send in a part of your cheek and to see if you’re originally (and genetically) from Africa (I’m a spoiler: Yes, you are). There are a number of other projects available “open source” (IBM-speak for “free and over the net”) that seem to be quite intriguing. Check them out and let me know what you think: PowerUp is a sort of sim-city, complex and within a multi-player environment. Nice and for kids (3-6) is this, for their teachers (who, as Stan Litow, Head of Corporate Citizenship and President of the IBM Foundation, says, does often not have a formal science education) maybe this. For SME, there’s an open source online suite available in “various African languages” (Litow) for Nigeria, Ghana, Kenya, Zambia and others. And, to top it all up, most of us probably have heard about the virtual supercomputer. It seems to work now.