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Leader to Leader
Governance and Responsibility: The
Relationship Between Companies and NGOs
One of the most contentious issues
facing economies is the relationship between companies and non-governmental
organisations (NGOs). In different parts of the world, the relationship
accounts for much of the media coverage of business and conditions public
attitudes. It would seem from this coverage that the relationship between
companies and NGOs involves unremitting conflict..
Most of the time, however, links are co-operative and productive while at
times and on particular issues the relationship raises significant
challenges, but sometimes the accusations and abuse goes beyond the limits
of civil dialogue. The assumption here is that companies are malign and any
means are justified to oppose them, while NGOs are disinterested parties,
always on the side of right. No company can ignore such a challenge. Those
who recognise the importance of production economics cannot accept neither
the stereotype nor the crude divide implied. Before addressing this issue
I’d like to look at why the relationship is important and whether conflict
is inevitable. The growing evidence of companies and NGOs working together
and achieving a great deal suggests that neither the divide nor the conflict
is inevitable ... many projects involving many other
corporations and NGOs are real projects with real benefits ...
companies, governments and NGOs perform different roles and
bring along different constituencies – companies their shareholders,
governments their citizens and NGOs their supporters. Cooperation not
coercion is the key to this principle, but mutual advantage is not always
attainable as there will always be unbridgeable differences of opinion.
Here, some level of mutual respect is important..
Lord Browne, Group Chief Executive, BP-Amoco.
The great thing about voluntary
restraint is that you can opt into or out of it as you please. There are no
mandatory inspections, there is no sustained pressure for implementation. As
soon as it becomes burdensome, the commitment can be dropped.”
But it is too easy to beat up on corporations. That they exacerbate and even
cause social inequality is a given. The issue is what to do? For my money
business does have the wherewithal to transform society. At no time in
history have we had so many compelling tools and resources at our disposal
to tackle poverty and inequality. Business can be a force for good and at
the risk of betraying my roots, I strongly believe that society can only be
transformed by economic activity.
For business is the base metal of society. The state we’re in reflects the
value of that currency. And from my perspective it seems that the
speculators have created a run on the currency of society. What is required
is more than a vision to stabilise the market but concrete action backed up
by impartial regulation to restore public confidence and trust. Anything
short of that is just a game of Chinese whispers.
Ken Wiwa
Writer and Commentator
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New Academy
Review: Volume 1 Number 1
Spring 2002
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Social responsibility,
respect for human rights, sustainability and animal protection are now
part of the mainstream business agenda
Anita Roddick
You can hardly blink for fear of
being blinded and seduced by compelling images and touchy-feely words of
the corporate philanthropists
Ken Wiwa
If the rhetoric is not
appropriate the code might as well not exist
Lynette Hunter
Alliances are not simply for the
big guys
James Austin
Business is part of the society
in which it trades however much it may irk those who lead it
Will Hutton
Cooperation not Coercion is the
key
Lord Browne
Corporate Responsibility is an
idea whose time has come
Martin Woolf
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Contents
A View from the Chair
Anita Roddick OBE
Cultural diversity, social responsibility and economic well-being –
three sides of the same future-coin.
Uffe Elbaek, KaosPilot
Notes from the Edge
Professor Tom Cannon
Leader to Leader
The Relationship Between Companies and NGOs: Lord Browne, Group
Chief Executive, BP-Amoco
Ken Wiwa: Writer and Commentator
Refereed Papers
Business Partnering Frontiers: Social Purpose Alliances - James
E. Austin, McLean Professor of Business Administration, Chair of
Initiative on Social Enterprise, Harvard Business School
The Rhetoric and Reality of Codes
Lynette Hunter, Professor of the History of Rhetoric, University of
Leeds
Raising the Stakes or finally Seeing them Clearly? Balanced
Leadership in Times of Economic Crisis
Mary C. Gentile, PhD., author and consultant; formerly faculty at
Harvard Business School, Gary E. Jusela, Vice President, Learning, The
Home Depot; William Wiggenhorn formerly Senior Vice President, Teaching
and Education, Motorola, Inc & President of Motorola University,
Confronting the Critics
Ella Joseph and John Parkinson, IPPR and Bristol University
Response to Confronting the Critics
Martin Wolf, The Financial Times
Response to Confronting the Critics
Will Hutton, The Work Foundation
Reconciling Shareholder Value and Corporate Social Responsibility:
The Role of Regulation
Simon Deakin, Richard Hobbs, Suzanne Konzelmann and Frank Wilkinson,
Centre for Business Research, Judge Institute of Management Studies,
University of Cambridge.
The State of the Game: The Corporate Governance of Football Clubs
Sean Hamil, Jonathan Michie, Christine Oughton and Lee Shailer -
Football Governance Research Centre, Birkbeck College, University of
London
Sustainability Literacy and Organisational Learning
Polly Courtice and Tracey Swift, University of Cambridge
Commentaries
Discrimination is Everybody’s Business: Corporate business takes up
the diversity challenge
Andreas Foller Respect Europe
Diversity at the Top of Organisations, Will oak panelling survive the
Twenty First Century?
Peter Hughes, The Smart Company
Dying for Change
David Ballard, Director General of the British Safety Council
Research Note
Employees and CSR: the missing link
Work-in-progress at The Industrial Society
Theo Blackwell, The Industrial
Society
New Academy Review
Book Reviews
What’s On
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Dame Anita
Roddick
Analyse the world’s hunger for heroes and you’d be
hard-pressed to see it as anything other than a need for leadership. In
every part of the globe, confusion reigns. The certainties that rule of
church or state used to represent are long gone. What we’re seeing
instead is big business stepping up to bat, cynically - to my mind -
taking advantage of the vacuum.
The profit motive is not inherently wicked. Look on it instead as a
powerful engine that can be harnessed for virtually any purpose -
including a socially responsible one. The fact that business is now
faster, wealthier and more creative than most governments means that the
decisions of business leaders affect not just the areas that directly
concern them, but also huge global issues like poverty, the environment
and human rights. As the need to address these problems grows ever more
urgent, it is increasingly critical that the business world exercise its
leadership responsibilities to become a force for positive social
change.
So what makes an effective leader in this day and age? Whatever else you
may think about the man, Tony Blair’s extraordinary speech after
September 11 was the speech of a leader. Blair understood, that day at
least, that it’s the leader who sells the dream. But while passion
persuades, I’m convinced effective leadership is actually quite a subtle
thing. It is influence, as opposed to control. And in order to
influence, effective business leaders need the following: an ability to
communicate, motivate and delegate; an ability to identify and cultivate
talent; an ability to think “outside-in” rather than “inside-out”. Not
only does this give them the vision and the force of character that
equips them for leadership, but it also keeps them moving and learning.
It humanises them, which in turn keeps their people interested and helps
inspire a sense of loyalty.
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Sustainability Literacy and Organisational Learning: the
route to real competitive advantage
Abstract
Sustainable development can be a spur for the sort of innovation and
organisational learning that is the key to being a successful business
in the 21st century. The ability to turn it into a business opportunity
depends in large measure on the human capital within an organisation,
and the manner in which it is developed. The need to develop corporate
wide sustainability literacy is a strategic necessity, both in
establishing the required stocks of knowledge and experience, and in
attracting and retaining the best talent. Consideration is given to the
practical implications of developing a systematic approach to
sustainability literacy, as reflected in the methodology being used as
part of an in-depth case study. Polly Courtice and Tracey
Swift, University of Cambridge Programme for Industry |
Confronting
the Critics of Corporate Social Responsibility
Abstract
This paper sets out in summary form, and makes a provisional response
to, the principal objections to CSR. The first set of objectors are the
‘critics’, that is, those critical of the notion that companies should
regard it as part of their function to respond, except in a very limited
way, to social and environmental issues. The second set are the ‘sceptics’,
those who doubt that companies will take sufficient account of social
and environmental factors given the current (and proposed) framework of
company law, and believe that a more radical rethink of corporate
governance is required. A positive response to these objections
provides a rationale for a formal exploration of the extent to which
soft intervention can indeed be relied upon to promote the public
interest. Ella Joseph, Institute for
Public Policy Research and John Parkinson , University of Bristol
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Reconciling Shareholder Value and Corporate
Social Responsibility
Abstract
UK corporate governance, by prioritizing shareholder value over other
interests, appears to threaten the implementation of a corporate social
responsibility agenda which relies upon voluntary action by companies.
However, case study evidence on labour-management partnerships shows
that some UK-listed companies succeed in reconciling shareholder value
with a long-term commitment to other key stakeholders. An important
factor in these cases is the presence of a supportive regulatory
environment in labour and product markets. Regulation helps to
reconcile shareholder value to corporate social responsibility by
shifting the hierarchy of interests between different stakeholder
groups, lengthening time horizons for investors, and shaping the
conditions for competitive survival in favour of companies which can
comply with quality-related standards. Simon Deakin, Richard Hobbs,
Suzanne Konzelmann and Frank Wilkinson, University of Cambridge
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Raising the Stakes or finally Seeing them
Clearly? - Balanced Leadership in Times of Economic Crisis
Leadership development for times of crisis can teach the value of
strategic pruning, as well as strategic growth. Just as organizations
can grow wisely or foolishly, so can they downsize in better and worse
ways. The necessity for restructuring provides an opportunity to cut
back the branches that will inhibit growth at a later date, when the
market opens up again … Crisis reveals the true stakes of their
managerial profession and of their firms, thereby raising them. So it
follows that the most effective leadership development programs may be
those that allow managers to see those wider, broader and longer term
stakes at all times, and not just when crisis makes their outline
more stark. Gary Jusela, Home Depot, William Wiggenhorn,
Motorola and Mary C. Gentile, author and consultant |
BUSINESS PARTNERING FRONTIERS: SOCIAL PURPOSE
ALLIANCES - ABSTRACT
In the age of alliances, the new frontier for business partnering is
social purpose alliances with nonprofit organisations. Although there
is a long-standing debate about whether or to what extent businesses
should engage in the philanthropic arena, the reality is that
corporations have been transforming their traditional charity approach
to one of strategic community engagement. Behind this shift is the
hypothesis that through new ways of cross-sector collaboration, benefits
can be generated simultaneously for businesses, nonprofits, and
society. The article identifies and provides examples of key links
between business value and social value in the areas of technology,
products, knowledge, customer preferences, employment, supplier inputs,
and corporate values. Partnering with nonprofits is distinct from
partnering with other businesses and factors enabling effectiveness are
offered. These include time requirements, virtuous circles, investment
mindsets, collaboration glue, and partnering portfolio management.
Additionally, the ethics of alliance management are discussed in terms
of transparency, respect, power, fairness, compliance, and loyalty.
James Austin, Harvard Business School |
The Rhetoric and Reality of Codes – Abstract
This paper examines recent developments in the formulation, articulation
and dissemination of corporate codes in global corporations and global
markets. The paper asks why, given the mutually enhancing past
relationship between business ethics and rhetoric, these recent
developments have eluded analysis by classical rhetoric. At the heart of
the analysis is consideration of the impact of distance, both within
organisations and beyond the enterprise to its partners and customers.
It is suggested that many of the concerns and much of the distrust that
has emerged reflects the failure to recognise that many of the concepts
that are employed to frame these codes were never intended to deal with
the extremes of distance faced now. A revised, dialogical rhetoric able
to recognise, interpret, negotiate and accommodate different sets of
values is presented as they key to overcoming distrust and embedding
behaviours based on sustainable codes. Lynette Hunter, University
of Leeds |
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The State of the Game: the Corporate Governance of UK
Football Clubs -
Abstract
This paper investigates
corporate governance in the professional football industry. Boards of
companies are under increasing pressure to operate in an open and
accountable manner. Codes of good practice, recommendations from the
Company Law Reform Review and reports by independent consultancy
agencies have applied pressure on directors to adhere to good practice.
Bottom up pressure has come from shareholders and other stakeholding.
Our survey of both football clubs boards and the stakeholding groups
they serve reveals that standards of governance practice in football
varies considerably. Based on our survey results, this paper argues that
there need to be three main improvements to the corporate governance of
the football industry. First, stakeholding groups need to organize as
trusts to ensure effective participation in corporate governance.
Second, football club boards need to comply with company law and codes
of conduct more closely. And third, a tailored code of best practice
needs to be developed to guide and inform the major players in the
industry.
Sean Hamil, Jonathan Michie, Christine Oughton and Lee Shailer,
Football Governance Research Centre, Birkbeck, University of London
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DIVERSITY AT THE TOP OF ORGANISATIONS Or
Will oak panelling survive the Twenty First Century?
Although there is growing interest in diversity within top teams and its
influence on organisational performance, there is still a dearth of hard
evidence. In the UK, only gender has been researched through the FTSE
Female Index – launched in 2000, whereas, in the US, there is data on
both gender and ethnic origin. For the UK, the FTSE Female Index
demonstrated the paucity of women at the top of organisations. Despite
accounting for over half of the workforce, women account for only 2% of
the Female Executive Directors. Only one FTSE 100 Company represented
in the Index had a Female Chief Executive Officer. Women are marginally
represented in the body of Non Executives, accounting for 8% of the
total. Surprisingly, almost half of the FTSE 100 constituent companies
had no women directors at all …The situation in the US is more
representative, but only marginally so. In 1998, some 72% of US
Companies had a woman director, up from 11% 25 years previously. For
the S&P Super 1500, 10% of Executives are women and 7% come from
Minority groups. Over 70% of Fortune 500 US companies have diversity
initiatives including materials. …Supporters of diverse teams assert
that:the quality of decision making can improve through access to a
wider range if propositions, companies that embrace diversity have a
wider talent pool on which to draw, national champions will better be
equipped to enter new markets if they have the processes to experience
and manage diverse cultures within their usual operating environment at
home, there is an external expectation that companies will be inclusive
not exclusive and a culture that celebrates diversity is more likely to
lead to employees feeling valued.This impacts the willingness to be
open, loyalty and productivity levels. Peter Hughes, The SMART
Company |
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