Jonathon
Porritt
There was a time when the debate about “voluntary vs. mandatory” ticked over
in a fairly relaxed and even cosy way. For instance, when the Prince of
Wales’s Business & the Environment Programme was set up in the early 90s
(still under a Conservative administration in the UK, of course), one of the
most hotly disputed sessions at those early seminars was a review of the
strengths and weaknesses of “command and control” regulation, fiscal
incentives and other economic instruments, and voluntary mechanisms. (Pretty
much a non-debate even then, in my opinion, as it’s perfectly obvious that
we need all of them, deployed in different ways, to secure different policy
outcomes).
At the same time, business in the community was out there energetically
exhorting companies to sign up to the 1% Club (devoting 1% of pre-tax
profits to “good deeds”), to fund local causes, send out executives to act
as “mentors” or school governors, support training schemes and so on – all
on a voluntary basis, of course – without so much as a peep of protest from
NGOs or community groups.
Fast forward ten years or so to the World Summit on Sustainable Development
in Johannesburg, where the “voluntary vs. mandatory” debate ran through the
event as one of the most controversial overarching issues needing to be
addressed. A dialogue of the profoundly deaf ensued. Business leaders were
intent on demonstrating the huge benefits that already accrue from their
voluntary programmes and partnerships, but were reluctant to engage in any
debate about the role of government in mandating an accelerated process of
change.
Most NGOs were critical or even contemptuous of all this voluntarism (asking
on whose terms is it being promoted, who measures it, who polices it, who
really benefits from it, and so on?), whilst demanding a raft of new
regulatory interventions by government and multilateral organisations.
As regards governments themselves, the US Delegation was intent on rolling
back the last thirty years of regulation in defence of the environment,
labour rights and public health; EU delegations wittered on about “an
appropriate balance”, whilst rejecting out of hand any suggestions about
increased regulation or binding targets; and the UK Government plugged away
at its own “enlightened voluntarism” line to avoid the debate about
regulation.
And the result? Crudely put, voluntarism won hands down. The WSSD’s Plan of
Implementation (PoI) is written in the soft language of “taking into
account”, “encouraging greater partnership” and so on. Business-as-usual
banalities abound. Corporate accountability is to be secured by companies
voluntarily committing themselves to increased transparency, improved
reporting and better stakeholder dialogue. Oversight of the PoI is to be
vested in the UN’s Commission on Sustainable Development (a patently
ineffective and marginalised body), and every other UN body must continue to
play second fiddle to the World Trade Organisation (WTO) and the old Bretton
Woods organisations like the World Bank and IMF.
And that’s precisely the issue. These institutions cannot act
disinterestedly to secure a proper balance. They are all zealously committed
to the dominant, neo-liberal paradigm of economic globalisation – that has
so clearly failed the majority of nations on earth over the last twenty
years...
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New Academy
Review: Volume 1 Number 4
Winter 2003/4
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Any
given asset pool is obviously worth more under the guidance of a good
management team.
Larry Chen
In other words, you can all bog off while we continue to trash the
planet in the name of free trade.
Jonathon Porritt
People, countryside, skills are allowed to moulder away, while we
truck in food for those who can afford it from the other side of the
world.
Anita Roddick
One of the greatest challenges now in CR is exploring how business
can trade with the four billion poorest people on the planet in ways
that are commercially viable and environmentally sustainable.
David Grayson
The task is to change globalisation from a zero-sum game in which
there are victors and victims, winners and losers, into a non-zero sum
one in which all can be winners.
Olukunle Iyanda |
Contents
A View from the Chair – Anita Roddick
Notes from the Edge - Tom Cannon
Debating Points
The Voluntary vs mandatory debate -Jonathon Porritt
Perspective
Corporate Responsibility – Fast Forward? – David Grayson
Refereed Papers
Accounting Narratives Evaluation: Using Texture as a Measure of
Quality – Justin Iu and Courtney Clowes
The Polluter Pays Principle – Peter Wheale and Laura Heredia Amin
Inclusive Globalisation: A Challenge to Multinational Enterprises–
Olukunle Iyanda
Governance, Social Responsibility and the
Banking Sector – Jonathan Batten and Warren Hogan
Regular Features
University of Cambridge Programme for Industry
The Merits of Socially Responsible Investing - Larry Chen
New Academy of Business
Women speak about Corporate Responsibility from Factories and
Plantations in Central America – Marina Prieto, Jem Bendell and
Rupesh A.Shah
Research Notes
Who would be a Trustee? – Jill F. Solomon, Aris Solomon, Nathan L
Joseph and Simon D. Norton
Social Responsibility through Corporate Strategy: a Matter of
Governance– Trevor Lucas and George Lafferty
Book Reviews
What’s On
About the Author
Notes for Writers
Technical Information
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Dame Anita
Roddick (an excerpt)
Agreements like GATS threaten to force the communities of
the world even further into pathetic dependence on the crumbs from
multinationals by opening up water, health and education to competition
from powerful multinationals.
People sometimes say that localisation is somehow incompatible with
trade. I know it seemed strange to some that I was advocating
localisation, while at the same time building up an international retail
business with outlets in 49 countries.
I don’t believe there’s any contradiction. When the Victorian advocates
of free trade first wove together their political beliefs, they meant
the crucial right of free people to do business with each other on an
equal basis. Free trade to Cobden and Bright meant the very opposite of
slavery. And I believe they were right.
But that rallying cry has become perverted over the past generation to
mean something very different. For our Victorian predecessors, free
trade never meant the right of the rich and prodigiously powerful to
ride roughshod over the poorest and powerless.
It never meant the imprisonment of Indian farmers for patent
infringement by the powerful corporations who own the GM seeds carried
around on the winds. Or charging for water in the Philippines, so that
the American military base gets an unlimited supply while the local
villagers can barely afford any.
And it certainly never meant opening up the poorest communities in the
world to competition for their schooling and health services from
French, British and American giants ...
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ACCOUNTING NARRATIVE
EVALUATION:
USING TEXTURE AS A MEASURE OF QUALITY
Abstract
This paper applies a texture-based approach to evaluating accounting
narratives. We employ the texture index created by Sydserff and Weetman
(1999) as it is purported to evaluate narratives more accurately than
previous methods. Not enough emphasis has been placed on the utilisation
of linguistic tools in the accounting context. We see that a rigorous
test serves the accountability function and may contribute positively to
investor protection and confidence. We support the contention that
improving narrative evaluation will help increase the quality of
accounting narratives as they are presented in corporate annual reports.
Quality for purpose of this paper is defined as a function of
readability and understandability. These characteristics are considered
essential for informed investment decision-making. We focus on the
usefulness of the texture index in determining an appropriate measure of
both readability and understandability by applying the texture index to
a sample of corporate annual reports. Our results show conditional
support for the use of the texture index as a viable alternative to
readability tests.
Justin Iu and Courtney Clowes,
School of Accounting and Finance, Deakin University |
Inclusive globalisation: A challenge to multinational
enterprises
Abstract
This paper examines globalisation within the context of corporate
social responsibility. It argues that globalisation, as a concept, is
neutral but that its implementation within a capitalistic rather than a
social framework produces results that divides, rather than integrates,
the world into victors and vanquished, proponents and opponents. The
paper advocates a more inclusive globalisation, analyses the role of
multinational enterprises in the globalisation trend and offers
suggestions on how multinational enterprises can serve as catalysts in
promoting a globalisation implementation mode aimed at creating a more
inclusive globalisation, thereby reducing international inequality and
poverty. Olukunle
Iyanda, Department of Marketing, University of
Botswana
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Governance,
Social Responsibility And The Banking Sector
Abstract.
Banks, in both the developed and undeveloped world,
remain at the core of financial systems and have the unique ability to
write cheques against themselves. In light of the essential culture of
credit at the heart of banking operations then the structures of
corporate governance should especially reflect the supervision and
management of risks and credit. This means that committee and management
structures as well as staffing commitments revolve around credit and
other risks.
Jonathan
Batten and Warren Hogan, School
of Accounting and Finance, Deakin University
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The Polluter
Pays Principle: An Assessment of Various Economic Instruments’ for the
Control of Pollution
Abstract
This paper compares and contrasts the policy implications of certain
important economic instruments, namely, taxes on pollution emissions;
subsidies; tradable emission permits; and ‘strict liability’ at law
devised for repairing market failure in the context of industrial
pollution. The respective ability of the various economic instruments to
aid control of pollution from the perspective of the ‘polluter pays
principle’ is reviewed and, in each case, what the polluter is expected
to pay and to whom, are reported. The views of a carefully selected set
of respondents were solicited in a survey of the FTSE 100 companies
where respondents were asked to assess the extent to which the specific
economic instruments comply with this principle and the findings from
this survey are reported. The authors conclude that market mechanisms,
for example effluent taxes and tradable permits, despite their
limitations, are not only capable of achieving a given pollution
standard at least cost but, of the instruments considered here, are the
ones preferred by the majority of the TSE 100 company survey respondents.
Peter
Wheale & Laura Heredia Amin, University of Surrey
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Research Note - Abstract
Who Would Be a Trustee? The Growth of SRI in UK Pension Funds:
Socially Responsible Investment (SRI) has grown substantially in
recent years in the UK, moving from a fringe to a mainstream investment
sector. In this paper we summarise the current state of SRI in UK
pension funds. We discuss a number of trends characterising the recent
growth in SRI, including: the drivers of SRI; how SRI has evolved from
being restricted to dedicated ethical funds to being applied across
mainstream pension funds; the shift away from screening towards an
active engagement approach to SRI; the emergence of a risk-driven
approach to SRI, and; general perceptions of an SRI dividend within the
pension fund community. Further, we discuss the impact of the recent
change to pension fund law forcing pension fund trustees to disclose the
extent to which (if at all) they take account of social, ethical and
environmental (SEE) issues in their Statement of Investment Principles
(SIP). Lastly, we make predictions concerning the future direction of
SRI in UK pension funds and discuss the changing perception towards SRI
within the pension fund trustee community. We suggest that pension fund
trustees are being pressured to take on more responsibilities in all
areas and that SRI is just one area where they are being asked to
broaden their accountability. We conclude that as pressure increases it
will become increasingly difficult to find suitable people to take on
the role of pension fund trustee. One policy recommendation which we
make is that increased training and improved incentives will be
necessary in the future to attract and retain trustees in the future.
Jill F. Solomon, Aris Solomon, BRASS, Cardiff Business School,
Simon D. Norton, Cardiff Business School, Cardiff University and
Nathan L. Joseph, Manchester School of Accounting & Finance,
University of Manchester |
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