THE LIFEWORTH REVIEW OF 2008

Movement East?

May 10, 2009 by  
Filed under Second Quarter

Simon Zadek of AccountAbility: challenged conference delegates to engage with emerging economies

Simon Zadek of AccountAbility: challenged conference delegates to engage with emerging economies

At the same Net Impact conference, Simon Zadek of AccountAbility encouraged younger delegates to think about why they were interested in the conference. Perhaps in the future being a CSR manager in a company such as Motorola could be an important role to play; or perhaps not, he mused. He challenged delegates to consider what the challenges of tomorrow’s world will be, rather than focusing on what has emerged over the last decade. The emerging corporations on the world stage are from Brazil, India, China and Russia, he explained, and engaging them is key.

This view is shared by other Western practitioners, such as Jane Nelson,38 with Harvard University, who has emphasised that India and China need to embrace corporate responsibility or other efforts are futile. Policy Advisor Eddie Rich,39 of the Extractive Industries Transparency Initiative, agrees that the influence of companies from these countries is key to the effort against corruption worldwide. It was promising, therefore, that the IBM study of CEOs found that Asian respondents were placing higher importance on their social responsibilities than those from other regions.

As a contribution to the UN Principles for Responsible Management Education working group on Research Priorities, in April 2008 Lifeworth conducted a survey of the 4,000 subscribers to its bulletin on CSR about their view of the future of research needs on responsible business. Respondents considered that the most important regions for future CSR research are in Asia. Other regions with emerging nations were also ranked highly, as shown in Figure 7 (available in pdf download and hardcopy versions only, from Lifeworth’s bookstore).40

Jane Nelson: India and China need to embrace corporate responsibility or other efforts are futile

Jane Nelson: India and China need to embrace corporate responsibility or other efforts are futile

Dr. Zadek wondered out loud whether it would be the Chinese oil firm Sinopec, rather than Shell, that would have more influence on sustainable development in years to come, for good or ill, and whether Net Impact delegates would seek jobs in the more challenging companies and environments in order to maximise their influence. ‘What’s your appetite?’ That question encourages us to reflect on whether corporate responsibility is emerging as a profession or social movement, or both. If processes of professionalisation dominate, with codes and qualifications determining what is considered appropriate, will that help or hinder the transformative potential of people working in this space? Many of those people speak of being part of a movement: a search for ‘corporate social responsibility movement’ delivers 13,700 hits on Google.41 If it is a social movement, what are the implications for priorities of work, and of research?

The field of social movement studies is large, and draws on experiences as diverse as the civil rights movement, the feminist movement and the environmental movement. The basic insights of these historical experiences and analyses are that people in a movement benefit from developing an understanding of common values and goals. They benefit from a sense of shared identity, from knowledge of the repertoires of action that movement participants use, and the elites that they engage with. They consider methods of entryism into those elites and the dangers of co-optation, because they recognise the role of power in both shaping the problems they seek to overcome and the opportunities for change. Consequently, they discuss strategies for influencing the political opportunities they can seize, and choose terminology on the basis of its potential to mobilise people and create deeper change. People participating in movements often recognise particular convening processes, networks and organisations as key to the movement’s success and evolution. In light of this context of the history of social movements, the corporate responsibility movement, if there is such a thing, still has some way to progress. The limited evidence of gender consciousness and solidarity among women working in corporate responsibility, discussed above, may be a symptom of a movement that does not yet know itself. Whether the outcome of networks such as Net Impact will be the socialising of business, rather than merely the business of socialising, is yet to be seen. The potential for a movement to emerge and have a historic impact on society is explored in more detail by the lead author of this review in The Corporate Responsibility Movement.42

» Hungry bubbles

(The references are available in the pdf download and hard copy versions of this annual review, available from Lifeworth’s bookstore.)

This section can be referenced as:

Bendell, J., and N. Alam, S. Lin, C. Ng, L. Rimando, C. Veuthey, B. Wettstein (2009) The Eastern Turn in Responsible Enterprise: A Yearly Review of Corporate Responsibility from Lifeworth, Lifeworth: Manila, Philippines.
(Page numbers for this section are available in the pdf download and hardcopy.)

Rent-a-geek

May 7, 2009 by  
Filed under Third Quarter

‘We see things as we are, not as they are’ it says in the Talmud. If we are someone who wants to benefit from society’s resources and respect, and who therefore associates with the people, organisations and ideas ‘in power’, how will we see ‘things’? Will we see them in a way that accepts, even praises, the status quo, and scoff at ideas that seem to challenge power? As you are reading this review, and have got to this stage of a rather long one, you are likely someone who takes pride in ‘knowing’ about things. But what are you actually coming to know, if you do not look inside yourself? In the face of a financial meltdown, the head-scratching of people who like to think they know things, and know some things better than others, should serve as a lesson.

During the third quarter, in classrooms and canteens of business schools around the world, business school professors were muttering about ‘necessary oversight’ and ‘greater transparency’. Many could not bring themselves to use the ‘R’ word: regulation. It does not take an expensive education to know that markets require regulation, so the stupidity of thinking that deregulation of financial markets would be beneficial had to arise from a process of social conditioning, willingly participated in by careerist academics.

‘Since the early days of recorded history there have always existed a class of people who will sell their intellectual prowess to those in power. The exceptions seem so rare that they are talked about for centuries afterwards. The most famous being Socrates. More typical are those who come up with reasons that the status quo is the appropriate organization of society and that those in power are the perfect persons to be running things,’ explains Robert Feinman.61 Until the 18th century religious leaders played a key role in providing justifications for power, such as the ‘divine right of kings’. Their influence waned with the Age of Enlightenment and modern science. ‘What is needed is a “scientific” rationale for the organization of society. This role has now been taken over by economists. Through the use of statistics and mathematical theories they have been able to produce whatever justification was desired by those employing them. Proof of their intellectual dishonesty is easily found. For every economist who can “prove” the effectiveness of, say, trickle down economics there is another who can demonstrate that such policies are a complete failure,’ says Feinman. In business studies this approach is sometimes taken to the extreme, when an academic’s concept finds its validity through being adopted by a famous CEO. Therefore, professors in more traditional disciplines have sometimes regarded business academics as intellectual rentboys of corporate elites.

The alternative should not be a retreat to the libraries, but to be clear about the type of business and business person a business school seeks to inform. The difference between a management guru and a management geek is not only the style of communication and the reach of their ideas, but also how they see a wider context and serve a higher purpose.

The World Economic Forum (WEF) likes to think it is the leading intellectual forum on the world of business. As the financial system unravelled, their minor mea culpas mixed with ‘told you so’ was particularly revealing. In interviews with Bloomberg, leading staff at the WEF said ‘chief executive officers who gathered in Davos, Switzerland, over the last five years didn’t listen to warnings from their peers. Davos organizers also say they failed to play tough with the financial-industry bosses, opting to accept their funding and let them turn Davos into a rave-up for Wall Street excesses.’62

Leaders of the Forum have been putting their failure down to excess, rather than principle. ‘We let it get out of control, and attention was taken away from the speed and complexity of how the world’s challenges built up,’ said its founder Klaus Schwab. If not as much money had been taken from Wall Street speakers at Davos, would the WEF really have been much smarter? Hardly. The lesson is that an institution that pays its bills by convening the world’s largest companies to entertain them at high-powered meetings will be beset by systemic sycophancy. Some WEF staff complained that delegates did not listen seriously to helpful sessions on emerging bubbles. But what do they expect when you are in the Alps and Angelina Jolie might be at the bar? The hubris of the Forum is that they see themselves as an emerging power in global governance as significant as the UN. Yet it would be a truly crazy planet if the world’s largest corporations would be able to set the agenda for policies across the world.

Daniel Kaufmann: finance bosses had no incentive to change

Daniel Kaufmann: finance bosses had no incentive to change

A Davos delegate for seven years, the World Bank Director of Governance and Anti-corruption, Daniel Kaufmann, warned finance bosses ‘about global risk and the abusive nature of their actions, but they had no incentive to change . . . why should they have listened to us? I see it with my 10-year-old daughter, who scolds me because I don’t put the garbage in the correct bin. Let’s not delude ourselves. It’s impossible to teach old dogs and investment bankers new tricks unless you change the incentive structure.’63 This implies that if one is truly committed to improving the state of the world then one must reach out beyond the old dogs and fat cats. More than that, you must seek to be accountable to others. Perhaps if the WEF had listened to the protesters outside their luxury hotels, rather than their hand-picked corporate-sponsored NGO leaders, they might have developed a better sense of the state of the world. The WEF staff mistakenly thought such protests were about specific social and environmental concerns, which they could then effectively incorporate into the agenda. Other staff realised that the criticisms were of an economic kind, particularly as the alternative World Social Forum developed. They thought it was a disagreement about which economic theory was best to encourage social development. But the protesters do not challenge what the WEF delegates believe in, but rather their legitimacy to decide for others.

That message has not sunk in. For 2009, Schwab says his goal is to transform Davos into the ‘Bretton Woods of the new millennium’,64 a meeting targeted at establishing a fresh set of global rules for commercial and financial relations, much as the original Bretton Woods conference in New Hampshire did in the summer of 1944. Doing that in their current form, with their current membership, is bound to cause deep concern across civil society. The World Economic Forum might soon find that not only were they the greatest fans of the Emperor’s new clothes: they were those clothes. For the WEF to avoid being an intellectually insubstantial adornment to power, it will need to reconsider its membership structure and its approach to dialogue. This will become even more important if its Global Agenda Councils, which met for the first time in 2008, are to play a useful role in informing how we tackle global challenges.

» Looking East

(The references are available in the pdf download and hard copy versions of this annual review, available from Lifeworth’s bookstore.)

This section can be referenced as:

Bendell, J., and N. Alam, S. Lin, C. Ng, L. Rimando, C. Veuthey, B. Wettstein (2009) The Eastern Turn in Responsible Enterprise: A Yearly Review of Corporate Responsibility from Lifeworth, Lifeworth: Manila, Philippines. (Page numbers for this section are available in the pdf download and hardcopy.)