Vol 3. No 4 November/December 2012

Holding to Account

PwC’s CEO Bob Moritz on his gold standard of corporate governance: employee engagement.

By Dirk Olin

Robert (Bob) E. Moritz has been with PricewaterhouseCoopers LLP, (the U.S. member of PwC International Limited) for more than a quarter of a century. He became a partner in 1995 and was elected to a four-year term as chairman and senior partner in 2009.

Before assuming that role, he served as the asssurance leader of the U.S. firm from 2006 to 2009 and managing partner of the New York Metro region from 2004 to 2006. From 2001 to 2004, he led the U.S. firm’s financial services audit and business advisory practice, which includes the banking, capital markets, insurance, investment management, and real estate sectors. From 1998 to 2001, he served as the metro regional financial services leader. In the early 1990s he served a three-year tour with PwC Japan in the Tokyo office, providing audit and advisory services to multiple European and U.

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Crony Capitalism Confronted

Right, left, and “other” convene to argue—respectfully—about a vexing societal dynamic.

By Nick Sorrentino

At CR Magazine’s recent Commit!Forum, held at Cipriani Wall Street and the New York Stock Exchange, we convened a forum within the forum. We dubbed it “The Unconvention,” because it was designed to provoke unconventional thinking—debate and disagreement, yes, but with participants committed to respectful argumentation and the pursuit of common ground.


One of the most highly rated sessions was a panel grappling with the concept of “crony capitalism.” Moderating the panel was Nick Sorrentino, director of political outreach for The Future 500, a non-profit organization dedicated to building bridges between corporations and non-governmental organizations (NGOs). Says Sorrentino, “I spend a lot of time thinking about the space where politics and business come together.

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Apples to Apples

America’s most transparent large-cap companies—sector by sector.

By the Editors

Welcome to the second annual set of “Industry Sector Best Corporate Citizens” lists. For these compilations, we use the same methodology as the “100 Best Corporate Citizens List,” with one additional data slice. The Best Corporate Citizens database comprises publicly available data from Russell 1000 companies collected and analyzed by IW Financial, a Portland, Maine-based financial analysis firm.

For the “Industry Sector Best Corporate Citizens” lists, we identify the industry sectors with high representation among the Russell 1000, our starting universe for our database. We then narrow those to 10 and apply the same review process to the companies on those lists.

The methodology collects 324 data elements in seven categories: climate change, employee relations, environment, financial, governance, human rights, and philanthropy.

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Measure (and Report) What Matters

The business case for environmental, social, and governance metrics.

By Peter A. Soyka

Financial market participants in the United States are making ongoing judgments about the quality of senior management in all publicly traded firms. Increasingly, they are considering a variety of environmental (including health and safety), social, and governance (ES&G) metrics in addition to more conventional endpoints. These judgments will be made irrespective of whether and to what extent company CEOs and other senior executives choose to engage with stakeholders, provide ES&G information, or otherwise actively try to influence those rendering such judgments.

Accordingly, corporate executives should recognize and make the most of their opportunities to influence external stakeholder judgments in a positive way.

They can do that by providing meaningful ES&G information that corresponds to at least the major issues shown to be of interest both to investors and senior managers at leading companies.

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The Sizzle With The Stakes

Why shareholder primacy doctrine is at least myopic—and possibly delusional.

By Mark McElroy and Jo van Engelen

It is customary practice in business to subordinate corporate programs and initiatives, no matter what they are, to business strategy in some way or another. Few would dispute this—first we acknowledge strategy, then we determine how best to support it with whatever program or initiative we happen to be dealing with. One articulation of this approach, where sustainability is concerned, can be found in a 2006 Harvard Business Review article by Michael Porter and Mark Kramer. Here is how they explain the connections between corporate sustainability management (CSM) and strategy from their perspective: “A corporate social agenda looks beyond community expectations to opportunities to achieve social and economic benefits simultaneously. It moves from mitigating harm to finding ways to reinforce corporate strategy by advancing social conditions.

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The Right Report

How to achieve genuine verification of corporate sustainability performance.

By Gwendolen B. White

Character is like a tree, and reputation like its shadow. The shadow is what we think of it; the tree is the real thing.
—Abraham Lincoln

If reputation is only perception, why does it matter for a company? If a company is doing well financially, is that enough? In recent years, the answer has been no. How did this come to be?

During the last 30 years, several things have influenced the way companies focus on their reputations. Large corporations such as McDonald’s, Apple, and Walmart have become recognizable all over the world, and globalization has brought greater scrutiny to all aspects of their products. News of unsafe products, poor working conditions, or environmental pollution can tarnish a company’s reputation. What’s more, bad news is traveling faster and faster; communication through the Internet and cellphones has connected stakeholders with unprecedented speed.

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Dirty SOX?

Two teams of thought leaders clashed over the worth of the Sarbanes-Oxley Act—including one of the bill’s sponsors himself.

By Heather Clancey

A decade after passage of the Sarbanes-Oxley Act (SOX), critics complain that the mandate for disclosure drains the competitiveness of corporate America. Supporters, however, argue that the law contributes to a more holistic awareness of corporate responsibility across big businesses.

In short, SOX dictates policies for independent audits and approval of financial statements at large public companies. The legislation’s impact—and the issue of corporate disclosure generally—was debated in October at the COMMIT!Forum, CR Magazine’s annual gathering of high-level corporate responsibility (CR) professionals.

“It is helping extend fiduciary responsibility deep into the company,” said Laralee Martin, executive vice president and chief financial and operating officer at Jones Lang LaSalle, the commercial real estate company.

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Staying Committed

A look forward and a progress report.

By The Editors

At Corporate Responsibility Magazine, we are biased. In fact, we are very biased. We want companies to be more sustainable. We designed the COMMIT!Campaign as a multi-media platform with the explicit intention of rewarding those that do and calling out those that don’t.

Deemed the “match.com for corporations and causes,” and the “Davos of corporate responsibility,” the campaign calls on companies to make commitments that will change the world. Throughout the campaign we address a set of anchor topics, set up a constant drumbeat, convene executives from the private and civil sectors, and work to find solutions to society’s toughest challenges. The campaign culminates with those actors being rewarded at the annual COMMIT!Forum.

Here’s a roadmap to the 2013 Campaign.

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Girl Trouble

One recent report would have you believe that progress on the gender equality front has been underreported in the private sector. A paper published by economists at the Federal Reserve Bank of St. Louis posits that the gender gap, which has undeniably been shrinking for decades, might be smaller still when analysts factor in such elements as education and work benefits. According to the study, the gap between the median earnings for men and women was 16.5 percent in the second quarter of 2011, down from 30 percent in 1989. But the reality might be closer still, the authors argue, because hourly earning differences are narrower, and men disproportionately occupy the highest paying professions.

Oh, and the economists offer one more gilded lily. Another source of gap exaggeration occurs, they say, because many women, after having children, consciously opt for jobs with lower pay but better benefits.

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A Greenwashing Checklist

Companies’ sustainability reports offer clues about both performance and integrity.

By Scott Wicker

This year, thousands of companies and organizations will issue sustainability reports. Inside the cover pages, data will be presented that is not available anywhere else even in financial filings disclosure forms. If the reports are following international sustainability standards, information will be presented on employee turnover, workplace safety, human rights, environmental impact, and charitable giving, among other topics.

For investors, sustainability reports provide insight into a company’s values, priorities, resource allocation, social commitments, and performance. But consumers also are benefitting. Purchasing decisions are no longer just a matter of price. Mindful consumers also are looking for companies that are transparent about their conduct.

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