Vol 3. No 4 September/October 2012

Oversight Overhaul

For better boards, better to exit the boardroom.

By Paul Strebel

The repeated failure of boards to intervene early enough to avert corporate disasters reflects a serious problem in the boardroom that cannot simply be swept under the carpet. The improvements in corporate governance made so far after each crisis have failed to address a fundamental weakness: Boards are too often out of touch with those who can make or break a company.

A disconnect hampers the relationship between the world inhabited by CEOs and board directors on the one hand, and the real world of customers, suppliers, employees, and society at large on the other. The world of CEOs and board directors is made up largely of other CEOs and top executives; in a repetitive routine, they interact mainly with one another, with management, and occasionally with analysts, consultants, and government officials.

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Social Capitalism

CR leaders help corporations be people, too.

By Stephen Jordan

Has anyone else been puzzled by how much corporations are distrusted? Between the tone of some campaign platforms and a recent Public Affairs Council poll showing 44 percent of Americans have little or no trust in major companies, this is an increasingly important issue, particularly since corporate leaders consistently identify trustworthiness as vital to their brands. Corporate responsibility officers (CROs) have a critical role in bridging this divide.

When a private enterprise is labeled a corporation, trust plummets—even though the term merely connotes conformance with a certain legal structure. Some might argue that this disparity in trust is a question of semantics since “business,” as a descriptive term, is generally liked. (“Small business” is practically loved.) But other issues here need to be addressed.

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Fuller Disclosure

Little by little, the windows are opening.

By Zoe Tcholak-Antitch

New Carbon Disclosure Project (CDP) analysis shows that S&P 500 companies are making significant strides in transparency and progress toward carbon goals when compared to the Global 500. The results highlight a tipping point in the actions being taken in American C-suites and boardrooms to integrate a sustainability agenda into overall business strategy despite a lack of comprehensive regulatory requirements in the United States.

The CDP S&P 500 Climate Change Report, released in September and co-written by CDP and professional services firm PwC, on behalf of 655 institutional investors representing $78 trillion in assets, provides an annual update on greenhouse gas emissions data and climate change strategies at America’s largest public corporations.

It reveals that the average disclosure score, calculated by CDP to reflect each company’s transparency on climate change, has increased by 13 percent, and the average disclosure score required by companies to achieve a position in the Carbon Disclosure Leadership Index (CDLI) has increased by 11 percent to 92.

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The Transparency “Super-Pac”

Why sustainability reporting is on the rise.

By Mike Wallace

‘Tis the season for politics, and this year’s COMMIT!Forum is bringing together all sides in what is being billed as the Right-Left Unconvention. Having partnered closely with the forum organizers (i.e., this magazine) since GRI re-opened its doors in the United States, we are very excited to play a part in this year’s event. In fact, we’re incredibly honored to not only have the magazine’s parent company (SharedXpertise) as one of our GRI Organizational Stakeholders (OS), but also grateful for all their added support around transparency.

As most of you know, GRI’s Focal Point USA was officially launched in January 2011 at the New York Stock Exchange (NYSE). We drew more than 200 attendees, and at the event we distributed a list of all known GRI Reporters in the U.S. and Canada.

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Good Work, Good Worker

The organizational responsibility-individual engagement equation.

By Melissa Herrett

As Millennials continue to enter the workforce at an increasing rate, organizations must adapt their engagement policies to incorporate the engagement drivers for this generation. Millennials, more than other generations, have a strong desire to work somewhere that both makes a difference in the world and is dedicated to the community outside of the business. According to a study conducted by Cone Millennial Cause Group and published in Forbes, 80 percent of 13 to 25 year olds interviewed want to work for a company that cares about how it impacts and contributes to society. These individuals are the working population of the future; thus, corporate responsibility is quickly evolving from a buzzword to a necessity for attracting, engaging, and retaining this younger population.

Avatar HR Solutions’ research found that 70 percent of employees believe their organization is responsible in the community, indicating that many leadership teams are already making efforts to increase their CR initiatives and dedication to the world outside their business.

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Good Chemistry

Clorox CEO Don Knauss explains how green works.

By Dirk Olin



Donald R. Knauss joined The Clorox Company as chairman and chief executive officer in October 2006. He has overall responsibility for directing the company’s worldwide business, which generated revenues of $5.2 billion in fiscal year 2011. 





Before joining Clorox, Knauss spent 12 years with The Coca-Cola Company. There, he served as senior vice president of marketing for The Minute Maid Company, followed by a promotion to senior vice president and general manager for the subsidiary’s American retail operations. Beginning in 1998, in what he describes as a formative experience, Knauss served approximately two years managing Coca-Cola’s businesses in 10 countries of Southern Africa. In 2000, he was named president and chief executive officer of The Minute Maid Company, and he became president and chief operating officer of Coca-Cola North America in 2004.

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An Ounce of Prevention

Having a safety culture is not the same as building a culture of safety.

By Kevin Beaty

Every company has a safety culture. But not every company has a “culture of safety” that protects its employees, its reputation, and its bottom line. Companies that don’t treat safety as an essential part of their mission and operations are not only increasing risk, they’re also missing out on important benefits.

A culture of safety focused on eliminating workplace injuries and illnesses can help reduce workers’ compensation, medical, legal and insurance costs; decrease absences, and improve productivity. For every dollar invested in safety, a company can save $4 to $6, according to the Occupational Safety and Health Administration (OSHA).

If you don’t focus on safety, accidents happen, and you’re at a loss as to why your employees continue to make poor decisions that result in injury. Whether you realize it or not, you have established a safety culture that is driving these results; it just so happens that the culture in question is not very good.

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And The Nominees and Winners Are…

The magazine’s editors announce finalists and winners for the Responsible CEOs of the Year.

By the Editors

THE WINNERS:

Gale E. Klappa, Chairman, President and Chief Executive, Wisconsin Energy
After taking the helm in 2004, Klappa cut upward pressure on customer rates while also executing a major plan to improve state energy infrastructure, including a focus on renewables.

Jeffrey Ettinger, Chairman of the Board, President and Chief Executive Officer, Hormel Foods Corporation
As Hormel Foods CEO, Ettinger was instrumental in helping set a new standard of transparency and sustainability through robust employee engagement and LEED-certified facility expansion.

Hikmet Ersek, CEO, Western Union
Financial Services
Hikmet Ersek has inaugurated a sea change in the way Western Union does business, focusing particularly on the rights of migrants and immigrants worldwide.

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The Unconvention: Two Deficits

Why conservatives and progressives are both right.

By Bill Shireman

Conservatives are right: As a nation, we are out of money and deep in debt. Progressives are also right: We can’t pay off our debt by extracting it from the poor, the middle class, or the environment.

But many right and left leaders are wrong about the solution.

To reduce the outflow of wealth, some on the right would radically cut government spending now. To increase the inflow of wealth, many would “drill, baby drill” the nation’s resources, as fast as we can. To reduce the concentration of wealth, some on the left would tax prosperity, or simply redistribute it, now. To increase the inflow of wealth, many would spend, baby spend—and pay off our debts by printing more money, as fast as we can.

The right and left often overlook a simple fact: There is a difference between spending money and earning money.

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The Unconvention: Make It, Take It

When nobody owns their environmental impacts, everyone loses.

By Robert F. Kennedy Jr.

When I decided to dedicate my life to protecting the environment through groups like Riverkeeper, NRDC, and the Waterkeeper Alliance, I considered recycling a small and slightly boring part of the solution. But the products and packages we consume cause 44 percent of America’s greenhouse gas emissions, according to EPA data analyzed by the Product Policy Institute. And the potential to adopt a rational, free market-based solution may provide the lowest cost bulwark against global warming with the highest potential for jobs generation and for quickly jump-starting American prosperity.

You see, America’s waste issues are rooted mainly in America’s irrational and rather un-American practice of subsidizing waste disposal. Riding happily on this gravy train of corporate socialism, most of the nation’s top consumer product giants have so far refused to acknowledge their responsibility or expressed any willingness to pony up.

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