Vol. 5 No. 1 – Jan/Feb 2014

Quick case study in corporate reputation: GM’s ignition-switch troubles

Quick case study in corporate reputation: GM’s ignition-switch troubles

By Bill Hatton


You’ve heard the saying that perception is reality. Usually, we mean we have to deal with not only what’s actually happening, but with what key stakeholders perceive to be happening.


Case in point: General Motors’ ignition-switch fiasco. After GM initiated a recall in February, the following developments have occurred:

  • Congress convened a House panel to investigate.
  • GM expanded its recall to include 1.6 million cars (2003-2007 Saturn Ions, 2007 Saturn Sky, 2005-07 Chevrolet Cobalt and 2007 Pontiac G5, 2006-07 Chevrolet HHR and Pontiac Solstice).
  • CEO Mary Barra issued a public apology.
  • GM publicly released three memos addressed to the National Highway. Transportation Safety Administration explaining in serially greater detail what it knows about the ignition-switch problem and when it knew it.

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How They’re Building Culture

Editor's Note

Bill Hatton

Editorial Director

A theme usually emerges as an issue comes together, even though stories are coming in from very different sources. If there’s one theme for this issue, it’s that corporate responsibility isn’t something external, but something that flows from what each person in the organization is doing.


In our interview, Sprint CEO Dan Hesse discusses some methods of getting the culture right for his organization. One key: He reminds people about the importance of speaking candidly. “Not to express a contrary view if you hold it isn’t acting with integrity,” he says. Our CEO, Elliot Clark, begins his in-depth discussion with Hesse on page 11.


Meanwhile, Blu Skye management consultant Jib Ellison talks about how the word sustainability implies a distance between doing the right thing and doing business right.

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Responsible People Acting Responsibly

CEO's Letter

By Elliot Clark

CEO, SharedXpertise

CR Magazine uses the name COMMIT!Forum for our flagship conference because the original conference construct was that the companies attending would commit to annual goals on our www.commitforum.com website and at the conference report on their goals. We chose the word “commit” because it is action oriented and has a deep meaning. It is beyond emotion, which is fleeting. Commitment is durable and ongoing. We have another word to describe momentary commitment. That word is “failure.”


Corporations need to first commit to the quality and engagement of their workforce and the leadership needs to set behavioral goals and standards. I get the privilege in my job to interact with CEOs of some of the largest companies in the world. They all have a common concern for their workforce.

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Responsible People Acting Responsibly

CEO's Letter

By Elliot Clark

CEO, SharedXpertise

CR Magazine uses the name COMMIT!Forum for our flagship conference because the original conference construct was that the companies attending would commit to annual goals on our www.commitforum.com website and at the conference report on their goals. We chose the word “commit” because it is action oriented and has a deep meaning. It is beyond emotion, which is fleeting. Commitment is durable and ongoing. We have another word to describe momentary commitment. That word is “failure.”


Corporations need to first commit to the quality and engagement of their workforce and the leadership needs to set behavioral goals and standards. I get the privilege in my job to interact with CEOs of some of the largest companies in the world. They all have a common concern for their workforce.

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From Where I Sit

By Jim Murren

Chairman and CEO

MGM Resorts International


The start of a new year brings with it the promise of new opportunities, new beginnings and, even, new friends. And the beginning of 2014 is no exception.


Earlier this month, I made several new friends when the Corporate Responsibility Officers Association’s board of directors met in Las Vegas. It was a great privilege to host the meeting at Bellagio, one of MGM Resorts International’s premier resorts. This was my first meeting as chair and I was pleased to get acquainted with board members and witness firsthand their enthusiasm and excitement for corporate responsibility.


The business we covered during the board meeting highlighted, once again, the important role the CROA plays as a steward of corporate responsibility. And it underscored the necessity for corporations to be involved, as well.

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Member Spotlight

Our Five Focus Areas

We focus our efforts to become a more sustainable company in these five areas:

  • Provide innovative products and services for a competitive world
  • Reduce our environmental footprint
  • Attract and retain a diverse, high-quality workforce
  • Help build strong communities
  • Be profitable, and demonstrate strong governance and transparency.

Innovative Products & Services
We deliver energy to our customers that’s reliable, affordable and increasingly clean. We do this by designing and developing innovative new products and services that help us reduce our impact on the environment and provide customers with ways to “go green” and save money.

Environmental Footprint
As the largest electric service provider in the U.S., we know our operations have a big impact on the environment.

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How culture works in the real, messy world

One company questions itself, another moves away, and researchers make a link between doing good and doing well


By Bill Hatton


The mission’s baked in, or supported to be


Ice Cream Social: The Struggle for the Soul of Ben & Jerry’s
by Brad Edmondson. 280 pp. Berret-Koehler Publishers, Inc. $18.95.


Plot summary: Vermont hippies learn how to make homemade ice cream. They sell some, try out ideas about some cool new flavors, and before they know it they perfect a way to mass-produce chunks of flavorful stuff in ice cream. They become major players in the premium ice cream market. Their business success gives them the opportunity to run a social- mission-oriented business, operating the company in a way they’d always thought one should be run—promoting values others would imitate such as sustainable agriculture and environmental awareness.

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Audit Insomnia

Take a deeper look at the risks of auditing, and everyone will sleep better.

By Bill Hatton

What keeps your company’s auditor awake at night? Like most professionals, it’s most likely uncertainty–nagging concern that there isn’t quite enough evidence to support signing off on the audit.


What keeps company executives up? Probably something similar: The auditor might have missed something important, putting your company at risk of embarrassing re-statements—or worse.


Martin Baumann, chief auditor and director of professional standards, Office of the Chief Auditor, Public Company Accounting Oversight Board (PCAOB), says there are good reasons for everyone’s loss of sleep: Auditors may be too credulous.


“Lack of auditor skepticism is common,” Baumann says. “Due professional care requires professional skepticism; auditors need to find evidence that statements are free from material misstatements.

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‘Let’s never use the word sustainability again’

Management consultant Jib Ellison of Blu Skye on collaboration versus competition, the tragedy of the commons, and why CSR is’t just a bunch of lefty talking points.


By Natalie Allen

In a recent survey of 1,000 CEOs of large companies in 27 industries across 103 countries, only 32 percent believed that the global economy was on track to meet the sustainability needs created by a growing population and rising environmental and resource constraints. That’s according to the 2013 UN Global Impact Study on Sustainability.


Why aren’t more corporations taking the lead? What’s standing in the way?


CR Magazine
spoke with Blu Skye Chief Jib Ellison. His team of strategists advises Fortune 500 companies on sustainability with the goal to make sustainability strategy the strategy of business. Ellison has also been a river guide leading whitewater expeditions on five continents.

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In the cyber cross-hairs

Target’s data breach offers lessons for every company.


By Jack Thomas Tomarchio

The nightmare that keeps every CEO up at night became a reality for Target’s Gregg Steinhafel last month when the retail chain he heads became the victim of the second largest data breach in United States history.
Between Nov. 27 and Dec. 15, 2013, Target suffered a data- breach of catastrophic proportions—one which resulted in:

  • more than 40 million credit and debit card accounts being stolen, and
  • customers’ private data being circulated and sold online in underground black markets.


Predictably, the first of what is expected to be many class- action lawsuits was soon filed in federal court in California. As a consequence of its failure to safeguard its customers’ private information, Target suffered damage to its corporate reputation, and a drop in the value of its publicly traded stock.

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