Politics & Legislation

Integrating Circuits and Responsibility

Intel constructs powerful agenda for new initiativesStangis

By Danielle Lee

Despite lofty positions on various best-of corporate responsibility and sustainability rankings, including the No. 1 slot on CRO’s 100 Best Corporate Citizens 2008 list, chip maker Intel—led in its CR efforts by Dave Stangis, its Director of Corporate Responsibility—believes its efforts are still a work in progress.

These planned improvements come at a time when various antitrust lawsuits against the company and an anti-competition investigation recently launched by the U.S. Federal Trade Commission (FTC) reach critical mass.

A Hallmark for Intel

Stangis appreciates how far Intel has come and where it needs to go. With 12 years at the Santa Clara, Calif., technology firm, beginning in an environmental, health and safety capacity, Stangis discussed Intel’s corporate responsibility accomplishments, challenges and priorities.

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China Checkup

Companies move beyond penning codes of conduct to auditing supply chain practiceschina

By James Hyatt

There was a time, long past, that companies with heavy exposure to manufacturers in China, were content to draft supplier codes of conduct and human rights policies. But, today, global corporations are stepping up and getting very involved in monitoring and clamping down on rogue supply chain practices in Asia and beyond.

Integral to many companies’ operations, supply chains in China are front page news, thanks to grim revelations about threats to U.S. public health and safety.

  • Baxter International recalled heparin blood-thinner products following adverse patient reactions and deaths, and the U.S. Food and Drug Administration (FDA) identified a contaminant in the Baxter product. The active ingredient in heparin, derived from pig intestines, is produced by a supplier in China.

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Government Requires Ethics Code for Contractors

Companion proposal seeks employee disclosure of criminal violations of government contracts

By James Hyatt

New Federal Acquisition Regulations, effective Dec. 24, 2007, require companies receiving government contracts to have a written code of business ethics, to establish an employee business ethics and compliance training program, and an internal control system.

The changes apply to contractors working for the Defense Department, the General Services Administration, and the National Aeronautics and Space Administration, but generally exclude contracts below $5 million. And the rules don't apply to contracts for work done wholly outside the U.S., which some commentators have noted would exclude many contractors in Iraq and Afghanistan.

The proposal didn't appear to pose much controversy; the agencies received only 27 substantive public comments. But the agencies did amend the rule to exclude small business from requirements for a formal training program and internal control system.

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A Sub-Primal Scream

Bottom-line CR impact: Goldman Sachs, JPMorgan Chase demonstrate good governance andhearing results, but other firms see fortunes destroyed

By Dennis Schaal

With the housing market implosion spurring writedowns and losses of more than $200 billion in subprime mortgages, other credit, and mortgage-backed securities since the beginning of 2007, and assuredly with more to come, many banks and brokerages are scurrying to revamp the way they manage risk as investors and other stakeholders are demanding answers about what went wrong.

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Campaign Strategies

A platform for engaging with NGOs when they elect to target companies’ operationssign

By Sandra E. Taylor

There is a growing worldwide movement afoot with no name, leader or headquarters. Found in every city, town and culture, it organizes from the bottom up, is extraordinarily creative, flies under the radar and includes NGOs, village-based organizations, foundations, institutes, citizen-based groups and more. This movement directly addresses social justice and environmental issues and is estimated to comprise more than 1 million organizations, populated by more than 100 million people. Collectively it constitutes the single biggest citizens’ movement.

In Paul Hawken’s book, “Blessed Unrest: How the Largest Movement in the World Came into Being and Why No one Saw it Coming,” he skillfully documents this proliferating network, from Greenpeace to Oxfam, from indigenous peoples to anarchists, from labor activists to Kenya’s Green Belt Movement—a worldwide movement, empowered by the Internet, of individuals and organizations dedicated to these concerns.

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Campaign Strategies

A platform for engaging with NGOs when they elect to target companies’ operationssign

By Sandra E. Taylor

There is a growing worldwide movement afoot with no name, leader or headquarters. Found in every city, town and culture, it organizes from the bottom up, is extraordinarily creative, flies under the radar and includes NGOs, village-based organizations, foundations, institutes, citizen-based groups and more. This movement directly addresses social justice and environmental issues and is estimated to comprise more than 1 million organizations, populated by more than 100 million people. Collectively it constitutes the single biggest citizens’ movement.

In Paul Hawken’s book, “Blessed Unrest: How the Largest Movement in the World Came into Being and Why No one Saw it Coming,” he skillfully documents this proliferating network, from Greenpeace to Oxfam, from indigenous peoples to anarchists, from labor activists to Kenya’s Green Belt Movement—a worldwide movement, empowered by the Internet, of individuals and organizations dedicated to these concerns.

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Protecting the Whistleblower

InvestigationCompanies should fine-tune internal probes to make investigation more asset than liability

By R. Scott Oswald and Jason Zuckerman

In litigating whistleblower retaliation claims, we have found that poorly conducted internal investigations can be extraordinarily helpful to plaintiffs and harmful to employers. In particular, investigations that are intended to discredit the concerned employee or cover up wrongdoing to protect the accused will, at a minimum, deprive the employer of an affirmative defense and can also provide circumstantial evidence of retaliatory intent.

Employers, however, can take fairly simple measures to prevent an investigation from becoming more of a liability than an asset. Following are five tips for conducting an effective internal investigation.

  • Keep the Concerned Employee Apprised of the Investigation.

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CEOpinion: Airline Industry Very Fuel-Efficient

Southwest CEO says cap-and-trade unnecessaryplanes

By Gary Kelly

The problem of greenhouse gas (GHG) emissions and the resulting climate change is one that faces all of us—as individuals, but also as corporations. The backbone of the aviation industry is helping individuals go, see and do in a time-effective manner. If we don’t address the problem of GHG emissions, there will not be natural places to go, a world to see or things to do. We, as an industry, are highly motivated to preserve the natural world around us.

Southwest Airlines and the entire airline industry have a great story to tell about improving fuel efficiency and reducing GHG emissions. Compared to other industries, and even other modes of transportation, the airline industry is incredibly fuel-efficient and continues to improve efficiency with investments in new technology and by adopting new operational procedures.

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Activists Seek Fix in Mortgage Disclosure

Proposals look to increase transparency and limit conflicts of interest in housing market

By James Hyatt

The mortgage crisis is rapidly becoming an issue for the 2008 proxy season, as activists press for more disclosure on mortgage practices and risks.

One of the broadest efforts has been launched by the Laborers’ International Union, which has drafted shareholder proposals for submission to 28 corporations, aimed at “restoring confidence and accountability to the mortgage industry and housing market.”

One set of proposals, aimed at financial service and mortgage holding companies such as Lehman Brothers and Washington Mutual, would require full discussion and disclosure of types of mortgages bought and sold and their underlying value. Other proposals seek to limit and disclose conflicts of interest between credit rating agencies and mortgage buyers and sellers; and others seek information on succession plans and executive compensation policies to determine whether “orderly succession plans for leadership are in place,” Union General President Terence M.

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Sustain-a-Campaign

Presidential wannabes: No carbon copies on environmental, corporate-responsibility platforms

By Jay Whitehead

What if you were picking 2008 presidential candidates based solely on their corporate sustainability, governance, compliance, or CSR platforms? Then you might believe politicians really had firm convictions that won’t buckle under well-applied political pressure. But go ahead and read on anyway.

I don’t know if you’ve ever seen the “flipchart comedian” Demetri Martin on Comedy Central or YouTube. One of his easel-based shows opens with a hand-drawn page entitled “Hummer Owners,” listing “Tough Guys” at 43 percent, “Pricks” at 27 percent, and at the bottom of the list at 1 percent, “Poets.” Somehow, choosing a presidential candidate based on their CR positions feels a bit like this flavor of PowerPoint comedy.

Nevertheless, we at CRO magazine are dedicated to helping our seriously humor-challenged readers with shorthand tricks for making unfunny decisions amid complexity.

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