CRO, GRC, CSR AND SRI: What’s the Future of These Acronyms?

MODERATOR: Phil Rudolph, VP & General Counsel, Ethical Leadership Group
PANELISTS: Nancy Nielsen, Senior Director, Corporate Citizenship, Pfizer; Carole Stern Switzer, EVP and GC, Open Compliance & Ethics Group

MOD: We’ll proceed and hopefully we’ll address it. The reason I’m asking as well because the topic that was defined for this session is a little ambiguous in terms of its title. We struggled a bit as we were planning for the program about how we would address it and what it actually meant. And so we’re going to continue to sort of muddle through that and hopefully help bring some clarity around these issues and so if you decide that you’re inspired to let us know what you do for a living just holler. But try to be polite. So over the years when scientists study civilizations, they say that you can learn a lot about how important something is to a society by how many names it’s given. And so perhaps researchers in the future will look back on the globalized society of the new millennium and draw conclusions about us based on the number of TLA’s we use. How many people here know TLA’s? A little more work. TLA? Three letter acronym. It’s something I picked up when I was in Washington, DC.

Our title here is just filled with these darn little TLA’s. That’s a joke, by the way. You’re allowed to. Anyway, the title here as CRO and GRC, which was actually a new one for some of us. CSR, SRI, there are others – TBL, triple bottom line, PPP, people, profits, planet. There’s an array of these different things. But in the world of corporate responsibility and ethics and sustainability, again a lot of names around that. Many three letter acronyms have been attached and what we’re trying to do is sort of wrap our arms around what does this mean for you, as people who are in the NGO field or in the academic field or working in business and the like. They don’t all mean the same things. But to my mind at least, the way I think about it, I think they’re all targeting the same goal. And what is that goal? It’s the imbedding of – now I’m going to sound like the Californian that I am – it’s the embedding of holistic cultures of integrity and responsibility within business organizations. It is helping companies sort of tie all of these pieces together in a single, unified way. Different people and groups approach this in different ways. I recently wrote a piece of a competing publication – I won’t mention the name, just because I want to be polite to the host – in which I contrasted Europe’s approach to ethics, which I refer to as large E, Ethics, tends to me much more, I think, all inclusive in their approach to these types of issues, with the small e, compliance-focused ethics in the United States. And I argue in that piece for businesses in the US to embrace the more all inclusive and holistic approach to ethics, integrity and responsibility. If you’re interested in getting a copy of that, just let me know afterwards. Just give me your card and I’ll send it to you. Indeed, I suspect that one of the reasons Michael invited me to moderate this panel was because I spend a lot of my professional life these days helping companies link their little e and big E ethics and responsibility efforts sort of at a strategic level, at a functional and a structural level as well. Which brings us to our panelists today, who toil in these fields but who, by virtue of their different roles and responsibilities, approach these issues from different perspectives. I’ll introduce the panelists, and I’m going to ask them a view words. And hopefully we’ll have some time to sort of mix it up. These chairs are like chaise lounges, so if we look uncomfortable and moving around, that’s probably why.

After Nancy, we’ve got Carol Switzer, who is the Executive Vice President and General Counsel of the Open Compliance and Ethics Group, OCEG. Is that right? Did I say that right?

CS: Yes.

MOD: Okay. OCEG is a not-for-profit organization established to develop a common framework for effective management of corporate compliance and ethics programs. Prior to OCEG, Carol maintained an active national environmental law practice, and has served on several ABA, American Bar Association, committees involving environment, energy and resources. And she’s published several articles as well as a book on environmental regulatory compliance. And if you want to flash pictures of your book up there, I’m sure nobody would be offended.

I’ve asked Carol if she would focus her comments on the structural issues and challenges associated with our topic, and how they bode for the future of this amalgamation of things that we talk about here my, whatever is the TLA’s. And then hopefully we’ll have some time at the end for some questions. So Nancy, I’ll turn it over to you.

NN: Thank you, Phil. So I created the CSR function at Pfizer in 2002, and it started with the signing of the UN Global Compact. And what I’ve seen over the last few years is, in fact, a convergence of these three letter acronyms. And by definition, convergence is slow and gradual. But every once in a while, something happens where you go something new is happening. What is that? What is it going to mean to my company and what should I do? So rather than, in the short amount of time that I have, track all that convergence, what I thought I would do is just talk about one of those little antenna moments that happened and walk through that, and talk about what convergence means to us today and look forward, not backwards. And what the strategic implications of convergence is, and then what that would mean to us if, in fact, we are CRO’s or what it would mean to each of us.

So a recent, or the most recent antenna moment for me was just about a month ago. And that was when we got a phone call from ABN Amrow, which is on one of the larger banks in Europe. And they asked for an in-person meeting with Pfizer to talk about our clinical trial policies in developing countries and our marketing policies. And it – it came into our Investor Relations Department. They thought it was a typical SRI meeting and so it came to me to set up. So in our email correspondence back and forth I said well, do you want to talk also about governance and compliance and EHS and so forth. And they came back no, clinical trials, marketing policies. And back and forth, okay. So I set it up. I brought in our experts. And when the actual day for the meeting came, it was very clear that this was no typical SRI meeting. They sat down and what they said is that they were representing the entire bank’s equity holdings, that the information from our meeting would be fed back to all of their analysts and to their portfolio managers, that they were a signatory of the UN Global Compact’s Principles for Responsible Investment, and that they were implementing it globally across all of the banks, globally. It would take them about two years to implement. And I sat there and I thought something new is happening here. This was just last month. And so I thought across the whole bank?

So actually in preparation for this meeting, I thought I’d better get this right. And I called them, and we walked through this. And they said that they’re screening all of their MSCI world-listed stocks for the Principles on Responsible Investment for all sectors. And it’s not just about screening. What this is about is engaging with their stakeholders actively, like they were doing with us that day, on key issues, and to keep these dialogues. Now, why I looked at this as a point about convergence is that this was no longer just SRI; this was total mainstream. And this wasn’t just about EHS and governance and compliance and so forth. This was about clinical trials and marketing policies. And that this was going to all their analysts and portfolio managers who were going to be learning about these issues in a way they probably never had before. And so what this said to me was that this is going to be material. Now a little m, not a big financial M, but this was going to be a little shift in materiality in a way that had never seen – been seen before.

So this leads me, then, to the second topic that I wanted to talk about, is what were the strategic implications now with convergence of these different three letter acronyms coming together. And I’ve been thinking about this a lot, and had a conversation yesterday as it turned out, with someone from Cone Communications. And what he came up with is he said, if all the different pieces of these acronyms are coming together in convergence, as I’ve seen at Pfizer over the last five years, he said this means that it’s the end of the big, game-changing strategies. And my heart sank. Because I love big, bold strategies. And – but I had to say I agree with that, that because of convergence, that the way that companies are really going to win is by getting all these pieces right. And it really is about integration. And I think that’s what it means when you said, you know, not – it’s the integration; it’s not the bolt-on piece. That this is the way that companies are going to win in the future. And it’s the integration of whatever you want to call this thing. I don’t think CSR actually works anymore. It’s just about integration of being a responsible company, or in this age of responsibility.

So I’m not willing to give up the big, exciting strategy, but I think that the way to go is what we call at Pfizer operating and partnering differently. So what that means at Pfizer is that with the ABN example, is that rather than going and speaking to the SRI team, which is what I would have done in the past, is that I also went and spoke then to the policy teams at Pfizer. And what it also meant was that by spending as we did 90 minutes with ABN – tell me when I should stop – that I – not only just on your policy team in, that ABN was happy with or satisfied I should say with our clinical trial policies, but that we then just go the next step as we did this week, in that we announced that we are opening up our Compound Library to the World Health Organization to work with them on trying to find new cures to parasitic diseases and that we are now going to bringing in some scientists from the developing world into our labs to help them learn about drug discovery. So that’s the next step. And that’s about partnering and operating and communicating differently.

And so what does that mean for all of us as CRO’s? Well, I think that means is that we too have to operate and partner differently. And that means that we need to – I’ll speak for myself – I need to communicate beyond my normal boundaries and my normal networks at Pfizer so that I take my learnings as part of an early warning system, like the ABN example, and take it beyond to my larger networks at Pfizer, so that we all learn from this. And as just I think a very telling example of what’s happened now that we have a new CEO, is that one of the things that he’s done is that he has completely changed what used to be called Corporate Affairs. That no longer exists. It’s now called Worldwide Public Affairs and Policy. And he said this isn’t a name change. This means something very different. It means policy is now going to play a much larger role in our businesses, and it means that this new entity is equal to the business units. So Corporate as we once knew it, no longer exists. And I thought, talk about convergence. There you have it.

CS: We are the world.

NN: So I kept my comments very brief so that we can have time to integrate across and have time for questions. But I have lots more examples that I can bring up. Thank you.

MOD: Carol.

CS: Thank you. So I’ll ask a question now, too. How many of you know the term GRC? Okay. Then I’ll start at the very beginning. The challenge – OCEG was formed to address certain challenges in the areas of governance, risk management and compliance. This is the term GRC and what we want to look at are what are the challenges that we face in attempting to both achieve compliance and insure ethical conduct while meeting general business objectives.

Just by way of background, I’ll tell you that the term GRC started first from Price-Waterhouse-Cooper in their development of solutions and offerings in the area of governance and risk. But it was a term that was very quickly picked up and adopted, both by my organization, OCEG, and by others. So if you look now at, for example, an analyst by the name of Michael Rasmussen, who’s a key analyst with Forrester, who addresses technology offerings, he’s pretty much defined the market as GRC and has done some very interesting reports lately that look at vendors, 400 different vendors, that address different pieces. Some address governance. Some address risk. Some address ethics. Some address specific areas of compliance like Patriot Act compliance. But he views them as a universe and discusses them as a universe of GRC. And I think the most telling thing about the convergence, to carry on that theme, of these concepts is SAP’s recent issuance of a whole suite of offerings that also integrate these functions from a technology viewpoint.

OCEG likes to look at this in the context of the big picture of business objectives. And I want to echo back to a lot of what was said earlier today. There was a lot of discussion about doing the right thing and doing well while doing the right thing, and making money while doing good. And that’s all right. But the reality that we all live in is still a little bit of Milton Freedman. It’s the job of the company is to make money, for itself, for its shareholders, for its stakeholders, whoever they may be. And so it is – traditionally what has happened is that especially in the area of compliance, compliance as been viewed as the Department of No. You’re always telling – there’s a lot of resistance in the organization to compliance because you’re always telling me what I can’t do. You’re always telling me I have to stop. You’re always interfering with my business goals. OCEG’s answer to that, by the way, is the fastest cars have the best brakes. You’re not going to get into a racecar and drive off down the track if you don’t know that you can stop, or that you can break enough to steer appropriately. But to really get people to understand the concept of compliance and the governance that’s needed to drive that compliance, we look at a business model, a typical business model, where you have your strategy, your people, your processes, that are aimed at achieving your business objectives while avoiding the obstacles that arise. The risks and the things that stop you from being able to move forward. And to do that while staying inside certain boundaries. To get the job done, to meet your business objectives without going – crossing those boundaries. And there are two kinds of boundaries. There are the mandated boundaries – the laws, the rules, the regulations that are imposed on you. And you might be pushing against them. You might have a lobbying force that’s trying to get rid of them or change them. But that boundary is always there. But at the same time, there is always a voluntary boundary. What organizations have you joined that impose certain things on you. Like if you’re in the chemical industry, maybe responsible care. What stock exchanges are you on that have certain guidelines? What corporate social responsibility or ethical structures has your Board or your CEO put in place? Do you determine that in this country we are not required to comply with certain labor laws that would arise in the US, but we’re going to impose on ourselves those labor requirements even in these other countries because we want to do that for our company. And so the goal is to find yourself a model that allows you to stay in this green area, what we would call staying in the green, in between those boundaries, while still achieving your business objectives. And then you’ve got to deal with this. It’s complex. There’s so much volume. There’s so many – there are so many laws, rules and regulations that apply, that – that have to be addressed in the context of your governance and compliance structure.

Some statistics from the General Accounting Office. Annually more than a trillion dollars just to comply with the US federal requirements, and over 4,000 new rules in the pipeline at any given point in time. And when you add to that state and local laws, foreign laws, global markets and jurisdictions, the impact of outsourcing your extended enterprise risks, merger and acquisition risks that arise, the volume becomes really overwhelming. And there have been a lot of mistakes made in the past.

I spoke last week to the Italian Banking Association in Rome. I just had to throw that out there, so you would all know I was in Rome. And I will tell you that I’ve determined that we in the US have a real deficit of good venues, because that speech is in a 17th century palace with painted frescos on the ceiling and marble statues around the perimeter. But anyway, something that I tried to impress upon them – what they wanted was to learn from what we’ve done here in the US, because the Italian banks are really just beginning to start a compliance function. They’ve never had a compliance function outside of internal audit. Scary. And they – and I said you have to learn from our mistakes. Do not do what we have done. What we have done is we’ve had silos for every different aspect of compliance. And so you’ll have an environmental director. You’ll have someone in charge of employment. You’ll have someone in charge of federal practices act. They never talk to each other. They all go out and they buy their point solutions and their technologies. They generally have not dealt even closely with their own IT departments in developing their solutions. They waste resources. They have incompatible approaches and they can’t truly measure in the company the cost of compliance. We did a survey last year where – which was a very intensive survey, benchmarking survey of compliance. And so we asked questions about what’s the budget for your compliance officer and that program. But what’s spent on compliance in operations, in legal, in sales, in marketing and all the – and the people that really filled that survey out, it took them days to even find the right people to get the information from, let alone get the information, which they weren’t always able to do. Because people were protective about their own siloed budgets. But it’s very eye-opening for a compliance officer to realize here she doesn’t really know what’s being spent in their company on compliance.

Another big issue is making sure that there’s governance beyond the board, that that direction and oversight goes down through the enterprise. Governance is not about, you know, your executive – it doesn’t stop at the level of executive compensation or how you structure independence on your board. It’s about true governance, driving things down through the organization, making sure that those compliance efforts align with the business goals. Risk assessment. A vast majority of companies, even big companies, even advanced companies in this country, do not do yet a really strong job on assessing their “non-financial” risks, meaning risks from anything other than what you put in your financial statement and the risks that arise from mis-stating your financial statement. If you truly are dealing with Sarbanes-Oxley and the benefits of putting Sarbanes-Oxley processes in place, you will realize that the so-called non-financial risks are financial risks. A major blow to your reputation sinks your company. And that’s a financial risk. And we haven’t done a good job of that. And it is essential in order to design your compliance program.

I know there are a number of academics in the room. I’m just going to take a couple more minutes. When we designed our framework of guidance in OCEG, which is our approach to a business process model for addressing governance, risk and compliance, we had a number of academics on our steering committee. And we had a huge fight, because one of them would say compliance is a non-starter. You have to comply. You cannot put anything into this framework about risk assessment and deciding whether to comply. And I said look, we’re not talking risk assessment like do you change the 20 cent piece in the car that causes it blow up upon impacts, versus how much it would cost to settle lawsuits. Not a risk benefit analysis. But you’re the compliance officer. You have 12 million dollars in your budget. You have 45 identified risks of compliance. How do you allocate that money? Do you just chop it up into 45 even pieces? Or do you do an assessment that says this is a tiny risk for us: tiny risk of occurrence, tiny likelihood, tiny impact. This is a really big risk for us. And so maybe here you make a policy and here you implement training and very tight controls and technologies. You don’t split your money evenly. You have to do risk assessment. And if you don’t, and you’re just putting out fires all the time, you’re not spending your resources properly. So all or these issues have to be addressed, and the model that we address is the convergence of considering the culture of your organization, modifying that culture where necessary if you need to drive better ethical conduct, if you need to have a better approach, a more conservative or a more lenient approach to risk. But at the same time then, converging your governance, your compliance program and your risk management processes together. And in your bag is this little drawing, which goes into much more detail about our approach to aligning governance risk and compliance activities. I would say even within that, in the culture component of that piece, and layered throughout then, governance, risk and compliance, comes the corporate social responsibility element. It is a layer. It is a filter that flows through all of those areas, just as all of these areas flow through operational systems of the company.

I’ll also tell you that I’ve put into your bags these orange cards that have on it a little demonstration code So you’re welcome to go use that to sign on to our site and download much more information. I will also tell you that together with Jay, we worked out an arrangement for all the members of the CRO to have a limited access membership, not a full access to everything, but access to a substantial portion of our materials, what we call an individual membership in OCEG. So shortly you will be receiving information about that. But in the meantime, I hope you’ll be able to take a look at it and see what we have for you.

MOD: Thanks, Carol. I’m going to exercise Moderator’s prerogative and just make a couple of quick comments, and then open it up for questions. I was in a program several, or probably 3 or 4 years ago now in London, outside of London in a place called Wilton Park which actually, echoing what Carol said about venues, this place was spectacular, a 13th century castle. This is fine, too, by the way. Frescos would be distracting.

CS: Better bathrooms here.

MOD: I was at a conference and it was basically a corporate responsibility conference and I was at McDonald’s at the time and one of the participants – it was a very high level conference; it was very interesting. One of the participants was a fellow named Jeffrey Chandler, who was the founding chairman of the Amnesty International Business Leaders Forum, and a real legend in this area, an extraordinary guy. And where people were sitting around talking about CSR program here, and CSR was very popular at the time in terms of the three letter acronym thing. And he never liked that acronym. But he – in general – after about a day and a half of people talking about their programs, whatever you want to call them, GRC, CSR, SRI, whatever, he finally just said look. He said we will all fail if we continue to be talking about as – and Nancy used this term – bolt-ons as opposed to part of. It’s essentially a part of what we are as organizations. If you’re building CSR programs, that means your organization is not behaving responsibly. You do have to create something to make sure that it does. And Nancy’s point, which I thought was interesting, is that there are no great, sort of big challenges or earth shaking, earth changing events going forward. That’s what you want to get to. You want to get to the point of maturity in this field where those acronyms disappear because they become imbedded into the ethics and the culture and the foundation of the organization. We’re not there, and we don’t know quite how to do it yet, because of the silos, because of the different approaches. We’re a globalized world, and there are US companies which really focus a lot on compliance. Why? Because of that slide with all those things all over it. Because of the lawyers. No offense to lawyers – I’m one. And it’s not the lawyers, it’s the laws. And it’s because of the litigation culture in the US, which I could spend hours talking about, but it would be way too boring. Although I kind of think it’s interesting. And the Europeans are somewhat different and they don’t focus as much on the compliance focus, and your point about Rome was quite telling, which was they don’t really – this is a bank that doesn’t really have a compliance function. They don’t think about it in those terms, although they’re kind of doing that as well. And so as we think about these issues as practitioners and as scholars and as NGO’s and the like, you’ve got to recognize that (a) there’s an array of challenges that face organizations that are trying to do this, and (b) the end state is to make those acronyms disappear, to just imbed them, to have them sort of become part of the organization itself. And that, I really did want to sort of throw the question out. Nancy kind of addressed it, which is what do you – I mean, how do your organizations either counsel people or actually embrace this theory? Is – are these things bolt-ons for the organization, or will the corporate citizenship function at Pfizer disappear because it’s just a given?

NN: Okay, so I’m a practitioner and I need to come back to you on what point, which is when you say all these acronyms need to disappear, we still – oops – as practitioners, we have goals and metrics that we get measured on, and for which our performance is tied to pay. I mean, in the every day real world. So that’s why we have compliance and there’s accounting and there’s these different functional silos, is because this is how an organization works. So at the end of the day, I have certain goals that I have to meet with real metrics. So when we say that these acronyms have to go away, the question is do these functions go away. The piece that we’re wrestling with is what do I get held accountable for at the end of the day? I mean, how do you make it work? Because the way that things get done and accomplished are people are held accountable. So the way that we’re making it work right now is exactly what was talked about earlier, is through cross-divisional teams. And we do use the corporate citizen report, and the corporate citizenship global team in order to do that. We went in 2002 from no cross-divisional teams to now so many cross-divisional teams that again, one of the early actions of the new CEO was to eliminate some of the cross-divisional teams because we had too many. But that’s how we are trying to get beyond some of the acronyms, is through the cross-divisional teams.

MOD: But I do see, and I think a lot of – any of you who are in HR feel, understand that there is a big issue now. How do you measure performance against these? And a lot of companies talk about measuring performance but they’re not really putting the metrics in place. And that is, that is a big challenge. And as we know, incentives drive behaviors, so you want to make sure you are creating the right incentives for the people in your organization to both perform at a functional level and perform in a culture of integrity and the like. And that’s a big challenge. Carol, do you counsel and work with companies on this?

CS: Yes. I think as if often true when there’s a lot of movement and change, things move in a certain direction and everybody gets excited about a certain structure. And then over time they realize that doesn’t necessarily work the best. You know, the 8-track tapes. But what – so what you’ve seen in, say the last five years, is the growth of chief compliance officer positions. And then creation of compliance offices with staffs in some industries. And we actually ultimately see that that’s shifting more and will shift more to kind of merge with the risk role. And also with the corporate social responsibility roles. And ultimately what we probably envision, based on what we’re seeing happening and what we think is appropriate, is yes, there will be some chief function. And someone asked earlier about lines of reporting, and most likely reporting to the CEO with a dotted line to the audit committee. Because the board’s role is not day-to-day management. But that we don’t see it being a huge, centralized staff function, that we do see it being drilled down and embedded into the operations of the business, that every operating unit has to have a piece of assessing risks, of addressing ethical conduct, of looking both for risks and opportunities as Andy was talking about earlier. And if you layer compliance or corporate social responsibility issues on top as a blanket, it’s going to get tossed off. It needs to be woven it. And it’s a very difficult task, because the more dotted lines of responsibility in teaming that there is, the more time gets wasted in meetings. And so that’s another reason why we try to push people towards using a process methodology that doesn’t have you reinventing that structure and that approach every single time, and then you’re more efficient.

MOD: I think we have time for a question or two.

Q: Hi, my name is Ken Fisher, I’m a practitioner of the last resort. I do legislation and litigation. I wanted to know about external financial partners, insurance companies and banks, whether they’re, as part of their due diligence process, looking to find out what kinds of programs corporations have. And if so, what kind of measurements they’re suggesting would satisfy their due diligence obligations?

CS: I can just mention that a little bit in terms of insurers. You’re talking about underwriters as well as – so when we first began OCEG, at our first executive advisory board meeting, a gentlemen named Bill Cotter was part of that group. At the time, he was the chief DNO underwriter for AIG. And his comment was this: if you can get me under the blanket so I can see what’s really going on in an organization, without my having to go through a very detailed one-on-one every single time review process, incredibly helpful to me. And would help me drive my decisions about coverage and so forth. But at the same time, don’t go out there and tell everybody to build a Cadillac, because I may not want that company to have a Cadillac compliance program. I might want them to have a Ford, and a low end Ford. Because again, it’s about the risk assessment and the addressing of risks. There’s definitely a desire and a push for being able to measure. So when – what we’ve been trying to encourage companies to do, and one of our resources is a measurement and metrics guide for compliance and ethics structures; it’s on the website. Should I flash it up there on the screen? Quickly, subliminally. It’s free, so it’s not a sales pitch. It’s free. And there is definitely a need to structure certain things in a way that can be measured. But there are two aspects to measurement. One is to measure effectiveness. Are you achieving the compliance control that you want to have? The other is performance. Are you doing it in a way that enhances performance, that’s effective, efficient, quickly responsive – you know, functions like a good business function functions.

MOD: I also think Nancy gave a really good story about where the financial institutions are going, sort of in a game-changing way in terms of interfacing with companies. And another sort of big picture response is sort of the equator principles, which by the way, will extend beyond banks. I think all the financial institutions are going to be pressured by the NGO’s in civil society to be putting – to be putting their customers and clients through these kinds of screens. That’s like quick, one-stop shopping, right. If I don’t have to go to 16 different retailers, I can just go to one bank and get the same thing, I’m going to do it. So there’s a lot of effort being put, pressure being put on the financial institutions and groups to impose these sorts of social and environmental screens as well. And the metrics are being developed; nothing’s perfect yet.

Q: My name is Jeff Pedard. I’m with IMS Health and my question is for Nancy. Nancy, there are probably few issues that are more contentious than the current state of our health care system. And I’m wondering how you in your role within Pfizer are helping to frame that debate and move it forward.

CS: Andy’s put on a costume so he could ask another.

NN: Actually what my role is, is that I listen to voices on the outside, and so I deal with a lot of NGO’s and the SRI’s and professors and those kinds of groups. And I bring their concerns inside, that sometimes don’t get listened to by other decision-makers at Pfizer. So I see my role as a bridge, as bringing those voices in, and then taking the views of Pfizer and then bringing them out. So that’s the key role that I play at Pfizer. And I bring those issues and that information around things like access to medicine, the clinical trials, the marketing policies, all the hot button issues. That’s the main contribution that I make. And I make sure that we bring as much transparency in our publications to them. I got our first corporate citizenship report out. That was a very big deal. That’s a big deal. The word is very powerful.

Q: This  question is for Nancy in particular. It seems like Pfizer’s seeing corporate responsibility/corporate citizenship as a proprietary advantage, a competitive advantage. And as such, your ABN Amrow example is a great example. These stakeholders are now seeing this as a significant way of differentiating you from your competitors, from an investment perspective. So, fast forward five years. You were at McKinsey, you do this whole exercise. Fast forward five years. Does your function become a strategic marketing function?

NN: I’m of two minds of that. Number one is we believe, in part because we’re pharma, that we can’t really accomplish anything unless we do it as a sector. And that frankly, we’re not believable unless we do it as a sector, and that we can’t do a whole lot individually. And that we need to do everything in partnership and that’s just the way it is. So that’s one part. The other part is yes, we do want a competitive business advantage through being a responsible company. And one of the things that I talk to my peers about in other companies like BP, or Gap or others that I’m utterly fascinated by is how do you decide what issue to pick to become real transparent about? Because that’s a high risk strategy. So how do you decide what issue you’re going to do that with and how you get everybody aligned internally to do it. Because there was an issue that I wanted to do that on at Pfizer and I couldn’t quite pull it off. And I wanted to know how it was done. How do you put the real business case behind that?

The reason I state that is because that is an example where one company in a sector can stand out and create a business advantage through CSR. So it can be done, even though that company can also be a great sector player. So my answer is yes, you can do both. And I think there are examples where Pfizer has done that.

I think our Global Health Fellows Program, which we started several years ago is an example of that, but now it’s been copied by some other companies. And that’s where we send our colleagues out into the field matched up with NGO’s to fight HIV, AIDS, malaria and TB on the ground for up to six months. And the distinctive piece about that program is that it’s the NGO’s that define the piece to be worked on or the job. They interview our colleagues. We don’t say here, this is what we’re going to do for you. They come to us and say this is what we need. That’s been seen by quite a few people as being very distinctive.

MOD: Hopefully this is never marketing. It could be communications. But if it becomes marketing, then it’s more show and less substance, in my view. I think companies get in trouble when they use it as a marketing tool, and Enron was a classic example of that.

NN: Maybe it’s not what you use it for, because the example that I had in mind of somebody else is if you’re using it for extreme transparency, is that marketing? I call it being pretty gutsy, but I don’t know. There’s a risk factor to it. I guess it’s a matter of degree. I don’t know.

MOD: I think we’re out of town. But I wanted to thank the panelists again, once more, for the discussion, and thank you for your patience. And we’re going to figure out what you do. We don’t know what it is yet; we’re going to figure it out.