Corporate Citizenship in the Chaordic Age

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Corporate Citizenship in the Chaordic Age

• Montreal
• 30 May 2005

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The Chaordic model

• The Chaordic model is based on this... A marriage
  of chaos and order, the model is one based on
  forming loosely organized networks that share a
  common cause. The achievement of that common
  cause is something that they can not achieve
  individually, or even among a small group, rather
  the cause is only achieved by the group
  establishing a mutually beneficial pre
  competitive arena.

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Mandatory vs. Voluntary

• Defining the pros and cons of each approach
  demands defining Corporate Citizenship.

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What is Corporate Responsibility?

• Profit Generation?
• Public Goods Production?
• Filling Governance Gaps?
• Taking Responsibility for Externalizations?
• Philanthropy?
• Issue Advocacy?
• Paying Taxes/Following the Rule of Law?

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Corporate Citizenship requires looking at the
changing responsibilities of CSOs, consumers, and
Governments.

• What is the responsibility of NGOs now that
  almost 44,000 have achieved a global footprint
  and with nearly a million alone in India?
• What is the role of governments as the statist
  view is more and more seen to be flawed and
  counterproductive?
• What role does the consumer/corporation play in
  creation and sustaining of Global Markets?

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What is corporate social responsibility?

• CSR is a concept whereby companies integrate
  social and environmental concerns in their
  business operations and in their interaction with
  their stakeholders on a voluntary basis.
• -- European Commission

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Two Models of CR- Best Practices / Systemic Change

• Best practices are always anticipatory a
  proactive approach, however, presupposes
  appropriate reflection on different
  fact-and-value scenarios.
• Are best practices scalable in a way that can
  make them standardized?
• Are there appropriate incentives in place for
  voluntary initiatives to be effective?
• Systemic or Organizational Change
• Can this type of change be mandated?

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How best to reach the goals of Corporate
Citizenship?

• Persuasion / Leadership
• Compliance
• Identification
• Internalization

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Compliance

• Rule of Law / Taxes
• Requires environments where the rule of law is
  respected by the government as well.
• Corporate Citizenship accountability depends upon
  agreed standardsthese are not currently
  possible, except as based on the local
  translation of universal principles.
• For example what is the standard for complicity?
  For sphere of influence? For transfer pricing?

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Identification

• Issue Advocacy
• Philanthropy

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Internalization

• Leveraging Core Competencies in pursuit of
  positive social impact and profit.
• Is this only the domain of the leaders? Can
  laggards inadvertently internalize the principles
  just by signing on?

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Incentives

• More and more Corporate Responsibility requires
  building incentive structures (the same is true
  of other responsibility movements)
• Leaders / Laggards (transparency)
• Pre-competitive Arena (where first movers are not
  penalized)
• Risk Management
• Sustainability / Competitiveness (of business
  models)

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Incentives

• The real difference between success and failure
  in an organization can very often be traced to
  the question of how well the organization brings
  out the great energies and talents of its people.
  What does it do to help these people find common
  cause with each other?And how can it sustain
  this common cause and the sense of direction
  through the many changes which take place from
  one generation to another?I think the answer
  lies in the power of what we call beliefs and the
  appeal these beliefs have for its peopleI
  firmly believe that any organization, in order to
  survive and achieve success, must have a sound
  set of beliefs on which it premises all its
  policies and actions. Next, I believe that the
  most success is faithful adherence to those
  beliefsBeliefs must always come before politics,
  practices, and goals. The latter must always be
  altered if they are seen to violate fundamental
  beliefs.
• Tom Watson Jr. IBM

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Outcomes

• Has anything changed?
• Is society (consumers, governments, businesses,
  CSOs) better off? Are governments / Businesses /
  CSOs doing a better job at meeting their
  responsibilities?

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(No Transcript)
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Examples I Shell
Shell Report 2003
Counter-Report 2003
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In order to be successful what must voluntary
measures do?

• They must be complimentary to regulatory
  approaches rather substitutes for them. To be
  effective, voluntary approaches need to be
  closely linked with what governments do or do not
  do.

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In order to be successful what must voluntary
measures do?

• They must bridge the local-global gap by being
  based on universally recognized principles, such
  as those presented in the Universal Declaration
  of Human Rights, yet be translated at the local
  level.

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In order to be successful what must voluntary
measures do?

• They must help us create a level playing field
  that does not discriminate against the poor. e.g
  CSR is often seen as a transaction cost.

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Finally

• Secretary General of the UN, Kofi Annan, said
  "If there is a concept today which is embracing
  many of our current and future challenges a
  concept we should all reflect upon it should be
  the concept of social responsibility. Social and
  environmental responsibility is one of the
  key-concepts for the future of our world.