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Posts Tagged ‘shareholders’

I wasn’t planning on writing a blog today but this piece in my favorite newspaper, The Guardian (yes, I am the typical lefty reader), made me roll my eyes. The piece is very well intended and generally pretty good advice for charities – Charity funding: How to approach business for help.

I agree that charities or NGOs should be more strategic in their approach to businesses for help. But when I read about the need for NGOs to have more “business realism” in their approach I couldn’t but help think of the need for business to have some “activist realism” in their thinking. It’s easy to ask the other side to be more like you but how about you being a little bit more like the other side too? Like any relationship, it’s about give and take – not just take.

Too often business think that charities should support them more and be more of their “voice”. Sorry, that’s not how it works. It’s a partnership. If you want NGOs to be more of a voice  then you need to be more of a voice as well. No more hiding behind industry associations to do your dirty work or hide you from criticism on key challenges. If you want Greenpeace to slap you on the back instead of on the head then you need to speak up against other businesses who don’t act responsibly. You can’t expect a progressive NGO to support you if you also back regressive policies via another NGO or a business association or lobby group. Or if you keep quiet while other businesses lobby and push for, and argue against, positions held dearly by NGOs – climate change, clean energy, waste, pollution, labour conditions, conflict etc. NGOs expect you to share their world view and not only on one specific issue. This is the “activist realism” they live and work in. This is their “business”.

And how about business in general showing more social conscious? It’s fine to ask NGOs to be more business like but for some reason too many businesses argue that their focus is on the “business bottom line” only and that their only responsibility is towards shareholders. Bah to other stakeholders and society in general. Sounds like double standards to me.

Business needs “activist realism” to realise that their responsibility lies not only with shareholder but to this world they live and operate in. If you see your value as purely making more money for shareholders then you should expect flack from those who are not shareholders. They receive no benefit in their relationship with you except for some products they might or might not really need – so why should they care about your “realism”? Your “realism” might be in direct conflict with their real world. You pollute and they breathe it in. You accelerate climate change and they fry or freeze. You waste and they drown in the plastic bags. You pay peanuts to farmers and they get products that are second rated. You get the picture.

Some “activist realism” will hopefully make companies realize that they have a role to play as citizens of this world. That they have a responsibility towards others through their actions and words. That this responsibility is directly tied to their own long-term sustainability. You kill this world and you kill your business. Easy economics. “Activism realism” will make you sit up and say “no more”. Say it and do it because it is good for your business. Be an “activist” because your company needs to stand up for its own future – one that is tied to the well-being of society. Don’t huddle with those businesses and associations who do not share your world view. Do not care about shareholders who do not care about your business. Shareholder who only care about the next quarter and maximum profits come hell or high water do not care about your business. Only about how your business can line their pockets. They’ll drop you like a hot potato if a better offer comes up.

They are like a bad relationship. They promise you the world but they’ll drop you if someone with more money shows them some shiny object and promise them a better date. Would you take that from a date? Sucker if you will…

Show some “activist realism” by caring about your company’s future. Show some “activist realism” by speaking out against those who threaten your business in hard and soft ways. Show some “activism realist” by being serious about serious investors. Show some “activism realist” when you engage with your stakeholders. Show some “activist realism” when you give us a reason to believe in your worth to society.

Until then – you really don’t have much of a leg to stand on by asking NGOs to show more “business realism”. As my mom used to say, “What’s good for the goose is good for the gander.”

That’s my “activist realism”. A world where business care about business as part of society and contributing to society. That’s the “business realism” I want to live in.

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Exxon not paying US federal taxes and kids smashing their new iPad. That made for a sad day of reading. But thank you Intel for saving my day with some real leadership in stakeholder engagement.

Exxon Pays NO US tax

It took me a while to try and figure out a snappy headline for this one but I think this one works best – plain and simple… Exxon paid no US federal tax in 2009. I must admit that I am a bit shocked by this. Is it even possible for a very profitable US company to get away with not paying any federal tax in the US? Well, the original source is from Forbes so I take it as true. I’m not going to go into details on their anti-climate change position and funding of dubious organizations and positions. Neither will I discuss how this non-tax paying bit makes their pro-carbon tax look a bit like playing politics. And I’m not going to mention how this might be a slap in the face of the US when taking into consideration the subsidies they received. Or that they really should not complain about the tax rate in the US anymore. Or maybe they are doing that on behalf of the lobbyist they hire…

However, I am interested in how this reflects on their broader responsibility as a supposedly proud American company. Look at this line from the Forbes report:

Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.

So Exxon (or any other company for that matter) reduces their federal taxes by hunting for the best shelters hidden on nice little island. Can these companies ever be judged as responsible companies if they go out of their way to not to pay taxes in their country of origin or where their headquarters might be? It seems as if those who have the means to get away with not paying taxes tend to get away with it and those small businesses who drive so much economic activities are more inclined to own up and pay up.

It’s when I read headlines like these that I get a bit despondent and ask whether there is any line out there we can agree on or is it just a free for all? Fight, argue, lobby – it’s all fine. But let’s agree that if you are going to fight, argue and lobby then you should at least pay your taxes and not run from your responsibilities. Does your home country and your responsibility towards your fellow countrymen mean so little to you that you will do everything to run and hide the money?

It’s just a bit too much, isn’t it?

The Empty Generation?

Continuing on this sad reflection on society – let’s talk about American teenagers today…

It seems as if everyone under the age of 21 waited in line to get hold of the latest cool Apple product – the iPad. (Full disclosure, I want one…) It’s the new must-have Apple product. The iPad brings us so close to having our device big enough to use and small enough to carry around easily. A few Apple tweaks and we should be there in a few years or months. Anyway…

A bunch of teenagers just managed to capture everything that is wrong with consumption today. They bought an iPad and then smashed it to pieces. Why? “It was just something to do.”

Again I am dumbfounded. They bought something that costs more than most people in this world make in a year and then just smashed it to pieces? So that they could put it on YouTube and have a few laughs? No consideration to the impact of making the product.

We live in a society that consumes just for the sake of consuming. And we get so bored of consuming that we purchase just to destroy. Out of boredom.

Companies can create products that can help society. But kids (or grownups) with too much money will prove that even the best products can be wasted by people who are a waste to society.

Intel (Sustainability) Inside

I couldn’t end with two stories on groups who just don’t get it – so here is a feel good story to make up for it.

Intel agreed to a shareholder resolution requesting the creation of a Board Committee on Sustainability. Harrington Investment submitted the same proposal last year but it got shot down. They tried again this year and Intel agreed with the proposal. The easy part will be to applaud both Intel for establishing the Board Committee and Harrington Investment for sticking to it and get the job done. That’s the obvious bit of good news. But there is more.

What I see as the real leadership is Intel showing that listening to stakeholders is something they actually believe in. Last year they didn’t agree but they sat down and considered it again. Instead of having the typical knee-jerk reaction that most companies have to activist shareholders, Intel listened and considered. And they supported the proposal because it was the right thing to do for them and for the shareholders and stakeholders. Big thumbs up to Intel for bringing a real maturity to shareholder proposals.

Sustainability inside.

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