Knowledge Centre:
News Digests

Stay abreast of what’s happening internationally with developments in corporate public affairs. Here is news that you may find useful and interesting:

Corporate foundations increase giving — US studyND


ProBono Australia, Corporate Community Newsletter, 25 May 2006

According to a new report from US-based Foundation Centre (entitled ‘Foundation Growth and Giving Estimates: Current Outlook’), giving by US corporate foundations increased by 5.8% in 2005 to a record US$3.6 billion. While corporate giving levels are expected to remain steady in 2006, Community Foundations are likely to increase their contributions as they benefit from an increase in asset gains in recent years. The report covers the 68,000 grant-making foundations (Corporate, Community and Independent Foundations) that exist in the US. By comparison, Philanthropy Australia estimates that around 2,000 trusts and foundations exist in Australia. For more information and to request a copy of the report, see http://www.probonoaustralia.com.au/new/default.asp?a=2&b=1593&d=2

Deeds without wordsND


Simon Lloyd, Business Review Weekly, 25 May 2006

Many companies are reluctant to promote their CSR efforts due to expectation of cynical consumer responses. According to the 2006 Grey Worldwide/Sweeney Research Eye on Australia survey, consumers still believe that business has ‘little or no social conscience’. Eighty per cent of respondents, including shareholders, say they do not hear much about big business’ community efforts. Although information is being published, consumers tend to still have a cynical attitude, which then results in many companies deciding to keep information about their efforts to themselves. There are other companies that have been able to get the backing of consumers for their community programs. For more information, see www.brw.com.au

Activists take aim at politicians with attack websitesND


Corey Reiss, Sarasota Herald-Tribune, 21 May 2006

Websites that criticise governments and politicians have increased significantly, particularly in the US. As Reiss describes it, these websites allows people anywhere in the world to ‘reach out and punch someone’. The problem is how to regulate virtual communication particularly in relation to electoral campaigning in the US. Some people are worried that these sites could become conduits for ‘soft money’ that reforms have recently addressed. The challenge in the US is to maintain free speech without undermining campaign finance laws. For more information see www.heraldtribune.com

An organisation’s credibility is dependent on its cultureND


Frank O’Toole and Lisa Barry, Australian Financial Review, 18 May 2006

Australia’s recent Cole Inquiry has ‘turned up the spotlight on governance issues and focused the limelight on the top end of town’. However, many Australian companies are unaware that since 1999 the criminal code requires a board of directors ‘to instil a corporate culture that shows zero tolerance for corruption and that actively manages compliance.’ A corporation’s culture needs to provide for reinforcement messages to ensure everyone understands what the corporation deems to be ethical behaviour. O’Toole and Barry argue that many companies will fail at achieving this because they monitor only risk as opposed to a zero tolerance culture where there are consequences for unethical behaviour. For more information, see Special Report on Ethical Business at www.afr.com.au

Business finds reasons to do the right thingND


Tim Mendham, Australian Financial Review, 18 May 2006

While businesses generally agree that CSR is ‘a good thing’, there are two issues to consider. Firstly, to what extent businesses should incorporate CSR and secondly, how should corporates report their CSR activities to their shareholders. As Mendham argues, businesses now see that CSR aids the bottom line and has moved ‘from HR to PR and now to financial returns’. For more information, see Special Report on Ethical Business at www.afr.com.au

Companies and critics try collaborationND


Claudia Deutsch, The New York Times, 17 May 2006

Environmental groups and corporations are increasingly focusing on collaboration and compromise to address environmental issues. Green groups have recognised that lobbying, boycotting and suing corporations is seen as an outdated tactic to resolving issues, and corporations have discovered that working with environmental groups can benefit business. Ford says it recognises that environmental groups provide key insights into the issues that consumers would like to see addressed. For more information, see www.nytimes.com

It’s easier being green at the local levelND


Jim Carlton, The Wall Street Journal, 17 May 2006

Environmentalists in the US are discovering that it is easier to focus on green politics on a local level, rather than on an international level. Partly this is because many in the US oppose some White House environmental policies. However, critics say that local green politicians are more interested in ‘fundraising, litigation and promoting partisan political agendas’ rather than helping people with local problems. For more information see www.wsj.com

A new type of threatND


Jeffrey Staples, Harvard Business Review, May 2006

Developing a rigorous contingency plan will help to limit the impact a pandemic could have on an organisation. Estimates suggest that an avian flu outbreak could result in an 18-month disruption to business. Strategies need to shift from protecting infrastructure to protecting employees and their ability to conduct business in a long-term crisis. Plans should address the human issues of employee education, hygiene, staff movement and evacuation, sick leave policies and absenteeism, along with managing supply chain and distribution network disruptions. For more information, see ‘Preparing for a pandemic’ (Harvard Business Review Special Report) at www.hbr.org

Continuity and communicationND


Harvard Business Review, May 2006

Interview with William MacGowan, Vice-President of Sun Microsystems: MacGowan believes the most challenging thing about dealing with avian influenza is that it has the potential to affect the whole world at once. To combat this threat, companies must work together and swap best practice information. In the event of a pandemic, Sun Microsystems plans on communicating with its’ employees through its’ intranet radio station WSUN, providing information to employees regarding the severity of a pandemic and how to deal with it effectively. For more information, see ‘Preparing for a pandemic’ (Harvard Business Review Special Report) at www.hbr.org

Getting straight talk rightND


Baruch Fischhoff, Harvard Business Review, May 2006

It is important to communicate the truth to stakeholders, even if it is bad news. It is not difficult to get risk communication correct if the following questions are considered: (1) What information do people expect from us? Different stakeholders will expect different information. Rather than assuming you know what information stakeholders want, consult them directly to make sure you understand their concerns. (2) What does your audience currently believe? No amount of correct information will be able to guide stakeholders if it is counter acted by what they currently believe. (3) Do you have the resources needed to communicate your message? Accurate information will not reach stakeholders effectively if a company does not have the resources needed to communicate it. For more information, see ‘Preparing for a pandemic’ (Harvard Business Review Special Report) at www.hbr.org

How to create a truly successful corporate responsibility reportND


PR News (Vol. 62, Issue 20), 15 May 2006

Corporate responsibility reports must provide a balanced account of both the positive and negative aspects of the company’s economic, environmental and social impacts. To ensure a successful report, it is important to: Establish a concrete publication deadline; Create a cross-functional task force; Enlist a high-level champion; and Identify and involve internal approvers early. It is also important to consider independent verification and an environmental friendly printing process. The report launch should be an opportunity to communicate the company’s corporate responsibility programs to employees so they can refine their own practices. For more information see www.prandmarketing.com

Limiting exposure of the legal kindND


Peter Susser, Harvard Business Review, May 2006

Companies with inadequate policies and plans could face HR-related legal concerns. In order to prevent legal issues arising, companies need to make sure their contingency plans address the following: (1) Education and communication: Inform employees about avian flu symptoms and about who to contact at work if they have been exposed to the virus. Polices should state when employees who have been exposed are allowed back to work. (2) Hygiene: Companies need to demonstrate that they have provided employees with information about ways, and the means, to stop the spread of influenza. (3) Privacy: Be aware of laws relating to the disclosure of employees health records. Employees must be aware of what information they are required to tell their employers. (4) Leave: Companies should examine their leave policies and possibly increase the amount of sick leave available to employees. For more information, see ‘Preparing for a pandemic’ (Harvard Business Review Special Report) at www.hbr.org

Survival of the adaptiveND


Nitin Nohria, Harvard Business Review, May 2006

When dealing with the possible threat of avian influenza, the organisations that will manage a pandemic most effectively are those that have continuous ‘sensing and response’ capabilities as well as a crisis plan. In order to respond to evolving threats organisations should ideally: be networked not hierarchical; have distributed leadership not centralised leadership; be less interdependent; have employees who are cross-trained generalists; and are able to follow simple yet flexible rules. Companies should make sure that all employees are able to adapt and respond in the face of unexpected threats; this change in attitude must be enforced from the top down. Corporations should also think about the possibility of working with competitors to develop an open-source model of crisis preparation, so that as companies lose resources, working with others to reduce damage to all parties. For more information, see ‘Preparing for a pandemic’ (Harvard Business Review Special Report) at www.hbr.org

Big guns fired up as battle for hearts and minds escalatesND


Tom Stevenson, Telegraph UK, 11 May 2006

The growing public distrust of major corporations has resulted in two types of responses: (1) an attempt to win the hearts of the public by demonstrating corporate values, integrity and highlighting CSR programs (2) fighting back against what Wal-Mart’s CEO calls a ‘constant barrage of negatives.’ Public distrust has been spurred on by films such as Supersize Me, The Constant Gardener and Fahrenheit 9/11, while future releases such as Michael Moore’s ‘Sicko’ has put industries on a pre-emptive defense. Todd Stitzer, CEO of Cadbury Schweppes asserts that business is not truly trusted, stating that businesses ‘only have ourselves to blame’ and that the time has come to communicate the values of the corporation, what they are doing and why they are doing it. For more information, see www.telegraph.co.uk

Superheroes in suits save the worldND


Julie Macken, Australian Financial Review (weekend issue), 6 May 2006

Companies are increasingly taking action to help preserve and protect the environment. Flight Centre chief executive Graham Turner says that while the majority of companies place profit before the environment, they are increasingly working with environmental groups to support environmental efforts. For example US-based The Nature Conservancy (TNC) has combined forces with local NGOs in Australia such as Australian Bush Heritage in an attempt to protect Australia’s environment. Australian Bush Heritage, in turn is supported by corporations such as BlueScope Steel, Integral Energy and Westpac. For more information, see www.afr.com.au

Big bad businessND


Simon Lloyd, Business Review Weekly, 4 May 2006

According to Grey Worldwide’s bi-annual study ‘Eye of Australia’, more than two thirds of respondents do not trust big companies. Many consumers said they want to trust companies but feel that they cannot as they value profits more than people. The study reports that people link big business to environmental degradation and that more than almost 90% of respondents believe businesses should do more for local communities. These figures demonstrate the increasing importance of CSR and sustainability reports as companies with “good corporate citizenship are likely to be amply rewarded by consumer loyalty.” If companies wish to reap the rewards of good social practices, they must ensure that the public hears about their actions – 79% of people say that if corporations are helping the community, they do not hear much about it. For more information see www.brw.com.au

Slave chocolate?ND


Deborah Orr, Forbes, 24 April 2006

Nestlé faces criticism from opposition groups who claim that the company uses child slave labour in chocolate manufacturing. A lawsuit has been filed against Nestlé and commodity traders Archer Daniels Midland and Cargill for breach of international laws concerning child labour. Nestlé has previously faced public scrutiny over the sale of infant formula, and is a popular target for anti-corporation groups because of its size. While Nestlé won the legal battle over the infant formula issue, the opposition groups gained much publicity. In recent years Nestlé has focused on improving its image, and has implementing programs such as assisting South American dairy farmers to improve yields and providing HIV medication to employees in Africa. Despite this, it continues to face new charges and ongoing lawsuits. For more information, see www.forbes.com

McDonald’s chips away at image as poor employerND


Andrew Taylor, Financial Times, 20 April 2006

McDonalds faces criticism following the release of a book (‘Generation X: tales for an accelerated culture’) that comments on ‘McJobs’. In response, McDonalds UK has launched a poster campaign with the slogan ‘Not bad for a McJob’ to correct the ‘misconception’ about its employer performance. The company hopes this campaign will reduce the gap between the external perception and internal reality of working for McDonalds. In the UK, McDonalds employs 78,000 workers, with 80% of senior workers and 20% of franchise owners beginning their careers at McDonalds as crew members. Working conditions have resulted in the company being recognised by Investors in People, an independent body which sets and measure employment standards, giving McDonalds a profile award last year. For more information, see www.ft.com

Business warms to change ND


Deborah Snow, Sydney Morning Herald, 10 April 2006

Some of Australia’s top business leaders have launched the Australian Business Roundtable on Climate Change, in an attempt to get business and government to respond to the impact of climate change. The Roundtable has commissioned economic modeling that shows climate change is a major business risk. While the group will not want to directly confront the Australian government on its policy, they may well prove to be a strong opponent for the greenhouse ‘policy blockers’ who have been heavily influencing government policy. For more information, see www.smh.com.au

Case Study: Preparing for Avian FluND


Jack Devine and Susan Varisco, Chief Executive, 10 April 2006

Only 18% of US companies have a preparedness plan for a possible avian flu pandemic, according to the University of Minnesota Centre for Infectious Disease Research and Policy. A plan is essential due to the global, sustained nature of a pandemic where the workforce could see a reduction of up to 30% and disruption to client supply and goods. A good plan needs to: - identify an individual or group to oversee planning and organise response; - identify critical functions and personal, cross train staff to ensure functions can be filled; - develop policies such as liberal sick leave to encourage sick staff to remain at home; - improve IT infrastructure so that personnel are able to work from home; - assess critical inputs and vendors of goods and services and develop redundancy in critical areas; and - ensure that emergency plans are practiced, including role-playing. It is imperative to have a pandemic emergency plan as there will continue to be other medical challenges, such as avian flu and SARS, that companies will have to face. For more information, see www.chiefexecutive.net

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