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:

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

Ideology the new consumer advocateND


Richard Dunham, Australian Financial Review (weekend edition), 8-9 April 2006

For millions of American consumers, politics drives their product choices. According to Dunham, these people choose or avoid certain companies depending on the political donations they make or the controversial causes that they support. While this is not a new trend, the movement has grown in recent years due to the increasing popularity of talk radio and new technology, such as communication via websites, blogs and listservs. This ‘ideological consumer’ trend has forced companies to review marketing strategies and engage consultants whose expertise includes ‘defusing politically based consumer revolts’. However, having angry customers on both sides of the political spectrum has left many companies with no other option than to lie low, with one executive stating, ‘Whatever we say, we just don’t win, so we don’t say anything.’ For more information, see www.afr.com.au

Read reports online: 21,000 trees can’t be wrongND


Fiona Buffini, Australian Financial Review (weekend edition), 8-9 April 2006

More companies are posting annual reports on the internet and sending printed versions to shareholders who specifically request them. Data from Computershare and coverservatree.com shows that Australian companies would save 21, 601 trees if they moved from paper to electronic delivery of all shareholder information. Other research indicates that up to 70 per cent of annual reports in Australia are not read and discarded. A move to online reports could result in significant cost savings and less paper usage. Shareholders appear to be supportive of plans to review reports online as long as companies provide user-friendly formats. For more information, see www.afr.com.au

Coalitions gain trust of authoritiesND


South China Morning Post, 31 March 2006

Difficulties with implementing effective CSR programs in countries such as China can be avoided by creating large business coalitions that are able to build trust with the local authorities. Social campaigns are accepted if they are have a defined and non-threatening focus such as the Global Business Coalition on HIV/Aids summit held last March 2005. This summit was successful due to its ties to the Chinese Ministry of Health and other government departments that shared the same goal of prevention and control of Aids. For more information, see www.scmp.com

Mining investors warned not to ignore ethicsND


Jo Clarke, Australian Financial Review, 31 March 2006

As a result of a greater focus being placed on working conditions in developing countries, some mining companies risk having their reputations damaged due to poor staff practices. In a report released by Citigroup, investors are encouraged to look beyond profit when choosing between mining investment options. The report rated resource-based companies according to ethical practices, with Rio Tinto and BHP Billiton toping the list. Citigroup says that while sustainability may not drastically impact corporate share prices at the moment, it will be a factor in the future and companies should be ready for this development. For more information, see www.afr.com.au

The CEO as global corporate ambassador ND


Alan Murrary, The Wall Street Journal, 29 March 2006

Proctor & Gamble’s chief executive talks about his responsibility to stakeholders rather than shareholders. However, in listing all of those who now come under this broad term, the WSJ asks: ‘Who on earth isn’t a Procter & Gamble stakeholder?’ The changing role of the CEO is due to increased demands from shareholders, customers, employees and the wider community, and the inevitable conflicts with so many stakeholders. Some critics argue that these are a distraction from the CEO’s main job. For more information, see www.wsj.com

Directors baulk at talk of wider dutiesND


Fiona Buffini, Australian Financial Review, 28 March 2006

David Gonski, chairman of Coca-Cola Amatil and Investec, has joined other Australian business leaders in opposing legislation that requires an extension of director’s duties beyond shareholders. Australian government inquiries are examining whether to extend director’s duties and give investors greater access to information on how companies are managing social and environmental risks. Although Australian companies lag in terms of producing sustainability reports (23% of the ASX100 produce reports compared to 41% in major international markets), Mr Gonski maintains that success in the social responsibility area resulted from ‘passion and commitment’ rather than obligation. For more information see www.afr.com.au

Bringing good things to peopleND


Aabhas Sharma, Business Standard (India), 21 March 2006

This article highlights General Electric’s CSR program in India. It has adopted a NGO, Vidya, which educates underprivileged children. GE employees mentor students on weekends, as well as provide meals, school uniforms and computers for the school. Results have been positive with almost all students participating in higher education programs, and a number of them being offered jobs with GE. For more information, see www.business-standard.com

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