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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:

The 50 percent clubND

McKinsey Quarterly, Martin Donnelly, February 2015

Female workers make up 53 percent of The British Civil Service but hold just 38 percent of leadership roles – which is better than the average at FTSE 100 boards or the UK judiciary, however still insufficient. This article, written by Martin Donnelly, the permanent secretary for the Department of Business, Innovation & Skills, explores his successful quest to achieve full gender balance on his leadership team. Donnelly became permanent secretary for the Department of Business, Innovation & Skills, in 2010, determined to make gender equality a priority. Donnelly’s success at achieving gender equilibrium is a move in the right direction which is not unique to his department. In 1996, just 17 percent of the country’s most senior civil servants were women. While that proportion has more than doubled, there is still some way to go. For more information see:

Corporate social media needs to be a two-way communicationND

ABC news, Andrew Robertson, 19 February 2015

Companies continue to grapple with how best to use social media to engage their stakeholders. A recurring error is to approach social media as a means to push information, much like television and newspaper. Laurel Papworth, social media expert from the University of Sydney, offers these 5 tips on what makes a good corporate social media strategy: • Know the purpose and value of channels like Twitter and Facebook and understand why you use them; • Keep marketing and customer service separate. Marketing and PR people should not be answering customer service questions; • Know your target audience (e.g. is it retirees or teenagers?); • Be where your customers are (i.e. if they are on Facebook, that is where you should be); • The best marketing and public relations is fantastic customer service. For more information see:

The corporate gift that keeps on giving ND

Business Spectator, Peter Baines, 27 February 2015

Businesses implement a CSR program for a variety of reasons, like believing it is the right thing to do, because it is what is expected of them, or it’s what their peers are doing. The most effective CSR programs are those that provide a return to business. When a return to business is established, people with the business offer it attention, and subsequently inject resources into the area. Increasing donations is not the key to success. There is no correlation between the size of a donation and benefits back to the business. It is important to understand the nature of the relationship you have with your partners, implement measures on the commitment you make and to attach KPIs so benchmarks are established by which performance can be measured. For more information see:

Shell, Audi, BVN and Australia Post discuss their policies towards sustainabilityND

Glenda Korporaal, The Australian, 19 February 2015

A roundtable, recently hosted by The Australian’s Deal Magazine delivered insights from leading sustainability practitioners, Paul Zennaro, head of media relations, Shell Australia; James Grose, national director, architectural firm BVN; Andrew Sellick, head of environmental sustainability, Australia Post; and Anna Burgdorf, general manager of corporate communications, Audi Australia. The discussion focused on distinct approaches from divergent fields, diverse opinions from the experts, and remarkably similar sentiments with regard to best practice approaches to tackling pressing sustainability issues. The article provides a comprehensive insight into the progress these companies have made and are set to make in the near future. For more information see:

Big firms face crisis of trust, business lobby group saysND

BBC, 9 February 2015

Criticism of big business has risen significantly over the last few years. The squeezing of suppliers, tax avoidance and the deliberate forcing of firms out of business have gained the public’s scrutiny. A UK lobby group has said that large firms face a “crisis of trust” and the government must prioritise better ethics. The Forum of Private Business (FPB) found that over three-quarters of respondents think big firms put profits before ethical standards. The survey also found that 74% of respondents agreed that the majority of big businesses have no concern for small business owners in the UK, while 76% agreed that the next government should penalise big businesses that act unfairly towards small businesses. The CEO of FPB, Phil Orford said: "The view of the British public is clear: we are facing a crisis of trust in big business and the UK wants the next government to respond accordingly, safeguarding the UK's small business community”. For more information see:

Sustainability now key selling point for business schools attracting studentsND

Mike Scott, The Guardian, 9 February 2015

As many people are aware, sustainability is a pressing business issue, dealt with at the highest levels of an organisation. Until recently sustainability didn’t receive much attention from many boardrooms. Business schools were also unworried by not devoting too much attention to the issue either. While businesses have moved ahead, the majority of business schools have not, choosing to maintain focus on maximising shareholder value, short-term profits, and the constricted interests of individual businesses, rather than society and the economy as a whole. The last 10 years has seen a drastic change in student attitudes toward sustainability and this subsequently has driven many business schools to greatly increase focus in this area. For more information see:

Promoting gender diversity in the GulfND

Tari Ellis, Chiara Marcati, and Julia M. Sperling, McKinsey and Company, February 2015

Throughout Gulf Cooperation Council member states (GCC), female participation in business is minimal, however according to this article by McKinsey, steps are being taken to improve this. The shortage of women in leadership roles is highlighted by data from the GCC Board Directors Institute showing that women hold less than 1 percent of executive-committee and board positions in the region. A recent study by McKinsey suggests that things may be improving. Close to two-thirds of survey respondents indicated that women in leadership was on their organisations strategic agenda. There is divergence within the region, with some states performing better than others. However, 74 percent of female respondents indicated that they felt the role of women in business was improving and would “absolutely” be increasingly important on their organisations strategic agenda over the next five years, versus just 51 percent of male respondents. For more information see:

Why Chief Human Resources Officers Make Great CEOs ND

Harvard Business Review, December 2014

The days when the corporate HR function was viewed as a back-office function, a cost centre focused on routine administrative tasks, is diminishing. Increasingly, Chief Human Resource Officers (CHROs) are having more influence in the C-Suite. There has been a marked increase in CHROs reporting directly to CEOs and consequently exerting greater influence. Research conducted by Korn Ferry, an executive recruitment firm, confirmed that the evolving importance of CHROs has become widespread. After CEOs and COOs, the CHROs are the highest paid executives, with an average base bay of $574,000 — 33 percent more than CMOs, the lowest earners on the list. The study’s author added, “Great CHROs are very highly paid because they’re very hard to find”. For more information see:

Understanding “New Power” ND

Harvard Business Review, Jeremy Heimans and Henry Timms, December 2014

Undoubtedly the world is witnessing increasing transitions of power. New power sources emanating from distinct parts of the globe have facilitated the overthrow of dictators, facilitated the election of presidents and seen people power challenging the status quo. Old power, held by a few and fiercely guarded, is closed, inaccessible and leader-driven. New power, created by many, is participatory, open and peer-driven with its goal not to store power but to channel it. The advances made by new power are often misunderstood, with traditional sources of power, while challenged, most often preserve their supremacy. The overthrow of Mubarak resulted in another dictator filling the void, the occupy movement gained immense traction and raised awareness to their cause however achieved little structural change. This fascinating and timely article provides an in-depth analysis of power models, values and structures. For more information see:

Guangdong province pioneers a new approach to keeping workers happy ND

The Economist, January 31 – 6 February 2015

As China’s economy slows and companies continue to move elsewhere in search of cheaper labour, China’s once burgeoning labour-intensive manufacturing industry has stagnated, while discontent among workers continues to increase. The number of strikes and labour protests doubled in 2014, the figure rising threefold in the last quarter. Independent unions are banned in China and response to unrest is typically with force. In an attempt to placate workers, Guangdong authorities have begun to permit a form of collective bargaining, where nominated representatives are tasked with negotiating terms of employment through representatives of behalf of employees. This approach has been opposed by businesses in Hong Kong, whom control many of the factories, fearing increased conciliation would lead to even higher labour costs. For more information see:

How companies can become more socially responsible in 2015ND

Paul Klein, Forbes Leadership Forum, 5 January 2015

How best to approach corporate responsibility in 2015 is a challenge facing many executives today. This article, written by Paul Klein, founder of Toronto based consultancy Impakt, aims to help executives aiming to best allocate their CSR budgets. Klein’s advice stems from discussions with corporate leaders and helps decipher how things will be heading over the coming years. He observed how most of the contributions made by corporations thus far have been ineffective and have not achieved satisfactory results. He predicts corporations will begin to drop tokenistic corporate social responsibility and start to dedicate themselves to bold social goals and begin to integrate social change in all aspects of their operations. He offers seven specific ideas to help executives drive their organisation towards more convincing long-term goals. For more information see:

Eight CSR trends to watch out for in 2015ND

Susan McPherson, Forbes, 31 December 2014

Approaches to Corporate Social Responsibility (CSR) in 2014 were varied and at times exceedingly imaginative. Overall, the CSR industry continued to steam ahead, with an ever increasing involvement coming from the C-Suite, now that transparency is considered the norm. With 2015 already underway, this article set out to determine what lies ahead in the CSR world for the coming year. By engaging industry experts, the authors share trends from 2014 and offer their predictions for what lies ahead for 2015. For more information see:

Is sustainability reporting a waste of time?ND

The Guardian, Jeff Leinaweaver, 7 January 2015

The efficacy of corporate sustainability reporting is increasingly questionable. A recent report by think tank and consultancy SustainAbility, warns that companies are wasting time and money creating sustainability reports that fail to achieve their objectives. The firm assessed 500 surveys and conducted over 50 interviews with sustainability experts and thought leaders. It determined that sustainability reporting has plateaued and large amounts of time are increasingly wasted on reports that fail to engage audiences. The increasing prevalence of social media as a source of information is also contributing to the ineffectiveness of sustainability reports. The authors argue that less focus should be placed on transparency and more about what the business is actually doing. For more information see:

The Companies with the Best CSR ReputationsND

Kathryn Dill, Forbes, 8 December 2014

The Reputation Institute, a private global consulting firm based in New York, has released its annual findings of its 2014 CSR RepTrak® 100 Study. The firm assessed data obtained from consumers across 15 countries: Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russia, South Korea, Spain, UK and the U.S. Companies were judged based on their performance in a number of areas, including environmental, social, workplace and government. Each company earns a score which represents an average measure of people’s feelings for it. Three of the seven dimensions that drive reputation (governance, citizenship and workplace) fall into the CSR category — data indicates that 41 per cent of how people feel about a company is based on their perceptions of the firm’s corporate social responsibility practices. Google heads the list for the fourth year in a row, obtaining notable attention for citizenship practices, including the commitment of $1 billion to renewable energy projects. Microsoft, The Walt Disney Company and BMW also maintained their position at the top. For more information see:

Joining Forces: Collaboration and Leadership for Sustainability ND

MIT Sloan Management Review Research Report (produced in collaboration with BCG and UNGC), January 2015

A key finding from the sixth global survey of executives from 113 countries illustrates a gap between those who agree that businesses need to collaborate to address sustainability challenges (90% of participants) and those that actually collaborate on sustainability (47 per cent). The report points out companies such as BASF and Intel that have had successful sustainability-related partnerships tackling global education issues and nutrition challenges. Reasons companies are engaging in sustainability partnerships include: to improve reputation/brand building, product innovation, foster transformation towards sustainability, risk management, expand into new markets and due to stakeholder demand. Findings over the past four years continue to show increases in the number of companies that are: publicly reporting on their sustainability efforts, developing sustainability KPIs and governance structures, ensuring sustainability is a key focus for management, and developing a business case for sustainability efforts. Another key finding is around board engagement: while most respondents (86%) believe boards need to play a strong role in terms of driving sustainability, only 42% of boards are perceived to be engaged or moderately engaged around sustainability issues. The authors identify barriers to board engagement and suggest that there needs to be a shift in thinking about the board oversight role and that the myth of shareholder supremacy and the short-term focus on maximising shareholder value needs to be debunked. For more information, see

Public sector digitization: the trillion dollar challengeND

Business Technology Office, Cem Dilmegani, Benji Korkmaz and Martin Lundqvist, December 2014

The benefits available to society and governments from digitization are enormous. Public-sector digitization does however pose challenges for those governments aiming to reap the benefits. Shared services, enhanced collaboration and integration, improved fraud management, and efficiency improvements enhance system-wide capacities. Online services offer greater connectivity for rural populations, enhance quality of life for the disabled, and offer ease of access like never before. Despite all the progress made, most governments are falling short. Analysis, conducted by McKinsey & Company, estimates that capturing the full potential of government digitization could release up to $1 trillion annually in economic value globally, through improved cost and operational performance. Today, in excess of 130 countries provide online services. This article provides an interesting insight into the public-sector digital revolution, paying particular attention to the systems implemented in the United Kingdom, Denmark, the Netherlands and the United States. For more information see:

Sustainability is now a factor — deal with itND

The Australian, Damon Kitney, 6 January 2015

Michael Jantzi, chief executive of Sustainalytics — a provider of ESG research and analysis to some of the world’s major pension funds, has expressed shock at the Australian government’s criticism of the Australian National University’s (ANU) decision to drop resource companies Santos and Sandfire Resources from their investment portfolio. The ANU decision was labelled as “stupid” by the PM, while the Treasurer ¬accused the ANU of being “removed from the reality of what is helping to drive the Australian economy and create more employment”. Mr Jantzi has stated that this approach is unprecedented and exhibits a shortsighted view. He outlined how a number of chief executives at major corporations are putting sustainability at the forefront of their strategic agendas. For more information see:

AirAsia’s Chief Responds to Crisis with Quick Compassion ND

New York Times, Alexandra Stevenson and Neil Gough, 31 December 2014.

The tragedy of AirAsia flight QZ8501, crashing en route to Singapore from Surabaya, has refocused attention on the region’s aviation industry. The disaster resulted in the third aviation tragedy involving a Malaysian airline in 2014. The response of Mr Fernandes, the company’s chief executive, has sharply contrasted with that of Malaysia Airlines — Malaysia’s struggling national carrier, which operated the two other planes involved in fatal accidents. The response of Mr Fernandes — his immediate, hands-on and measured approach, has impressed analysts. Within hours of the plane’s disappearance, Mr Fernandes was in Surabaya, speaking with the families of passengers and crew. He actively maintained engagement through social media and sustained a proactive and applied approach. This article provides a background briefing on Mr Fernandes, AirAsia, and his response to this tragedy. For more information see:

Why there’s more to sustainability than 2015’s big global eventsND

Aron Cramer, The Guardian, 26 December 2014

Close attention will be paid to two major milestones that lie ahead later in the year — the launch of the new sustainable development goals in New York this September, and the COP21 climate talks in Paris, scheduled for December. For business, however, the outcomes of New York and Paris will create only the beginning of a bigger picture. Adherence to binding regulation agreements no longer suffices for companies aiming to fulfil their sustainability obligations. This well timed article outlines how the shrewdest strategies will not take a one dimensional approach, but will realise that change today comes simultaneously from the top down, the middle out and the bottom up. For more information see:

A Company’s Good Deeds Can Energize EmployeesND

Christoph Lueneburger, Harvard Business Review, 3 December 2014

Approaches taken by companies suffering tough times can inadvertently lead to decreased employee engagement. Focus turns to cost cutting and big strategy shifts rather than on retaining employee talent. A culture of purpose, it is argued, is the key to invigorate a business while at the same time revitalizing employees. This interesting article provides two very thought-provoking case studies on iconic companies that have responded to tough times with purpose-driven initiatives that both inspire employees and improve results. The first company is American Standard and the other Hewlett-Packard. Both initiatives resulted in remarkable outcomes. For more information see:

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