Climate Change and Climate Change and Social Responsibility Social Responsibility A Reality Check

Dr James Bellini 20 April 2008

CSR DefinedCSR Defined

CSR is about corporate behaviour

That behaviour includes:◦What you do or say◦What you do not do or say

CSR is not only about climate change

It’s All In The MindIt’s All In The Mind

The successful companies of the future will base their strategies on a healthy corporate psyche founded on clarity, integrity and authenticity

The New ScarcitiesThe New Scarcities

Time

Attention

Trust

‘The pressure to deceive is felt everywhere in business and deceptions are ethically justifiable … departing from the strict truth and thegolden rule is part of the strategy of business.’

Albert Z Carr Is Business Bluffing Ethical?

Harvard Business Review

Building The Company ‘Trust Bank’Building The Company ‘Trust Bank’

What ‘Trust’ Is NotWhat ‘Trust’ Is Not

Familiarity

Heritage

Low cost

Local

Availability

Who trusts whom?Who trusts whom?

0102030405060708090100

Doctors Businessleaders

Journalists Govtministers

trusted to tell truth - % of sample

MORI

Future ConditionalFuture ConditionalBlueprint for Tomorrow?

The Millennials’ AgendaThe Millennials’ Agenda

Authentic companies

Courageous leaders

Sustainable future

Millennium PollMillennium PollPublic opinion on the changing role of

companies

25,000 citizens worldwide

Most important corporate values by rank:1. Social responsibilities2. Brand quality / reputation3. Financial success

The World in 2032The World in 2032%

Oil famine

Climate change impact

Key Issues

Future Leaders Survey 2007

The New AgendaThe New Agenda

86% agree material consumption must reduce

66% think 4x4s should be banned from city centres

41% support personal carbon quotas

Future Leaders Survey 2007 - 08

‘This world cannot continue to function the way it is if we wish to live out the next hundred years.

Not only do both government and the individual’s perspectives on the environment need to change, but also the way we relate to each other’

Camilla van Klinken, 18, Netherlands

Future Leaders Survey 2007- 08

‘There is no trade-off between economic growth and responding to climate change. Either we do something about it, or all our growth will go to waste when climate change begins to wreak havoc with markets, international relations and the world in general…’

Matt Bardley, 18, Cardiff University Future Leaders Survey

Corporate DenialCorporate DenialCasebook

‘The national science academies of the G8 nations and Brazil, China and India, three of the largest emitters of greenhouse gases in the developing world, have signed a statement on the global response to climate change...and call on world leaders to ... acknowledge that the threat of climate change is clear and increasing’

June 2005

Case Study in DenialCase Study in Denial

“We in ExxonMobil do not believe that the science required to establish this linkage between fossil fuels and warming has been demonstrated”

Lee Raymond Chairman/CEO ExxonMobil

2002

‘In September 2006, the Royal Society wrote to ExxonMobil to express concern that some of its corporate publications were presenting a misleading view of the scientific evidence about climate change

The Society raised concerns about Exxon's position on climate change and the company's funding of lobby groups that misrepresented the science

Although we have exchanged further letters with ExxonMobil, it has still not addressed this issue’

Royal Society press release

EXXON VALDEZEXXON VALDEZ

Good Friday 1989

1100 miles Alaskan coastline affected

Clean-up bill $3.5bn + private lawsuits

Two years after 70% believed still polluted

34th largest spill in history - not large but effects on reputation critical

Case Study in DenialCase Study in Denial

Alaska Oil Spill: “An Act of God”

ExxonMobil management

Case Study in DenialCase Study in Denial

“The presence of nicotine does not make cigarettes a drug or smoking an addiction”

Q: “Does smoking cause lung cancer?A: “I do not know.”

On oath before Congress 1994:

The Badvertising Backlash

A Crisis of TrustA Crisis of TrustThe 21st Century Corporate Agenda

Dishonesty PandemicDishonesty Pandemic

EnronWorldComTycoQwestGlobal CrossingArthur Andersen...........

Dishonesty PandemicDishonesty Pandemic

HIH -- $4 billionParmalat -- €10 billionAhold -- €500 millionMannesmann – six

execs tried for‘breach of trust’ over €57 million bonuses

Multiple scandals in Japan

THE MAP OF CORPORATE MISCONDUCT

10 of the 15 biggest bankruptcies in history have occurred since 2001

All have been driven by massive corporate dishonesty

Corporation  n.

artificial person created by charter; an entity unto itself under the law.

‘The corporation’s legally defined mandate is to pursue, relentlessly and without exception, its own self-interest, regardless of the often harmless consequences it might cause to others.’

You are here

Traditional ‘Mistrust’ Model

Virtual Trust-based ModelVirtual Trust-based Model

TASK

Contingent specialist

Knowledge broker

Customer

The Company – A Living OrganismThe Company – A Living Organism

A company has ‘psychological verities’Corporate psyche can be analysedPsyche can develop dysfunctionsDysfunctions block clarityLack of clarity

◦ imperils psychological contract◦ threatens corporate survival

Doing Business in 2020Doing Business in 2020

The successful organisation of 2020 will have no HQ, no CEO, own no IT and

will have one-tenth the fixed assets it has today

It’s most vital competitive resource will be the authenticity and trust it has built

with its stakeholders

CSR – A Progress ReportCSR – A Progress Report

Legal and compliance

Strategic philanthropy

Value-based self regulation

Efficiency

Growth platformCSR Value Curve

IBM Institute for Business Value

The Future Company?The Future Company?HYPER-ORGANISATION

‘Win’

Strip out unnecessary Ps◦ Positions◦ Processes◦ Purchases◦ People

Order workplace lives to match corporate goals

The Future Company?The Future Company?HYPER-ORGANISATION

‘Win’

Strip out unnecessary Ps◦ Positions◦ Processes◦ Purchases◦ People

Order workplace lives to match corporate goals

DISORGANISATION

Align with personal values

Mirror individual identities

Flatten hierarchies

Integrate workplace lives with non-work goals

Lost OpportunityLost Opportunity%

% engaged in CSR activities

IBM Institute for Business Value

Exploring Corporate Exploring Corporate PsychePsycheWhat drives corporate behaviour?

A New Psychological ContractA New Psychological Contract

We are moving from the Industrial Ageto the Connected Age

Business needs a new mentalmodel of how to engage inrelationships with its stakeholders

Trust and truthfulness are key

‘The central theme of The Bullshit Factor is that organisations and people inhabit the same psychological universe and that, like people, organisations can have psychological issues.

These issues are manifested in patterns of behaviour that reflect levels of ‘untruthfulness’, misperceptions, delusions or some other deceit.’

The Bullshit Factor p 171

What Makes A ‘Healthy’ What Makes A ‘Healthy’ Psyche?Psyche?

Objective perception of realityNaturalness; simplicity;

spontaneityEmpathy for humanityDemocratic characteristics

Goodbye Gordon Gekko Goodbye Gordon Gekko A New Business EthosA New Business Ethos

Healthy CorporationCivilised WorkplaceNice Company‘No-jerks rule’“Our people are hired and fired for

attitude” SouthWest Airlines

Companies On The CouchCompanies On The Couch

Case Study in ArroganceCase Study in Arrogance

[ Caught with their pants down?]

Case Study in ArroganceCase Study in Arrogance

Food Is Survival

Portrait in Courage: GE’s Jack WelchPortrait in Courage: GE’s Jack Welch

Routinely fired worst-performing 10 per cent

‘Neutron Jack’

100,000 jobs disappeared during his tenure

Portrait in Courage: GE’s Jack WelchPortrait in Courage: GE’s Jack Welch

Took GE in 20 years from $26.8 bn to $130 bn

Company share price rose 4000 %

‘I want bosses to have more candour, less bullshit’

Semco: A ‘Maverick Semco: A ‘Maverick Corporation’Corporation’

KEY PRINCIPLES

Be dependable and reliable Value honesty and transparency above all Encourage creativity; support the bold Question decisions imposed from the top Pleasant and informal environment No dress code; voluntary meetings; mandatory vacations Employees set hours and wages, choose IT

Principled Leaders – A ChecklistPrincipled Leaders – A Checklist

Personal humility, not egoAmbitious for organisation, not

themselvesDefend beliefs with courageNurture core values – ‘integrity’ Hire people of right character

Elements of CourageElements of Courage

Consumers, employees, leaders◦ New consumer equation / precision markets◦ Optimum talent mix◦ Metanoia for business decision-makers

Virtuous circle in the workplace◦ Clarity, honesty, integrity◦ End to ‘workplace schizophrenia’◦ Principled leaders

Climate Change and Climate Change and Social Responsibility Social Responsibility A Reality Check

Dr James Bellini 20 April 2008

19 September 2007 | Slide 56

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