Top 10 Corporate Responsibility Stories of 2010
Matten
It’s been a big year for corporate responsiblity. A huge oil
spill, continued ructions in the financial sector, landmark
decisions in the courts, and a new dawn for online companies around
human rights issues. It is never easy to pick the most important
stories of the year.
Some get huge coverage simply because they feature big brand
companies. Some hardly even scratch the public consciousness
despite having major implications. In other cases, it can be
difficult to determine accurately what their long-run significance
will be.
But here in the Crane and Matten control room, we’ve put our heads
together to come up with what we regards as the top 10 corporate
responsibility stories of the year. These are the events that we
think will have the most lasting impact on the field.
But it was a hard choice - narrowly missing the cut were the 10
year anniversary of the Global Compact, the FIFA World Cup
corruption scandal, Unilever’s “Sustainable Living” plan, Apple’s
labour violations, Wal-Mart’s latest announcements on sustainable
agriculture, Jerome Kerviel’s massive fine, and American Apparel’s
rollercoaster ride through 2010, among others.
But, hey, not everyone can be a “winner”. So if you think we’re
worng, or if we’ve missed off your biggest story of the year, do
let us know. And while you’re at it, take a moment to complete our
poll on the right to help us find the top stories according to our
readers.Here, though, is our top 10.
1. BP’s oil spill in the Gulf of Mexico
Deepwater Horizon was one of the world’s largest ever oil spills,
and understandably this story absolutely dominated 2010. Not only
did it put a final nail in the coffin for BP’s once vaunted
sustainability reputation, but it heralded a major rethink about
the viability of deep sea drilling. BP didn’t cover itself in glory
by failing to come up with a realistic remedy until far too late -
and ended up picking up most of the tab, thereby putting paid to
the usual assumption that
target=”_blank”>pollution is simply an ‘externality’ of
business. Really, this was the mother of all corporate
responsibility crises in 2010.
2. Google’s battle for free speech
target=”_blank”>Google’s withdrawal from China at
the beginning of the year was a landmark decision in the battle for
free speech on the web. A real clash of titans, no other story this
year illustrated better the clash between government and big
business around human rights issues. But Google’s
target=”_blank”>subsequent legal problems in
Italy, where senior executives were convicted of privacy
violations, demonstrated just how complicated this battle is going
to be.
3. WikiLeaks publication of the embassy
cables
Who knows where this one will end up, or just what its long term
significance will be for corporate responsibility? But it’s hard to
deny its significance as a major turning point in the fight for
greater government transparency, and the contested role of the
media and NGOs in
target=”_blank”>bringing confidential information into the
public realm. Heralded by some as the first great cyber
war, the WikiLeaks maelstrom inevitably
target=”_blank”>catapaulted online companies into the
fray with predictably unpredictable results.
4. Citizens United decision
The only court case to make it into the Top 10, but
target=”_blank”>according to President Obama the
5-4 decision by the US Supreme Court in
target=”_blank”>Citizen’s United vs Federal Election
Committee “reversed a century of law” and “opened the
floodgates” for corporations to play an ever greater role in US
politics. According to the ruling, companies and other special
interests can now spend as much as they like on influencing the
outcome of elections. And why? Because despite their vast
resources, companies should have rights to free speech on political
matters the same as any other citizen. An historic ruling.
5. Toyota’s product safety recall
This case grabbed a lot of headlines in 2010, mostly because of the
very scale of the recall and Toyota’s previously unblemished safety
reputation. This was a huge embarrasment for the
Japanese car maker and showed up
target=”_blank”>serious problems in the firm’s management
culture.
6. Bank bonuses
Bank bonuses stayed in the headlines during 2010. Despite continued
economic problems, huge public bailouts in Greece and Ireland,
persistent unemployment, and widespread austerity measures, some
banks managed to award
target=”_blank”>bigger bonuses in 2010 than ever
before. No surprise that the public stayed angry
with a bonus culture apparently so far removed from their
day-to-day problems. But European regulators finally seemed to get
the message with
target=”_blank”>new guidelines released at the end of the
year that looked set to dramatically change the bonus
landscape across the entire continent.
7. Corporate response to the Haiti
earthquake
Few stories better illustrated the precarious role of business in
international development than the corporate response to the Haiti
earthquake back in January. The
target=”_blank”>arrival of cruise ships full of
vacationers represented for many the unacceptable face
of corporate insensitivity and amoral consumerism. Yet, few denied
that business had to be an essential ingredient in getting the
stricken country back on its feet again.
8. Greenpeace campaign against Sinar Mas palm
oil
Greenpeace won Ethical Corporation’s campaigner of the year in 2010
for its work in combating deforestation. This was exemplified in
the NGO’s campaign against Indonesian palm oil producer Sinar Mas
which saw them force Unilever, Nestle and others to cease buying
from the company during the year.
target=”_blank”>Greenpeace’s spoof ad on YouTube
for the Nestle chocolate bar Kit Kat
target=”_blank”>went viral demonstrating how
campaigners were effectively harnessing social media for
anti-corporate protest.
9. HP’s termination of CEO Mark Hurd
Hewlett Packard has had its ethical ups and downs over the years,
but few expected the company to follow through quite so severely
when CEO Mark Hurd was found to have made fraudulent expense claims
to cover up a relationship with a female contractor. Rejecting
Hurd’s offer to pay back the $20,000 he’d received for the claims,
the highly regarded leader was
target=”_blank”>ousted by the board for failing to live up
to the company’s code of conduct. This was an impressive
commitment to ethical rules by anyone’s standards. However, it
angered many who thought the company was shooting itself in the
foot. A tumbling stock price and Hurd’s instatement at competitior
Oracle showed how much pain there could be in doing the right
thing.
10. India’s 2G licence scandal
OK, so actually this happened in 2008, but it was only in the
closing months of 2010 that the full extent of the 2G telecom
spectrum licences scandal began to be revealed. In what some have
called
target=”_blank”>India’s biggest scandal since
independence, Telecommunications Minister Andimuthu Raja
was forced to resign over
target=”_blank”>allegations that he lost the Indian
Government some $38 billion in revenues using an opaque
permit system that was riven with corruption. Leaked tapes of
secret phone calls with corporate lobbyists have poured oil on the
fire. This could yet become India’s Enron moment.
So that’s our Top 10 for 2010. Doesn’t make for particularly
edifying reading, but it hasn’t been all bad. In amongst the
scandals and corruption there have been some genuine cases of
ethical leadership in 2010, where companies like Google and HP have
had to make some hard ethical choices that have cost them dear. No
one said corporate responsibility was easy.
Andrew Crane is the George R. Gardiner Professor of Business
Ethics, Schulich School of Business in York University, Toronto and
Dirk Matten, is the Hewlett Packard Chair in Corporate Social
Responsibility, also at the Schulich School of Business in York
University, Toronto. You can follow their latest thoughts on the
and Matten blog.
Source: craneandmatten.blogspot.com
