Thursday, August 26, 2004

IR and CR

In an interesting though far from simple article, Will Barret (Research Fellow with the Centre for Applied Philosophy and Public Ethics at the University of Melbourne) explains that the notion of CR dominates business ethics, in education and in practice. The relationship between the moral R. of corporations and that of their individual and collective members is an ongoing philosophical issue, ultimately riding on theories of moral agency. Whether corporations possess moral agency or not, C. activity undeniably has morally significant effects. In the article Barret discusses moral R. and how it gives rise to accountability. He then outlines the connection between R. and moral agency, and associated theoretical difficulties. Barret finally gives 5 reasons why corporations can be accountable without necessarily being able to make rational decisions:

  1. First, and perhaps a little facetiously, Barret recommends you look at some C. mission statements. They invariably mention the corporation's aims, commitments, and activities. They talk as if the corporation has the properties required for rational decision-making.
  2. Second, we describe systems and processes as rational in cases where no individual or collective could have produced the outcome.
  3. Third, allowing that only the members of corporations have the required capacity, C. accountability might emerge from individual capacity, without being reducible to it. The idea that corporations are accountable doesn't require a theory of C. agency, but rather a causal history.
  4. Fourth, corporations satisfy whatever is required to meet the demands of legal accountability, so we already have a sense of C. accountability.
  5. Fifth, and finally, a corporation can be morally accountable for some state of affairs without having the capacity for rational-decision making, as long as people who possess that capacity can meet the demands of accountability on behalf of the corporation. Those people may themselves not be morally responsible for the relevant state of affairs.

Read Barret's full argumentation

Friday, August 20, 2004

London Stock Exchange announces "CR Exchange"

The London Stock Exchange (LSE) has developed an online disclosure tool to make it easier for firms to comply with CR demands. The tool will prompt firms to provide details concerning a wide range of policy areas. This will create a unified resource to which institutional investors can refer requests for information and so avoid duplicated effort. Topics covered include health and safety issues and supplier relationships.

This so called "CR Exchange" (CRE) allows companies to save time by disclosing only once to an audience of many – and provides analysts, fund managers and research agencies with a better tool for researching companies’ policies and practices in areas of CR.

The system is said to be compatible with:
- GRI (Global Reporting Initiative)
- EiRIS (includes FTSE4 Good)
- SAM Dow Jones (Sustainable Asset Management)
- BITC (Business in the Community)
- NAPF (National Assoc of Pension Funds)
- ABI (Assoc of British Insurers)
- The 2003 Combined Code

There is a cool online demo also.

Thursday, August 19, 2004

2004 best MBA paper in C. Citizenship

A paper entitled "Thinking Strategically About CR: The Merits and Limitations of the Value Creation Approach" by Bradley Cameron Smith (Rotman School of Management, The University of Toronto) has won an "Honorable Mention for the 2004 best MBA paper in C. Citizenship".
In this indeed interesting paper, Smith presents a number of innovative concepts that can be integrated into an assessment of a corporation’s CR strategy. Two of these models – Laszlo’s approach to value creation and the real options valuation technique merit further study, according to Smith.
Smith concludes that his analysis demonstrates that corporations are capable of framing the perceived threats of CR as potential opportunities to capture and create value. The downside is that this new approach faces some concerns.

  1. Complex alternative valuation techniques, such as real options, must be used to better assess the total value of CR investments.
  2. Creating organizational alignment is difficult and old cultures are unlikely to adapt until local managers believe the link between CR and business strategy.
  3. Furthermore, it must be ensured that expectations of CR initiatives do not exceed capability to deliver on those initiatives, both internally and externally. Failure to do so may diminish credibility to stakeholders, hinder changes in the organizational culture, and damage the brand.

Read the paper