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Paul McNeillis Director of CSR Achilles Information Ltd. Bradford School of Management 26 th May 2010

The Demise of Unilateral Corporate Responsibility... ...its implications for leaders and some thoughts about what might follow. Paul McNeillis Director of CSR Achilles Information Ltd. Bradford School of Management 26 th May 2010 . A Proud long tradition.... . ...Of bad news.

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Paul McNeillis Director of CSR Achilles Information Ltd. Bradford School of Management 26 th May 2010

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  1. The Demise of Unilateral Corporate Responsibility... ...its implications for leaders and some thoughts about what might follow Paul McNeillis Director of CSR Achilles Information Ltd.Bradford School of Management 26th May 2010

  2. A Proud long tradition.... ...Of bad news...

  3. http://www.guardian.co.uk/world/2010/may/25/foxconn-ninth-worker-death-fall-chinahttp://www.guardian.co.uk/world/2010/may/25/foxconn-ninth-worker-death-fall-china Latest News.... market pulse May 25, 2010, 1:47 a.m. EDT · Recommend · Post: Foxconn falls 10% as another suicide reported

  4. Climate change belief given same legal status as religion An executive has won the right to sue his employer on the basis that he was unfairly dismissed for his green views after a judge ruled that environmentalism had the same weight in law as religious and philosophical beliefs. By Stephen Adams and Louise Gray 03 Nov 2009 Telegraph. The Guru of the bottom of the pyramid Coimbatore Krishnarao Prahalad was the most creative management thinker of his generation. …He was haunted by the contrast between the rich world he inhabited and the poor world he had grown up in. This led him to veer off in a radically new direction and to produce perhaps his most thought provoking book “The fortune at the bottom of the pyramid: Eradicating poverty through profits (2004)…” The Economist April 24th 2010. SC Johnson Grows Sustainability Around the World SC Johnson believes a flower can change a community. In 2000, 90 percent of the Rwandan workforce earned their living from agriculture and exported crops accounted for approximately 40 percent of the country's gross domestic product (GDP). Pyrethrum farming has met a lull due to inconsistent harvests and lack of stable business processes. "We're working together to develop sustainable agriculture and business practices that will strengthen these communities," said Chairman and CEO Fisk Johnson, "As a family company we're motivated to do our part to make the world better.“ CSR Wire 02/04/2010 Headlines you couldn’t have imagined ten years ago...

  5. A Story with Momentum... • Firm level Drivers • License to Operate • Right thing to do • Gain competitive Advantage • (Bansal & Roth, 2000) Online protest drives Nestlé to environmentally friendly palm oil Food giant bows to Greenpeace campaign and vows to cut its 'deforestation footprint' By Martin Hickman, Consumer Affairs Correspondent Wednesday, 19 May 2010 The Independent

  6. Millennium Development Goals Report 2009 “Although data are not yet available to reveal the full impact of the recent economic downturn, they point to areas where progress towards the eight goals has slowed or reversed. Major advances in the fight against extreme poverty from 1990 to 2005, for example, are likely to have stalled. During that period, the number of people living on less than $1.25 a day decreased from 1.8 billion to 1.4 billion. In 2009, an estimated 55 million to 90 million more people will be living in extreme poverty than anticipated before the crisis.” But...the global institution critique... “In the countdown to 2015, and amidst a global economic crisis that originated in the developed countries, the need to accelerate delivery of MDG 8 commitments in all their dimensions has now become an emergency rather than simply a matter of urgency.” MDG Gap Task Force Report MDG 8 Strengthening the global partnership.

  7. ....global supply chains are currently falling short of their potential for poverty reduction because they are failing to deliver good labour standards.” Oxfam Briefings for Business no 5. 2010 “...From the perspective of sustainable development there has been less attention for this industry then for some of the other manufacturing industries. Research however points out that there are major problems in the production of ICT hardware. Many abuses related to human rights, labour, environment and health issues are taking place in the global supply chain of ICT hardware. In response to this, SOMO decided to include the ICT sector in its four-year research program on Corporate Social Responsibility.” SOMO (Center for Research on Multinational Corporations – The Netherlands) “Responsible supply chain management of minerals from conflict zones and fragile states The OECD will develop practical guidance for managing the supply chain of key minerals in conflict zones and fragile states, with particular regard to the Democratic Republic of Congo (DRC), including relevant aspects of conflict financing, extortion, corruption/financial crime, human rights, security and transparency.” OECD 2010 ...The NGO critique

  8. Does Monitoring Improve Labour Standards? Lessons From Nike “...the point of codes of conduct is not simply to monitor, audit, or discipline: the point is to generate measurable improvements in compensation, working conditions, and rights of association. And recent research raises important questions about the effectiveness of this approach.” (Locke, Qin and Brause 2007; Maquila Solidarity Network 2006; Barrientos and Smith 2006). Balanced by Corporate Social Responsibility Wisdom or Window Dressing The scary economic developments of the past two years are contributing to a renaissance of discussion about "Corporate Social Responsibility," and how it might have helped head off Wall Street's precipitous failure. To explore that question, Truthout contributor William Fisher talked with Chip Pitts, one of the world's leading authorities on the subject. In this interview, Professor Pitts answers key questions. He believes that CSR, if "properly implemented, would have prevented the crisis." Wednesday 07 April 2010 William Fisher, t r u t h o u t | Interview ...The academic critique...

  9. From Walmart- Watch http://walmartwatch.com/ Wage Violations at Supplier Factories. According to Wal-Mart's own audit, "several serious violations are still found consistently at the factory level, including problems with payment of overtime compensation, coaching of workers for worker interviews, and the use of `double-books' to hide true numbers of hours worked or wages/benefits paid." [Wal-Mart Stores Inc. 2005 Ethical Sourcing Report] Norway Calls Wal-Mart's Human Rights Violations "Serious" and "Systematic." In 2006, Norway sold its 2.5 billion kroner ($415 million) worth of Wal-Mart, citing "serious" and "systematic" human rights violations in Wal-Mart's supply chain. Norway's federal pension fund - valued at almost $300 billion - is one of the world's largest. ["Norway Dumps Wal-Mart Stock," Aftenposten, 6/6/06; "Norway Backs its Ethics with Cash," New York Times, 5/4/07] Exploiting Child Labor. In 2006, the National Labor Committee uncovered a factory in Bangladesh where an estimated 200 to 300 children were discovered sewing pants for Wal-Mart. They were routinely beaten, forced to work overtime, cheated out of their wages, given phony time cards and told to lie about their age. [National Labor Committee, 2006] Case 1 Walmart Part 1: The Bad Guys

  10. Wal-Mart's First Sustainability Report: Just a Gesture or a Just Account? Many call the biggest retailer's sustainability report a good first step on a long road. Two years after Wal-Mart CEO Lee Scott announced the company's environmental goals in his "Twenty-First Century Leadership" speech, last week Wal-Mart released a report of its progress, "Sustainability Progress to date, 2007-2008." Full of figures and charts, it covers many sustainability issues from health care coverage and green products to Wal-Mart's giving in local communities to supply chain safety. Wal-Mart set three ambitious goals as announced in Scott's speech: to be supplied 100% by renewable energy; to create zero waste; and to sell products that sustain natural resources and the environment. Sustainability Investment News November 19, 2007 by Anne Moore Odell Walmart to 60000 suppliers: We’ve got 15 Really important questions for youThe only way a consumer-oriented company can become more sustainable is by engaging its direct suppliers, encouraging them to do the same for their suppliers, and so on up the chain. The bigger the company, the more powerful this effect can be. Walmart has decided to trigger this supply "chain reaction" for sustainability sake. Read on for the list of 15 questions they now ask their suppliers. http://www.treehugger.com/files/2009/07/15-questions-walmart-asks-suppliers.php Case 1 Walmart Part 2: The Big Guys

  11. Do Walmart’s priorities align with those of their stakeholders? What are the advantages/disadvantages of using the supply chain to mobilise action? What criteria would you use to decide if Walmart’s initiatives have been successful? Case 1 Walmart Part 3: Take a view

  12. “As the only environmental group with an office in Bentonville, Environmental Defense knows that Wal-Mart is serious about its sustainability program," said Gwen Ruta, Director of Corporate Partnerships at Environmental Defense, a non-profit environmental rights group which helped review drafts of the report. "The company is moving in the right direction, and learning as it goes.”The Big Box Collaborative, a coalition of shareholder activists, environmental, and labor right groups that works to transform large retailers, in particular Wal-Mart, was more cutting in its response to the report: "Wal-Mart continues to give anecdotes with few facts about their systemic change and impact,“ “This report covers quite a bit of info, but yet doesn't provide enough in depth detail”.The Interfaith Center on Corporate Responsibility(ICCR) released a statement on the sustainability report. The ICCR has filed a shareholder resolution at Wal-Mart for the past three years requesting Wal-Mart issue a public sustainability report. "We welcome Wal-Mart's Report as a first step. It demonstrates a commitment by the Company to both develop internal mechanisms for implementation and to be transparent with respect to its sustainability initiatives," ICCR's statement reads. "It is clear that this first Report demonstrates progress particularly toward the environmental goals that President and CEO Lee Scott articulated two years ago. We recognize that collecting information on key indicators for environmental goals is less difficult than attending to social performance indicators, but without social indicators, the Report pales," ICCR's statement continues. Case 1 Walmart Part 4: Stakeholder Perspectives

  13. Apple's launch of new green products at this week's Macworld show has been overshadowed by the company’s attempts to quash shareholder requests for more corporate social responsibility(CSR) reporting. The company issued a proxy filing on Wednesday in which it urged shareholders to vote against a shareholder resolution proposed by As You Sow, an environmental group co-sponsored by the New York City Office of the Comptroller and the Green Century Equity Fund. The resolution would require the company to publish a CSR report detailing its approach to greenhouse gas emissions, toxics and recycling by July this year. The report would also require Apple to define "sustainability", and would include a company-wide review of policies contributing to sustainable operations. As You Sow claimed in the resolution that there were strong commercial reasons for Apple to produce such a report, arguing that over 2,700 companies now produce formal CSR reports, including many direct competitors such as Dell, IBM and HP. "Apple lags behind its global industry peers on sustainability reporting, especially regarding key environmental issues such as climate change, " the resolution said. However, Apple's board of directors, which includes Nobel Prize-winning climate change campaigner Al Gore, recommended shareholders vote against the resolution. "The board believes that the proposal has been substantially addressed and publication of an additional report would produce little added value while requiring unnecessary time and expense," Apple said in its proxy filing. Danny Bradbury, BusinessGreen, 09 Jan 2009 Case 2 Apple Part 1: Apple Is Different...

  14. TAIPEI -- Police in the southern Chinese city of Shenzhen are investigating the suicide of an employee of Hon Hai Precision Industry Co., which assembles the popular iPhone for Apple Inc., in an episode that has put the Taiwanese company under a spotlight. Hon Hai, which is known by the trade name Foxconn and makes a slew of products for the world's biggest electronics companies, said it is cooperating with the investigation and expressed regret over the suicide of Sun Danyong, a 25-year-old recent engineering graduate who worked as an administrative staffer at a company plant in Shenzhen. Associated Press Hon Hai, whose factory in Shenzhen in southern China, said it is cooperating in the investigation of the suicide of an employee. Hon Hai also said it suspended a security official who had questioned Mr. Sun before his death. The security official couldn't be reached for comment. Local authorities said Mr. Sun jumped from the 12th floor of his apartment building in Shenzhen last Thursday. A spokesman for Apple said, "We are saddened by the tragic loss of this young employee and we are awaiting results of the investigations into his death. We require that our suppliers treat all workers with dignity and respect." According to local media reports, which couldn't be independently confirmed, Mr. Sun was questioned about the disappearance of a prototype of Apple's next-generation iPhone. The reports also said he had been beaten. Case 2 Apple Part 2: But with the same problems

  15. Why would Apple not want to report on CSR? Why do Apple take a different view of Green Products? Should they accept sole responsibility for the Foxconn incident? Will the Latest incident change anything? If so what? Case 2 Apple Part 3: take a view

  16. Will child labour claims stop you buying Apple? An audit of Apple's suppliers has found all sort of transgressions. But will we ever take notice of the real reasons that our cheap electronics are so inexpensive? Was your iPod built on the back of child labour? That's something everyone should be wondering after Apple said an audit of factories highlighted numerous failures at factories that supply it - and other companies - with electronics. The report, which is posted online, lists a litany of failures - including several instances of 15-year-olds being employed by the unnamed suppliers, nearly two-thirds of factories failing to pay workers properly, long hours and poor environmental and safety credentials. The company, not surprisingly, says it wants to "eliminate" these violations. You can take several positions on the affair: that it's reprehensible that Apple should ever work with companies that treat employees so badly, that it's positive that an audit had picked up such transgressions, that Apple has to really up its game and make changes. There's a bigger question here too: one we should all be asking ourselves whenever we're buying electronics. Why is it so inexpensive? Yes, we often complain about the high prices of our gear, but in truth, the price is sometimes subsidised through exactly the sort of behaviour that Apple's audit highlighted. Apple may beg to differ. Let's face it, these cheap electronics are cheap for a reason. But do revelations like this stop you from buying? Guardian April 2010 Case 2 Apple Part 4: Perspectives

  17. L1 Progress against the global challenges is slow and fragile L2 Global leverage through supply chains not yet effective L3 Brands often singled out/or seek to act alone - but issues usually much wider L4 Measurement is inconsistent for green issues and often absent for social issues L5 Company-stakeholder priorities often unaligned L6 Consumer pressure patchy and product dependent L7 Business and CSR goals often in conflict or tension So what have we learned?

  18. What’s the alternative? • Collaboration • Case 3: Global E-Sustainability Initiative (GeSI) • 26 member organisations ICT industry • Smart 2020 Report: • Estimated contribution of industry to global C02 = 2% • Estimated potential to reduce global emissions by 2020 = 7.8Gt CO2e= 15%. • Supply Chain WG • Created E-TASC online tool • 50 major buyers >1000 suppliers E-TASC Annual Report 2010 Down Jones Sustainability Index Report 1999-2009 the first decade identifying sustainability leaders “The rising weight of industry-specific criteria reflects our conviction that sector-specific sustainability opportunities and risks play a key role in the long-term success of companies and are thus crucial in the identification of sustainability leaders.

  19. The Challenges of collaboration as a learning process Shared views but no standard practices Shared views and shared Consensus Standard Converging P3 Agreement without action P1 Convergence Interpretation No shared view no standard practices Shared practices without shared views P4 limited or compromised consensus P1R Divergence Diverging Diverging Converging • Four year DBA research • Case study method: • Coffee Standard • Sustainable Fishing standard • Ethical fashion standard • ISO 26000 • Social Responsibility • Standard Theory Origins Organisational Learning Theory [Bapuji and Crossan (2004)] Stakeholder & CSR Theory [Branco and Rodrigues (2007)] Network Learning [Knight and Pye (2005)] Multi-Stakeholder Learning [Theory (Calton and Payne 2003)] Practices

  20. Challenges of Collaboration as a Stakeholder Network Learning Process Non-Participant Stakeholders Converging Participant Stakeholders P3 Agreement without action P1 Convergence P3 Agreement without action Interpretation P4 limited or compromised consensus P1R Divergence Diverging Representation Converging Diverging Practices

  21. The Lost Flock ‘Dislocated Learning’ Scenarios Converging Converging Interpretations Diverging Diverging Converging Practices

  22. Squabbling Leaders Other Scenarios Converging Converging Interpretations Diverging Converging Diverging Practices

  23. Matched Apathy Another Scenario Converging Converging Interpretations Diverging Diverging Converging Practices

  24. Implications for Leadership in a world of Network Responsibility

  25. Contact me at: paul.mcneillis@achilles.com Bradford DBA Thesis: Collaborative Learning and the Co-design of Corporate Responsibility (Building a Theory of Multi-Stakeholder Network Learning from Case Studies of Standardization in Corporate Responsibility) Questions

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