Friday 25 March 2011

Companies: cash cows or communities?

Quote
“I have found no greater satisfaction than achieving success through honest dealing and strict adherence to the view that, for you to gain, those you deal with should gain as well.” Alan Greenspan

News
The bank bonus scandal has been stirred up again this week, as the directors of Dutch bank ING backed down from paying executive bonuses for 2010 after public pressure from clients, MPs and trade unions.  Chief Executive Jan Hommen, who renounced his €1.25 million bonus, said ING had underestimated the negative public reaction.

A few weeks ago, the two British banks that have received the biggest bailouts – RBS and Lloyds TSB – announced “modest” bonus payments.  There is still strong public feeling against bankers’ bonuses in Britain, especially as the impact of government cuts, rising unemployment and lower real incomes begin to bite. 

However, protests have not had the same impact on board decisions as in Holland this week.  This might be a reflection of stronger social solidarity on the continent, and the tendency for companies to defer more readily to the state compared to Britain.
 
But it may also signal a shift in attitudes towards corporate governance; South Africa is leading the way in this respect, where a “stakeholder inclusive” approach is preferred over an “enlightened shareholder” focus regarding what is in the best interests of the company.

In Holland, four types of stakeholders in ING voiced their opposition to the decision by directors and shareholders: employees (via their unions), customers, government and taxpayers who rescued the bank. 

Perhaps the winds are changing towards recognising the broader, long-term interests of all stakeholders and not just the narrow, short-term, transient financial interests of its present shareholders.  This would move companies closer to what they actually are – a community of stakeholders, whose relationships together determine the long term financial, social and environmental impact of the company wherever it works.

Read on...
The ground-breaking proposals which launched South Africa into the forefront of corporate governance reform are laid out in the King III Report.  You can read a summary of the report here.

Walk the talk
It can be easy to overlook the impact of our decisions on others who are lesser stakeholders – particularly if they are not party to any relevant discussions.  Are there any important decisions that you are taking at work, home, or in the community, which will have a significant indirect impact on others?  It may be worth including them in the stakeholders you consult.
 
The last word
From the Bible, Proverbs 15:31 “He who listens to a life-giving rebuke will be at home among the wise.”

Friday 18 March 2011

Japan: disaster response and relational capital

Quote
"Fall down seven times, get up eight" Japanese Proverb 

News
Few can be unmoved by the events of the last seven days in Japan, which are being reported on from a variety of points of view. These include:

- the physical perspective, which focuses on the power of the tsunami, destruction of property and the wiping out of whole towns;
- the humanitarian perspective, which concentrates on the numbers of people killed, missing, or homeless; it emphasises the need for food, water, fuel and shelter, and highlights the logistical challenges;
- the environmental perspective, which is focused on the Fukushima nuclear power station and the battle to cool the reactors fuel storage pools, in order to reduce radioactive emissions and prevent a much more serious disaster.;
- the financial perspective, which highlights the costs of reconstruction, the insurance loss and effect on GDP, stock market changes and the impact on Japan’s government debt.

Alongside all these is the relational perspective. This is not only about the raw, emotional side – the breadth and depth of human suffering caused by the disaster – but it also sheds light on one of the most significant factors determining the speed and effectiveness of the response: relational capital. This might be defined here as the sum of trust, knowledge and shared experience in a relationship, leading to empathy, goodwill and perhaps a measure of obligation.

The evidence of strong relational capital in Japan can be seen at different levels. In the extended family, people are going to great lengths to rescue and care for loved ones. Various companies and organisations have contributed generously to the rescue efforts. Then the general efficiency and preparedness for disasters is brought about by the high level of social cohesion in Japanese society.

But it is on the international plane that the evidence is most striking. Japan has long been one of the most generous nations in responding to disasters. They gave $500 million to Indonesia after the 2005 tsunami (nearly as much as USA, UK and China combined), and pledged $5 billion to Afghanistan, one third of the total international response. Japanese rescue teams were at the forefront in Christchurch, New Zealand, and regularly assist in other emergencies.

It is no wonder, then, that offers of assistance have been pouring in from around the world – despite the fact that Japan is financially wealthy. The mayor of Khandahar in war-torn Afghanistan promised $50,000 to the relief effort the day after the quake, and New Zealand promptly dispatched one third of their own search and rescue teams to Japan. In all 113 countries have offered to help.

As people invest in relationships of all kinds, they are building relational capital. When a crisis comes, and help is needed, then that capital is translated into the spontaneous outpouring of help such as we've witnessed this past week.

Read on...
Hugo Slim wrote an insightful article on relationships between relief workers and the survivors of disasters - with particular reference to the 2004 Indonesian tsunami. You can read his paper, "The Grammar of Aid" here.

Walk the talk
Where might it be wise or good for you to invest in building up more relational capital, either personally or on behalf of an organisation you are part of? And are you aware of any person or group who might want to draw on the relational capital they have invested in you?
 
The last word
From the Bible, 2 Corinthians 8, verse 14, “At the present time your plenty will supply what they need, so that in turn their plenty will supply what you need. Then there will be equality…”

Friday 11 March 2011

Technology and abortion – a tale of triumph and tragedy

Quote
“Technology… brings you great gifts with one hand, and it stabs you in the back with the other.” C.P. Snow
 

News
Dr Bernard Nathanson, whose funeral was held last week, was once a prominent figure in the abortion industry, yet ended up as one of its greatest opponents.  In the 1960s, the contraceptive pill permitted sexual relationships to be separated from the responsibility of parenthood, and helped usher in the sexual revolution.  At this time Nathanson was a leading campaigner for abortion rights in USA, which led to the landmark Roe vs. Wade decision legalising abortion on demand. 

Nathanson personally performed over 5,000 abortions and supervised 70,000 more.  However, advances in ultrasound technology in the 1970s permitted him to observe what was happening to the unborn child during the abortion procedure.  This profoundly affected his attitude and he went on to make the influential film “The Silent Scream”, becoming a staunch opponent of the very practice which he had helped legalise.

Since then, ultrasound technology has become widespread, used not only for monitoring pregnancies but also for terminating them.  It permits gender selective abortion, which has led to the death of many million unborn girls across Asia, mainly in China and India.  On the other hand, high resolution, 3-D ultrasounds can help pregnant women reconsider having an abortion.  Often they are pressurised through their relationships with their partners or their parents, but once they ‘see’ their unborn child moving inside, they may be empowered to resist the pressure and continue with the pregnancy.

Advances in pre-natal technology lead to children surviving outside the womb at ever decreasing gestational age – currently as low as 21 weeks.  As these technologies develop, it will become feasible to terminate an unwanted pregnancy early on by removing the foetus alive, and then nurturing it in an incubator – permitting, some argue, a win-win situation for both pro-choice and pro-life tendencies.

Technology is about what can be done; ethics is about what ought to be done; relationships help us understand why things are done, as well as the consequences of what is done.

Read on...
Melinda Tankard Reist researched into the experiences of Australian women who had undergone abortions, and published some of their stories in a book, “Giving Sorrow Words”; you can read an excellent review of the book here.

Walk the talk
Do we assume that all new gadgets are good gadgets?  The fact that there is a market for them doesn’t mean they are unequivocally beneficial.  Why not evaluate how your relationships simultaneously drive your choice of technology, and are affected by the way you use that technology?  How might such a relational evaluation modify your own technological habits?
 
The last word
From the Bible, 2 Corinthians 7:10 “Distress that drives us to God… turns us around. It gets us back in the way of salvation. We never regret that kind of pain. But those who let distress drive them away from God are full of regrets, end up on a deathbed of regrets.”

Friday 4 March 2011

Death, dissent and diversity

Quote
"In a democracy dissent is an act of faith. Like medicine, the test of its value is not in its taste, but its effects." J. William Fulbright

News
For the second time in 2011 a moderate member of the Pakistani government has been assassinated. First the governor of Punjab province, Salman Taseer, was murdered on 4th January. Then on Wednesday the minister for minorities Shahbaz Bhatti was gunned down on his way to work; both men spoke of the need to reform the country’s harsh blasphemy laws, and the Punjabi Taleban have claimed responsibility.

Today’s Economist reads, “Until recently, Pakistan was a joyfully argumentative and outspoken place. Now Pakistanis are falling silent.” Although most people arrested under the laws are acquitted by higher courts, the mere accusation of blasphemy against Islam leads to intimidation or even murder of those accused. The majority of people falling foul of the laws are Muslims, but the 5 million Pakistanis who adhere to other religions (4% of the population) feel particularly under threat.

Once a community grows beyond two people, there is the possibility of a dissenting voice and the emergence of a minority. In any community – whether organisations, neighbourhoods, congregations or even countries – the quality of relationships between majorities and minorities go a long way towards determining the degree of freedom, cooperation and social cohesion.

There is always a tendency for majorities to assume they are right, and to consider the dissenting opinion at best naïve and irrelevant, and at worst dangerous and subversive. Yet history has proved that a dissenting voice – whether it is Churchill warning against appeasement with Germany in the 1930s, or a whistleblower in the corporate sector – can result in enormous benefit to society. Conversely, of course, minorities can exert undue influence, especially in a rights based culture.

Cultivating a genuine respect in relationships with minorities, and taking time to consider dissenting voices, are not only signs of a civil society, but are marks of wisdom also. Not only does a diversity of contributors lead to a more balanced judgment or a more effective solution, but the one dissenting voice may prove to be the key in bringing stability and prosperity, whether the group involved is a business, an army or a nation.

Read on...
Scott E. Page’s book, "The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies." explores how a team of people with diverse perspectives and cognitive abilities will always outperform individual excellence when it comes to complex problems and issues. Read a full review of the book here.

Walk the talk
How do you react to the minority report, the dissenting voice? Might it be time to stop and listen carefully to someone expressing dissent at work, at home or in wider society?

The last word
From the Bible, Proverbs chapter 15, verse 22: "Plans fail for lack of counsel, but with many advisers they succeed."