Business Respect - CSR Dispatches No#162 - 13 Jan 2010

An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.businessrespect.net and produced every two weeks.

This web page provides news stories and articles from the newsletters. Newsletters also include links to features on the internet, Mallen's blog, and other resources.

In this issue, we ask whether values driven companies are undermined by their shareholders.

Welcome

Breaking news as this edition is being put out is that Google is revisiting its position in China, and considering pulling out. Following attacks on the Gmail accounts of Chinese human rights activists, it has announced that it is no longer prepared to continue censoring Google.cn search results. It will discuss how it could proceed with the Chinese government, but assuming that there turns out to be no legal way to do this, they are prepared to exit China.

This is a real case of putting your money where your mouth is.

It is a move that has consequences, of course. A number of free-thinking citizens in China will be devastated to lose Google, because it has been a symbol of at least some degree of independence in the face of the regime. Loyal Google China employees - and Google has attracted many of the brightest and best - will lose their jobs. And competitor companies like Baidu - not overly concerned about social responsibility - will be punching the air in joy.

But sometimes there is a line that has to be drawn. Google said when they took their original - much criticised - decision in 2006 that they would carefully monitor what happened. That was taken at the time as so much fluff. Obviously not.

It's worth noting that Google has now been a great deal more robust in the face of China's human rights issues than most governments - including the ones that criticised the internet companies before. This may be just the toppling of the first domino, and it will be interesting to see what happens next.

I suspect that, even though retreating from China will have consequences for the business, most of Google's shareholders will go along with it. They stuck by the self-censorship route in the face of attack, but I suspect they will accept that things have moved on.

You can never tell though. Because by and large shareholders are not engaged with the values of a company, they are engaged with the numbers. This theme makes up the key feature this time.

By the way, if you're engaged with numbers yourself, you might want to note that the early bird for Ethical Corporation's big Responsible Business Summit event finishes this week. See the ad below.

Is it too late to wish you a 'happy new year'?!

News

India: Balco executives arrested over chimney collapse

Police have arrested three executives, including a former vice president, of Bharat Aluminium Co (Balco) following a fatal accident which killed 40 workers. The three have been charged with culpable homicide not amounting to murder.

Netherlands: Nigeria case to be heard in Dutch court

A suit brought against oil giant Shell by four Nigerian farmers can be heard in a Dutch court, it has been ruled. Shell had opposed the move, arguing that it court had no authority in the case.

UK: Ryanair attacked for "puerile and childish" payment policy

The UK's Office of Fair Trading (OFT) has attacked budget airline Ryanair for its payment policy. It said that the company was using a legal loophole to justify charging extra fees while advertising the lowest theoretical fares.

US: UTStarcom pays $3m for China bribery

US telecoms company UTStarcom has been fined $3m for a longstanding approach to winning business in China that involved bribing officials with cash, holidays in locations such as Hawaii disguised as training, and other gifts.

US: Pension group TIAA-Cref disinvests from Sudan

TIAA-Cref has announced that it is sellings its stakes in four companies that have failed to respond to its concerns about operations in Sudan. The move makes it the first major US asset manager to take this action.

South Africa: Apartheid case against companies divides opinion

A US court has been hearing an appeal by a number of companies, including IBM, Daimler and General Motors, to dismiss a suit that seeks damages from them for their role in South Africa during the time of Apartheid. The appeal argues that the US court has no jurisdiction over the matter, and companies could not be held responsible for the actions of the then South African government.

Article

Is it time to change the ownership of our best companies?

Author: Mallen Baker, dated 12 Jan 2010

It is completely impossible to prove that a commitment to corporate social responsibility has any effect whatsoever to a company's share price. I wish we would agree that, and move on to more interesting territory.

Previous edition - No 161 | Following edition - No 163

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Special Feature

photo of cash

Social responsibility and finance - on the precipice

In a recent article, the BBC's economics editor Robert Peston highlighted the fact that in 2012 the chances are that the economy - punch drunk as it is from the various flavours of debt crisis it has been pummelled with over the course of the year - will be hit by the collapse of a major bank and / or government.