Business Respect - CSR Dispatches No#39 - 22 Sep 2002

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 review the fall from grace of the charismatic CEO in general, and Jack Welch in particular. We follow it up with a new voting question on the ethics of high levels of executive pay.

Welcome

What makes a good business leader? For many years, it was assumed that the best leaders were charismatic - almost heroic individuals who ruled either with an iron fist, or with enlightened benevolence. In any case, they were exciting and difficult to be around, but always delivered the results.

Then came the "Built to Last" and "Good to Great" books which seemed to suggest that business success could actually be hampered by such individuals. It was a difficult argument to credit, when such a colossus as Jack Welch bestrode the land.

We return to this dicussion in the main article this time - informed by the rather remarkable events of the last few months. It seems that the laws of gravity do kick in eventually.

We've now put in place a brand new vote on the website to probe opinions about one of the key aspects of this debate - that of executive remuneration. Specifically - do you think that executive pay should be:
a) - whatever the market will bear, b) as high as necessary, but linked to performance, or c) restrained to a set percentage of whatever the rest of the workforce earns. Go along to the website now to make your views known!

Finally, we've changed the way that news stories are gathered and prepared for the newsletter / website. This means that stories are now updated on the website on a much more regular basis - every day or two - with the full collection then aggregated into this newsletter. If you want to pick up the very latest news, therefore, it will be worth returning to the website more regularly to check for new stories.

Also, if you find a news story you think a friend would appreciate, you can now "send to a friend" any story in the Business Respect news database - which is now a database of hundreds of CSR-related news stories from the last year and a half.

As ever, we are always delighted when people send us stories, or draw our attention to such.

News

South Africa: Old Mutual provides AIDs drugs to staff

The financial services group, Old Mutual, has announced that it is to provide anti-retroviral drugs to its employees.

BP did not conduct test on well in Alaska before explosion

BP has admitted for the first time it failed to conduct comprehensive tests on a well that exploded in Alaska last month. The explosion seriously injured an operator and caused a spill.

South Africa: AngloGold signs union deal for worker rights

AngloGold and the International Federation of Chemical, Energy, Mine and General Workers’ Unions (ICEM) have signed an agreement on the promotion and implementation of good human and industrial relations in AngloGold operations worldwide. The company says that it is the first such global agreement to be signed in the mining industry and the first in the developing world.

Brazil: Meat exporter to ban GM food exports

Perdigao SA, Brazil's second largest meat exporter, has said that it intends to ban the export of food products which contain genetically modified ingredients.

US: Gays and lesbians face persistent workplace discrimination

Two out of five gay and lesbian adults report facing hostility and harassment at work, according to a new survey by Witeck-Combs Communications and Harris Interactive. Almost one in ten say they have been fired, dismissed unfairly or pressured to quit their job because of their sexual orientation.

South Africa: Cape plc under pressure over asbestos

Cape plc is to be taken back to a UK court by thousands of South Africans who say that the company has failed to honour a settlement reached last year over the effects of exposure to asbestos.

DaimlerChrysler honoured for HIV/AIDS programme

The Constituency for Africa (CFA) has presented DaimlerChrysler AG with its Corporate Leadership Award in recognition of the company's commitment to combating HIV/AIDS in Africa.

CEOs thinking more about CSR since September 11th

Chief Executive Officers are thinking more about corporate social responsibility - particularly since the World Trade Centre tragedy last year - but very few companies are actually devoting more money or resources to the issue, according to a recent survey.

Merrill Lynch sacks executives for not testifying on Enron

Merrill Lynch has sacked its vice chairman Thomas Davis and investment banking managing director Schuyler Tilney, following their refusal to testify in the investigation of Enron by the US Securities and Exchange Commission and the Department of Justice.

Work-life balance depends on corporate culture

The success of work-life balance initiatives is hampered by the competitive nature prevalent in most of today's corporate cultures, according to experts at a recent round-table session convened by the New York Times.

Unocal to face Myanmar human rights charges

Unocal Corporation is to face a trial over alleged human rights abuses involving villagers in Myanmar who worked on the company's $1.2bn pipeline. This follows a ruling by a US appellate court.

Tobacco industry faces nightmare lawsuit

A US federal judge has decided that a lawsuit being brought against the tobacco industry can be conducted as a nationwide class action - potentially leading to the involvement of a far larger group of people and huge damages against the industry.

Japan: More utilities admit reactor coverups

More utilities have followed the Tokyo Electric Power Co (Tepco) in admitting to covering up structural faults in their nuclear power plants.

CSR link with increase in sales

The results of a recent survey of over 800 Chief Executive Officers and other executives show an apparent correlation between CSR initiatives and increase in sales.

Oxfam targets main coffee companies on prices

The major coffee companies should be forced to pay higher prices to farmers, according to the latest Oxfam campaign sparked by the devastating impact created in developing countries by low coffee prices.

Article

The interesting demise of the legend of Jack Welch

Author: Mallen Baker, dated 22 Sep 2002

In the very first issue of this newsletter, I wrote a piece pondering the fact that - although we remain convinced that social responsibility is a symbol of true leadership - the two consistently "most highly respected" business leaders in the US were Bill Gates and Jack Welch. Neither had established much of a reputation for caring about their wider impact on society, and yet their reputations seemed iron clad.

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