Corporate pseudo Responsibility
Posted on May 26th, 2004
David Batstone at Worthwhile (where I also blog) expresses skepticism that is not only appropriate but inevitable when it comes to corporations issuing reports about how well they’re upholding their self-defined social responsibilities. Some of the reports may be honest but they suffer from Electronic Ballot syndrome: By their nature, they engender disbelief.
I’d be more impressed if corporations enabled an independent, third-party group to investigate them and issue reports. Is there any such group that gets full cooperation and support from the corporations it researches?
Categories: business
Ah, but wouldn’t it be basically the same problem? That is, go too hard on the customer in the report, you don’t get the contract next time around. There’s enough scandals in financial report auditing. Think Arthur Anderson accounting firm and Enron.
You to develop - or find - a group whose integrity is unchallenged, so that dumping them makes a corporation look bad.
The American Institute of Certified Public Accountants feels that attestation agreements will be the next area of growth for the accountancy profession. In theory a CPA firm would be able to offer such a service - but whether the relevant constituency (enviromentally sensitive folks) would trust a CPA firm to this type of social audit is another matter.
But the other model might be that of Underwriter’s Labs. UL is private, non-governmental organization. A company pays to have UL test its products and if it passess, it gets to put a UL tag on their product.
If UL lowers its standards too much, it doesn’t have credibility with the public and companies won’t pay for its listing with UL.
I could see this type of service being offered by someone like the Nature Conservancy or the Sierra Club.
“You develop - or find - a group whose integrity is unchallenged, …”
But isn’t this the whole problem in the first place? That is, auditors aren’t supposed to allow executives to cook the corporate books, but again we had Enron and Arthur Anderson anyway.
Heck, I have a few “integrity” battle stories of my own to tell, of the genre of “These people are funding to the tune of $$$, so shut-up already about the ethics”.
Ed: UL does not work for the public. UL works for insurance companies in practice. This is very important to understand, they don’t get their relevance in quite the same way as people think they do.
Repeat after me: “It’s not about the CSR report!”
At 12.46pm GMT on 31st May 2004, there were estimated to be 6,371,606,670 people in the world. There are around 2 million CEOs around the world (less perhaps?) 6,369,606,670 people on the planet do not believe that CSR is about