Apple's big bet on consumer trust and privacy

The Apple Watch understandably took the limelight at Apple's big launch event today. But what is becoming increasingly clear is that to really understand the company we need to see it as so much more than simply a technology company. And we have to look beyond its products, however alluring they might be.

Nowhere is this more evident than in the area of corporate responsibility. For much of the past few years, the corporate responsibility community has been focusing hard on Apple's product supply chain. And for good reason, with a spate of labour violations plaguing the company (most recently from the BBC in December last year) despite some impressive commitments to responsible sourcing. But with the launch of the Apple Watch and its extended capabilities for health monitoring, research and diagnosis, along with the rapid growth of its Apple Pay system, it is the company's capabilities in data management and security that will likely define its reputation for corporate responsibility over the next decade.

As Tim Crook noted at the launch, the Apple Watch is "the most personal product we've ever made". It is not only wearable but collects real time data on users' health and fitness, enables them to make contactless payment direct from their financial services provider, and provides the possibility for a host of other applications relying on personal data. Keeping all of this data private and secure is going to be a big test for the company. Their success now will rely just as much on maintaining the trust of their consumers as it will on wowing them with cool new gadgets.

Apple is not alone in this of course. Other technology companies such as Facebook, Sony, Microsoft and Google have already learnt to their cost the necessity for maintaining the confidence of their customers in terms of privacy and security. Apple has had its own scares with breaches of its iCloud service, but its exposure to data security risks are only going to accelerate now that it is going increasingly personal. Apple is now not just in the technology industry but also in financial services and health services where the privacy and security concerns are accentuated even further.

Apple is making a big bet on consumer trust because it has a strong reputation for digital security already (say, compared to Microsoft) and it has less of the challenges in managing privacy compared to some of its others competitors. This is because it does not rely on ad revenue (and therefore intimate knowledge of its consumers) to drive profitability, unlike say, Google and Facebook. So it is already out ahead in many important respects. Whether it can maintain that pole position will remain to be seen. But what is clear is that Apple's reputation for corporate responsibility, and indeed its success in personal devices and services more generally, will increasingly be won and lost in the area of consumer trust and privacy rather than product design and execution alone.

Image copyright Martin Hajek. Reproduced under Creative Commons Licence. 

What the hype around Steve Jobs really says about us

Let me confess this right upfront: I have never been an avid user of Apple’s products. I briefly owned an iPod in the mid 2000s but when it fell into my toilet (true!) one day I didn't really miss it. So writing about Steve Jobs this week feels a little like an atheist writing an obituary for the pope.

This said though, the remarkable expressions of sympathy for Steve Jobs’ untimely death wasn’t lost on me. They are extraordinary in number (2.5m tweets in the first 13 hours), source (e.g. Obama) and nature. It all reminds me a little of what happened when Princess Diana or JFK died, I guess. The question here of course is: what is it that causes millions of people to respond so emotionally and affectionately to the death of this business tycoon?

It is obvious that most of the usual features of these icons of popular culture do not really apply to Jobs. He was hardly a charismatic business leader with big PR value such as Richard Branson (Virgin) or Jack Welch (GE). In fact, many of his co-workers actually describe him as rather awkward and geeky in personal interactions. It also can’t be his generosity to society which has given business leaders such as Bill Gates or Warren Buffet some more charisma these days: up to now Steve Jobs has only engaged rather reluctantly in charity and so far has refused to join Gates’ initiative to pledge large parts of his personal wealth (at least $6.5bn) to social causes.

Talking of responsible business practices, in fact there might be a group of people who are actually a tad gleeful about seeing Jobs go: Chinese factory workers in Suzhou poisoned two years ago by toxic chemicals at Apple’s touchscreen factory wrote to Jobs directly, asking for his help in getting medical care and compensation for their illnesses and lost work time. Jobs never even cared to reply.

Much of the hype focuses on his ‘vision’, his ‘innovation’, his ‘genius’ etc. But is that really true? One of the first ‘inventions’ credited to Steve Jobs – the computer mouse and the clickable workspace (later adopted by Microsoft Windows) were initially invented at the Xerox PARC laboratories in the late 1970s. Jobs saw these ideas there first, and then just went on to commercialize them. All in all, Apple in this sense lives with ‘creation myth’, as Malcolm Gladwell recently put it.

Was it his business acumen? Maybe, but even here, until he was fired from Apple in 1985 the Macintosh PC was a niche product. It was rather Bill Gates who played that phase of the game to perfection. And as Robert Reich points out in Supercapitalism (Chapter 2) Steve Jobs and the entire Silicon Valley phenomenon was by no means initiated by all that ‘American entrepreneurship’ or ‘True spirit of modern capitalism’ which is now touted on all the American TV networks reminiscing about Jobs’ life. The American IT boom was initiated mostly by whopping defence contracts from the Pentagon and NASA – i.e. good old ‘socialist’ government money – in a quest to keep up in the cold war arms race in the 1970s and 80s.

So – what is it really? At a time when IT has become a key instrument not just for work but for most areas of our life many of us ‘consumers’ are pretty gutted by the quality of products we are ‘forced’ to use. Who of us has not despaired over the dismal quality of his Office software or the unreliability of his Windows browser? Who among us has not gone ballistic at the slow speed of their hardware at times or been incensed that the next ‘generation’ of software now forces us to by yet another, faster computer? Or utterly despaired when ploughing through an incomprehensible user manual or trying to install the new TV or some software on the PC for the umpteenth time?

One thing Steve Jobs obviously had understood is this: that consumers are actually happy when they use products that are suited to them: easy to operate, fun to use, opening new experiences or simply making life easier. Apple’s recent products - and the real beacons of Jobs’ fame and commercial success - are different in this one aspect: they put the user and his preferences first. And even as a heathen in the church of Apple followers I am ready to admit that the iPhone or the iPad provide an ergonomics and a scope of service which is really phenomenal. Especially compared to what is otherwise on offer.

So, in somewhat cynical terms, what is the real regret about Jobs’ untimely death? We will miss a CEO who put consumer interests first. It is that simple. While this should be a normal thing in a free market economy the reaction to Jobs’ death in my reading just goes to show how modest we have become as consumers. This is particularly true in the world of IT, where we rely in many areas on just one monopolist (Microsoft). Who has treated us over the years not exactly well. To a degree that the one entrepreneur, who really gave us our money’s worth, who offered us products and services which really add value to our life - we no longer see this as the normal result of free consumer choice in a competitive market, but as a gift bequeathed to us by a god-like figure of divine foresight, clairvoyance and care. St. Steve, as it were.

(DM)

Artwork by Cea, reproduced under the Creative Commons Licence.

Will privacy and security be critical differentiators in cloud computing?

The debut this week of Google's new web-only Chromebook laptop, coming hot on the heels of Sony's massive data security breach just a few weeks ago suggests that data security is becoming increasingly critical for the success of technology companies. Google, no stranger to accusations over infringements of privacy, is upping the ante with the release of a computer that, rather than running software and storing files on its own hard drive, will instead rely predominantly on cloud computing. Yes, that means everything that you'd usually keep stored on your laptop will actually be held somewhere in a vast data center run by Google ... and of course, everything that you do can be tracked and recorded because you're signed-in and doing it online.

Although the Chromebook itself may not become quite the challenger to Microsoft and their Windows operating system that Google hopes it will be, the shift to cloud computing (which anyone using Picasa, Google Docs, Dropbox or numerous other applications is already very much part of) is sure to continue apace. But cloud computing raises a number of troubling ethical issues. On the one hand there are the environmental problems associated with running servers capable of storing such huge amounts of data. And then, of course, there are the privacy and data security issues that are faced by any company storing so much personal data online.

In recent weeks, consumers have been made all too aware of these privacy and security issues because of several high profile data disasters. Last month, for example, Amazon, which has been a leader in cloud computing, was forced to shut down its service for several days. A number of companies using its services were paralyzed and some even lost potentially valuable data. Then Sony's travails with hackers reached a new zenith when the company was forced to concede that more than 20,000 of users of its online gaming system had their financial details stolen. Osama bin Laden even got in on the action when a swath of spam Facebook messages purporting to be photos and videos recording the death of the former Al Qaeda leader turned out, according to the Financial Times, to be malicious malware designed to phish for passwords and financial data from infected computers. Ironically, even as we tried to publish this post, Blogger experienced a service disruption that meant that we were unable to publish for more than 24 hours. So much for the instantaneity of social media! All of this added up to bad news for technology companies looking to convince customers of the safety and security of their products and services.

This then raises the question of whether data security and privacy protection will increasingly become critical areas of competition between leading technology companies, especially those relying on cloud computing, rather than just being a kind of necessary evil for everyone concerned. Microsoft, whose operating systems and internet software had long been plagued with security problems, certainly seemed to be thinking this way when it launched its Windows 7 operating system. The company has long been compared unfavourably in terms of security to Apple's Mac OS - but appears to have regained some ground with its latest version. But as more and more personal data moves to the cloud, and companies like Facebook and Google become increasingly involved in recording, using and selling data related to our usage stats and preferences, this is likely to affect a wider range of companies ... and potentially in an even more significant way. Yesterday's revelations that Facebook employed a leading PR company to plant negative stories in the media about Google's privacy policies gives some indication of just how high the stakes are becoming. And nothing focuses corporate attention more than the threat of multiple lawsuits, which is the latest ignominy faced by Sony in the fall-out from its hacking attack.

Despite all this, there are still reasons to doubt whether security and privacy will ever become major differentiators in the battle for technology market share. Unlike speed, performance and design, security is a tricky intangible that is difficult to evaluate up front. And besides, despite their criticisms of technology companies, most end users in practice tend to display a fairly carefree disregard for security issues, and even for their own privacy protection. After all, how many people actually read all of those terms and conditions when they download another Facebook app or install a new piece of software? With commercial users the equation is different, of course, but for the average Joe, security is a concern but not one that yet impacts significantly on their technology choices.

In the end, a better way of looking at this might be for technology companies to start looking at privacy and security as pre-competitive issues. That is, rather than competing on the quality of their privacy protections, why not collaborate with one another to improve standards across the industry. After all, a major hack at Sony, an outage at Amazon, or a spate of malware at Facebook threaten the reputation for security across the board not just for the individual company that is targeted. Problems at one company can spell reputational damage for the industry as a whole. Sure, healthy competition can drive innovation in new security systems. But so too can healthy cooperation. And in the long run it might just be more effective, and provide a better service for skeptical consumers unsure of how far they want to put their trust in tech companies.

Picture by samplereality. Reproduced under Creative Commons licence.

Controversies in university funding: LSE and the Libyan connection

The London School of Economics has been embroiled in a major controversy regarding its relationship with the under-siege Libyan regime, and most particularly Saif Al-Islam Gaddafi, the son of the Libyan leader. Last week saw the shock resignation of the LSE's Director, Sir Howard Davies, as a direct result of the crisis - a major scalp for those arguing that the university had put commercial interests before its academic integrity. But the case is far from clear cut.

So what has got the internationally acclaimed university into such hot water? The critical issue here is the receipt of money from sources attached to the Libyan regime, including a donation of £1.5m from a charitable foundation run by Gaddafi's son, and £2.2m paid to the university to train Libyan officials. To complicate matters, Davies also acted as an advisor to the Libyan sovereign wealth fund. Oh, and Saif Al-Islam Gaddafi is an alumnus of LSE, whose PhD, awarded in 2008, is now the subject of a heated plagiarism scandal. As with the recent case of Karl-Theodor zu Guttenberg, the German Defence Secretary that we covered two weeks ago, an on-line campaign to identify and make public alleged plagiarism offences in Gaddafi’s doctoral thesis has gathered considerable momentum, forcing the university to instigate an academic offences investigation. Who knew that PhD plagiarism would be such an on-trend internet phenomenon in the first months of 2011?

Davies' resignation from his role as Director of LSE could not have been envisaged only weeks ago. But with Gaddafi senior and his Libyan regime now widely condemned after the dictator’s brutal response to the public uprising in the country, (and Gaddafi junior very much defending his father’s position) those with links to Gaddafi have also increasingly come under fire. And it’s not only pop stars like Usher, Beyonce, and Nelly Furtado. When a university such as LSE is linked in such a direct way to human rights abuses, it is no surprise that its reputation will come under fire. As Davies remarked about his resignation:

"I advised the [LSE] council that it was reasonable to accept the money and that has turned out to be a mistake," he said. "There were risks involved in taking funding from sources associated with Libya and they should have been weighed more heavily in the balance."

Well yes, that’s probably so. University leaders do have a responsibility for upholding the reputations of their institutions. And despite the recent charm offensive from Libya, it certainly did continue to pose a significant reputational risk. But then with hindsight that is, of course, easy to say. The UK government was certainly strongly encouraging the LSE to engage more with the country and there’s definitely a strong case to be made that bringing the educational heft of the LSE to the Libyan regime might well have made a contribution to enhancing openness and democracy in ways that only a liberal education can. This side of the argument was persuasively presented by our former colleague, Darryn Mitussis, writing in the Letters pages of the The Guardian newspaper:

“Introducing the children of autocracy to the best traditions of critical, reflexive British education and inculcating anointed leaders with the rigours of public accountability and transparency is a wonderful and deeply subversive thing to do (irrespective of the fee accepted). If – and only if – accepting the money required a compromise in the academic integrity of the syllabus then resignation is appropriate. If academic standards were not compromised and it was still wrong to take Libyan money, then it is also wrong to take money from any number of government scholarship schemes funded by undemocratic states (including Saudi Arabia and China) that prepare their chosen future leaders for business, political and scientific leadership.”

There is clearly a broader issue here about the appropriate balance of public, private and international funding for education. But we agree that given the reality of so much external funding, the main issue with funding is whether it impedes academic freedom. When “strings” are attached to funding the ethical problem is one of misusing power to distort knowledge. With “no strings attached” arrangements, this moves to a more vague “complicity” with undesirable people or organizations or being associated with “dirty money”. Not that these are inconsequential considerations. But there is certainly a good case that can be made for using “bad” money for “good” ends – as critics of Microsoft’s monopolizing tactics might recognize in the Bill and Melinda Gates Foundation, for example. In the case of LSE, there is no evidence as yet of any such strings – but maybe Davies' prompt resignation could hint at further skeletons in the closet. Time will tell.

Ultimately though, universities should be (but are not) better prepared for the risks associated with their funding arrangements, especially in the UK where a great deal of controversy is attached to funding sources in higher education (a subject that barely raises a peep in North America). We should know, having both worked in a CSR centre initially funded with tobacco industry money (which understandably caused a storm) and now occupying chairs named in honor of a company featuring no less than two disgraced CEOs (HP), and a business man who among his many accomplishments was responsible for bringing the renowned animal lovers KFC to Canada (George Gardiner) – neither of which has raised a murmur.

When we joined the BAT-funded International Centre for Corporate Social Responsibility at Nottingham University in 2002 we quickly joined Jeremy Moon, the Director, in establishing a governance structure and a funding policy that ensured academic independence and scholarly freedom along with clear lines of decision making and reporting. LSE, by comparison is now nearly 10 years later only just talking about a developing guidelines for donations as part of an independent inquiry into the Libyan affair. Perhaps it would also be wise to belatedly start tackling the issue of plagiarism more concertedly. Davies was unlucky to take the fall for an unexpected series of events in the Middle East. But he only has himself to blame for not instituting the systems and structures necessary to deal with the problems effectively in the first place.


Photo by Leo Reynolds. Reproduced under Creative Commons Licence

Living proof of the power of capital?

This post comes from one of our occasional guest bloggers, Dr Laura Spence,from Royal Holloway, University of London. She's also the unofficial Crane and Matten photographer having been responsible for our latest profile pic to the right, (as well the one it replaced). Thanks Laura!

------------------------------------------------------------------------------------

While Crane & Matten have been enjoying a well earned break, I had an intriguing and thought-provoking week here in the UK. On Monday I was invited to a talk by Bill and Melinda Gates, the entrepreneur behind Microsoft and his wife. The purpose of their talk was to spread the word on an initiative called the ‘Living Proof project’. They asked the audience to tell the story further, which I am happy to do here.

Akthough focusing only on US investments, Living Proof reminds us of the progress that investment in sustainable development has resulted in over recent decades. The Bill and Melinda Gates Foundation have played a substantial role in these improvements alongside government aid and the work of charities and other institutions globally (though interestingly not much mention was made of the contribution, such as it might be, of business).

Some of the incredibly encouraging facts that Bill and Melinda presented are worth registering: 5.4 million child deaths were averted through immunisation between 2000 and 2009; we are nearing the eradication of polio; 98 million fewer people are going hungry in 2010compared to 2009; in Africa measles deaths dropped by 92% between 2000 and 2008.

No-one is suggesting that poverty and public health are not still critical problems globally, but progress has been made. Aid is a large part of the reason for these wonderful improvements in the lives of the poorest. Highlights of their talk can be seen at: http://www.one.org/international/livingproof/share/?rc=email , or for the full blown version, go to http://www.one.org/international/blog/?p=3988 .

Meantime, I have been pondering what it is that makes people like Bill and Melinda Gates, who have dedicated a large part of their lives to generating vast wealth, switch focus and seek to give it all (indeed, 95% in their case) away. They are not the only ones to take this route (think of James Carnegie, William Hesketh Lever, George Cadbury, Thomas Holloway). And I should say I don’t mean to have a dig at Bill and Melinda. I wish others would take a leaf out of their book. But what is it that motivates such a shift?

It would be easy to assume that in some cases it is to assuage guilt for spectacular financial success by means not always bathed in moral glory. Well, maybe. But there appears to be something more going on. Accepting moral responsibility for the power that wealth delivers must also play a role. Being released from the shackles of complex, large organizations with multiple priorities may be another reason. Or is it a question of the enormous gratification – better surely than any number of diamonds or private jets – that must come with saving lives? Perhaps ensuring a positive social legacy is also a driver. There again, thy may just be in a position to do good, and willing and able so to do. This phenomenon of refocusing on public good post-career is not just a privilege of the private sector. Pop stars, and politicians, all represented ably at the Bill and Melinda Gates talk, have also been known to do this.

You do have to wonder though, if some of the people we deem the most successful in our society have ideas of philanthropy in later life, why don’t they get thinking about what they can do NOW, with the tools at their disposal. Why do many of us fail to adequately ‘do good’ during our day jobs? This was part of the discussion at a workshop I was involved in last Wednesday on Social Enterprise. This enigmatic concept broadly encompasses the idea of an organization that has social or environmental drivers as the PRIMARY goal. It is a huge phenomenon and is an area to watch in terms of research and, more importantly, its actual impact on pressing global problems.

Last Wednesday also saw the UK government announce the details of a strategic spending review intended to reduce the UK debt, which will cause a great deal of pain over the next few years. While the axe has been taken to nearly every aspect of public spending and the benefits and welfare system in our country, miraculously the investment in foreign aid has been pretty much spared. Though I didn’t spot him there, maybe the Chancellor was listening to the message from Bill and Melinda Gates. I sincerely hope a few business leaders will too.

Laura Spence

Photo by Johnny Vulcan. Reproduced under Creative Commons Licence

Should companies police for child pornography

Few issues arouse as much public condemnation as child pornography. As a visual record of child sexual abuse, its production and dissemination scars innocent lives forever. It is illegal in virtually all developed countries to produce, distribute, and receive child pornography. So despite a criminal online trade in child pornography worth billions of dollars, no legitimate company would knowingly go anywhere near the practice. But should companies play a larger role in actively stamping out child pornography? And if so, how far should they go?

Read more on our blog posting over at CSR Wire 


Photo by Za3tOoOr!. Reproduced under Creative Commons licence.

Google vs China: upping the ante on industrial espionage

One of the big business ethics stories of the last month has been Google's announcement in mid January of a 'new approach to China' following reported attacks on the company's IT infrastructure from inside the country. Google's announcement spoke of targeted attacks on the email accounts of known human rights activists, both within and outside China, as well as other security breaches of Google and 'at least 20 other large companies'. Whilst the announcement of this degree of hacking would have been cause for concern, the explicit link to the surveillance of advocates of human rights in China was positively incendiary. Google was not just talking about regular industrial espionage here but about state-sponsored spying for political purposes. So suddenly the company had launched itself into a diplomatic row - albeit one between a company and a government - rather than its usual commercial scrapes.

The announcement didn't just make the headlines because of Google's allegations though. The company dropped another huge bomb by declaring that it would no longer continue to operate a censored version of its search engine in China - despite being required to by the Chinese authorities. 'Over the next few weeks' the company announced, 'we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.'

Since the furor over Google's announcement blew up a couple of weeks ago, numerous commentators have offered their view on what's going on. Many have focused on Google's ongoing troubles in securing in market leadership in China, (suggesting that the human rights concerns have been used as a smokescreen behind which to withdraw gracefully from a commercial failure), while some have presented it as a belated switch to principled behavior. Some have even reckoned that Google is using the publicity around the announcement to build awareness and brand loyalty in China. Working out the motivations of the company in picking such a huge fight in one of the world's most important markets is never going to be easy.

Three things that have particularly stood out for us though in all this are these, and we think they offer some salutary lessons for the brave new world of business ethics that is starting to emerge.

1. Google the 'political corporation'. Google clearly feels big enough and powerful enough to pick a fight with one of the most powerful governments in the world.... over human rights. On the one hand, this is great in that it means that we don't have to just rely on the government to protect our human rights. Some big companies (whatever their motivations may be) may also be willing to do some of the heavy lifting from time to time (at least when when it suits them). In some of our writings, we've refereed to this as the corporate administration of citizenship rights (yes, not the catchiest phrase we'll admit, but it does the job). On the other hand, isn't this an issue that national governments - especially the US Government - should be leading on, rather than, as Hilary Clinton did, simply backing-up Google once it has broken cover. Still, whatever one thinks about this Google is clearly feeling big and important ... and perhaps also starting to feel the heat that comes with such size. It could just be getting in quick before the ethical backlash over its mammoth reach begins in earnest. With its fingers in all kinds of free speech, privacy and intellectual property issues, Google is fast becoming the essential political corporation of the 21st century.

2. One step forward, two steps back for the Global Network Initiative. The global what??! If you've not heard of it, well you're not alone. In the latest bout of Google vs China, the initiative hardly even scored a mention in the media storm. However, the GNI was launched back in 2008 to much fanfare, and was promoted as the new approach that internet companies were going to deal with censorship issues after getting their knuckles rapped by the US government for bowing to the Chinese government's demands. Well, the 'new approach' before the latest new approach of course. As a partnership between Google, Microsoft, Yahoo and a score of NGOs and academic institutions, the GNI held out considerable promise for delivering a more responsible approach to a tricky ethics problem that frankly, was not going to go away fast. Fast forward to January 2010 and GNI advocates could well point to Google's announcement as proof that the initiative is starting to have a significant effect. After all, one if its members is making a major song-and-dance about its commitments to internet freedoms. The trouble is though, no one at Google thought to mention the GNI, or suggested that it played a role in its decision. More worryingly, one of Google's main partners in the initiative, Microsoft, publicly criticized the company for it stand in China. Oops, hardly a hallmark of a strong partnership.

3. Industrial espionage goes up a level. First, spies worked for governments, just like in the old movies. Then they worked for companies ... in fact just like in the (new) movies, such as the 2009 Julia Roberts' release Duplicity. But some of the big news stories now in industrial espionage involve both companies and governments. It's a kind of semi-industrial espionage. The Google story was just the latest and best known incident of this government-business espionage, but clearly its becoming an increasingly prominent feature of the contemporary business landscape. Just this last weekend, the Sunday Times in the UK reported on a leaked British security service document accusing China of bugging, bribing, and blackmailing UK business executives in an attempt to secure commercial secrets. Notably though, here the warning came not from a multinational corporation, but from the national security service (the irony of MI5 warning against spying was not lost on many of the newspapers' readers who commented on the story). Either way though, as these incidents suggest, the stakes being played in industrial espionage have been significantly raised. The question, of course, is how best to respond ... and whether governments or companies should be leading the line.


Photo by Mykl Roventine. Reproduced under Creative Commons Licence

The state of CSR in Canada

In our last post we commented on the No.1 position claimed by the Schulich School of Business in Toronto in the Beyond Grey Pinstripes ranking of business schools – a global survey which assesses the performance of schools in integrating responsible business into MBA curricula and research. Overall, Canadian business schools did well in the ranking with several schools making the top 50 – McGill (31st), Concordia (34th), and the University of British Columbia (49th).

But though Canadian business schools are starting to punch above their weight in the world of responsible business education, the performance of the country’s corporate sector in responsible business practice remains in question. For example, you’d be hard pressed to find any Canadian companies in the top 50 of Corporate Responsibility Officer’s Best Corporate Citizens of 2009. Still, rankings like this don’t tell you everything. So we thought we’d take the pulse of responsible business in Canada by checking out a couple of practitioner conferences taking place in downtown Toronto this last week. Clearly it is full-on conference season in Canada’s responsible business community with 3 major gatherings happening in 2 weeks – the first two of which we dipped into to test the waters.

First up was the ‘In Good Company’ CSR Conference organized by the Orenda consulting firm that took place on Tuesday 27th October 2009. This was a first-time outing for Orenda on the CSR conference circuit, and it was interesting to see the differences with some of the more mainstream conferences. We didn’t stay for the whole event but it was notable just how much the CSR agenda here was dominated by corporate community investment (CI) issues. This no doubt reflected to some extent the particular orientation of the consultancy running the show, but still, it was something of a surprise for a gig billed as a ‘CSR conference’. As Peggie Pelosi, the CEO of Orenda told us, the event was mainly aimed at engaging SMEs – and issues like CI are where most of them are with respects to CSR.

That said, the level of expertise demonstrated by the speakers on CI was pretty impressive. Clearly the leaders in Canada have been quick on the uptake in terms of developing well-managed CI programs with plenty of measurable impacts and meaningful metrics, good attention to employee involvement, and a genuine desire to both make a positive social contribution and generate greater meaning for employees. All good stuff, even with what looks like relatively limited resources compared to some of their overseas counterparts.

Strikingly missing from much of the debate however was a genuinely strategic approach to CI where firms focus their attention not just on doing good, but on leveraging their own competencies, and focusing on social problems within their own value chain or ‘sphere of influence’. Given we are in the middle of a financial crisis, and an energy situation that is rapidly heating the planet, it was somewhat disconcerting to hear a finance company talking about investments in homework clubs, tree planting and affordable home-building, whilst an energy firm regaled us with stories of their success in supporting food banks. All very laudable, and all very successful, but haven’t they got more pressing business-critical social issues they should be concentrating on? Aren’t food banks just a bit of a distraction when we’ve got climate change to solve? To be honest it was quite a relief when the Director of Corporate Citizenship at Microsoft got up and starting talking about investments in technology projects. Here was clearly a company that demonstrated that it got CSR in a deeper way.

And so it was onto the Conference Board of Canada event ‘Creating Business Value with Integrated Sustainability’ two days later. Unsurprisingly a somewhat more suited-up corporate event, but again one where, with one or two notable exceptions, the real leaders seemed to be, like Microsoft Canada over at the Orenda event, the Canadian subsidiaries of US corporations who had picked up their best tricks from over the border …. or even back in Europe. Companies like the American carpet manufacturer Interface, or even IBM, appear to be leading the pack here. And it's regulation from Europe that appears to be driving attention to environmental issues - though whether catching up with Europe's regulatory requirements is really a 'proactive' strategy, as one presenter claimed, is a moot point.

Funny how Canada manages to maintain a reputation for being all socially responsible and environmentally friendly, when corporate Canada actually seems to be dragging its feet somewhat in developing a progressive approach to responsible business. Obviously we didn’t hear everything said at either event. But from what we could gather from our admittedly brief forays into both of them, the debate here seems little more than a warmed up version of what we were hearing in the UK and other places years ago.

This is not to say there are not some impressive movers and shakers in the corporate CSR world here – but whole sectors of the economy don’t appear to have quite got it yet. The Conference Board organizers had put together a good program, but in oil and minerals rich Canada where were the energy and mining companies with something to say about ‘creating business value with integrated sustainability’? Holed up in the tar sands no doubt. Still, it was good to see consumer products companies at least starting to think seriously about green innovation issues.

So what can we conclude from our conference crawl this week? Well, let’s just say that Canada still has plenty of untapped potential when it comes to responsible business. As Peggie Pelosi acknowledged, Canadian companies are doing a pretty good job on community investment initiatives but are still well behind their overseas counterparts in sustainability and other key areas of CSR practice. As glass-half-full kind of guys, we’d like to think this means that Canada has a real opportunity to leapfrog the US, the UK and others. But we won’t be holding our breath….

Green Canada flag copyright Realc. Reproduced under Creative Commons license

A step forward for technology companies and internet freedoms

If you've been following, as we have, the story of internet companies being implicated in human rights abuses around privacy and freedom of expression - see one of our earlier blogs here - then you'll be interested to see that Yahoo, Microsoft and Google, three of the companies most in the firing line on these issues, have launched a new multi-stakeholder program, the 'Global Network Initiative' aimed at tackling the problem.

This has come in a little under the radar, as there has not been much news of these developments in the business press leading up to the launch, but it appears to have arrived as a pretty well worked out program. With a tagline of "Protecting and Advancing Freedom of Expression and Privacy in Information and Communications Technologies", the initiative is a partnership between tech companies, human rights groups, academic institutions, and other institutions involved in media and communications freedoms. It has a set of principles, guidelines on implementation, including a commitment to human rights impact assessments, and a built-in review process. Most importantly, there is also a commitment to institute independent monitoring of companies' compliance with their commitments (though not, as far as we can tell, a commitment to report publicly).

It is, it has to be said, a difficult area to navigate for technology companies. Dealing with overseas governments can raise a host of problems that they are ill prepared to deal with, especially when they are operating overseas through a subsidiary or joint venture. So the initiative is certainly welcome. It establishes a clear framework for action that should make a meaningful difference to decision makers inside the organizations concerned. Of course, the devil will be in the detail of how such principles will be realized in practice. Especially interesting in this respect for us are the commitments to actively lobby governments to shift their expectations and demands:

"Participating companies will encourage governments to be specific, transparent and consistent in the demands, laws and regulations (“government restrictions”) that are issued to restrict freedom of expression online.

Participants will also encourage government demands that are consistent with international laws and standards on freedom of expression. This includes engaging proactively with governments to reach a shared understanding of how government restrictions can be applied in a manner consistent with the Principles.

When required to restrict communications or remove content, participating companies will:

• Require that governments follow established domestic legal processes when they are seeking to restrict freedom of expression.
• Interpret government restrictions and demands so as to minimize the negative effect on freedom of expression.
• Interpret the governmental authority’s jurisdiction so as to minimize the negative effect on to freedom of expression."

There are so many tricky details in that one passage alone, but it is heartening to see that the participants seem to be fully aware of the complications. As the Wall Street Journal blog, China Journal, put it:

For the most part, however, members decided not to include specific rules on issues such as where to host servers — outside servers can keep data out of problematic territories — because they felt that fast-changing technology might make them quickly irrelevant.

“The idea is that we believe the guidelines will need to be reviewed, and we will have to revise them as we take into account the actual experience,” says Sharon Hom, the executive director of Human Rights in China, which also helped develop the framework over two years. “It envisions an ongoing process of learning and sharing best practices,” she says.

So, there is still a lot to work out as the initiative unfolds. Let's just hope that Microsoft, Yahoo and Google can stay friends long enough to do all that mutual learning and sharing before they fall out with one another again...