Lessons in politics from Starbucks: sign of the times or storm in a coffee cup?

Drip, latte, cappuccino, espresso, frappuccino; short, tall, grande, venti, trenta. Starbucks, the international coffee chain is great at giving choice in getting our daily dose of java. But what about campaign contributions or no contributions? Doesn't exactly roll off the tongue in the same way, but that is the stark choice that Starbucks CEO Howard Schultz is now offering US politicians in the face of the country's ongoing debt crisis. For the past few weeks Schultz has been seeking to build a coalition of US business leaders ready to join him in withholding campaign contributions from Washington until the main political parties start working together and agree a debt deal to turn around the beleaguered economy.

In the last few days Schultz has stepped up the campaign with full-page ads in the US press, including the New York Times, taking the form of an open letter on Starbucks headed paper to his "fellow citizens" to join him in "restoring hope in the American Dream" by sending "the message to today's elected officials in a civil, respectful voice they hear and understand, that the time to put citizenship ahead of partisanship is now".

It's quite a remarkable campaign. Schultz has the support of more than a hundred business leaders joining his pledge. Among those listed as "key supporters" on the campaign website are the CEOs of AOL, BBDO, NYSE, NASDAQ, Wholefoods Market and Zipcar. It is not such a significant coalition yet to cause the main political parties any real loss of sleep - compared with major contributors, most of these individuals and companies are not heavily involved in funding political parties. But for a business leader like Schultz to come out and so explicitly take a stand that effectively seeks to hold his domestic politicians to ransom until they do his bidding represents a fairly unique twist on the growing involvement of business in politics and the claim by corporations to be "good citizens".

In one sense, Schultz should be applauded for seeking to use his own and his company's economic muscle to try and achieve what he sees as a greater public good. Management guru, Rosabeth Moss Kanter, for instance has come out in favor of his "courage and leadership" in attempting to restore confidence. Even the more cynical corporate critics will find it difficult to see a clear-cut corporate self-interest at stake here. Sure it could help reinforce the famous Starbucks brand but at the same time its also going to annoy a lot of people too, especially those in Washington who are being labelled by Schultz and his CEO friends as having a "pervasive failure of leadership".

On the other hand, though, we might also question what's really going on here when we have a company CEO leveraging his company brand in such a way to make a political rather than an economic point, and at the same time claiming to be a "fellow citizen" with the rest of us (who can hardly afford to take out full page ads in the New York Times to present our own views on the current political logjam). This is not just Schultz the individual citizen speaking here but Schultz the corporate CEO and representative of Starbucks. But then, if (and it is a big "if") we accept corporations as political actors, then at least this example represents a fairly good case of building coalitions, providing an arena for free and fair deliberation, and moving beyond mere corporate self-interest.

To our mind the whole situation presents a really interesting insight into the emerging political role of the corporation and the difficult decisions that have to be made when business leaders start increasing their involvement in public debates. According to a McKinsey survey, "almost half of US executives believe they and their peers should play a leadership role in publicly shaping debate and in efforts to address sociopolitical issues such as education, health care, and foreign policy ... yet only one-seventh of survey respondents consider themselves to be playing that role now". Schultz's efforts to restore economic confidence by taking a step into politics gives us a taste of what might happen when these executives really start doing so. We still have a choice about whether and how those steps should be taken.

Photo by Nick Humphries. Reproduced under Creative Commons Licence.

Top 10 Corporate Responsibility Stories of 2010

Mermaids protesting the BP oil spill. Photo by Johnathaneric.

 It's been a big year for corporate responsiblity. A huge oil spill, continued ructions in the financial sector, landmark decisions in the courts, and a new dawn for online companies around human rights issues. It is never easy to pick the most important stories of the year. Some get huge coverage simply because they feature big brand companies. Some hardly even scratch the public consciousness despite having major implications. In other cases, it can be difficult to determine accurately what their long-run significance will be.

But here in the Crane and Matten control room, we've put our heads together to come up with what we regards as the top 10 corporate responsibility stories of the year. These are the events that we think will have the most lasting impact on the field. But it was a hard choice - narrowly missing the cut were the 10 year anniversary of the Global Compact, the FIFA World Cup corruption scandal, Unilever's "Sustainable Living" plan, Apple's labour violations, Wal-Mart's latest announcements on sustainable agriculture, Jerome Kerviel's massive fine, and American Apparel's rollercoaster ride through 2010, among others.

But, hey, not everyone can be a "winner". So if you think we're worng, or if we've missed off your biggest story of the year, do let us know. And while you're at it, take a moment to complete our poll on the right to help us find the top stories according to our readers.Here, though, is our top 10.

1. BP's oil spill in the Gulf of Mexico
Deepwater Horizon was one of the world's largest ever oil spills, and understandably this story absolutely dominated 2010. Not only did it put a final nail in the coffin for BP's once vaunted sustainability reputation, but it heralded a major rethink about the viability of deep sea drilling. BP didn't cover itself in glory by failing to come up with a realistic remedy until far too late - and ended up picking up most of the tab, thereby putting paid to the usual assumption that pollution is simply an 'externality' of business. Really, this was the mother of all corporate responsibility crises in 2010.  

2. Google's battle for free speech
Google's withdrawal from China at the beginning of the year was a landmark decision in the battle for free speech on the web. A real clash of titans, no other story this year illustrated better the clash between government and big business around human rights issues. But Google's subsequent legal problems in Italy, where senior executives were convicted of privacy violations, demonstrated just how complicated this battle is going to be. 

3. WikiLeaks publication of the embassy cables
Who knows where this one will end up, or just what its long term significance will be for corporate responsibility? But it's hard to deny its significance as a major turning point in the fight for greater government transparency, and the contested role of the media and NGOs in bringing confidential information into the public realm. Heralded by some as the first great cyber war, the WikiLeaks maelstrom inevitably catapaulted online companies into the fray with predictably unpredictable results.   

4. Citizens United decision
The only court case to make it into the Top 10,  but according to President Obama the 5-4 decision by the US Supreme Court in Citizen's United vs Federal Election Committee "reversed a century of law" and "opened the floodgates" for corporations to play an ever greater role in US politics. According to the ruling, companies and other special interests can now spend as much as they like on influencing the outcome of elections. And why? Because despite their vast resources, companies should have rights to free speech on political matters the same as any other citizen. An historic ruling.

5. Toyota’s product safety recall
This case grabbed a lot of headlines in 2010, mostly because of the very scale of the recall and Toyota's previously unblemished safety reputation. This was a huge embarrasment for the Japanese car maker and showed up serious problems in the firm's management culture.

6. Bank bonuses 
Bank bonuses stayed in the headlines during 2010. Despite continued economic problems, huge public bailouts in Greece and Ireland, persistent unemployment, and widespread austerity measures, some banks managed to award bigger bonuses in 2010 than ever before.  No surprise that the public stayed angry with a bonus culture apparently so far removed from their day-to-day problems. But European regulators finally seemed to get the message with new guidelines released at the end of the year that looked set to dramatically change the bonus landscape across the entire continent.

Butcher in Haiti with food vouchers used to stimulate trade. Photo by DFID

7. Corporate response to the Haiti earthquake 
Few stories better illustrated the precarious role of business in international development than the corporate response to the Haiti earthquake back in January. The arrival of cruise ships full of vacationers represented for many the unacceptable face of corporate insensitivity and amoral consumerism. Yet, few denied that business had to be an essential ingredient in getting the stricken country back on its feet again. 

8. Greenpeace campaign against Sinar Mas palm oil 
Greenpeace won Ethical Corporation's campaigner of the year in 2010 for its work in combating deforestation. This was exemplified in the NGO's campaign against Indonesian palm oil producer Sinar Mas which saw them force Unilever, Nestle and others to cease buying from the company during the year. Greenpeace's spoof ad on YouTube for the Nestle chocolate bar Kit Kat went viral demonstrating how campaigners were effectively harnessing social media for anti-corporate protest. 

9. HP's termination of CEO Mark Hurd
Hewlett Packard has had its ethical ups and downs over the years, but few expected the company to follow through quite so severely when CEO Mark Hurd was found to have made fraudulent expense claims to cover up a relationship with a female contractor. Rejecting Hurd's offer to pay back the $20,000 he'd received for the claims, the highly regarded leader was ousted by the board for failing to live up to the company's code of conduct. This was an impressive commitment to ethical rules by anyone's standards. However, it angered many who thought the company was shooting itself in the foot. A tumbling stock price and Hurd's instatement at competitior Oracle showed how much pain there could be in doing the right thing.

10. India's 2G licence scandal
OK, so actually this happened in 2008, but it was only in the closing months of 2010 that the full extent of the 2G telecom spectrum licences scandal began to be revealed. In what some have called India's biggest scandal since independence, Telecommunications Minister Andimuthu Raja was forced to resign over allegations that he lost the Indian Government some $38 billion in revenues using an opaque permit system that was riven with corruption. Leaked tapes of secret phone calls with corporate lobbyists have poured oil on the fire. This could yet become India's Enron moment.

So that's our Top 10 for 2010. Doesn't make for particularly edifying reading, but it hasn't been all bad. In amongst the scandals and corruption there have been some genuine cases of ethical leadership in 2010, where companies like Google and HP have had to make some hard ethical choices that have cost them dear. No ne said corporate responsibility was easy.

Client 9: the Rise and Fall of Eliot Spitzer

"All I ask for is an unfair advantage.” Reputedly a favourite line of Hank Greenberg, the former Chair and CEO of AIG, it makes for an apposite tagline for a leader forced to resign by his own board as a result of investigations into financial impropiety. The Greenberg investigations were instigated by then New York Attorney General, Eliot Spitzer, who made a habit of making enemies amongst the city's most powerful  corporate leaders during his uncompromising campaign to prosecute corporate misconduct. And as writer and director Alex Gibney argues in Client 9: the Rise and Fall of Eliot Spitzer it was the foes he created in his day job as much as the night time friends he sought among the high class escort world that ultimately brought him down.

Gibney, the oscar winning documentary maker of Taxi to the Dark Side, Casino Jack, and Enron: the Smartest Guys in the Room, is no stranger to the twilight morality of big business, and the powerplays of American politics. In Client 9 he weaves the two together in a fascinating and surprisingly gripping account of Spitzer's downfall. It's played out like a battle of giants, Spitzer the so-called "Sheriff of Wall Street" fiercely defending the moral purpose of his achievements, and a cast of highly entertaining, and visibly bristling combatants like Greenberg who can hardly contain their pleasure at tough-guy Spitzer's remarkable demise ... and their own part in contributing to it.

There's no shortage of insight here about the ethics of business and politics, and especially in Spitzer's spectacular rise and fall, about the intersection of public virtue and private vice.  He gives a frank and compelling interview to camera, insightful and erudite on his public achievements and then stilted and seemingly at a loss to explain his private problems. The question at the heart of this is how could someone so vigorous in policing the law so knowingly engage in illegality. Spitzer himself doesn't offer too many answers. But one of his aides makes the case in terms of a balance sheet - on the one side cracking down on the financial misdemeanours that led to a worldwide financial crisis that cost billions and billions of dollars - and on the other side having sex a few times with a prostitute. In those terms, Spitzer is on the side of moral good. The good he did far outweighed the bad - at least that is how Gibney couches it in a balanced but ultimately sympathetic portrayal of someone that tends to divide opinions. But Spitzer also admits to hubris, albeit in rather ironically self-important terms. “The only metaphor I can think of" he says at the outset of the movie, "is Icarus. Those whom the gods would destroy, they make all powerful.”

It's not just Spitzer's brittle character though that gives Gibney's movie it's edge. It also features some wonderfully revealing portraits of his enemies and other players in the story. These include: Kenneth Langone, a billionaire American businessman and an outspoken critic of Spitzer; Roger Stone, the infamous lobbyist with a Richard Nixon tatoo on his back; Joseph Bruno, Spitzer’s chief political rival when he became governor of New York; “Angelina” his preferred escort; and audience favourite Cecil Suwal, the disarmingly ditzy CEO of Emperors Club VIP, the escort agency at the heart of the scandal. It's a feast of moral messiness, perhaps best summed up  by the giggling Suwal who admits to getting "confused" about the illegality of high end prostitition given the huge sums of money involved. Gibney doesn't give us any reason to believe that she was the only one.