Five things we've learned about social responsibility in the media this month

If the WikiLeaks embassy cables saga that kicked off at the end of last year wasn't enough, the first month of 2011 has seen media organizations facing a whole slew of social responsibility issues. The Guardian newspaper has been breaking a major phone hacking scandal at News Corporation; a sexism case at Sky Sports in the UK has been championed by those bastions of political correctness, the UK tabloids; and the Qatar-based broadcaster Al Jazeera was identified this week by the New York Times as a major force behind the spread of riots in the Arab world. Not only this, but earlier in the month, Al Jazeera was involved in publishing the leaked 'Palestine papers' about the Middle East peace process, which immediately inflamed tensions in the region and, according to the Middle East peace envoy Tony Blair had destabilised the peace process.

Meanwhile, back at WikiLeaks, Rudolf Elmer was convicted of breaching Swiss banking secrecy laws when he handed over client information to Julian Assange, pledging to make public the confidential tax details of 2,000 individuals and companies,which he claimed revealed instances of money-laundering and large-scale illegal tax evasion. Oh, and some of the WikiLeaks supporters that attacked the websites of Mastercard, Visa and other companies last December after the firms withdrew their services from WikiLeaks were arrested. Phew! These are just some of the headline grabbers in what has been a month to remember for corporate responsibility watchers in the media sector.

Talking of which, we are also expecting to see any day now, the release of the Global Reporting Initiative's final draft Media Sector Supplement ready for a last round of public consultation. This supplement is intended to offer specialist guidance for media organizations 'measuring and reporting on the economic, environmental, social, and governance dimensions of their activities, products, and services'. Judging by the events of the last month, they'll have their work cut out.

So what then have we learnt about social responsibility in the media this past month? And how prepared will the GRI guidelines make media organizations who want to report on all this stuff?

1. The media sector might have to start thinking harder about product responsibility
There has been a gradual acceptance that media organizations have to take some regard for the impact of their content, as well as for the actual physical media they use. From protections for minors from adult content, to recycling of newspapers, there are a whole host of product responsibility issues for the media to consider. The GRI guidelines are generally suitable to cover these. But recent events suggest a shift in the conversation about the impacts of publishing controversial political content. When news organizations become complicit in political unrest and pose threats to peace, the standard response of "publish and be damned" comes under increasing scrutiny. By the same token, stories that help forge greater democracy in repressive states should be held up for praise. Organizations such as The Guardian and the New York Times have been leading the way in accounting for the positions they take on such issues with their commentary around the Embassy Cables and the Palestine Papers. The Guardian editor, Alan Rusbridger, also recently published an interesting commentary on this (and points 2 and 3 below) in an extract from his forthcoming book about WikiLeaks. But a serious question mark remains about whether and how media organizations should consider the social impact of their version of the news - or like tobacco companies before them, lay the responsibility squarely in the hands of the consumer.

2. News organizations are being held to higher standards for how they gather information than they hold their own sources to.
The phone hacking scandal at the UK Sunday tabloid the News of the World demonstrates the importance of news organizations subscribing to legal and ethical standards in how they generate ‘news’. Illegally accessing the private voicemails of royals, film stars and other celebrities is simply unacceptable by normal standards of journalistic ethics. The Guardian newspaper has rightly been pursuing this story over the last few years. The resignation of Andy Coulson, the Government’s Director of Communications (and former editor of the News of the World) and Ian Edmonson, the paper’s Assistant Editor, show just how significant a story this is turning out be. On the other hand, the Guardian (and other news organizations) have decided to run stories based on illegally hacked emails, and no doubt will also do so using stolen financial information and other data gleaned by dubious means by intermediaries. Although there is a difference in the public interest component of these stories, the main distinguishing factor is that in one case the news organization is doing the dirty work, and in the other a third party is and the news organization simply takes advantage of it.

This has been a common ethical position adopted by news organizations, but as organizations in other sectors have learnt to their cost, the claim that the actions of those further back in the supply chain is not their responsibility doesn’t always convince – nor does it pacify their critics. News organizations will probably need to take a closer look at their policies and practices regarding the news supply chain. And the GRI should ensure that reporting on these policies and practices is part of their guidelines.

3. The fight between transparency and privacy is only going to get nastier.
Privacy and transparency are two fundamental principles frequently at odds with one another. The events around WikiLeaks have shown that much of the momentum is towards the latter, but the arrests of Elmer and the Anonymous hackers who supported WikiLeaks, not to mention mounting pressure on Assange and the travails of the original source of the Embassy Cables leak, Bradley Manning, are a warning that the proponents of privacy (or secrecy as their rivals put it) are not going to let the balance change without a fight. Media organizations need to articulate clearly where they stand on these critical issues for their business.

4.  Diversity issues affect media organizations in quite unique ways
The GRI guidance is quite clear on the need for media organizations (like all other organizations) to respond to and report on diversity issues. But the media actually has particularly acute responsibilities here because of its critical role in influencing public attitudes. So it's good to see the guidelines also cover diversity issues in media content. The Sky Sports case, which has seen one leading presenter fired and another resigning over sexist comments delivered off-air (but with the microphones still on), demonstrates just what a lightening rod the media sector can be for diversity issues. After all the presenters were off-air and would normally have expected their comments to go unreported and unheard by the public. Still, public they became and because this was a media organization and not say a bank or a real estate office, a couple of dodgy comments led to a firestorm of publicity. For Sky, sacking some star presenters isn't a bad way of advertising their commitment to diversity in such a context. But there's also a case for seeing the developments as an attempt by Sky to find a couple of scapegoats for what would appear to be something of a culture of institutionalized sexism at the organization - and not just a couple of off-message old dinosaurs.

5. Media organizations need other media organizations to make them act more responsibly.
Finally, for all the concerns about social responsibility in media organizations, the past month has also made it clearer than ever that the media plays a critical role in ensuring the accountability of powerful interests, whether those are governments, corporations .... or even media organizations. For this policing of the media by the media, we of course need plenty of plurality in the sector. Unfortunately, as far as powerful media players go, this is actually on something of a decline. And social media, for all its worth, simply doesn't have the research and reporting depth to do the core of that 'fourth estate' job as well. But that's a debate for another month.  

Photo by Caro Spark. Reproduced under Creative Commons Licence 

Can the Canadian oil sands really be an 'ethical' source of energy?

The new year has got off to a bang in Canada with the new Environment Minister Peter Kent coming out of his corner fighting. According to Kent, the Albertan oil sands are not the environmental catastrophe we all thought they were. In fact, as he says, the oil sands are "an ethical source of energy". Yes, that's right. Alberta is the new home of ethical oil.  Oh boy, that's going to need some explaining.

Now, before you slam your head into the computer screen in disbelief, let's take a closer look at this claim and put it in a little bit of context. Kent's basic point is that because the oil sands are in Canada, they are properly and democratically regulated, they do not fall foul of corruption and abuses common in oil rich countries - and the proceeds don't go into funding terrorism. Compare that to the other states in the top 10 countries by proven oil reserves and you can see that he might have a point. Saudi Arabia, Iran, Iraq, Kuwait, Venezuela, UAE, Russia, Libya, and Nigeria - hardly a list of ethical hotspots it has to be said. As Kent puts it, "[Oil sands oil] is a regulated product in an energy superpower democracy... The profits from this oil are not used in undemocratic or unethical ways. The proceeds are used to better society in the great Canadian democracy."

OK, so let's not get into a debate about just how "great" the Canadian democracy is. After all this is a country that, under the current Government, has regularly taken to shutting down Parliament when things get a bit dicey. But against the rest of the countries with big oil reserves, it still comes up looking pretty good by comparison. This is important for potential buyers of oil sands oil, especially the US which is concerned with global energy security, and is looking to wean itself off its dependence on oil imports from countries that it would rather not have to go to war with again. In fact, Kent's ethical makeover of the oil sands is all part of the major charm offensive that the Canadian government is pursuing to bolster its reputation in the US and elsewhere where climate concerns have started making Canadian oil distinctly unpopular in recent years.

In this context Kent is right to promote some of the virtues of the oil sands. All energy sources have their positives and negatives - yet the oil sands has become chiefly known only for its social and environmental downside. So a bit of rebalancing of the ethical equation is not inappropriate. But claiming any source of non-renewable energy is "ethical" and especially one that is fraught with such problems as oil sands oil, is not too helpful in advancing the debate in a meaningful way. Such claims may get media attention but they also infuriate critics and simply serve to entrench existing antagonisms. Climate activists are likely to target the oil sands even harder now that the Canadian government is drawing out the battle lines in this way. Greenpeace Canada for example had already started campaigning on a 'Separate oil from state' platform including an anonymous leak site for inside tip-offs about government efforts to promote the oil sands. This is all part of a concerted NGO response to what  the Climate Action Network regards as, "federal officials ... systematically trying to kill clean energy and climate change policies in other countries in order to promote the interests of oil companies."

Far better it would have been then for Kent to acknowledge the shortcomings of the oil sands along with proclaiming their virtues. Any freshman ethics student knows that a utilitarian cost-benefit analysis of the ethics of different energy sources has to take into account more than just one factor. Country of origin is just one of a whole range of relevant issues. There is no way that the tar sands can be regarded as an ethical source of oil based on one factor alone. But country of origin "benefits" can be traded off with climate change "costs" if you subscribe to a utilitarian mode of thinking. However, a myopic, one-sided piece of government propaganda doesn't help anyone ... especially when it is proclaiming the virtues of "the great Canadian democracy".

Photo copyright Greenpeace. 

New year, new design

Since we've now moved into our 4th year of writing this blog, we thought it was time for a little freshen up. So along with a new year, we've got a new design. We hope you like the new-look Crane and Matten blog, but please send us any comments you have about it, especially if you have trouble reading the text, accessing the links, seeing the pictures, or any other troubles. In the meantime, we'll still be doing a few more nips and tucks, and perhaps a little botox here and there, to make sure everything looks good. It ain't easy getting old, you know.

Business ethics more culturally significant than CSR ... but not everywhere

'Business ethics' and "corporate social responsibility" are two terms that are often used interchangeably, but at the same time represent somewhat different lenses on business practice. Ethics, of course, is always concerned with norms and values, and is basically about what is right and wrong. CSR on the other hand may be about these things, but doesn't have to be - lots of people take a purely economic or strategic approach to CSR without any real consideration of the normative dimensions. CSR is also, as might be expected, a lot more business-friendly than business ethics. In fact, people often tend to use CSR when they're talking about the good things companies are doing, and business ethics (or a lack of them) when talking about the bad things they do. There are other differences too, but we'll save the definitional niceties for another day.

The point is that the term you use is not always just arbitrary. And the two have a very different heritage even if they have broadly similar concerns. As a professor of business ethics (Crane) and a professor of corporate social responsibility (Matten), and co-authors of textbooks on both subjects, we often get asked which is the most important, which is the most popular subject at university, and why we do we need more than one term to describe the same thing? So we were pleased to discover the new gizmo from Google that lets you easily and quickly do a simple analysis of the cultural significance of different words and phrases. The Ngram viewer from Google Labs plots the incidence of specific terms over the last 200 years in more than 5 million digitally scanned fiction and non-fiction books. It may not let you do anything very sophisticated from a research point of view, but it is incredibly easy and fun to use.

So we plugged "business ethics", "corporate social responsibility" in, and for good measure added "corporate responsibility" and "sustainable business". The results, shown above, relate to books published in English from 1900 to 2008 (the last year provided by the data). As you can see, CSR only really emerged post 1960, whilst business ethics has enjoyed more than a century of cultural dominance, with particular peaks around the crash and depression of 1929-1930, and the financial scandals of 2000. And CR was actually a preferred term to CSR in books until around 2001.

By the looks of things, the dominance of business ethics could be coming to an end though. CSR and corporate responsibility have become increasingly more used - especially in the last decade which has seen an exponential growth in their incidence. Saying that, we'll see if the most recent financial scandals see another resurgence of business ethics post 2008 as the last data points on the graphs might seem to suggest.

An interesting feature of the tool is that you can distinguish between books published in English in the US and books published in English in the UK (as well as books published in non-English languages). And here, we were intrigued to see that in UK publications, CSR has already overtaken business ethics as you can see in the graph below.

In fact, in UK books, business ethics in general has not achieved anything like the cultural significance it appeared to in the first graph. Until the early1980s corporate responsibility was actually the dominant term.

Looking then to US books (see below), we can see that it is here that business ethics particularly stands out - albeit with a mid 1970s blip when corporate responsibility overtook it. Even as late as 2008, business ethics still dominates by quite a gap, although this is clearly narrowing over time.

The US emphasis on individual ethics versus the European focus on system-level responsibilities is something we've discussed at some length in our Business Ethics textbook. Plus the UK has been very much at the vanguard of the CSR movement. So these graphs don't come as a complete surprise. Still, it's interesting to see the data set out so starkly. That said, there are clearly some limitations to the Ngram methodology, as has been widely discussed. Still, there is clearly food for thought in here. And, of course, we're sure there are a whole lot of other corporate responsibility analyses that can be conducted with the tool. Do let us know of any interesting ones you come across.

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.