Posts Tagged ‘ transparency ’

Too Little for Too Long

At the end of September, the Institute of International Finance held its annual meeting in Washington.  The IIF is a global association of financial institutions, whose mission is to “support the financial industry in prudently managing risks, including sovereign risk; in developing best practices and standards; and in advocating regulatory, financial, and economic policies that are in the broad interest of [its] members and foster global financial stability.”

Prominent on the agenda was international financial regulatory reform, over which considerable debate is ongoing. On the one hand, the G20 plan tougher financial regulatory requirements.  The IIF, on the other hand, while acknowledging the need for reform, calls for a cautious approach, arguing that stricter rules could compromise a fragile economic recovery.  In his speech to the IIF’s annual meeting, Bank of Canada Governor Mark Carney was critical of the IFF’s position, in part because it fails to assume any economic benefit from reducing the risk of future financial crises and because banks already have until 2019 to adapt to the changes. The contrasting viewpoints are summarized succinctly in this Globe and Mail article by Kevin Carmichael, titled “Carney, Waugh spar over new banking rules” (September 26, 2011).

Bank of Canada Governor Mark Carney

What jumped out at me from Mr. Carney’s remarks is this gem of a quote:  “If some institutions feel pressure today, it is because they have done too little for too long, rather than because they are being asked to do too much, too soon.

This statement reflects the reality that increasing demands for transparency, accountability, ethical behaviour, and consideration of non-financial material issues (like environmental, social, and governance issues) have been apparent for some time, and there is diminishing justification – and tolerance – for delayed action.  This is relevant not only to financial institutions, but to other corporate sectors as well.

The pressure to which Mr. Carney alluded will only increase with prolonged inaction, as the gap between corporate behaviour and performance and emerging stakeholder expectations and regulatory requirements continues to grow.

 

Click here for Governor Mark Carney’s full remarks to the IIF.

Click here to link to the IIF’s paper, “The Cumulative Impact on the Global Economy of Changes in the Financial Regulatory Framework” (September 2011).

Click here to link to the IIF’s latest paper on cumulative economic impact of regulatory reform, addressing revisions (October 2011).

Social Media and Corporate Responsibility

Getinvolved.ca is a fantastic initiative focused on connecting individuals and organizations to make change possible. They’re the folks behind Power of the Hour, a national campaign to encourage Canadians to stand up and count the power of volunteer time. They’ve also done a whole series of interesting videos, called Digital U, about various aspects of social media.

Late last year, we filmed a piece about social media and corporate responsibility. Here it is.

By the way, at 10:25, when I said “non-material issues”, I meant “non-financial material issues”!

(And my name is pronounced “Sa-lisa”, not “Sa-lessa”! Ah, but I quibble…)

Air Canada Is On Their Game

In Tuesday’s National Hockey League match-up between the Boston Bruins and the Montreal Canadiens, Habs forward Max Pacioretty suffered a serious concussion and a broken vertebra in his neck after a devastating hit by Bruins defenceman Zdeno Chara.  Chara received a major penalty for interference and a game misconduct for the hit, but, to the surprise of many, he was not suspended.

Now, despite being Canadian, I’m not a diehard hockey fan.  I watch Hockey Night in Canada sometimes, I’ll watch the playoffs, at least while there’s still a Canadian team in the running, and I even go to see a game once in a while.  But this hit has my attention, not because it’s so different from those that have happened before, but because of its link to – you guessed it – corporate responsibility.

What, you might wonder, does a check in hockey have to do with corporate responsibility?  Well, a lot, it turns out, if you’re Air Canada.
Click here to read more about Air Canada’s flying body check to the NHL…

Investor Relations: where capital meets corporate accountability

For some 250 years, responsible investing has been a key means of aligning our influence with our values.  The Investor Relations function is squarely at the nexus between the strategies and performance of the company and the primary leverage point for stakeholder expression of sustainability goals.  What does this mean for the Investor Relations professional?

Perhaps the very earliest occurrence of socially responsible investing took place in 1758 when the Yearly Meeting of the Religious Society of Friends, better known as the Quakers, issued the first of a series of denunciations of the slave trade, advising its members to “avoid being any way concerned, in reaping the unrighteous Profits arising from that iniquitous Practice of dealing in Negroes and other Slaves” and “endeavour to keep their Hands clear of this unrighteous Gain of Oppression.”

John Wesley, founder of Methodism

Around the same time (between 1744 and 1760), John Wesley, an English preacher and founder of the Methodist Church, delivered his sermon entitled The Use of Money.  You may have heard the saying, “Make all you can, save all you can, give all you can.”  That is John Wesley, paraphrased.  What it doesn’t capture, however, are the boundaries he drew around the first of his three rules: “gain all you can.”  Wesley advised his followers to gain but without hurt to body, mind, or soul, of either ourselves or our neighbours.  He spoke of unhealthy work environments, cheating, lying, anti-competitive behaviour, the sale of anything that may impair health, and what he called “sinful trade”.  He advocated honest industry, diligence, continuous improvement, and best practice.  Religious institutions have been at the forefront of socially responsible investing, or SRI, ever since.

In the last five decades, we have seen a steady rise in interest in SRI.  [For a brief history of SRI, see these entries on Wikipedia and About.com.]  We know environmental, social, and governance (or ESG) issues are not new to investors.  So what has changed? Read on!

The convergence of social media and corporate responsibility

In the early 1400s, Johannes Gutenberg invented a mechanical movable-type printing process that enabled the first mass production of books.  Within decades, the technology had spread across Europe, and the growing availability and affordability of the printed word revolutionized society.  The flow of information and ideas fuelled the Reformation and the French Revolution, broke down strongholds of power, whether political or religious, and contributed to the democratization not only of societies but of knowledge itself.

Over time, we’ve witnessed the emergence of mass media, designed and used to broadcast information from and by a small group to a large one.  This communications audience is, essentially, a mass society of undifferentiated individuals.  It receives information.

However, social media turns a receptive mass society into a creative public.  Information doesn’t just flow from a small group to a large one, and information creation isn’t just the purview of the powerful elite anymore.  The trickling democratization of knowledge that began with the Gutenberg press, social media is making a flood.

Now, humans have always been social creatures.  It’s not social networking that’s new.  Rather, it’s the development of new technologies at a time of rapid globalization and increasing awareness of humanity’s impact on the Earth that have converged to create the perfect storm of new social media. Read the whole post here

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