Many, many thanks to the readers
helping with
our Executive Search Reengineering Project.
▪▪A Holiday Thought▪▪
A Broader Perspective on Corporate Governance
"The Global Sullivan Principles"
Any reader of this occasional column knows the focus is on
providing executives the techniques to provide stakeholders with
sustainable increases in the value of their equity. We do this mostly
by converting key battle tactics to business strategy and by showing
the behaviors of history’s great generals. We get feedback that this
has proven useful as it has helped readers ask themselves questions
that have resulted in action items ultimately enriching their
stakeholders. That's gratifying. It’s hard to find any group more focused on helping
clients enrich their shareholders than we are.
Of course we also get asked questions ourselves. One of the most
frequent is variations of “But what about the Big Picture? What
about corporate governance?”
Well, we co-developed BoardLens
to help boards and advisory teams efficiently look at themselves and
that’s certainly useful for becoming more effective as a team. But
it’s not enough. The vital question remains: What does the board
DO other than “work together, in a principled manner, to help
the company create and maintain customers for the benefit of the
stakeholders”?* The point is, with the power large companies have
today perhaps enriching the stakeholder isn’t enough—maybe that’s just
the beginning.
Ok, this holiday season, with Tyrant No. 1 now in jail, and with
2004 looking good, we’d like to suggest something… Back in 1971 a
Baptist minister by the name of Leon Sullivan joined the board of
General Motors (Sullivan was the first African-American on the board
of a major US corporation). At the time General Motors was the largest
employer of blacks in South Africa. Sullivan used his position on the
board to oppose apartheid, the set of official policies in the
Republic of South Africa that discriminated against nonwhites. To do
this he created the Sullivan Principles in 1977 which were a set of
ethical guidelines for companies operating in South Africa. Where
other reformers, such as Nelson Mandela, had failed, the Sullivan
Principles were instrumental in bringing about the ultimate
dismantling of apartheid. The country has flourished since. (We’ve
worked there and liked it.) How did he do
it? Simple. Economic pressure. Sullivan knew multinationals and large,
nongovernmental entities, are growing in power where nation states are
increasingly having a difficult time achieving co-operative solutions.
Sullivan mobilized over a 100 companies to leave South Africa and
apartheid eventually crumbled. That’s a simplification but the
Sullivan Principles are credited as the flashpoint.
In 1999, not long before his death, Rev. Sullivan and United
Nations Secretary General Kofi Annan, introduced a revised set of
ethical operating guidelines called the
Global Sullivan Principles of Corporate Responsibility. These
expanded guidelines call for multinationals to take a more active role
in the advancement of social justice. But if you read them, and
think about them, you can see the Principles provide a sensible
framework and filter set for balanced corporate behavior on a global
basis. It’s easy to see why many large and admirable
companies have
adopted the guidelines and why some significant institutional
investors have chosen to focus on investing in companies that follow
the principles. Have a look and give it a thought. Happy Holidays
and Happy New Year---and cheers to a strong 2004. –Tal Newhart,
Parcon
Research
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THE GLOBAL
SULLIVAN PRINCIPLES
Announced November 2, 1999
at the United Nations, New York City
As a company which endorses the Global Sullivan Principles we will
respect the law, and as a responsible member of society we will apply
these Principles with integrity consistent with the legitimate role of
business. We will develop and implement company policies, procedures,
training and internal reporting structures to ensure commitment to
these principles throughout our organization. We believe the
application of these Principles will achieve greater tolerance and
better understanding among peoples, and advance the culture of peace.
Accordingly, we will:
- Express our support for universal human rights and,
particularly, those of our employees, the communities within
which we operate, and parties with whom we do business.
- Promote equal opportunity for our employees at all levels
of the company with respect to issues such as color, race,
gender, age, ethnicity or religious beliefs, and operate
without unacceptable worker treatment such as the exploitation
of children, physical punishment, female abuse, involuntary
servitude, or other forms of abuse.
Respect our employees' voluntary freedom of association.
- Compensate our employees to enable them to meet at least
their basic needs and provide the opportunity to improve their
skill and capability in order to raise their social and
economic opportunities.
- Provide a safe and healthy workplace; protect human health
and the environment; and promote sustainable development.
- Promote fair competition including respect for
intellectual and other property rights, and not offer, pay or
accept bribes.
- Work with governments and communities in which we do
business to improve the quality of life in those communities -
their educational, cultural, economic and social well being
and seek to provide training and opportunities for workers
from disadvantaged backgrounds.
- Promote the application of these principles by those with
whom we do business.
- We will be transparent in our implementation of these
principles and provide information which demonstrates publicly
our commitment to them.
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* Parcon Research’s CEO,
Tal Newhart
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