Archive for UN Global Compact
Do We Protest or Change to Sustain?
@workecology (twitter system problem has not yet been repaired: please be patient)
Everyday there is a sensational headline or more, protesting CEO Pay. This topic is complex and far more complicated relative to industry and sector. In Massachusetts, where I live – advocates from government, industry and non-governmental organizations are getting active in the analysis and scrutinizing the need for change.
CEO pay seems to seep into many other complex issues, e.g. rising cost of health care, CEO performance and ethics, and legislation that protects major corporations from paying taxes.
Yet, I don’t believe we will get out of the squalor and mess government is in financially that is complicating the global economy and stripping citizens of their ability to sustain, if we keep perpetuating the same discussions about corporate greed or tax dodging.
As the US Government continues to face a shutdown because our politicians cannot agree – is compliance, scrutiny and protest going to be our only tools to spark change.
As I read the news over the past weekend, I was reminded to two notable observations from my own research,
1. Jared Diamond, winner of the Pulitzer Prize wrote in Collapse: How societies Choose to Fail or Succeed. Historically, Diamond has been chastised by environmentalists as “being in bed” with corporations Diamond reminds us that when he visits a corporation, he writes honestly and factually.
On some properties he has seen destruction and on others he has seen caution and he wrote his book, Collapse with this value in mind,
“My view is that, if environmentalists aren’t willing to engage with big businesses, which are among the most powerful forces in the modern world, it won’t be possible to sole the world’s environmental impact problems.”
2. Tyler J. Elm, Wal-Mart Stores, Inc, Former Senior Director of Corporate Strategy and Finance, identified a new form of perspective in th examination of global companies; Of the 100 largest world economies, 42 are corporations (not countries).
This argues for the merit of looking at a corporation that is an economy, e.g. Wal-Mart and General Electric from different filters and questions than companies that are not performing to the scale of a large global economy.
This also provides an interesting perspective from the view of transparency and analysis about forming a new generation of activity to reform taxes, compensation and CEO performance in my my mind.
In my mind right now the tradition of how NGO’s protest and debate and how media reports is limiting. This is the case particularly in the United States to where the value for sustainability conflicts with a diverse input from outside the corporate sector that argues for scrutiny, compliance and legislation to change the problems we perceive as sole focus for solution.
Based on the recent press that GE paid no taxes in 2010 after posting profits of $14.2B, I had a citizen’s reaction of “What?” Given conditions of our schools, health care system and more: I was torn about the degree to which corporations do not pay taxes. But hidden in my story is a strong view I have that US government of all levels, Federal, State, City do not perform.
Do I focus my time on protesting corporate tax dodging? How do I deal with my stress that government in my country is focused on spending rather than focused insuring our spending carries us forward into a future and that all sectors align with this value in action, not just government?
If GE paid taxes, how much of this money now would be wasted in a time where our government is not performing for a majority of its citizens. I have become mixed in thinking about taxes, since US government is not performing?
I am disappointed on the corporate side as to what they can do with profits to create new jobs, increase access to health insurance and over haul their compensation and benefit schemes to recognize the rise in chronic illness, stress and the average American’s inability to insure the 4 pillars of sustainabillty – a job, a doctor, a home and education.
The Latest Focus for Protest – Corporate Tax Dodging.
From the corporate perspective, wheels are spinning about corporations who do not pay taxes. Political activist, Chuck Collins, Senior Scholar at the Institute for Policy Studies in Washington DC is one of the quality voices in the NGO movement questioning why corporations do not pay taxes.
Collins lives with his family in a neighborhood of Boston, known for its grassroots and political advocacy, Jamaica Plain. He has become one of the leading voices documenting, analyzing the complexity of the issue fills the blogSphere with a quality of advocacy journalism that is exceptional.
Chuck’s personal page on Facebook, provides a look into that complexity, why there is no easy solution and why it is so urgent to lead change in this arena as corporations that include GE, Bank of America, Verizon, and Federal Express.
Collins editorial on Huff Post Business is candid, factual and maps out the full agenda in a brief editorial, General Electric King of the Tax Dodgers.
And yes, General Electric heads this list of tax dodgers and some facts I know of that would not be posted to a tax analysis with regard to Jeffrey Immelt’s compensation over the past few years.
General Electric the Corporate Citizen Change Agent
As I indicated to Chuck Collins on his Facebook wall over the weekend, I think the fact that General Electric is what he describes as the “King of Tax Dodgers” is dedicated to Corporate Citizenship and all that implies to its governance and has embedded sustainability into its culture.
In review of my own research archives and identification of these facts, I wonder how the CSR practice of transparency will apply to GE’s filing a return of $0 on its Federal IRS return?
With Obama appointment of GE’s CEO Jeffrey Immelt’s to the Federal Economic Advisory Panel this sets a stage for more controversy related to GE’s lack of tax payments and a need for transparency.
For naysayers, it is easy to take the position that Obama has made a mistake appointing a registered Republican to this position who heads a corporation that delivered $14.2B in global profit and $5.1B in US profits in 2010. GE claimed a tax benefit of $3.2B based on federal tax qualifications.
Last year, I covered a story on a meeting at the Paley Center called the #CSRdebate. At the time, I attended this meeting, I felt that the success of this conversation reflected more a progress report on accountability, performance and success of embedding sustainability into a corporate culture.
General Electric has done all that leading globally initiatives that are impacting climate change, health and energy through their internationally respected initiatives of Ecoimagination and Healthmagination.
Within that story, George Kell, Executive Director of the UN Global Compact pointed out
George Kell pointed out that the American tendency to shape conversations that are generalized does not work for construction of complicated issues that involve CSR. Generalizations cannot empower what is needed to have a constructive CSR conversation.
Kell’s final remarks offered related to reporting on the membership of the UN Global Compact response of 20% interest to climate change that he anticipated would grow to 30% next year represented an indicator of importance.
It is still unclear of the 7700 members of the UN Global Compact how rapidly more than 10% of its members are actually embedding sustainability. Yet, General Electric is a leader of that in forum and within the top 1% of performers.
Also represented in this event, was Bob Corcoran – Vice President, Corporate Citizenship, President & Chairman, GE Foundation. Bob outlined how GE’s core business strategy to embed sustainability into its culture is driven by its corporate citizenship program.
Ecomagination and Healthyimagination were driven by General Electrics’ innovation of sustainability venturing.
Immelt himself authored his plan, A Blue Print for Keeping America Competitive and published it in the Washington Post. The plan focuses on trade, export of US goods and job creation.
Over the last two years, GE has created over 6,000 manufacturing jobs in the United States as well as stepped up to investing in energy and health related businesses that create new companies and jobs.
In 2008, Immelt gave hope to a group of students at UC Berkeley Hass School of Business when he
In 2008 in forum to UC Berkeley Hass School of Business, Immelt gave hope and direction for a future to these students, that so few know how to give at these times, shortly after the September 2008 financial market meltdown.
Immelt has described himself as a banker with “deep pockets, who also invested in people. Immelt differentiates himself from an investment firm because he devised and put into practice a sustainability framework that defined how General Electric could lead the world into the building of a sustainable economy.
Outside of GE, Immelt announced and carried through on plans to invest in new ventures that are not entirely owned by GE. In some cases these small enterprises are competitors to GE divisions and businesses; creating a social network of coopetition as part of the GE Culture.
Immelt’s Compensation and How It is Managed
GE Directors and Immelt have align Immelt’s compensation based on long term strategy and current financial performance. In reviewing articles regarding his compensation; I have decided to begin to look at other companies closely in terms of ratio of profit, total sales and CEO salary. But doing this analysis was a good beginning.
While reports show that Immelt”s compensation for 2010 doubled, within the report were some explainations of adjustments from past years and a modification to how Jeffrey Immelt used General Electric resources of personal use. Directors viewed that Immelt performed well. In this context,
- He compensation doubled to a total of $15.2M based on profits of $14.2B.
- Shares offered in 2006 were cancelled because the company did not meet its performance expectations at that time.
- During 2 years of reduced financial performance, Immelt received no bonus. The $4M received for 2010 was the first bonus he received in two years.
- In 2010, Immelt received $389,809 of other compensation by using the GE jet for personal business. He has a new agreement to lease the jet for personal use and reimburse for the cost of its use.
What does the US need – Corporate Taxes, Lower CEO Pay or a Sustainable Economy
While I would not identify myself as a ‘libertarian,” I have to ask what would I prefer? That a profitable corporation pay taxes ? Or create a tax systmee for sustainable economy? Is there a simple answer to these questions. I think not.
For a company that is leading performance in the top 1$ for sustainable value, there is a real advantage to not protesting the problem, but opening a dialogue with this company to find out what change would benefit stakeholders and how.
And a real dialogue is not based on protest, argument and debate–a dialogue begins with briefing sessions and gives the players opportunity to learn and absorb in an educational forum.
This kind of initiative is then structured in a setting where participants can focus and think and ask question from which to generate questions that direct the participants in a new direction of thought that can be formed into a action strategy.
Embedded in this issue are issues of leadership, CEO performance, global versus local economy, size of company and a new view of a size of company that merits being defined an economy,
thestoryofmeaningfuluse.com readers what do you think? Is the world ready to redefine the GDP and spark new economic thinking that is sustainable and not about corporations or government and political feuds?
Lavinia Weissman is an sustainable market leadership coach, journalist, and publisher of thestoryofmeaningfuluse.com. As a speaker she describes the new emerging patterns of markets shaped by sustainable market leaders and the social networks they work with and employ. As a coach, Lavinia works with all her clients to inspire professional development that assures a person the opportunity to embed sustainability as a leader into the network and culture of people they work with.
Publisher’s Note: Please be patient while we figure out if Twitter can repair our @workecology id and recover our network. By Friday 4/1, I hope twitter will resolve this and I will know by then what I have to do.