Corporate Governance  and Social Compliance Presentation to the Rotary Club of Hong Kong  By Alan VanderMolen  President, ...
What  is  Corporate Governance ?  <ul><li>A set of processes, systems and policies by which your  business is governed to ...
Asia Pacific: Fundamental Assumptions Shattered
What we’ve learned from 2009 Edelman Asia Pacific Trust Barometer Trust in Asia Pacific has fallen in business, government...
What we’ve learned from 2009 Edelman Asia Pacific Trust Barometer Companies less trusted now than a year ago
Asia: In Bad Company
Lack of Trust Triggers  Call for Government Intervention <ul><li>“ ...our problem is not just  a deficit of dollars.  It’s...
Government and business share responsibility for causing global issues <ul><li>. </li></ul>E. 119-120, E124-125, 129-130, ...
APAC has higher trust in business to address global issues driven by high trust in China, Indonesia and Japan <ul><li>% wh...
Business partners with others to solve global issues <ul><li>E139. Thinking about the role that business should play in he...
Who Can We Trust? Trust in Information Sources and Spokespeople Declines Across the Board <ul><li>“ Under the circumstance...
Trust wanes for most traditional information sources; Word-of-mouth on par with media N/A
Academics, a person like yourself most credible CEO and government increase in APAC despite global drop <ul><li>D112-118. ...
Trust in corporate channels down Employees most trusted source <ul><li>C99-101,109,110. [TRACKING] Now I’m going to read y...
The Business Case for Trust Reputation, Sales, and License to Operate  Driven by Trust and Transparency <ul><li>“ Trust is...
 
Responsible Companies: A mix of “what” and “how” <ul><li>B62-73.  When you think of good and responsible companies, how im...
Businesses are expected to act quickly and make significant changes when problems arise <ul><li>B83-90. How much would you...
Through personal action,  trust has tangible benefits <ul><li>B74-78  Thinking back over the past 12 months, have you take...
APAC more supportive of responsible companies to pursue local changes <ul><li>B91-94. Thinking now about companies operate...
Public Engagement: A Strategy for  Changing Policy and Communication Shared  Sacrifice Continuous Conversation Private Sec...
Private Sector Diplomacy <ul><li>Shape policy on world’s most pressing  problems, including ones that don’t concern compan...
Mutual Social Responsibility <ul><li>Benefit society and the bottom line </li></ul><ul><li>Integrate approaches to societa...
Shared Sacrifice <ul><li>Set collaborative tone for company: </li></ul><ul><li>we’re all in this together   </li></ul><ul>...
Continuous Conversation <ul><li>Be agile and “of the moment” </li></ul><ul><li>Inform, don’t control the conversation  </l...
Corporate Governance Re-Boot  OLD:   Pyramid Model NEW :   Sphere of Cross-influence Stakeholders now demand transparent a...
Social compliance  is  corporate governance
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Cg Presentation For Rotary Club Of Hk (Aug 31)

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Cg Presentation For Rotary Club Of Hk (Aug 31)

  1. 1. Corporate Governance and Social Compliance Presentation to the Rotary Club of Hong Kong By Alan VanderMolen President, Asia Pacific Edelman September 1, 2009
  2. 2. What is Corporate Governance ? <ul><li>A set of processes, systems and policies by which your business is governed to serve the needs of your stakeholders </li></ul><ul><li>Corporate governance goes beyond legal and regulatory compliance: social compliance is now a key element of corporate governance. </li></ul><ul><li> </li></ul>
  3. 3. Asia Pacific: Fundamental Assumptions Shattered
  4. 4. What we’ve learned from 2009 Edelman Asia Pacific Trust Barometer Trust in Asia Pacific has fallen in business, government and media
  5. 5. What we’ve learned from 2009 Edelman Asia Pacific Trust Barometer Companies less trusted now than a year ago
  6. 6. Asia: In Bad Company
  7. 7. Lack of Trust Triggers Call for Government Intervention <ul><li>“ ...our problem is not just a deficit of dollars. It’s a deficit of accountability... a deficit of trust.” </li></ul><ul><li>– Barack Obama </li></ul>
  8. 8. Government and business share responsibility for causing global issues <ul><li>. </li></ul>E. 119-120, E124-125, 129-130, 134-135. Now thinking about (energy costs, financial credit crisis, global warming, affordable healthcare), please tell me how responsible you think each of the following entities are for contributing to (global issue)? TOP 4 BOX 25-64 informed publics in 6 countries
  9. 9. APAC has higher trust in business to address global issues driven by high trust in China, Indonesia and Japan <ul><li>% who trust business to find and invest in solutions </li></ul><ul><li>E140-143. How much do you TRUST global businesses to find and invest in solutions for each of the following issues? Please use a 9-point scale where one means that you “DO NOT TRUST THEM AT ALL” and nine means that you “TRUST THEM IN A GREAT DEAL”. (Top 4 box.)(Informed publics 25-64 in 20 countries) </li></ul>
  10. 10. Business partners with others to solve global issues <ul><li>E139. Thinking about the role that business should play in helping to solve global issues such as energy costs, the financial credit crisis, global warming, or access to affordable healthcare, which of these following three statements is closest to your view? Business has to partner with governments and advocacy groups to solve these global issues, it cannot do it alone; OR Business should focus on what they themselves can do on these global issues, whether or not governments or others partner with them ; OR Business should not play a part in helping to solve these global issues (Informed publics 25-64 in 6 countries) </li></ul>
  11. 11. Who Can We Trust? Trust in Information Sources and Spokespeople Declines Across the Board <ul><li>“ Under the circumstances, I am tendering my resignation… I am now prepared to subject myself to the laws of the land and face the consequences thereof.” </li></ul><ul><li>– Ramalinga Raju, former chairman, Satyam Computers </li></ul>
  12. 12. Trust wanes for most traditional information sources; Word-of-mouth on par with media N/A
  13. 13. Academics, a person like yourself most credible CEO and government increase in APAC despite global drop <ul><li>D112-118. [TRACKING] Now I’m going to read you a list of people. In general, when forming an opinion of a company, if you heard information about a company from that person, how credible would the information be—extremely credible, very credible, somewhat credible, or not credible at all? (Top 2 Box) Informed publics 25-64 in 18 countries </li></ul>*asked as “an academic” in 2008
  14. 14. Trust in corporate channels down Employees most trusted source <ul><li>C99-101,109,110. [TRACKING] Now I’m going to read you a list of places where you might get information about a company. Please tell me how credible you believe each one of them is as a source of information about the company—is it extremely credible, very credible, somewhat credible, or not credible at all? (Top 2 Box), Informed publics ages 25-64 in 6 countries </li></ul>
  15. 15. The Business Case for Trust Reputation, Sales, and License to Operate Driven by Trust and Transparency <ul><li>“ Trust is the cornerstone for the survival of an enterprise and a society.” </li></ul><ul><li>– China Daily </li></ul>
  16. 17. Responsible Companies: A mix of “what” and “how” <ul><li>B62-73. When you think of good and responsible companies, how important is each of the following factors to the overall reputation of the company? Please use a nine-point scale where one means that factor is “not at all important” and nine means it is “extremely important” to overall reputation. (Top 4 Box) 25-64 Informed publics in 6countries </li></ul>
  17. 18. Businesses are expected to act quickly and make significant changes when problems arise <ul><li>B83-90. How much would you trust companies to take the following actions when problems or difficulties arise? Please use a 9-point scale where one means that you “DO NOT TRUIST THEM AT ALL” and nine means “YOU TRUST THEM A GREAT DEAL” to take this action when problem arise. (Top 4 Box), Informed publics ages 25-64 in 6 countries </li></ul>Cap pay for executives who are accountable for the problems Fire any executives or employee found to be guilty of wrongdoing Partner with governments, or other third parties to solve the problems Make full public disclosure about the problems and their causes Have senior executives take a visible lead in communicating about the problems Admit their mistakes when things go wrong Make significant changes so the problems don't happen again Act quickly to correct problems
  18. 19. Through personal action, trust has tangible benefits <ul><li>B74-78 Thinking back over the past 12 months, have you taken any of the following actions in relation to companies that you trust? Please answer yes or no to each action.. Informed publics 25-64 in 6 countries </li></ul><ul><li>B79-82. Still thinking about the past 12 months, have you taken any of the following actions in relation to companies that you do not trust? Please answer yes or no to each action. Informed publics 25-64 in 6 countries </li></ul>Chose to buy their products/services Refused to buy their products/services Recommended them to a friend or colleague Criticized them to a friend or colleague Paid a premium for their products/services Bought shares Sold shares Shared positive company opinions/experiences online Shared negative company opinions/experiences online – +
  19. 20. APAC more supportive of responsible companies to pursue local changes <ul><li>B91-94. Thinking now about companies operate in your company, how supportive would you be towards a good and responsible company being allowed to do the following? Would you be not at all supportive, not very supportive, neutral, somewhat supportive or very supportive towards a company operating in your country taking this action? (Top 2 box.)(Informed publics 25-64 in 20 countries) </li></ul>
  20. 21. Public Engagement: A Strategy for Changing Policy and Communication Shared Sacrifice Continuous Conversation Private Sector Diplomacy Mutual Social Responsibility
  21. 22. Private Sector Diplomacy <ul><li>Shape policy on world’s most pressing problems, including ones that don’t concern company’s industry    </li></ul><ul><li>Partner with government, NGOs to drive decision-making and set strategy on major societal issues </li></ul><ul><li>“ … Come together—government, NGOs and business—in new approach to solving big problems facing our country. … This can work.” </li></ul><ul><li>– H. Lee Scott, Jr., President and CEO, Wal-Mart </li></ul>Shared Sacrifice Continuous Conversation Private Sector Diplomacy Mutual Social Responsibility
  22. 23. Mutual Social Responsibility <ul><li>Benefit society and the bottom line </li></ul><ul><li>Integrate approaches to societal problems into products and services </li></ul><ul><li>Involve employees and customers in decisions and actions about company’s social responsibility  </li></ul><ul><li>Starbucks invites customers to partner as a force for good </li></ul>Shared Sacrifice Continuous Conversation Private Sector Diplomacy Mutual Social Responsibility
  23. 24. Shared Sacrifice <ul><li>Set collaborative tone for company: </li></ul><ul><li>we’re all in this together  </li></ul><ul><li>Equitable compensation (executive pay cuts, bonus forfeiting) sends powerful message </li></ul><ul><li>Communicate with employees, welcome their voices </li></ul>“ Heavy equipment maker Caterpillar Inc announced in late December it would cut executive pay in half, and many salaried employees would see cuts of as much as 15 percent.” – Wall Street Journal Shared Sacrifice Continuous Conversation Private Sector Diplomacy Mutual Social Responsibility
  24. 25. Continuous Conversation <ul><li>Be agile and “of the moment” </li></ul><ul><li>Inform, don’t control the conversation </li></ul><ul><li>Say... then do as you say </li></ul>Johnson & Johnson among first companies to join public conversation on health Shared Sacrifice Continuous Conversation Private Sector Diplomacy Mutual Social Responsibility
  25. 26. Corporate Governance Re-Boot OLD: Pyramid Model NEW : Sphere of Cross-influence Stakeholders now demand transparent and interactive communications from corporates Company Mass Audience Consumers Media NGOs Investors Regulators Employees Trade Bodies Businesses
  26. 27. Social compliance is corporate governance

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