Chapter 12 – Accountability – Business Accountability

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CSR Certifications – Correcting Business Accountability

In the 2013 Oxford University Press publication “Firm Commitment”, Colin Mayer explains in great detail why the corporation is failing us. Professor Mayor states that the corporation has created more prosperity and misery than ever imagined and that the balance is moving increasingly to the latter direction as it now threatens to consume us. These are failings that we now need to address as a matter of urgency.

Accountability in major corporations is one of the most pressing issues in society today. CEOs, CFOs, Crown and State corporate procurement departments, Hedge Fund managers, and most every business school grad today – is taught, and rewarded based upon business ethics that externalize social costs.

The problem has been recognized internationally too in 2015 with Monsanto being brought up by the World Court in The Hague under the charge of Ecocide and Crimes against Humanity in 2015. Major Lending, Investment, and Risk organizations are just beginning to implement CSR Leads and Corporate Social Responsibility Policy that are inserting new considerations into Due Diligence approval workflows for lending and support.

High Social Cost behaviors – such as eradicating pensions, offshoring (also called globalization and outsourcing), starvation-level minimum wages, tax and benefits dodges – have all become the norm. Any of these practices will also get you promoted and bonused at most any financially motivated companies on the planet today as well.

Canada and the UK are in worse shape economically than others in recent years because they permit the wholesale offshoring of our engineering as well. This is a practice that the Netherlands outlawed 20 years ago and a process that America, Germany, and other nations, have started to correct already.

The Dutch legislated social responsibility in all aspects of their businesses and the reward was to give a country the size of Lake Ontario, an export GDP 20% larger than Canada and Russia.

When engineers and doctors harm society, they lose their license and can’t practice: when business harms society, they get a bonus. When politicians permit these behaviors, we vote for them. We are accountable voters too of course; we need to be voting for engineers, but instead we elect business leads and career politicians that exacerbate these unproductive behaviors.

Failure rates at major engineering universities are 20% to 30% despite the highest screening of any programs; I have never heard of an eMBA that did not graduate and yet MBAs are often thrust into roles that manage Technology or Engineering even within technology and engineering organizations like major airports.

An inverse correlation exists between society’s forward progress and crowded executive administrator pools until finally, we begin to see major corporations pulled into The Hague under the charge of Ecocide and Crimes against Humanity in 2015. Major Lending, Investment, and Risk organizations are just now beginning to implement CSR Leads – heads of Corporate Social Responsibility Policy – that embed new Accountability Policies into Due Diligence approval workflows.

As long as the trend of CSR accountability can persist, there is every chance of a turn-around in investor-driven change for the better.

Consider also a typical corporation operating executive team – say a pension fund, or major airport, which might include a CEO, CFO, CAO/HR, COO, CIO, SVP Sales, and SVP Marketing. There are one or two engineers to as many as five or more admins and yet all have an equal vote at the boardroom table. Human resources, finance, and C-level administration stewards have accelerated hiring and bonuses to their ranks based on their boardroom voting numbers as well.

If engineering or social-leaning voices are strong, they risk being marginalized or not permitted at the table; to be replaced by Non-SME generalists like MBAs, by the majority votes of other executive administrators.

From our discussion of Accountability and social responsibility above, this organizational design gives the strongest voice to those who are trained in Business Ethics classes – and not prevented by licensing – to externalize social costs with indifference to society’s needs. Boards of Directors too, are often structured with far heavier administrative and financial votes.

Solutions to this accountability problem are implemented in Germany already. Here, workers vote for their executive team members. This means that Executives who have poor track records for socially irresponsible behavior, cannot be elected into the boardroom. Other controls might include the licensing of business leads in the same way that we license engineers and doctors today.So what are the options ?

So what are the options ?

1. German workers elect their executive- a form of business accountability that ensures socially irresponsible executive are not hired.
2. CSR Certifications- give investors piece-of-mind that their stewards are operating ethically and in both investor and society’s interest.
3. Business Ethics classes in every major university teach students that: if its good for business, then it must be good for society – change this ASAP.
4. Licensing – license business leads like they do engineers and doctors – where abuse lose their license and cannot practice if they harm society.

Whichever solution you choose, these choices are being made industry-wide in 2015 and 2016. Business Accountability begins by revamping the Business Ethics programs within our biggest and richest business schools and in boardrooms everywhere.

Enquire about CSQ Research CSR Certifications at [email protected].

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