Ethical Corporation is now Reuters Events - LEARN MORE
As relationships between the corporate world and government evolve, how should companies get involved in politics? Toby Webb has some suggestions
How can a large company become involved, ethically, in global politics? This is probably the most fundamental question facing really large companies in the next 20 years. At least, those large companies with a commitment to ethics and sustainability.
Here are a few ideas for companies that want to engage in this most difficult of questions.
1. First, build a proper global policy and research team. Fund them and keep them, let them educate themselves, and your management team, on the issues, materiality and, possibly, solutions.
2. Develop ambitious (and defensible) positions on issues. That might be water policy or labour standards enforcement. The positions are governed first by materiality, and second by global significance for your business and your stakeholders
3. Push hard at the forums and associations where your company is a member so that they are at the top of their game, or closer to it, rather than, like an infantry unit, marching at the pace of the slowest member. If those groups can’t speed up, leave them, and/or create a leadership group.
4. Advocate systems change on easy-win issues first. Where is the low hanging fruit on which you and your fellow companies can make progress via your industry or issue body? How far can you go, and what can you expect to gain, and by when? Do you start regionally with like-minded companies? Maybe, as long as the ambition to go further exists.
5. Do not donate to political parties anywhere. Demand that your suppliers do not. You can’t stop employees donating, but make it clear that’s on their own time.
6. Take a public position that corporate political donations are wrong. But acknowledge that governments desperately need skilled help. Lobbying governments does not help build the capacity needed. Think harder. For example, BP funds the Oxford Centre for the Analysis of Resource Rich Economies. What can your company – or industry – do that helps contribute to long-lasting capacity building for better decisions?
7. Be transparent about dealings, financial or otherwise, with government. It may cost you a contract or two, but the long-term impacts are worth the trade-off. Not all conversations need to be on the record, though, and acknowledging when they are off the record can be tough.
8. Take criticism on the chin. Many people hate the idea of large companies having a position on anything. The argument that “there’s no such thing as business ethics, only the ethics of individual business people” still holds much sway. Having a long-term position is something that’s very new for companies, particularly given that long-term positions must be seen to withstand several changes of leadership.
9. Hire lawyers (there’s two words I thought I’d never write) to make sure you are not falling foul of anti-cartel regulations when you negotiate with peers and competitors on pre-competitive issues (supply chain basic standards, climate change, corruption etc). If that competition law is the problem, what can your policy team – and other stakeholders and companies – suggest is amended to drive progress?
10. Find existing and new progressive organisations to support, and challenge them to go further, faster. For example, the Institute for Human Rights and Business is becoming more vocal and practical (look at its work on Burma) and need long-term support.
11. Make it clear to investors that this is part of core company strategy, and educate them as to why careful, long term engagement in progressive, collaborative and multistakeholder driven systems change is vital to future success.
12. Always think collaboration. The term may have negative overtones in some cultures so rename it if you have to. Do remember that very few companies, if any, have changed much of anything on their own.
13. Institutions and social capital matter. These two areas are not well understood: how fundamental governance happens on a day-to-day basis, and how people feel about that, and their level of trust as a result. In emerging markets institutions are almost always weak. Most business-NGO partnerships do not yet aim to address the fundamental capacity, resource and design challenges of institutional development and longevity. This must change. Look at Bangladesh as an example.
There are only a handful of companies thinking part-time about these things. But many more companies will soon start to think about getting involved in politics than are today. The next question is when.
Toby Webb is founder of Ethical Corporation and Stakeholder Intelligence. He blogs at http://tobiaswebb.blogspot.co.ukcorporate governance corporate responsibility government politics strategy Toby Webb