The Business Ethics Exchange
September 2012
Bi-monthly news from the Center for Ethical Business Cultures
Doing Good While Doing Well
Leadership Insights

By Ron James

Ken Powell

Can a company be profitable and a good corporate citizen? General Mills is writing a chapter in this story, having recently been recognized by Forbes Magazine as the “Most Reputable Company in America” for its work in corporate citizenship, products and services, governance and leadership. General Mills’ chairman and CEO, Ken Powell, described just how as he keynoted a recent CEBC public forum: The Evolution of Corporate Responsibility in American Business.

Corporate responsibility is fundamental to General Mills. Founded in the 1860s, Cadwallader Washburn’s vision included building his mill to make flour that would bake bread and someday feed the world. Powell shared that same spirit highlighting the central focus of the General Mill’s mission: nourishing lives.

In 1878, General Mills, following mill explosions that killed 18, responded by investing in new technology that made mills safer and shared it with his competitors. The company also created a fund for workers’ families and built an orphanage that still exists today in the Washburn Center for Children. That same spirit continues. General Mills contributed over $143 million in foundation grants, product donations, corporate contributions and brand partnerships. Over 83% of its employees utilize company supported time to volunteer in the community, and many of its food products are delivered in 100% recyclable paperboard.

Powell talked about the concept of “holistic value creation, ” which he described thus: solving problems that create solutions that benefit not just the company, but consumers, customers, shareholders and the community. For example, when General Mills faced a subpar corn supply for its Bugles snack in China, it developed exclusive relationships with farmers and brought in an agronomist to teach them how to grow more and better corn. Today, the corn supply is higher-quality and more reliable and the business is more profitable. The annual income of the farmer has increased four-fold, paving the way for a higher standard of living and a strengthened community.

CEO’s Report: Corporate Responsibility: The American Experience

Ron James

It’s finally here! After four years in the making, and due to the generosity of Harry Halloran of Halloran Philanthropies and chairman and CEO of the American Refining Group, CEBC launched the landmark book chronicling the history of corporate responsibility in the United States.

A public forum facilitated by David Rodbourne, CEBC vice president, not only featured the keynote presentation from Ken Powell, but also insightful comments from the panel of the book’s authors, and reflective thoughts from a panel of seasoned business practitioners with decades of experience in the field.

CEBC used the combination of events to begin to celebrate its 35th year anniversary. We were honored to have present the initial and most recent executive leaders of the center, Don Imsland and Bob MacGregor, respectively. Also sharing the experience were former and current CEBC board members, business leaders, donors, members, friends, faculty and students.

The launch of the book provides scholarly research into how American business, government and civic leaders over the last few hundred years have sought to answer the question, “for whom and what purpose does business exist?”

The business voice was represented by Nate Garvis, founder of Naked Civics and former vice president of government relations for Target; Mary Pickard, principal advisor at Adler LLC and former vice president of community affairs at the St. Paul Companies (now Travelers); and David Etzwiler, executive director, Decade of Discovery, former vice president of community affairs and executive director of the Medtronic Foundation.

Each took turns peering into the lens of corporate responsibility and dramatic shifts underway. There is a deepening public expectation for corporations to be good stewards with a civic heart … not driven by laws which have physical and political borders, but by the expectations of trust and trustworthiness.

Upcoming Events

Beyond Compliance Series
Friday, October 5
CEBC Members' dialogue focused on “Beyond Compliance: Leadership and Core Values.”

From Fool's Gold to Financial Integrity
Tuesday, November 13
Join us for a public forum to reflect on the lessons and insights on the banking and financial crisis gleaned by Joe Nocera, one of America’s leading business journalists and columnist for the New York Times. The program includes commentary from Peter Young, Ph.D., 3M Endowed Chair in International Business at the University of St. Thomas Opus College of Business.

CEBC Members Roundtable
Wednesday, December 12
CEBC Members roundtable discussion on “Assessing Your Organization’s Progress” on ISO 26000 featuring T. Dean Maines, president of the Veritas Institute, and Arnie Weimerskirch, former vice president of quality at Honeywell.




CEBC Membership

To learn more about becoming a member, please visit the Center's website at
www.cebcglobal.org

An International Perspective on Business Ethics

CEBC’s August 28 Members Roundtable – An International Perspective on Business Ethics – featured a lively presentation from 3M’s Istanbul-based Ray Eby, director of compliance & business conduct for the company's western & central east European regions. Eby sees his role in compliance as that of adviser and resource for business unit leaders. He argued compliance risk can arise from a company’s strategic plan (e.g., Walmart’s aggressive growth plan in Mexico) as well as from conflicts of interest. 

A number of points surfaced during the discussion:

  • Compliance officers and business managers must understand local culture and business practices in order to identify conflicts and compliance risks. Because they understand local culture, business unit managers are often better equipped, and more conservative, than compliance officers in shaping guidelines to avoid creating conflicts of interest.
  • Conflicts of interest are common, subtle and different from culture to culture. For example, in the old Soviet system, people found ways, networks and relationships to survive outside the rules which may make it more difficult today for some in those countries to even see a conflict. However, conflicts can be avoided if the organization communicates clear guidelines, requires full disclosure and has developed an auditable process. 
  • Most opportunities for growth are in countries that are high risks for corruption – see the Corruption Perception Index produced by Transparency International (TI). However, it is also true that most major fines for corruption have been levied against businesses in western countries which are well regarded in the TI index. On the plus side, awareness about the down sides and risks of corruption is growing in more countries.
  • Being a values driven company is important but difficult when values vary across cultures. However, it is possible to set down clear guidelines and procedures that everyone can understand regardless of different perceptions and interpretations of values.

Interesting 3M innovation: after new leaders have been identified, but before they are announced, each must meet with the ethics and compliance organization. More than a final vetting, this step signals that their new responsibilities include ensuring that they and their team live up to ethics and compliance standards. This meeting also builds a relationship with compliance staff.


CEBC Launches New Book

Dr. Ken Goodpaster and the authorial team of Archie Carroll, Ph.D., Ken Lipartto, Ph.D., Jim Post, Ph.D., and Patricia Werhane, Ph.D., proudly unveiled the release of the new book. Four years of collaborative research in the making, the authors reflected on the challenges of getting five independently minded leading scholars to work together, developing a single voice, addressing both academic and practitioner audiences, telling a history in written and pictorial forms, spanning several hundred years. Led by Kenneth Goodpaster, Ph.D., as executive editor, and David Rodbourne as project director, that is exactly what they accomplished as Corporate Responsibility: The American Experience debuted at a CEBC sponsored public forum.

Dr. Goodpaster guided a panel discussion addressing the foundations of corporate responsibility, the relationship between the public sector and corporate responsibility, the drivers of change, the practical meaning of corporate responsibility, and the patterns and prospects of corporate responsibility.

The discussion highlighted the evolving relationship between government and business, a relationship shaped by internal business behavior and influenced by the external social drivers of change in the broader society. A cycle repeats itself. Business provides socially responsible leadership, but self interest emerges leading to ethical lapses. This in turn leads to societal change raising expectations, bringing government intervention to curb behavior.  The group reflected on the lessons learned but, equally important, the choices to be made by business leaders now that will affect the future course of corporate responsibility.

To purchase your copy of the book, visit your favorite bookstore.


You Can Double Your Money While Helping the Center Celebrate its 35th Anniversary!

There is still time! Double the impact of your contributed dollars by investing in the Center for Ethical Business Cultures, which is included in the current Opening Doors Capital Campaign at the University of St. Thomas. We have raised $2.3 million dollars to date toward a $5 million goal.

Generous anonymous donors have committed challenge grants to the university and offered to match every gift of $1,000 or more. So a gift of $1,000 is immediately matched and becomes $2,000. The more you give, the larger the match.

Please note this matching gift opportunity expires October 17 or whenever the funds are exhausted, whichever comes first. Should you have any questions about this opportunity, please contact Brendan Bannigan at (651) 962-6975 or babannigan@stthomas.edu in the University of St. Thomas' development office. Or contact  Ron James at rjames@cebcglobal.org. If you support the work we are doing and want to be a part of perpetuating the legacy, please respond.


Research Spotlight

Christopher Michaelson is not just an associate professor of ethics and business law at the University of St. Thomas Opus College of Business (OCB). In his new role as the secretariat of the International Society for Business, Economics and Ethics (ISBEE), Michaelson attended ISBEE’s fifth quadrennial World Congress hosted by Kozminski University in Warsaw, Poland, in mid-July. ISBEE, founded in 1992, is the first world-wide professional association to focus on the study of these issues, with a global membership uniting several regional associations that address ethics and corporate responsibility.

The World Congress was attended by scholars and practitioners from six continents and more than 40 countries, including OCB professors Kenneth Goodpaster, a founding member of ISBEE who spoke on a panel on “Spirituality in Business, Economics, and Management;” Daryl Koehn, who spoke on “The Ethics of CEO Apologies,” and Christopher Michaelson, who spoke on “The Rise of the Rest: The Competition for the Tallest Skyscraper and its Implications for Global Ethics and Economics.” Other sessions and themes included “The Virtue of Responsibility,” an assessment of progress resulting from the United Nations Global Compact over the last 10 years, and the release of a landmark study on business ethics teaching and research with reports from eight regional survey heads.

In his role as secretariat, Dr. Michaelson is supported by CEBC’s Terri Hastings and Judy Olson. The secretariat, previously housed at the University of Kansas, Notre Dame and Johns Hopkins, supports the operations, financial administration and membership engagement of the organization.


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