Archive for the ‘Corporate Social Responsibility’ Category

The Environmental and Competitive Disruptors That Lie Ahead

July 23rd, 2014 | By

More than 100 directors gathered at The Ritz-Carlton, Denver on July 15 to learn about competitive and environmental forces that can disrupt business as usual.

The half-day symposium was the second of three NACD Directorship 2020® events this year. The forums are addressing seven disruptive forces (competition, demographics, economics, environment, geopolitics, innovation, and technology)—the major trends and transitions expected to drive significant change for companies and industries in the near future—and the implications for the boardroom.

Environmental Disruptors

Linda J. Fisher, vice president of safety, health, and environment and chief sustainability officer at DuPont, called attention to five key sustainability trends: population growth, water supply, climate change, resource scarcity, and circular economies.

Population growth. The earth’s population is expected to reach nine billion by 2050. Population growth will lead to increased demand for food and other goods, while supply may be limited. This could lead to price hikes, increased regulation, and shortages.

Water supply. Water will become limited somewhere within businesses’ value chains, potentially affecting—among other things—transportation of goods. In December 2012 and January 2013, low levels in Mississippi waterways resulted in more than $6 billion in commodity losses when barges carrying goods were unable to pass through the river, according to waterways groups.

Climate change. The Intergovernmental Panel on Climate Change reported last year that they are 95 percent sure that human activity is primarily responsible for global warming.

Resource scarcity. Focus also should be placed on resource efficiency concentrating mostly on improving building performance and food waste reduction.

Circular economies. Also gaining traction is the trend of circular economies in which products are designed so they can be used, deconstructed, and have the remaining materials captured for reuse or recycle.

And while companies are accustomed to the government regulating environmental issues, concerned consumers now are playing a regulatory role. These consumers increasingly are business savvy, understanding the degree to which companies rely on their reputations and brands. Activist consumers can call negative attention to a company’s brand until they see the change for which they have advocated.

These increased demands mean that companies should stay abreast of environmental and sustainability issues. There must be a balance found between sustainable market growth, environmental stewardship, and social responsibility.

Competitive Disruptors

Adam Hartung, managing partner at strategy consultancy Spark Partners, CEO of Soparfilm Energy Corp., board member of 6 Dimensions, and an NACD Fellow, shared his thoughts and concerns about the impact of competitive disruptors and how boards should help set the competitive edge at their companies.

People often think about bankruptcy filings as being the sign of business failure, but Hartung proposed that business failure begins when a company loses its relevancy.

He said the biggest risk to companies’ competitiveness is getting stuck maintaining the status quo. The secret of being successful in today’s marketplace is to overcome the “lock-in” to past successes.

Hartung detailed four steps that boards could take to stay competitive:

  1. Focus on trends and potential future competitors, rather than on companies that have been competitors in the past.
  2. Shift direction away from current solutions and customers’ desires and instead steer more toward marketplace needs and competitors.
  3. Ask how your company can disrupt the marketplace—not just how it can do things better, cheaper, and faster.
  4. Allow for white space innovation, in which creative thinkers (outside the board of directors) can develop business or product ideas that are outside the status quo. White space innovation can lead to ideas that will set the competitive curve in your industry.

NACD Directorship 100: A Call for the Most Influential

April 10th, 2014 | By

Wanted: The names of corporate directors and corporate governance professionals who you believe represent the very best in corporate America. Attributes include experience, integrity, knowledge, and courage. The call for nominations for the 2014 NACD Directorship 100 is now live at www.NACDonline.org/Nominations. It takes only a moment to nominate a colleague or peer. Multiple nominations are encouraged. All NACD members are invited and encouraged to participate in our online poll.

The NACD Directorship 100 is the annual lineup of the most influential people in the boardroom and corporate governance. It is composed of 50 directors and 50 governance entities or professionals. The 2014 list, our eighth, will be published in the November/December issue of NACD Directorship and celebrated during a black-tie gala on December 3 in New York City.

Included in the NACD Directorship 100 is the call for nominations for two very special awards: the 2014 Lifetime Achievement and Public Company Director of the Year awards.

What happens once you make a nomination? Our editorial team goes to work vetting each and every candidate, checking to see that the nominee fits within our guidelines for inclusion. Directors who have already been included in a prior NACD Directorship 100 list are no longer eligible for consideration–a change adopted in 2013 to ensure that a fresh crop of directors is featured each year. The list of nominees is ratified prior to publication by the NACD board.

Questions? Please contact me at jwarner@NACDonline.org.

Michael Woodford: CEO Turned Whistleblower

October 14th, 2013 | By

Today marked an anniversary for former Olympus Corp. President and CEO Michael Woodford: the day he was fired from the camera and medical products manufacturer. What brought him to that day is a series of events that kicked off when Woodford had no choice but to blow the whistle on his own company after discovering a serious fraud.

Before being asked to assume the role of president–which he very gladly accepted–Woodford had a 30-year career at Olympus. Nevertheless, he knew that he wanted to make changes within the company, and soon into his presidency, an article in a business magazine titled Facta, ran an article about odd acquisitions Olympus had made and the high fees it paid a management consultancy.

When Woodford raised the issue with two managers in Japan about the article, he was told that CEO Tsuyoshi Kikukawa had advised them not to bring it up to Woodford. After demanding to speak to Kikukawa and Executive Vice President Hisashi Mori about the questionable acquisitions, Mori told Woodford that he worked for Kikukawa and that he was loyal to him.

Seeing no other option to raise the issue, Woodford wrote letters to the Olympus board and management and copied their auditor, Ernst & Young, on two of the letters. Instead of addressing the issue of the dubious acquisitions, the board unanimously ousted Woodford.

For more on the Olympus fraud, read an NACD Directorship magazine interview with Woodford from the March/April issue: http://www.directorship.com/exposing-fraud-at-any-cost/.