Archive for March, 2014|Monthly archive page
Bribery is Still a Challenge for International Business
Comments (3)Bribery and other forms of corruption continue to pose a challenge to international business. Bribery is a problem because it distorts markets, saps economies, and hurts local communities. For all these reasons, bribery is illegal just about everywhere that has a functioning legal system. And as reported recently in the Wall Street Journal, many countries are stepping up efforts at enforcing anti-bribery laws. Both because of the possibility of prosecution, and because of the slippery slope between bribery and other forms of criminality, bribery poses significant business risks.
Clearly, improved enforcement is an important part of combatting bribery, and combatting corruption more generally. The temptation to win ‘by any means’ will always be there, and so tough rules need to be in place.
But another element is the promulgation and adoption of good, clear, international business standards. As it happens, I’m currently in Madrid as part of the Canadian delegation to an International Standards Organization working committee that is drafting a new “Anti-Bribery Management Systems” standard (ISO 37001).
Christian Levesque, Chair of the Canadian ‘mirror committee’ and head of the Canadian delegation here in Madrid, had the following to say about the project:
“It is important that we, as Canadians, be part of this discussion and this drafting process. We are pleased to see that the matter of Anti-bribery is seen by ISO, and by many countries, as an important matter that needs to be addressed at an international level. We need to be vigilant about bribery as a global community, and ISO is the international platform to offer solutions to deal with that challenge.”
The ISO’s working committee is still in early days of its 3-year process. When completed, the standard will describe a set of best practices for companies that want or need to establish management systems that will help them avoid, detect, and deal appropriately with bribery wherever it is encountered — either in their own operations or potentially in the operations of business partners. And, to the extent that their business partners are compliant with the standard, businesses will have some assurance that those partners have processes in place to ensure the integrity of their own operations, thereby reducing risk. The standard will constitute the core of an eventual ISO certification regime, alongside certification regimes for Quality Management (ISO 9000), Environmental Management (ISO 14000), Social Responsibility (ISO 26000) and many others.
Establishing an ISO standard, of course, doesn’t mean the problem of bribery is going to go away. But it does give global businesses a target to aim at, and it gives companies of all sizes access to a set of best practices, such that if they really want to be diligent about avoiding bribery, they’ve got the tools to put that ambition into practice.
Baseless Accusations Aimed at Lady Gaga’s Charity Foundation
Accusations recently arose that Lady Gaga’s charitable foundation, the Born This Way Foundation (BTWF), was spending its money in what looked like an irresponsible way. For example: according to 2012 tax filings, BTWF spent almost $60,000 on publicity fees, $50,000 on social media, and nearly $80,000 on travel, but spent “only” $5000 in the form of “grants to organizations or individuals.”
BTWF was founded in 2011 to “foster a more accepting society, where differences are embraced and individuality is celebrated.” But how, commenters wondered, could the foundation accomplish that mission when the vast majority of its spending is goes to what many organizations would consider mere overhead?
As it happens, the accusations were more smoke than fire — not surprising, since the story originally broke on ShowBiz411 and were popularized by Gawker.
Gaga’s mom (who is also co-founder and president of BTWF), Cynthia Germanotta, responded recently, saying that the nature of BTWF had been misunderstood:
“First and foremost, we are an organization that conducts our charitable activity directly, and we fund our own work. We are not a grant-maker that funds the work of other charities, and were never intended to be.
Our activity has included The Born Brave Bus Tour, which has travelled to 23 communities, interacting with more than 19,000 young people and raising awareness to the tune of more than 300 million media impressions. The foundation’s messages of kindness and bravery have touched more than half a million online users via our website, which includes the Bravest Map Ever and the Play Brave Game, as well as social media channels such as Twitter and Facebook — which on a peak week can hit 50 million individual users.”
In other words, the ShowBiz411 story betrayed a lack of understanding of what BTWF is for, and what it takes to run a foundation of that kind. It doesn’t make sense to insist that a charity give away more money to charity — when it is itself dedicated to doing what most charities do, namely spending donated money in ways that aim to help people directly.
Of course, the fact that BTWF (or any other foundation) is dedicated to doing good does nothing at all to put them beyond critique. Indeed, a do-good mission is itself a good reason to insist on accountability, since a do-good mission is liable, in at least some cases, to make those who run a foundation feel a sense of entitlement. And the need for accountability is all the more relevant with regard to charities that accept donations from the general public: when people are trusting you with their money and when all they get in return is your promise to use it well, well, you’ve got an obligation to live up to that trust.
So yes, accountability at charitable foundations is an important topic. Too many (that is, more than zero) foundations spend too much on overhead and too little on doing good. Were I a donor to BTWF, I would like to know a little more about just how the foundation spends its money, why it had to spend so much in 2012 on lawyers ($150,000).
The lesson here is one that should be heard not just by charitable foundations, but by organizations of all kinds. It’s not enough to be doing good. You have to communicate that to key stakeholders. And that means telling them not just that you are doing good, but letting them know how you’re doing it.
3D printing gives everyone a chance to be the next Edison
Manufacturing technology is evolving rapidly. Technologies like 3D printing and production concepts such as mass customization are allowing the kinds of changes in manufacturing not seen since the industrial revolution. And those changes are ethically important. These modern technologies promise significant increases in the speed and efficiency of many kinds of manufacturing, and are already allowing increasingly tailored products to heighten consumer satisfaction. There are of course worries about the uses to which some of these technologies will be put. Much has been made of the possibility of 3D printed guns, for example, and of the fact that many people will soon have the ability to 3D print consumer products at home has intellectual property lawyers watching very carefully.
But there’s another ethically-important aspect of this revolution in manufacturing, and that’s the promise it holds to bring to a broader population the ability to make stuff. The desktop PC and computer-aided design software has for years now put the basic tools of design into the hands of millions. But actually making stuff — creating prototypes, holding your invention in your hand — has until recently been a privilege reserved to relatively few. Today, 3D printing and on-demand computer-guided fabrication mean that just about anyone with a computer and an idea can see their idea take form, quickly cheaply. This is a radical change.
What these technologies promise is nothing less than the diffusion and decentralization of the fundamental tools of design and production. While the 20th century saw massive corporations build vast factories to churn out the products of an elite class of industrial geniuses like Edison and Ford and Jobs, the 21st century is more likely to see what we might loosely call the democratization of design, production, and ultimately innovation, as the means of technologically-sophisticated design and manufacturing become widely available.
This is a point that Chris Anderson emphasizes in his 2012 book, Makers: the New Industrial Revolution. Anderson points to the example of his own grandfather, an inventor who struggled through the long process of tinkering, building a prototype, acquiring a patent, and eventually — necessarily — licensing his idea for a new, smarter lawn sprinkler to a big company with the manufacturing capacity to turn his invention into a consumer product. Those days, Anderson argues, are gone. Today, someone with a good idea can relatively easily acquire the tools for rapid prototyping and, ultimately, for consumer-grade production. No factory is required. The bottleneck is gone. And while Anderson clearly sees this democratization as a good thing, he doesn’t focus explicitly on its ethical significance. That ethical significance is two-fold.
First, the democratization of innovation is good for those who make use of these new technologies. As a matter of economic and creative freedom, it is good to know that large numbers of people are being empowered to create and to build. No longer do creative types need to be beholden to those with the vast quantities of capital required to build factories and to hire armies of workers. The means of production, if you will, can be in the hands of hands of the workers. If you can dream it, you can build it.
Second, the democratization of innovation promises to be good for society as a whole. It promises to unleash the creative power of an an entirely new generation of would-be inventors and entrepreneurs, and eliminate the cost barrier that has heretofore existed between good ideas with production capacity. Society will benefit from seeing the tools that truly enable productive creativity put into the hands of many, many more bright individuals.
So we should continue to watch carefully the increasing quality and diminishing cost of these new manufacturing technologies. There will of course be risks, but there will also be benefits. And enabling a new generation of creative geniuses and would-be entrepreneurs is far from the least important.
Chris MacDonald is Director of the Jim Pattison Ethical Leadership Education & Research Program at the Ted Rogers School of Management.
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