Fast Talk: Hail, global citizens!

Georg Kell

Executive head, The Global Compact
United Nations
New York, New York

When we launched the Global Compact in 2000, only a handful of companies had explicit policies on human rights. We know of board meetings where the Compact was rejected on the grounds that "human rights is not our business; it's the business of governments." A year later, though, many of those companies made a choice to take a stand in their sphere of influence. They do so through their market power and sheer presence, which can have a direct impact on how a society interacts and the values it upholds, or doesn't. Companies shouldn't wait for governments to get it right. Most problems we face are pragmatic responses to government's governance failure. In the absence of responsible governments' doing their share, corporations are being asked to be part of the solution. Companies can't make up for government deficiencies, but they can be a positive force. It's simple. When companies invest abroad, they are aware of the risks associated with that investment. Increasingly, they are obliged to check for human-rights abuses, corruption, and environmental impact. They can insist on transparency measures, for example, before investing in a corrupt environment. Their case to government: If you don't fix it, then the company is running a risk down the road. We tell every company that joins the Global Compact the same thing: If you are serious about global citizenship, it requires institutional change. It must begin with the CEO. If you don't have the CEO's commitment, then you run the risk of simply running a public-relations campaign.

Madeleine Albright

Former secretary of state of the United States;
Principal, The Albright Group
Washington, DC

Corporate citizenship begins with an honest look at how the rest of the world perceives the United States. Gone is the America-can-do-no-harm climate. When there is anger toward this country, brand-name American companies are going to suffer; they're emblematic. So the question for business leaders is, How do you make sure your company is viewed as one that is doing the best it can to help a country's evolution and development?

In today's climate, American companies have to develop their own foreign policy. They have to develop relationships with local and national leaders and work with nongovernmental organizations and governments. They have to embed themselves within the societies where they live and be seen not as specifically American companies there to make money, but as American companies that have local context. It's a matter of advancing the best of U.S. interests, not taking advantage of a population that is willing to work under lesser conditions. Companies can be a beacon of the right approach. They can mitigate their negative impact and push the positive in a way that helps everybody.

That requires serious leadership. From a fiduciary perspective, company executives and board members have an obligation to address social and environmental issues as potential risks. And they have to show ethical behavior. Transparency, openness, and accountability--those things matter. The CEOs who get out of their U.S. offices and travel to see what's really happening in the world are making good corporate citizenship a priority.

People talk about globalization as if there were a choice. There isn't. It's happening, and we have to manage it in a way that benefits communities and companies.

Bill Joy

Founder and former chief scientist
Sun Microsystems
Aspen, Colorado

Businesses are economic creatures. They can talk about all of this social responsibility stuff, but they are likely to do something about it only if there's an economic reason for them to do it.

Consider the companies that voluntarily reduced their greenhouse gas emissions. They recognized that it's probably economically profitable on a global basis, anyway. Processes that use less carbon are generally better economically because they're more fuel efficient.

But to expect companies simply to be socially responsible without an economic incentive is asking a lot. In today's hypercompetitive world, I just don't see companies taking on anything other than what they and their competitors are required to do. Think of the erosion of jobs in this country as we lose out to Chinese competitors with lower cost standards. How can companies take on more burdens?

That's how they think.

If we can apportion true societal costs to the things we want and don't want and then apply those costs through financial feedback as opposed to regulation, we all might win. Companies won't care unless the costs of their bad behavior are reflected back to them. They respond to economic signals, not regulation. Regulation is shortsighted and inefficient; it doesn't allow for fractional and innovative solutions.

For example, carmakers measure automobile safety in terms of the people in an individual car, as opposed to total safety of the vehicle. If it were about the total safety of vehicles, we might say that SUVs are unsafe on the road because of the impact they have on other vehicles' occupants. We're regulating a maker of an individual car as opposed to rewarding the result we want: lower fatalities. We have to encourage the future we want rather than trying to prevent the future we fear.