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Hubris and the CEO: A Cautionary Tale

posted by Boyd Neil

Wikipedia defines hubris as indicating "overweening pride, superciliousness, or arrogance, often resulting in fatal retribution or Nemesis". Hubris is an essential element of Shakesperean tragedy in which the protoganist over-steps divine or natural law and suffers for this pridefulness (Think Lear, Macbeth, Hamlet).

The whole idea came to mind watching the sad, and in this case possibly tragic (the words aren't  synonymous), events surrounding the former Ontario attorney-general Michael Bryant who was involved this week in an altercation in which a cyclist was apparently killed by Mr. Bryant's car.

It would be irresponsible to pass judgment on these events or on whether Mr. Bryant suffers from hubris. However, he has been the subject of a number of articles in the last few months in which he has been described, for example, as a "political rock star" with "an overstuffed closet full of accomplishments in which to drape himself: magna cum laude LLM from Harvard Law School, Fulbright Fellow, MPP at 33 and cabinet minister from 2003 until earlier this year." He has been congratulated on his pricey wardrobe and described as "dapper" and "intense".

Which means if he did listen to his own notices, to use the theatrical expression, it would not be surprising if he suffered from some sense of invincibility. And that, as the Greek tragedians would tell you, leads to retribution.

Turns out there is a recent study that suggests hubris and its retributive consequences were also present in CEOs who were found to have committed fraud.

Thanks to a blog for institutional investors called Pom Talk I was directed to a recent Canadian study titled Like Moths Attracted to Flames: Managerial Hubris and Financial Reporting Frauds. In it Michel Magnan of Concordia University in Montreal, Denis Cormier of UQAM and Pascale Lapointe-Antunes of Brock University suggest

"Taking a look at the size of management’s ego as a possible indicator of fraud. . . the authors suggest that egotistical managers, stoked by media attention and analyst praise, gain a 'feeling of invincibility' that leads them to 'take more risks in fraudulent activities,' akin to the 'moths attracted to the flames that ultimately kill them.'  The study also suggests that 'managerial hubris… ignites and accelerates the propensity of senior executives to commit or to be oblivious to fraud' and thus may just be the red flag that can effectively weed out the truly fraudulent operations from the non-fraudulent.  The authors opine that 'inconsistencies between executives’ statements and observable facts or realities, outlandish claims, and a lack of concern for operational detail can be signals that managerial hubris has set in.'"

Since many in-house and agency communications professionals help manage their CEO's public persona, and spend time urging reporters and bloggers to profile him or her, this is a cautionary report. Abetting journalists as they strain to make celebrities out of leaders, no matter how successful the person, has its risks. Too much stroking of the ego in public can lead to inspiring boldness . . . or reckless bravado. Let's think twice about pumping up the boss. Humility today is a more constructive -- and safer -- virtue.

 

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Dilbert Always Gets It Right

posted by Boyd Neil

Todays’ Dilbert cartoon by Scott Adams captures the zeitgeist of how some still view corporate responsibility and sustainability.

Dilbert.com

We’re Back!

posted by Boyd Neil

In 2007, the North American corporate responsibility (CR) team launched a blog on Collective Conversation called ResponsAbility, a play on words reflecting H&K’s unique and powerful ‘ability’ to help provide counsel on all facets of CR and CR communications. ResponsAbility featured original thinking, case studies and insights from H&K offices across North America, on a wide range of CR topics including employee volunteering, recycling, stakeholder engagement, privacy, green tech, and workplace diversity. (All of these posts have been migrated to this new platform and are accessible here.)

Although well received by clients and H&K colleagues alike, with posts attracting hundreds of views and trackbacks, the demands of keeping up a blog ran up against the business exigencies of day-to-day client service.

Well, ResponsAbility is back . . . with renewed commitment and energy and frankly a better infrastructure for ensuring the breadth and regularity of contributions. Why are we doing this? Because we have more and more clients coming to us for support on various facets of CR and sustainblity. We want to demonstrate that H&K’s CR consultants are among the brightest and most passionate counselors in this field. And we want to prove we deliver confirmed results.

From our perspective CR is much more than strategic philanthropy or “green” initiatives. So expect ResponsAbility to offer a broad range of posts covering everything from governance issues, employee engagement, impact on biodiversity, ethical behavior of sales forces, employee benefits, product quality and safety, CEO compensation, and energy efficiency . . . to responsible downsizing, supply chain working conditions, and responsible advertising and marketing to children.

Our goal is to make this the go-to source for the best thinking on corporate responsibility and sustainability.

You can help by subscribing to our RSS feed, adding ResponsAbility to your blog roll and insisting — by way of your comments, criticism and praise — that we make evident high standards in our thinking about, and our counsel on, these crticial business issues.

Boyd Neil . . . on behalf of Chad Tragakis and the North American CR team.

Corporate Responsibility as Public Diplomacy

posted by Boyd Neil

By Manuel Pauser, account executive in H&K’s Washington office.

As a 17-year-old I decided to live in Malaysia for a year, to immerse myself in another culture, learn the language, live with a local family and attend a local high school. At that time, I saw the year mainly as a benefit for me, for my family at home, and for my host family and friends in Malaysia. It had never crossed my mind that this cultural exchange could be a tool of foreign policy and diplomacy—to share and advocate German ideals abroad while bringing Malaysian values back to Germany.

Only a few years later, as a student of political science and international relations, I realized how crucial such programs are to foreign policy. Whereas traditional diplomacy—the art and practice of direct communication between political representatives of different countries—remains an integral part of foreign policy, public diplomacy has become increasingly important to the foreign policy efforts of the U.S. Department of State and other foreign ministries around the world.

Instead of reaching out to officials, public diplomacy programs seek to engage a wider audience in a non-political fashion. These programs provide a country with a human face abroad—something that is tangible for the public. Prominent examples include the Fulbright academic exchange program and the recent concert of the New York Philharmonic Orchestra in North Korea.

Increasingly however, governments have realized that corporations and their corporate responsibility efforts can be part of public diplomacy strategies as well. Only a few weeks ago, the U.S. Department of State inaugurated its Benjamin Franklin Award for Public Diplomacy. The award recognizes the achievements of Americans who actively contribute to advancing America’s ideals through public diplomacy. In the category of corporations, Johnson & Johnson won the award for its Safe Kids Worldwide campaign, one that aims to educate the public and advocate for children’s safety at home and in school.

On another occasion, German Foreign Minister Frank-Walter Steinmeier announced that the German Federal Foreign Office, together with the Bertelsmann Foundation, planned to set up an internet platform to highlight best practices in corporate responsibility among German companies at home and abroad. Embassies will provide background information on countries and confer on-the-ground insights regarding companies’ cooperation with the local public.

In both cases, corporate responsibility as public diplomacy is viewed as a new way to create understanding and appreciation for other cultures, while establishing a dialogue between people of different nationalities. Subsidiaries of companies in other countries tend to resemble the culture of that parent company, the quality of products and production processes, the relationship between management and workforce, and the relationship with local communities.

Each case also indicates that diplomacy not only serves businesses, but businesses can serve diplomacy as well. For the past decades, it has been common practice for country officials to travel on official diplomatic visits accompanied by representatives from the business community. Such trips help to build and strengthen economic ties with other countries and serve businesses.

Businesses, in turn, can provide grounds for closer diplomatic relations and increased collaboration. With strong corporate responsibility engagements abroad, businesses can help build and expand powerful ties among the publics and people, while at the same time, enhancing the image of their home countries.

Corporate responsibility is part of public diplomacy. And public diplomacy becomes an integral part of corporate responsibility strategies. Even though we are still miles away from a fully integrated relationship between public diplomacy and corporate responsibility, I am glad to observe that governments around the world are beginning to recognize that corporations can assist diplomacy efforts by conveying the ideals and values of their home countries abroad.

Transgender Protection in the Workplace — PART TWO

posted by Boyd Neil

by Michelle Tsai, senior account supervisor for the corporate group in the New York office. 

This is the second of a two-part post on equal protection for transgender employees in the workplace.

In my last post, I brought up the point that lesbian, gay, bisexual and transgender (LGBT) employees are not protected under Title VII of the Civil Rights Act of 1964, which outlaws hiring or employment discrimination on the basis of the employee’s “race, color, religion, sex, or national origin,” but not specifically sexual orientation or gender identity.  Early court decisions after the Act was passed held that transgender people were not entitled to protection from employment discrimination under Title VII. More recently, however, a new line of cases, based on intervening U.S. Supreme Court decisions, may provide protection for LGBT people in some situations. 

One case in particular speaks directly to the issue of gender identity.  In Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), the Supreme Court held that Title VII was not limited to discrimination on the basis of one’s biological status as a man or a woman but instead prohibits the “entire spectrum” of discrimination on the basis of sex, including discrimination on the basis of gender stereotypes. In Price Waterhouse, plaintiff Ann Hopkins was denied a partnership at an accounting firm because she was deemed to be insufficiently “feminine.” To improve her chances for partnership, Hopkins was told she should “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry.” The employer argued that Title VII did not prohibit discrimination based on gender stereotypes.

The Supreme Court disagreed. “As for the legal relevance of sex stereotyping, we are beyond the day when an employer could evaluate employees by assuming or insisting that they matched the stereotype associated with their group, for ‘in forbidding employers to discriminate against individuals because of their sex, Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.’”

Despite this landmark case, transgender employees continue to struggle to be treated fairly in the workplace.  Case in point:  the passage of the Employment Non-Discrimination Act by the U.S. House of Representatives last November, which was originally written to include protection for transgender employees facing discrimination on the basis of gender identity. However, that protection was stripped out of the bill in a controversial decision by Democratic House leaders, among them lead ENDA sponsor Barney Frank, the openly-gay representative from Massachusetts, in order to ensure its chances for passage.  (Passage is mainly symbolic, since the Senate is not likely to consider the bill, and President Bush has already promised to veto it, should it reach the White House.)

What we are left with is a limited ENDA bill that – if it ever became law – would extend protection from workplace discrimination to straight-looking and acting lesbian and gay employees but leave the most vulnerable transgender employees bereft of such legal protection, as well as non-gender conforming individuals, both straight and gay, such as Ms. Hopkins, who are denied equal career opportunities based solely on their appearance and nonconformity to sex stereotypes. 

However, there is progress being made, and the private sector is leading the way.  Last year, 125 of Fortune 500 companies specifically prohibited job discrimination against transgender employees.  In 2008, I am proud to say that Hill & Knowlton has joined this forward-thinking minority of companies by including gender identity in its current EEO policy. 

Some companies, like Goldman Sachs, go a step further by adding health-insurance coverage of sex reassignment surgery, which can cost an individual anywhere from $5,000 to $150,000 if they paid out of pocket, depending on their particular situation.  That figure doesn’t include hormone and other drug treatments. The company says it made the change as part of a push last year to attract top talent and recruit and retain a more diverse workforce.

Some U.S. states are also filling the federal void by passing their own laws protecting LGBT employees.  Currently, 13 states and the District of Columbia have policies prohibiting both sexual orientation and gender identity discrimination in employment: California, Colorado, Connecticut, Iowa, Illinois, Maine, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington.  New York is one of seven other states that protect against sexual orientation only.

Protection for LGBT employees aims to the heart of fairness and equality that the U.S. espouses for its citizens.  It’s also a hallmark of good business practice to recruit and retain the best available talent in the global market without regard for characteristics that do not impact job performance.  LGBT employees deserve the right to work and be rewarded for their professional achievements without regard to their personal characteristics or situations.  And straight women and men should not be forced to adhere to outdated sex stereotypes for fear of workplace discrimination.  The business world, like the natural world, thrives on diversity, even if our society is often uncomfortable with it.

Transgender Protection in the Workplace – PART ONE

posted by Boyd Neil

by Michelle Tsai, senior account supervisor for the corporate group in the New York office. 

This is the first of a two-part post on equal protection for transgender employees in the workplace.

When I started my communications career in the early 1990s at the Texas Department of Transportation as a public information officer, my boss told me there was an unwritten rule that women were discouraged from wearing pants in the office, by fiat of the district engineer.  But, she said, things were better than when she started her career in the 1970s, when women who flouted this rule were actually sent home to change! 

We’ve come a long way indeed.

Interestingly, this example of our shifting attitudes toward sex stereotypes (i.e. that women wear skirts and men wear pants) has become a factor again with regard to non-gender conformist individuals increasingly present in the workplace.  This group includes transgender men and women, people who are transitioning or have already transitioned to a different sex than they were assigned at birth; and intersex individuals, those born with genetic anomalies that can cause impaired development of secondary sex characteristics.  But this group also includes individuals who simply are more comfortable with challenging traditional sex stereotypes, such as men with long hair, or women who don’t wear makeup.

In order to fully understand the issue, it’s important to make a distinction between three separate concepts: gender identity, gender expression, and sexual orientation.  Gender identity is your own internal feelings of being male, female, both or neither.  Gender expression is how you present yourself externally to the world, whether masculine, feminine or androgynous.  Sexual orientation is your preference for a partner based on your physical, emotional and spiritual connection to the gender qualities of another person, and is usually described as being gay, lesbian or bisexual.

Public attitudes and legal protection of transgender employees varies widely throughout the world, with Canada and Europe generally more liberal and the Middle East generally more conservative.  Currently, there is no federal law in the United States that explicitly prohibits discrimination against lesbian, gay, bisexual, and transgender (LGBT) people. Title VII of the Civil Rights Act of 1964 outlaws hiring or employment discrimination on the basis of the employee’s “race, color, religion, sex, or national origin,” but does not mention sexual orientation, much less gender identity.

Early court decisions held that transgender people were not entitled to protection from employment discrimination under Title VII. More recently, however, a new line of cases, based on intervening U.S. Supreme Court decisions, may provide protection for LGBT people in some situations. 

In my next post, we’ll look at one landmark Supreme Court case almost 20 years ago that continues to impact gender identity law today, and take a look at the progress we’ve made in establishing equal rights for LGBT employees in the workplace.

 

From Earth Day to Earth Week to Sustainable Environmental Practices

posted by Boyd Neil

By Liz Purchia is an account executive in H&K’s public affairs group in Washington D.C.

Last Tuesday was Earth Day and for many organizations, Hill & Knowlton included, it turned into Earth Week. 

Everywhere you looked from clothing stores to TV stations to global corporations, people were championing the environment, offering environmental tips and discounts on eco-friendly products. In our Washington, D.C. office Hill & Knowlton handed out free reusable water bottles and tote bags to every employee to cut back on the amount of waste we produce.

I found myself logging on to various Web sites, signing up for petitions and learning tools that I can use to curb my environmentally harmful habits.

Sustaining Environmental Energy

I work on a lot of energy and environmental issues for clients in D.C. and what I’m wondering is now that Earth Day is over, what’s going to happen? Has everyone done their part for the year?

Recently, President Bush outlined the administration’s goal to reduce greenhouse gas emissions by 2025.  As Sen. Barbara Boxer (D-CA) chair of the Senate Environment and Public Works Committee said, “We can’t wait until 2025 to deal with greenhouse gas emissions (GHG). That is too late, that is dangerously late, that is doing nothing.

The Warner-Lieberman bill, scheduled for debate in the Senate calls for halting growth in GHG emissions starting in 2012, 13 years earlier than the president proposes.

All three presidential candidates, Sens. McCain (R-AZ), Clinton (D-NY), and Obama (D-IL) support mandatory limits on GHG and are advocating a much more aggressive climate change platform. But with the election year, there’s very little chance that much will get done in terms of environmental policy.

Everyone’s looking to see what others are doing to support the environment and to reduce their environmental impacts. Before hiring us, some potential clients are even looking to see what Hill & Knowlton is doing as a company to address climate change.

Environmental Sustainability as Business Opportunity

In February, I was on a Hill & Knowlton exchange program in Brussels where we were the exclusive PR partner for the European Business Summit. The focus of this year’s event was “Greening the Economy,” underlining that the environment can become a business opportunity.

The U.S. can take a few notes from European businesses, which have incorporated environmental plans into their business models for many years. We can support our economy through green practices. What’s good for the environment can and should be good for business.

I recently read a New York Times article, “Millions of Jobs of a Different Collar” in which Jerome Ringo, president of the Apollo Alliance predicted that the U.S. could generate between three million to five million more green jobs over the next 10 years. Van Jones of Green for All is quoted in the article as saying that green jobs “cannot be easily outsourced…If we are going to weatherize buildings, they have to be weatherized here…If you put up solar panels, you can’t ship a building to Asia and have them put the solar panels on and ship it back. These jobs have to be done in the United States.”

As clients come to us to help shape their business and communications plans, inserting environmental practices will be beneficial to their business, their potential business and employees.

The market needs companies to adopt environmental practices. It may just be monitoring data center usage, improving energy efficient technologies or turning off the lights on weekends, but making a commitment to the environment means making a commitment to sound sustainable business practices.

The Greening of the Super Bowl – Important Step or Not Enough?

posted by Boyd Neil

By Lena Davie, Vice President, Hill & Knowlton Tampa

If you are like me, you were glued to the tube on Super Bowl a few Sundays ago. Whether or not you had a personal stake in the game, you watched with interest to see whether Eli would triumph over Tom or if the 1972 Miami Dolphins would have to relinquish their perfect season crown to the Patriots. And perhaps (again, if you are like me) you watched the commercials with even more interest to see who would pull out all the stops and whose ad would be a bust in USA Today’s ad meter the next day.

But what was perhaps even more interesting was what happened before and after the game, what most of the 90 million plus viewers were not privy to, and that is the greening of the game.

I was surprised to learn that over 150,000 people travel to the Super Bowl host city for the big game each year. And that an estimated 500 tons of greenhouse gas emissions result from local travel and events associated with the big day.

2008 marks the 15th year that the National Football League (NFL) has linked green “activities” to its festivities to offset some of these emissions and the second year it has taken great pains to host a “carbon neutral” event.

Specifically this year the NFL:

  • Powered their NFL Experience and the stadium completely by solar, wind and geo-thermal energy sources
  • Bought certificates through the Salt River Project to offset the amount of carbon generated through other electricity use
  • Planted thousands of trees to help offset greenhouse gas emissions. These trees helped reforest more than 84 acres of land devastated by fires. The NFL also hired tribal forestry crews, employing people who need jobs, to help do the work
  • Worked with local waste management officials to control the recycling of the trash from the game and events surrounding it
  • Used hybrid and flex-fuel vehicles as a substantial portion of their official staff cars
  • Partnered with Expedia and TerraPass to offset the travel of the two teams and their staff

But is it enough?

Depends on who you ask.

The NFL seems to be taking its responsibility quite seriously. It even has a director of environment, Jack Grohl, whom I heard speak at a Recycle Florida Today conference last June.  I believe he genuinely wants to help the NFL help the environment and has dedicated the last 15 years doing so. And while he acknowledges that more can always done, efforts such as those taken this year in Arizona are a giant step in the right direction.

Naysayers will point to all of the places where energy leakage occurs as a result of the big game. This includes everything from the energy used when millions of American homes tune in, to the 400 plus chartered jets that ferried high-end travelers to and from Phoenix for the big game.

Grohl says that responsibility for preserving the environment lies with all of us and with all involved industries. It is not up to the NFL, for example, to convince airlines to use paperless ticketing, to require fans to carpool, to require FOX to air PSAs that talk about environmental protection or to persuade average Americas to recycle for that matter. Personal accountability can and should always play a role but I for one am thrilled to see the NFL taking such great pains to do its part.

Now that that is said and done, what did everyone think about the ads?

The Intersection of Privacy and Public Relations

posted by Boyd Neil

(By Emily Crane, a senior account executive in Hill & Knowlton’s Washington, D.C. office)

Traditionally, corporate responsibility refers to the various ways a company protects its stakeholders’ best interests. When consumers and stakeholders consider CR, they often think about the environment, a company’s spirit of volunteerism and how that company gives back to its community. An overlooked aspect of corporate responsibility is privacy. With reports of information leaks, lost laptops and hacked credit card files coming to light almost daily, it is evident that companies must be as responsible for protecting the personal information of their consumers, employees and stakeholders as they are for making sure they are energy efficient.
 
This post is not about privacy and information security policies and procedures. On a day-to-day basis, I see most corporations striving to put top-notch security and privacy practices in place. No corporation wants to damage its reputation and end up under a microscope. You can learn more about various thought leaders in privacy and their practices by visiting the International Association of Privacy Professionals.
 
But there are some interesting questions about privacy that public relations professionals should start thinking about. Should we be recommending to our clients that they consider positioning themselves as thought leaders in privacy? By doing so, however, would they open themselves up to greater scrutiny and legal vulnerability? How do companies determine if they should be ambassadors of their privacy and information security practices? While companies want to protect employee, customer and business information, does going out in-front of the crowd and talking about those policies and procedures open them up to greater liability if something should go wrong in the future?  And is there an obligation to share and promote best practices in the area of privacy and information protection?
 
I can see it from both points of view. From a legal standpoint, I understand how companies would be concerned that discussing their policies might make them vulnerable legally. What if a company’s talk on privacy procedures leads consumers to assume their information is “guaranteed” to be protected? But, I believe companies who strive to be responsible owe their stakeholders a better explanation then “they don’t want to talk about it.” I’m not saying companies should throw all legal concerns to the wind when talking about information security, but I do believe that corporate responsibility does not end with doing well.
 
It is just as important that a company is responsible with its information policies as it is that the company makes sure people know how responsible it is. That type of thought leadership drives improvements, innovation and the conversation around privacy and information security. I think we need to give more credit to consumers and employees—and assume they understand the difference between talking about precautionary measures and legal obligation.

Is Green the New Black?

posted by Boyd Neil

(Kelly Newton is a vice president with Hill & Knowlton.  She is based in Washington, D.C. and represents a variety of clients in the technology, consumer and government sectors.)

In the past year we have witnessed a sea change in how business views the environment.  Not only are companies instituting significant changes to their own business, but leading companies are driving change among customers and their businesses as well.

At Fortune’s inaugural iMeme conference in San Francisco in August, HP CEO Mark Hurd offered one of the boldest perspectives on the role of the IT industry in driving environmental change, “Environmental responsibility is good business. We’ve reached the tipping point where the price and performance of IT are no longer compromised by being green, but are now enhanced by it.”  (In the interest of full disclosure, Hill & Knowlton is the global agency of record for HP.)

Hurd’s view was supported in a New York Times op-ed in September, when Thomas Friedman stated, “Green is not just right for the world, it is better, more profitable, more healthy, more innovative, more efficient, more successful.”

Joel Makower, a recognized thought leader on sustainability, recently challenged public relations professionals to take the lead on driving business to fight climate change by leveraging the media to communicate real impact on the environment.  In his blog posting, he asked some tough questions:
 
“Will you steer your clients beyond short-term media hits to create longer-term value by counseling them to aim high, to make bold, audacious commitments in order to stand out from the crowd? Or will you focus on short-term results, creating flash-in-the-pan media moments that celebrate incremental change in lieu of substantive environmental progress?”

This is a challenge many of us face each day, and it ties back to the age old conundrum – how do we prove the value of public relations for long-term business success? 

GE’s Ecomagination initiative is arguably the best recent example of effectively communicating the business case for environmental thought leadership.  Yes, GE talked about improving its own environmental impact by reducing energy use, recycling more, and limiting harmful chemicals in products.  But GE went a step further.  They pushed the envelope and changed the way businesses view environmental leadership today.  GE created a market for products to help improve the environmental impact of its customers.  As a result of developing these new products and providing them to customers, the program has produced $12 billion in revenue, with an additional $50 billion expected from pending orders and commitments, since it launched in 2005. 

Granted, not all of our clients have the global reach and financial resources of GE, but I believe we must approach communications around environmental leadership in much the same way that we would approach any other emerging business topic.  Here are a few tips:

  • Transparency is critical: A company must be willing to report its success and admit its failure.
  • Honesty is the best policy: Reporters and consumers are cynical and they demand facts and figures that prove a company’s claims.
  • Leverage experts: Third party thought leaders add credibility.

In the past, clients turned to PR for help in dealing with environmental challenges such as strict legislation and regulation, attacks from radical environmentalists, and hazardous chemical spills.  But today, we are more likely to be engaged to help tell the positive stories about what businesses are doing to “go green.”  It’s impossible to say if all of our hard work will lead to a cleaner, healthier environment, but I am confident this is not simply a trend.  Business strategies have evolved to incorporate environmental leadership, and the PR industry is helping to drive this change.