Global Institute for Tomorrow
This week in Hong Kong, I was fortunate to meet Chandran Nair, Chairman of Global Institute For Tomorrow, a Hong Kong based think tank. Nair's goals are broad, weighing the role of business in society, governance and ethics, and leadership development from an Asian point of view.
The Asian perspective of his organization is critical to his mission. While Asia has 75% of the world's poverty, there are no effective institutions for ensuring the wealth of the commons, such as clean oceans and air. While companies give lip service to corporate social responsibility programs, the problems are much deeper than a company's public relations exercise. Companies exist to create prosperity. Society in turn decides what limits to impose on how companies behave and thus we have laws to protect the common good. Most of Asia has reached the stage where good laws are in place, but poor enforcement exists for those laws. Much of that has its roots in corruption and weak institutions, and poor governance perpetuates poverty.
Corporate social responsibility programs are useless in Asia, until basic fundamentals are met, such as obedience to local laws, avoidance of exploitative practices, and complete transparency.
I found his comments to be a strong change from the utopian feeling in Silicon Valley that the knowledge commons is as important as the ocean -- the ability to preserve each hinges on the preservation of the other. Nair thinks it's ludicrous that someone should have mobile phones but no toilets, as is common in parts of Asia. The Valley places an idealistic emphasis on access to information as an escape from poverty, but until basic needs are met, access to information brings only futility. Upon reflection, it's much easier to get a mobile than a sewer system -- all it takes is a corporation, not good government.
The problems are not a lack of capital. For example, Nair believes that basic education for all can be obtained $6b, and the US spends $8b on cosmetics but the problems are not really financial -- they're governance. (No, unfortunately he didn't give a resource for that remarkable statistic.)
In Asia, it's easy to see corporations destroying communities in pursuit of economic expansion. The sense of urgent market opportunity, combined with the fact that professionals are disconnected from the world and feel the problem is too big for me to make a difference, leads to a lack of accountability. The education system in Asia (and who am I kidding -- the rest of the world, too) pushes technical skills and breeds arrogance. Social responsibility and ethics have not been successfully integrated into a curriculum of business and market leadership.
It's particularly painful when the problem is so clear, and the bar is so low. Many corporations operate in grey areas where it's difficult to get caught abusing the community for economic gain. This can happen in areas as diverse as polluting, violating worker safety regulations, or evading tax under the name of transfer pricing.
Before organizations in developing nations get on the corporate social responsibility bandwagon, an earlier mark must be met. In Nair's words, "This is what we do as a business, how we do it, and this is where we meet every law of the land every day and everywhere we operate. And where we do not, this is what we are doing to improve our performance. And where we do not agree with certain laws, here is where we're lobbying to change them or working with regulators and civil society to find a happy medium. It's okay for companies to say that they're lobbying against a law. If it is a legal effort, then be open about it."
As Asia leapfrogs over so many technological and economic developments, it's critical that they don't skip regulatory compliance and accountability on their way to corporate social responsibility, or the gains will be hollow.
"Competition need not be the death of humility."