Category Archives: Corporate Responsibility

That’s one for you and 171 for me

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The wretchedly poor are far more likely than the stupendously wealthy to publicly disclose their incomes. After all, the former needn’t ever worry about being kidnapped for a ransom of mac and cheese.

So, we must turn to the Canadian Center for Policy Alternatives (CCPA) to learn that the rich are, indeed, getting richer faster than everybody else in the country.

According to a folio entitled All in a Day’s Work? released last week, the annual compensation packages of Canada’s 100 highest-paid CEOs included, on average, a base salary of $1 million, cash bonuses amounting to $1.73 million, corporate shares and stock options worth $3.93 million, and miscellaneous perks and pensions valued at $1.29 million for a grand total of $7.95 million, giver or take a grand or two.

If anyone is counting, that amounts to 171 times more than the average Canadian wage, which tops up at about $47,000 a year. And, it gets worse (unless, of course, you’re rich, in which case it’s getting better all the time).

“The average wage in Canada increased by 6 per cent between 1998 and 2012 while the average compensation of Canada’s highest-paid CEOs increased by 73 per cent during that same time period (inflation-adjusted),” author Hugh Mackenzie writes. “Reality was harsher for Canada’s minimum-wage workers: If they were lucky enough to have a full-time, 40-hour a week job, minimum-wage workers earned, on average, $20,989 in 2012.”

In fact, another source, the AFL-CIO, says the wage cap in industrialized countries – including Canada – is wider and accelerating faster than even these numbers indicate. In the United States a top CEO, earning an average of $12.2 million annually makes 354 times what a wage-earning stiff pockets in a year. In Canada, the ratio is 205:1. In Germany, it’s 147:1. In England, it’s a downright egalitarian 84:1. “In the past few decades, CEO pay has skyrocketed while the average worker’s pay has stagnated despite increases in productivity,” the union’s website observes.

Of course, the purpose of these timely revelations is not a little political. Neither the CCPA nor the AFL-CIO are especially fond of corporate fat cats. To be sure, the CCPA can’t resist thundering its disapproval: “Five ears after a global recession knocked the wind out of Canada’s labour market, throwing tens of thousands of workers onto the unemployment line and sidelining a generation of young workers, the compensation of Canada’s CEO elite continues to sail along.”

But if such criticisms are expected from the usual assortment of fellow travelers outside the gates and beyond the moat, less predictable is the chorus against excessive compensation rising within the castle keep, itself.

Here’s what McGill University professor of management Henry Mintzberg had to say in a piece he penned for the Wall Street Journal in 2009:

“These days, it seems, there is no shortage of recommendations for fixing the way bonuses are paid to executives at big public companies. Well, I have my own recommendation: Scrap the whole thing. Don’t pay any bonuses. Nothing.”

As Dr. Mintzberg concludes, “Too many large corporations today are starved for leadership – true leadership, meaning engaged leadership embedded in concerned management. And the global economy desperately needs renewed enterprise, embedded in the belief that companies are communities. Getting rid of executive bonuses, and the gambling games that accompany them, is the place to start.”

The larger point is that, ever since much of the world’s financial sector collapsed under the weight of an adept minority’s avarice, fairness and equity (or least some semblance of these scarce resources) have become centerpieces of economic development and job creation among the abused and disaffected majority.

That’s why obscenely high pay packets for CEOs, such as Canadian Pacific’s E. Hunter Harrison who earns a staggering $49.1 million a year, affects public opinion (and perhaps even public policy) more directly today than ever before.

Will it be enough to imbue the system with a little sanity? “Despite the scrutiny and pressure,” Mr. Hugh Mackenzie writes, “the pay of CEOs in Canada and elsewhere has proven to be remarkably resilient.”

All of which suggests a reason other than fear of kidnapping why Canada’s stupendously wealthy are loath to discuss their loot in public: Lest they die of embarrassment.

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“Common ground” initiative makes common sense

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Proof, perhaps, that the best ideas on just about everything originate far from the cocoons and cloisters of governments and corporations, the Atlantica Centre for Energy, based in Saint John, is injecting a long-overdue dose of sanity into New Brunswick’s shale gas debate.

In fact, the outline of its scheme, called “common ground”, to encourage “dialogue” among opponents and supporters of onshore petroleum development in the province – particularly, on the hot-button issue of hydraulic fracturing – makes so much sense, I’m puzzled – even a little annoyed – I didn’t think of it, myself.

The approach is simple enough.

We know that many rational people here are deeply worried about the effects on potable water and soil of large-scale fracking operations, and that, given the industry’s track record over the decades in other parts of North America, they have good reason.

We also know that exploration companies in New Brunswick insist that their technologies and practices have substantially improved, in recent years, and that provincial regulations governing their activities are among the strictest in the world.

Furthermore, we know that the debate has been hung up on competing definitions of what is actually knowable – a sort of epistemological hornet’s nest of a priori and a posteriori suppositions – about an industry that has not yet determined whether there is enough recoverable resource to justify commercial enterprise.

So, the Atlantica Centre reasonably argues, why not create an online podium for both sides – unedited, unfiltered, utterly transparent? Why not build a series of videos that present the divergent opinions, for and against, post them to its website and invite public reaction?

Or, as the group’s president, John Herron, told the Telegraph-Journal on Monday, “My view is that in the old days industry used to come to town and say, ‘I promise you jobs and growth – love me.’ That doesn’t work anymore. You can’t address an environmental concern or a health concern with an economic response.”

In fact, he added, “The minimum we owe each other is a dialogue, and if there is a process that people feel they can participate in, if there is a safe place where those different perspectives can be exchanged, I think we can identify points of agreements on many aspects that we are currently not. . .Consultation and engagement really has to be an ongoing, progressive process. It can’t be an event or even a series of events, and if there isn’t a process in place that people have confidence in, it’s not by accident that the default response in many cases becomes protest.”

Naturally, the key is creating that “safe place”. To this end, the Centre appears to have given serious thought to the breadth of representation that’s necessary to legitimize its venture. The first video, according to the T-J, incorporates commentary from “Cyril Polchies from the Elsipogtog First Nation; Jim Emberger, a Taymouth resident who is part of an alliance of New Brunswick community groups against the development of shale gas; Green Party Leader David Coon; NDP Leader Dominic Cardy; Stephanie Merrill of the Conservation Council of New Brunswick; Barbara Pike, executive director of the Maritimes Energy Association; and Donald Savoie, the Canada Research Chair in Public Policy and Administration at l’Université de Moncton.”

Of course, none of this will fully immunize Mr. Herron and his association from criticism. The Atlantica Centre’s membership roll is a who’s who of business interests in the province. It includes Canaport LNG, Deloitte, Emera, Ernst & Young, Fundy Engineering, IPR-GDF SUEZ North America, Irving Oil Ltd., J.D. Irving Ltd., Maritimes Northeast Pipeline, NB Power, PricewaterhouseCoopers, and Stantec. It also includes the two heaviest of hitters in the province’s shale gas game: Corridor Resources and Southwestern Energy.

But, these affiliations, alone, should not automatically dilute public confidence in the authenticity of the Centre’s project. Industry has known, for some time, that it can’t merely brush aside principled opposition. Until now, though, it hasn’t had the faintest clue about how to communicate its points to the broader public.

Letting its critics have their say, without ginning up the traditional spin machine, is a fresh idea whose time has finally come round.

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Je me souviens. . .the late, great jobs swindle

St. Paul's wasn't built in a day; the jobs were crap!

St. Paul’s wasn’t built in a day; the jobs were crap!

Few jobs are uniformly good. But some are unrelentingly awful, and you remember them as you would a bully’s fist.

I remember the wretched May of 1981 when, at the untempered age of 20, I sold encyclopedias door-to-door in poor trailer parks that ringed the outskirts of Dartmouth, Nova Scotia. I remember the unemployed residents, drunk and foul in their singlets. I remember the doorless freezers, rusting in gravel drives. I remember the feral dogs chained (if I were lucky) to iron bars driven into cracked and broken lawns.

I remember the infamous summer of 1982 when the only jobs recession-ravaged Halifax offered a young, university-bound father of an infant daughter were dish washer at a greasy spoon on the failing thoroughfare of Spring Garden Road and box boy at a woman’s garment store in a crumbling strip mall in the city’s dying west end.

I remember the middle-aged matrons who managed these establishments reeking of unrequited desire and cheap perfume. I remember the weekly pay packets, rattling with just enough loose change to pay for the bus rides home and 36 hours (again, if I were lucky) worth of groceries.

All of which flooded back to me the other week when, while researching a piece on youth employment in Canada and the United States, I happened upon an item penned in 2002 for my favorite parodic organ of news and opinion, The Onion.

“In a keynote address at the National Economic Summit, (former) President Bush issued a bold challenge to the nation’s business leaders Monday, calling on them to create 500,000 shitty jobs by next year,” the squib began. ‘So long as unemployment continues to rise, this recession will continue, as well,’ said Bush, speaking before nearly 400 of the nation’s top CEOs. ‘That is why I am turning to you to create thousands of new shit jobs. Whether it is a night-shift toilet-cleaning position at an airport or a fry-cook post. . .it’s up to you to help provide every hard-working American with a demeaning, go-nowhere job.’”

To be any good at all, satire demands verisimilitude, and this is good satire. More’s the pity; for in the intervening years, conditions have, if anything, worsened, especially for young people.

As the The Huffington Post reported earlier this year, “In 2000, the United States had the lowest non-employment rate for 25- to 34-year-olds among countries with large, wealthy economies. By 2011, America had one of the highest youth non-employment rates compared to its peers, according to a New York Times op-ed by David Leonhardt, the paper’s Washington bureau chief. . .As unemployment soared during the Great Recession, young people – with and without college degrees – were forced to compete with more experienced candidates suddenly out of a job for very few openings. The result: Nearly half of the nation’s unemployed are under the age of 34, according to a report last month from public policy organization Demos.”

Moreover, Huff Post declared, “It doesn’t seem like things will get better for America’s young people any time soon. Demos found that the U.S. economy will have to create more than 4 million jobs before young adults will be employed at levels similar to those before the recession. In addition, 16.1 percent of Americans ages 18 to 29 were out of work in April, according to Generation Opportunity, a nonpartisan youth advocacy group.”

And this doesn’t begin to touch the gathering “truly-bad-job” phenomenon, which Canadian writer and filmmaker Jim Munroe dissects to marvelous effect in his 2011  mockumentary, “Ghosts With Shit Jobs”. In it, he chronicles the daily, working lives of a band of young professionals as they struggle to survive a dystopian future following the economic collapse of the western world and the concurrent ascent of China.

His cast of characters, variously, assemble android babies for affluent Asians, operate as human “spammers” pushing corporate products and brands in the otherwise polite company of restaurants and call centers, and function as virtual-reality repairmen ridding cyberspace of plethora copyright infringements and expired slogans.

It’s damn funny stuff. It is, that is, until you realize the filmmaker is not kidding, and it’s no joke.

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A bitter lesson in corporate responsibility

Death in Dhaka...600 and counting

Death in Dhaka…600 and counting

Galen Weston’s remorse notwithstanding, it’s tempting to think the man who runs one of the largest retail organizations in Canada should have known how dangerous conditions were for the Bangladeshi garment workers who died when their building – where some of the Loblaw-owned Joe Fresh apparel was manufactured – caved in on them.

There was even a hint of self-recrimination in remarks he made separately to reporters and investors last week, as reported by CBC News and The Canadian Press. Referring to his company’s commitment to safety standards at the overseas facilities it contracts to produce its goods, the executive chairman said, “Nothing in (the) reports suggested a problem, but the scope of the audits does not cover structural integrity. . .I am deeply shaken by the event. . .Our thoughts and prayers. . .go out to those who were injured and to all of the families who have lost loved ones.”

More than 500 perished in the collapse outside the Bangladeshi capital of Dhaka last month. As many as 150 remain missing. The tragedy made headlines around the world. And, still, Mr. Weston wondered about “the deafening silence from other apparel retailers on this. . .I’m very troubled. . .Thirty companies were having goods manufactured, but only two have come forward to speak publicly.”

But whether or not he and his industry counterparts should have known about the perilous condition of the edifice (and if, by knowing, done something about it before the dreadful accident occurred) is lamentably moot. What matters is what they do now.

Other than remaining mute, they can exit the country altogether. According to an item in The Independent, “Executives at Disney were so concerned about labour conditions in Bangladesh that they ordered a halt to operations in the country, before the clothes-factory collapse. The decision to stop production of branded merchandise was taken in March and was prompted, in part, by the factory fire in Bangladesh in November last year that killed more than 120 workers.”

The news source quoted Bob Chapek, president of Disney Consumer Products: “We felt this was the most responsible way to manage the challenges associated with our supply chain.”

The third option is a version of staying the course, sadder but wiser. Reports suggest this will be Loblaw’s approach, with renewed vigilance. The company plans to enhance its facility audits, engage its own people directly in inspections and create a disaster relief fund for the victims and their families. “We have taken action to address the situation,” Mr. Weston said last week, according to CP. “(This includes) the announcement of a fund to provide relief. . .There is more we will do and we will make that public over the next few days.”

Crucially, the company will remain in Bangladesh because Mr. Weston and his senior executives believe the garment industry can be a “force for good” in the otherwise impoverished Third World. Under the circumstances, this is the most responsible course of action.

Globalization has changed the rules of the road for western corporations that avail themselves of cheap labour overseas. The vast and integrated nature of their supply chains demands that, if they choose to do business with poor countries such as Bangladesh (where, paradoxically, the apparel industry generates $20 billion a year), they are also obliged to assume a more direct role in overseeing manufacturing processes and infrastructure.

The disaster in Dhaka illustrates that globalization’s evolution is halting and still fraught with atavistic, hands-off ignorance of, or indifference to, working conditions around the world.

But it also stands as a wake-up call to rich retailers who can no longer afford, either morally or financially, to shirk their duties abroad. The Internet and near-ubiquitous mobile communications is seeing to that. So, increasingly, are consumers who, in virtue of the options they enjoy, can and do make mincemeat of a company’s most important asset: its brand.

Mr. Weston’s remorse is genuine. He might yet take some comfort in the fact that, in exercising his presidential choice, he is doing the right thing in Bangladesh.

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