Tuesday, May 4, 2010

Age of Corporate Transparency is Here

Age of Corporate Transparency: HBR Cover Article

Corporate transparency is here to stay. At our recent conference, chairman and founder of Seventh Generation, Jeffrey Hollender, spoke about the importance of radical corporate transparency (such as publicly detailing more product information than competitor's products).

The April article in the the Harvard Business Review is "Leadership in the Age of Transparency" and is a must read for senior executives. Highlights include:
- Companies are increasingly responding proactively to external risks of their actions before being regulated (e.g. Kraft changed its use of trans fat before regulatory changes)
- Greater accountability for corporations and senior management is unavoidable
- Proliferation of information continues. For example, scorecard.org provides a list of polluters by zip code and a list of company owners of top polluting sites. This information was not easily unavailable ten years ago
- Stakeholders regard a company as responsible when it measures and manages its negative impact on society
- The worse of all worlds is to be made responsible (through regulations, fines, etc.), but to still not be considered responsible
- Most corporate efforts are an incoherent jumble of activities under banners of corporate social responsibility, sustainability, give-back and philanthropy

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