Lessons from Bank of America

Widely honored for its corporate philanthropy and community involvement, Bank of America suffered a reputational setback when it admitted to the Justice Department that it had engaged in a conspiracy to rig bids in the municipal bond derivatives market. Story here.

To its credit, the Bank stepped forth willingly to report its misconduct and was granted leniency as part of the Justice Department's Antitrust Corporate Leniency Program. Nevertheless, Bank of America must pay $137 million in restitution.

Going forward, it helps the Bank that several employees were convicted of wrongdoing, and the abuse was not widespread. Nevertheless, this case points up the importance of strong financial controls and accountability--even for the most responsible corporate citizens. It also points out the importance of immediate remedial action by a corporation, once it discovers bad behavior.

(c) 2010 Adonis Hoffman

Hooray for Huggies

It has been a long time since my two kids were in diapers, so I do not pay attention to anything remotely related to babies' bottoms. Thus, although it is not a new story, I was surprised and impressed to learn that Huggies has a national campaign which donates diapers to needy families. The background is here.

Huggies, of course, is a well-known brand of disposable diapers made by Kimberley-Clark. The arrangement seems to be simple and straightforward: for every diaper purchased by consumers, Huggies will donate a diaper to a designated diaper bank in the U.S. Needy families can go to a diaper bank and receive ample supplies of clean, new, disposable diapers.

Why is this so good?

Apparently one in three moms in America cannot afford to buy enough diapers for their children. Most daycare centers require a full day's supply of clean diapers. If a family cannot provide the required complement of diapers, the child cannot attend daycare. Beyond that, a recent study found that many needy moms throughout America are washing and re-using disposable diapers because they cannot afford fresh ones. Yes, in America, this simple convenience escapes many in need.

Huggies campaign to meet this need by allowing customers to contribute and participate suggests a level of corporate responsibility not manifest in many organizations. The company saw a need, and designed an innovative, simple solution that goes a long way to solving the problem.

To be sure, the cynics among us will point out that Huggies is in the business of selling diapers, and the more goodwill they develop through this campaign will help them sell more diapers. Well, yeah. In a capitalist, free-market economy, the first order of business is to profit. If a company can master that feat, it can turn its attention to helping society by combining its core business with a good cause.

It seems the folks at Kimberley Clark and Huggies have mastered this balance. They have done well and are doing good. Hooray for Huggies.

(c) 2010