California Invites More Corporate Board Diversity

As the nation's largest public pension fund, with over $224 billion in assets, the California Public Employees' Retirement System (CalPERS) recognized two years ago the need for more diversity on corporate boards.  Today, CalPERS announced that it was taking the next step in the inclusion journey by inviting applicants to submit their information to the Diverse Director DataSource .

Ostensibly, the registry will be a resource for institutional investors, public companies and others who want to tap into the reservoir of diverse talent for corporate directors.  According to one key observer, "investors looking for ways to increase corporate value will find such voices in the corporate boardroom indispensable to boosting the bottom line."

As a director, lawyer, and longtime observer of board practices, I hope more jurisdictions follow the California lead. A broader set of experiences and perspectives, typically brought by diverse directors, should allow corporations to become more sensitive to consumer concerns in a down economy, while not sacrificing the duty to improve shareholder value.

Ikea's $62 M Pledge for African Relief is Leadership In Deed

When Ikea announced its foundation would send $62 million to help the victims of the Kenyan famine, the world's largest furniture chain reached another milestone. Ikea's pledge is the largest private donation to go to a UN relief agency in the agency's 60-year history.  At a time when national governments and transnational corporations seem impervious to the suffering in that region, Ikea's business leadership speaks volumes through its deeds. Critics have taken on the Swedish company over labor and supplier matters. But if Ikea's commitment to salve the human condition is any indication of its character as a company, the other issues should be easily solved.

More Than Money

In a curious piece in the New York Times, Andrew Ross Sorkin questioned why there was no public record of Apple founder Steve Jobs' philanthropy.  Despite a net worth in the billions, Jobs and his wife appear to leave no trace of charitable giving to any organization. They do not belong to the exclusive "Giving Pledge" group led by billionaires Warren Buffett and Bill Gates, and a whispering campaign is now audible about Jobs' commitment to philanthropy.

I'm sure the opinions of other billionaires and the media are far from Steve Jobs' psyche these days as he battles for his life and continues to fret over his company's fate from the chairman's office.  Whatever money Mr. Jobs chose to give (or not) to worthy causes is a personal matter between him and the good Lord. If he never gave a dime to a down-on-his-luck panhandler on the corner, Jobs could still rest easy for all the good he has caused in this world through his works.

We should keep in mind that several of the fabled 20th century robber-barons and industrialists cleansed their hands and souls by establishing huge endowments to aid the public good. Today their foundations carry on their legacies by doing good throughout the land in their names.  Steve Jobs may end up bequeathing a well-funded foundation or something of the sort, which would cast him into posterity.  On the other hand, he may very well  let his marvelous products, and the joy they bring to hundreds of millions of people, quietly extol his virtue.  

Netflix Just for Kids

Recent news by Netflix that it will launch a "just for kids" tab on its online offerings is cool, but wrought with landmines.  The company must be careful to safeguard the data and privacy of its underage users.  It should proceed step-by-step with self-regulatory privacy enforcement, and shore up its data security mechanisms.  If Netflix can perfect this model, it could be come a strong competitor in the online children's content space.  Stay tuned.

Save the Children

Children under the age of 13 are inherently vulnerable to marketing messages.  That is the rationale behind the Children's Online Privacy Protection Act (COPPA), which  requires, among other things, that online marketers get parental consent before engaging these young consumers.

When the FTC found out that a company was using a mobile app to collect the data of thousands of kids, and did not notify their parents, it filed a case and compelled the company to stop the practice and pay a fine. That was the right thing to do.  Although the choice of communications platforms have expanded, the basic principles remain the same.  Children are a special and protected category, and responsible marketers should go the extra mile to take care of them, even as they employ new and cool ways to connect.

Day-to-Day Leadership

"Any idiot can face a crisis.  It's day-to-day living that wears you out," Anton Chekhov, the noted Russian physician and playwright once said.  

So it seems with the state of business in America these days.  We move from one crisis to another, each coming much too quickly in succession.  For the most part, though, leaders rise to the occasion, as evidenced by the debt ceiling debate (debacle), the Standard & Poor's downgrading, and the chronic and continued joblessness.

What our business and political leaders have significantly less success addressing, however, is the day-to-day drudgery that saddles most Americans.  Making the ends meet is a constant and consistent challenge for the average family. Whether it is paying the mortgage, coming up with college tuition, or handling higher gas prices, the day-to-day living is wearing the public out. 

Now that business leaders, especially the big guys, know these things, we all must wonder what they can do on a day-to-day basis to help their employees, staffs, small business partners, vendors and suppliers weather the daily storm.

(c) 2011 Adonis E. Hoffman

Corporate Integrity and Transparency

"It's Not the Crime; It's the Cover-Up."

So goes the adage decrying the tendency by wrongdoers to deny, deceive and deflect the truth when things go awry.

The re-emergence of integrity as a watchword in the realm of corporate affairs is long overdue.  As consumers, government and media uncover the deeds of a few corporate miscreants, the case gets stronger for greater transparency in the business and financial practices of (especially big) corporations.

While all of us should bristle at the notion of intrusive government, there is something to be said for better oversight and control when it comes to business.  In lieu of that, companies should just take it upon themselves to be more transparent.

Innovation as Leadership

"Innovation distinguishes between a leader and a follower. To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of discipline." 

This advice from Steve Jobs provides a key insight into the philosophy that drives a company like Apple. 

Apple's innovation in consumer technology has outpaced almost every other competitor in the marketplace. Remarkably, Apple's leadership has been accomplished by sheer performance. It is not known for its philanthropy, or for its political influence, or for its corporate sponsorships. Apple's solid reputation as a good corporate citizen emanates from  its ability to deliver what consumers want, even before they know it.

This form of social leadership through innovation seems to be a model that new technology companies are most comfortable in following.  The challenge for other companies, however, will be to remain as innovative as Apple in the long run.  Otherwise, they should be prepared to bolster their leadership through more recognized avenues of corporate citizenship.

Leadership by Legerdemain

What happens when a leading company is found to be a cheater?  Does it shake the confidence of investors, employees, partners and customers?  Will it suffer legal consequences?  Will it lose market share or go under altogether?

I do not know the answer to these questions, but I am sure that Rupert Murdoch and his team of advisors are pondering these and more.  The success of Mr. Murdoch's media empire is virtually unrivaled, bur rumors of foul play--or at least hard checking-- have been whispered for years by those in the know.  

If the allegations in England hold true, and the transgressions there were done in the U.S.too, then the much-heralded Murdoch leadership legacy may be overshadowed by a few sleight of hand shortcuts that were completely unnecessary to beat the competition.

Value and Values

The late senator from California, Alan Cranston, once remarked: "Unless you have a sense of values that's shared by people and turns them loose to do certain things on their own within those sets of values, the organization, whether a nation or citizen or group, just doesn't work very well."   Average customers today are looking for value, but they also are looking for values from companies they patronize.  One of the challenges for business leaders is to marry these two offerings.  Those who succeed develop loyal and enduring customers who come to see the organization as something more than a purveyor of goods or services.