Category Archive

Back now from my unannounced hiatus. Sorry. Its been an exciting time. Dan Farber invited me to blog on sustainability over at ZDNET and so I have been busy getting up to speed with that. Its a real kick to have the opportunity to blog on ZDNET - its tier one for the tech sector and maybe the best opportunity I’ll have to keep the sustainability debate fueled up at industry level.

This blog is not a standy though - still lots to talk about here and plenty of room to differentiate Stay tuned. Thanks for reading - lots more to come.

An interesting debate on transparency seems to have spontaneously broken out around the blogosphere. Frank Buytendijk wrote a thoughtful piece on the topic and although he sees significant upside for technology enabled transparency:

Transparency is a competitive weapon to differentiate from the competition in attracting capital, informing customers about the value proposition (not only price) and in cost efficiencies by driving down the transaction costs in the value chain. Empowering the knowledge workers leads to more organizational collaboration, everyone being on the same page (focus and alignment) and as a result more ambitious targets.

but he also worries that perfect information leading to perfect competition will destroy margins:

The conclusion is simple. Part of your profitability exist because of intransparency. Transparency can lead to margin erosion. Is that what you are looking for?

Nick Carr plied the same path and ended up concluding:

You have to wonder whether, as what was once opaque is made transparent, the bolder among us will lose the incentive to strike out for undiscovered territory. What’s the point when every secret becomes, in a real-time instant, common knowledge?

These ponderings I classify similarly to the famous quote in 1899 from the then Commissioner of the US Office of Patents who said:

Everything that can be invented has been invented. 

From the consumer perspective (and indeed for that matter from the pov of all stakeholders)such transparency can be only a good thing. With still 4 out of 6 billion on the planet excluded from meaningful participation in markets we have a long way to go and plenty of competitive space left before we reach this economic utopia of perfect competition, perfect information and no barriers to entry. But supposing we did reach it, I still think competition would thrive though the playing field of differentiation might focus more on dimensions of quality, trust, responsiveness and stakeholder assurance. Maybe then we will see the functioning of the perfect market place, a pure manifestation of economic theory.

A few snippits.

It was good to see such a determined reinforcement of the Millennium Development Goals. The thing about sustainability is its multi dimensional nature. You scratch a technical issue like climate change hard enough and a governance issue emerges. Al Gore and Bono therefore tried to reconcile the MDGs and climate change crisis. Soon, I suspect we will see the green tech euphoria begin to run up against the hard edge politics of trade policy. Al Gore made this point:

In an IT empowered outsourcing world it is unimaginable that the wealthy industrialised developed nations would enter into an agreement, that has no provisions to anticipate the moving of production facilities, that might, at the margins, face a brand new set of economics because of carbon constraints, into countries that do not have any carbon constraints.    

Maybe heresy to say but Bill Gate’s Creative Capitalism speech left me somewhat cold. There is nothing new here and great work has been underway for sometime to try to innovate new business models for the base of pyramid. Check out this report from the Harvard JFK School of Government CSR Initiative detailing some of the efforts in this area from across the ICT sector. These are all serious initiatives where companies are trying hard to kick start a real market for real profits rather than ‘recognition’ as a substitute.

Moving on, my favourite Davos question YouTube videos were from Jeff Jarvis of BuzzMachine.com and Bruce Sewell of Intel.

Though I enjoyed very much his prolific coverage, one Davos curiousity for me was Robert Scoble. Recently he wrote:

I don’t usually write about stuff that I don’t have first-hand knowledge of. I’m not in Kenya. The Kenya story, as awful as it is, really doesn’t impact the tech world that much……….

For me its kind of an inside out way of looking at things. It’s as if the world exists to serve technology and not vice versa. Surely all these gadgets, communications and software we hold court on can offer something to help in terms of improved communications, institutional development, education and economic development for countries like Kenya. Something? 

But Robert did say:

I’m hoping to expand my personal connections next week at the World Economic Forum where we’ll talk more about this, and other issues that don’t seem to — on the surface — affect the tech industry.

Well?

Davos really is the best place on earth to hold a beauty contest and what is more beautiful than sustainability? Every year for the past four, Corporate Knights and Innovest announce the global 100 most sustainable companies in the world at Davos and for the 2008 list tonight is the night. You can find the press release and the full list here.

The ratings agency Innovest carry out the research for this list and the methodology is clearly rigorous. The list represents category leaders in terms of Environment, Social and Governance (ESG) risk and opportunity management relative to peers out of universe of 1800 securities of MSCI World-listed companies.  What’s even more hair raising about it is the tremendous rate of churn each year and this year is no different with a churn of 30%. You can view the turnover lists here.

Interesting to see so many big names in the banking industry dropped including HSBC, Goldman Sachs, JP Morgan, ABN Amro. Out too is Henkel who produce one of the finest CSR reports in Germany if not Europe in terms of methodology. A notable deletion from the tech sector is Google.

Notable additions to the list include Honda, Nestle, Royal Bank of Scotland, Deutsche Post, L’Oreal, Rio Tinto, State Street and Societe Generale.

The IT & Telco sector breakout is as follows:

Nokia Corporation
Finland
Information Technology

Tietoenator OYJ
Finland
Information Technology

SAP AG
Germany
Information Technology

Ricoh Company Limited
Japan
Information Technology

Electrocomponents PLC
United Kingdom
Information Technology

Advanced Micro Devices
United States
Information Technology

Agilent Technologies Inc
United States
Information Technology

Hewlett-Packard Company
United States
Information Technology

Intel Corp.
United States
Information Technology

NTT Docomo Inc
Japan
Telecommunication Services

BT Group PLC
United Kingdom
Telecommunication Services

Cable & Wireless PLC
United Kingdom
Telecommunication Services

Of course, I’m really pleased to see SAP again in this list but know we will have to again work hard to stay within the G100 in 2009.

Meet Le Hien Duc, she is seventy seven years young and a retired school teacher and community activist living in Hanoi, Vietnam. Last night she was honoured in Berlin by Transparency International as one of two recipients of the annual Integrity Awards. Le Hien Duc is a grass roots organiser who, over her twenty five years of activism, has never been afraid to represent the interests of her community against the petty demands of public officials even in the face of numerous death threats. She has become something of a celebrity in her native Vietnam and today the local media regularly seek out her opinion and follow her doings in her work to resist corruption.

Also honoured last night was Mark Pieth, Chair of the OECD Working Group on Bribery in International Business Transactions and member of the Independent Inquiry Committee into the Iraq Oil-for-Food Programme scandal. Mark has been a tireless campaigner who has spoken out eloquenty and forcefully out when national government agencies have fallen short in their duty to fight corruption. 

The awards were presided over by TI’s Chair, Hugette Labelle at a GTZ hosted reception. In honouring these two individuals, TI have highlighted the necessary dual approach taken separately by these individuals, grass roots and top down reform, towards fighting corruption. I was invited to this event on account of SAP’s long time support of and participation in Transparency International private sector engagement programmes. It was great pleasure to be present as these individuals were hnoured by TI. The cause of transparency can all to quickly get policy wonkish and technical and so we need to hear the stories of people such as Le Hien Duc and Marke Pieth to understand the day to day reality of the problem and to gain inspiration to do something about it.

Incidentally, Mark Pieth and Hugette Labelle will share a panel session entitled ‘The Challenge of Endemic Corruption’ this week at Davos with SAP Deputy CEO, Leo Apotheker.  

This week I had the distinct honour to visit Nigeria and share a panel with the Minister for Finance, Shamsuddeen Usman at the Economist Roundtable with the Government of Nigeria. It was also a real pleasure to meet the SAP West Africa team who are running a thriving business led by Olayemi Keri out of the Abuja office.

These are exciting times for Nigeria and not only because of current high oil prices but because the rest of the economy at last seems to be on the move. This is critical if Nigeria is to escape the problems associated with the so called resource curse. Though there are significant constraints in the economy - namely security in the Delta region, infrastructure & education - still, Goldman Sachs estimates that Nigeria is currently on target to be within the global top 25 economies by 2020. Further, Goldman Sachs has identified Nigeria as the only sub sub Saharan Africa in its N11 list, the next eleven countries of high economic potential after BRIC markets. With this prediction Nigeria has the potential to quickly eclipse South Africa as the continents major economic force.

It surprises me that yet many of the experts don’t seem to get the structural changes that are taking place under our feet in the global economy. Jason Busch for example created quite a lively discussion with this blog post where he essentially writes off all prospects of economic development in Africa. BRIC and developing markets are not just a source of cheap supply of goods and services for western markets. I think the changes we are seeing with the rapid development in BRIC and N11 countries is more fundamental and we have to look beyond on our own western bias to understand them.  

Proctor & Gamble seem to have no such difficulty spotting the opportunities in Africa. Last month P&G announced a $3bn investment in manufacturing facilities in Nigeria to supply the West Africa region. Coca Cola has invested Naira 10bn in Nigeria between 2000 and 2007. Beyond consumer products, financial services and telecommunications sectors are also really taking off.

The stock market grew year on year by over 50% measured as of Q3 2007. Deregulation in the telco sector has also led to rapid development here. Teledensity increased from just 0.73% of the population connected in 2001 to 28% connected in 2007 with more than 1 million subscribers being added to the network each month. Nigeria’s total population is 140 million people. In 2006 Nigeria achieved it’s first sovereign credit rating from S&P & Fitch and foreign direct investment increased by 60% between 2004 and 2006.

China is flooding the place with development dollars and cheap goods. Interestingly as communists they don’t seem to have a political agenda, just hungry for markets. The Nigerians seem ambivalent, the local industrial sector has a hard time competing but the government does enjoy the political power having a more diverse and balanced portfolio of foreign investment.

GDP grew 6.5% in 2007 and per capita income is steadily rising to create the emergence of a middle class. Corruption is still pervasive but the anti corruption drive led by the Economic & Financial Crimes Commission has been politically popular and so the focus on this issue will remain. (I recommend a visit to the EFCC web site). On thiss issue and others the press is lively and open.

But I don’t want to be too effusive, there are real issues for investors in Nigeria. The government seems distracted by legal challenges to the recent general election results, crude oil production fell by 4.9% in 2007 due to the security situation in the Delta region, electricity production is woefully inadequate to demand. Worryingly, the EFCC chief was recently sent on ’study leave’ but this seems to be more of a local political issue than any serious signal that the government has gone soft on corruption. Poverty alleviation is a major challenge, with life expectancy of about 50 years, life remains tough. The domination of oil on the economy is a problem, it can lead to run away inflation, a temptation for fiscal indiscipine. For citizens, many of whom remain outside the tax net, the role of government becomes one of an ‘allocator’ and this leads to a stilted view of participatory democracy and government accountability.

On the panel I shared with the Finance Minister, he outlined his seven point plan including:

1. Power & Energy - development of the national infrastructure
2. Food Security and Agriculture - getting Nigeria production to commercial scale (Nigeria imports a lot of food)
3. Wealth Creation & Employment - particularly through economic diversification and development of the mineral and agricultural sector (oil and gas doesn’t generate much local employment)
4. Mass Transportation - necessary infrastructural development
5. Land Reform - to enable more commercially viable farms and boost production (BTW, ever wondered what happened the white Zimbabwean farmers dispossessed by Mugabe’s land reform? The Nigerian government, recognising their requisite skill, offered them land and a new start in Nigeria) 
6. Security - maintaining law and order, especially in the Delta
7. Qualitative and Functional Education - absolute poverty and illteracy is high

The government has gone sort of quiet recently as it gets back to basics of detailed planning after the administration change with the 2007 elections. The Finance Minister on the one hand was a little defensive about this saying something to the effect that people did not understand, media manipulation etc, but we would soon see more detail. On the other hand he was sincere in his view that the Finance Ministry in the past had wasted a great deal of money due to poor project conceptualisation, planning and execution. For example this week in the local newspapers he was reported to say that the previous administration had spent USD$10 billion on power infrastructure and had little to show for the efforts. He also spoke of similar examples of state funded efforts to ignite the local sugar industry.

On the corruption question he was forthright, he said (i) corruption often comes about through poor public project management, or at least there is a fine line between corruption and poorly negotiated & managed contracts and (ii) now that the government has spent many years cleaning up it’s own house he would also like to extend focus to the bribe payers. He said he would soon announce an initiative and invite the private sector to participate. I suspect this could be a new trend emerging where emerging markets somewhat jaded by poor performance on international indices such as the Transparency International Corruption Perception Index rightly are shifting more of the share of responsibility to the supply side of the bribery equation. The government last month, at the order of the President, suspended all business dealings with Siemens, pending investigations of allegations that Siemens bribed public officials. I suspect pressure will begin to mount on the international banking sector to take tougher measures to prevent the corrupt from moving embezzled funds off shore. Thus we could see some new angles of risk for GRC management as we know it.

The minister said he ‘liked’ my presentation on IT led innovation and how it can help public sector reform and development in a constrained economy like Nigeria. I think he recognises well the need for the government to deliver on the democracy dividend in Nigeria and he sees IT as key enabler to accelerating these changes. Compared to any western government ministry the level of dificulty of his job is exponentially more difficult. He seems dedicated to carrying out his work with a good measure of integrity, just look at his full declaration of assets as it appears on the ministry website. I could find no such declarations on the UK Treasury site for Alistair Darling or the US Treasury site for Hank Paulson for that matter.

Nigeria is an exciting place, full of intrigue and entrepreneurship, but faces immense challenges. But don’t take it from me, read this excellent round up from the FT.  I think it has a somewhat tarnished reputation that deserves a second consideration. As I said in comments to Jason’s blog post, these markets are not for the faint hearted but they do reward handsomely. Free enterprise really should not be too afraid of risk and in the case of Nigeria, it will be the doubters and risk averse in cosy corporate offices in Europe and North America that may the ones that will loose out.

The Sydney Morning Herald last Saturday had an extraordinary story of how local US telephone carriers shut down FBI wire taps because of late and no payments from the FBI with subsequent loss of sensitive intelligence. The report cites various US Department of Justice, Office of the Inspector General (OIG) audit investigations. In 2002 and again in 2004 the OIG also raised some difficult questions about missing guns and laptops.  

You can read the latest OIG report on the wire tap payment problems here and the earlier 2002 guns ‘n laptops report here. But here are the best bits from the wire tap report:

As part of our audit, we analyzed 990 telecommunication surveillance payments made by 5 field divisions and found that over half of these payments were not made on time. We also found that late payments have resulted in telecommunications carriers actually disconnecting phone lines established to deliver surveillance results to the FBI, resulting in lost evidence including an instance where delivery of intercept information required by a Foreign Intelligence Surveillance Act (FISA) order was halted due to untimely payment.

Moreover, our audit found that many FBI employees did not know how to handle refunds of confidential case fund money. One technical agent told us that he sends refunds back to the carrier attached to other telecommunication surveillance bills and requests that they be applied to the remitted bill. Another official told us that he does not know why he receives refunds and has a difficult time matching them to the proper case. In some cases, special agents told us they returned refund checks to the third party draft office simply because they did not know what else to do.

we also examined the personnel and security files of 35 field division employees who had daily access to confidential case funds. This examination revealed that nearly half of the sampled employees had indications of personal financial problems, such as late loan payments and bankruptcies. As demonstrated by our review of FBI files, the 5-year background investigation program may be helpful in identifying employees who have financial hardships or concerns. Beyond identification, however, the FBI has not developed or implemented procedures that ensure employees with financial concerns are not placed in situations where they are responsible for approving and handling confidential case funds without enhanced supervision.

Conclusion

FBI’s FMS lacks the controls necessary to prevent theft and, as such, is not an effective financial system for FBI employees to use to account for and approve confidential case funds. In addition, the audit found that the FBI has not established sufficient guidance and consistent procedures necessary to track and pay telecommunication surveillance bills accurately and timely. The audit also identified areas where field division oversight should be improved to further mitigate the risk of improper use of confidential case funds.

SOX has really forced the private sector to think a lot about corporate governance but this latest report is a timely reminder that the workings of the public sector are also too often in need of better fiscal and administrative controls. And there can sometimes be a great deal more at stake than shareholder value. 

As if blogging is not exhibitionist enough I have been tagged by Thomas Otter for even more personal disclosure. The task is to list 8 things you may not know and pass it on. Oh well, in for a penny, in for a pound.

1. I grew up a farm boy, still am sort of. First generation off the land. My brother is a farmer. I envy the freedom of his life style and this just proves far away hills really are greener, literally.

2. I share a birth date (not just day) with Kylie Minogue. I’m not sure what this means if anything. As information it is like a lighthouse in a bog: brilliant but useless. Free tickets Kylie?

3. I trace my political awakening to an encounter with former President of Ireland, Patrick Hillery whom I met as a boy at the World Ploughing Championships in 1979. I asked him for his autograph and he promised me one better - that he would write to me on official Áras an Uachtaráin letter head. I waited for the mail every day for weeks but the letter never came and my faith in politicians has never quite been restored (I’m only half joking about this). Years later I met one of Ireland’s greatest Presidents and a great champion of global Human Rights, Mary Robinson on  a flight from Dublin to New York. She came back from first class to shake hands with everyone on the plane. This time I didn’t ask for autographs or favours and was not disappointed. (but Paddy it’s not too late you know) 

4. I worked my way through university initially as a waiter but I wasn’t very good at it. Then I graduated to driving stretch stretch limousines around New York. I managed even to total/write one off. I could write a meme on this alone, so many bizarre weddings, funerals and such and the driver gets a unique perspective. The lasting legacy has been a really good geographic knowledge of New York and New Jersey.

5. My fist car was a Chrysler Newport. It looked and ran a little better than the one in the picture but not by much.

6. I studied acting at The Questors Theatre in London for two years. It was a curious itch that needed to be scratched after I finished my MBA. It was fascinating to learn the Stanislavsky system. Of course all actors are vain and self indulgent and ironically, on stage it is the last thing you can or should be if you want to act well. It’s quite an exercise in masochism. A lot of what I learned I think has tremendous application to HR management. The Stanislavsky idea of units, objectives and super objectives; having a clear sense of your role and motivation and that of your stage collaborators, trust, teamwork and constant rehearsal. In fact, Laurence Olivier’s son Richard is making a handsome living doing such. I highly recommend his work.

7. Cycling - I love to get on the bike and ride for a long time. I commuted 25 miles a day in London because it happened to be the cheapest and fastest way for my commuting route. cycling in London is dangerous but exhilarating and a great way to get to know all the nooks and crannies of the city. Then I moved to Germany and became more sedentary, too much beer & bread. A 2008 resolution maybe? My ambition is to one day do an audax event such as the famous Paris-Brest-Paris run. Its like a marathon for cycling.

8. Though I work in CSR I once participated in the tobacco industry as a lowly student tobacco picker in Germany. I was paid 5DM (about €2.5) per hour and all the beer I could drink. Actually, before I completely write off the tobacco industry from CSR perspective check out British America Tobacco. It’s a tough case to make but they are taking some strong positions on human rights and responsible operations.  

Well there you go, enough privacy surrendered for one day. I now pass the baton to  Dennis Howlett, Charlotte Otter, Marilyn Pratt and James Governor for same.

Later this week I will visit Nigeria for what will be my third visit. Personally, I’m fascinated with the place. It is the cultural and economic powerhouse of West Africa, a vibrant and optimistic people. There are some rather surprising connections between Nigeria and my home country of Ireland. Nigeria is the third largest export market for Guinness, the seminal Nigerian novel Things Fall Apart penned by Chinua Achebe is loosely based on WB Yeats’ The second Coming and the inspirational story of the Nigerian emigrant Rotimi Adebari who became Ireland and Portlaoise’s first black Mayor.

Over the past few years Nigeria has made significant progress in curbing corruption, reducing debt and generating economic growth more effectively from its petro dollars. There are still many challenges ahead and it cannot be an easy country to govern with current levels of poverty, low levels of economic & institutional development. Nigeria needs to continue it’s progress towards finally escaping the so called resource curse.

I have the opportunity to present at an Economist Intelligence Unit roundtable and these are the questions at hand:

Maintaining fiscal stability, boosting spending and pushing reform forward

• Scaling up government spending in an era of high oil prices—is there a risk of sacrificing fiscal discipline and quality?
• Boosting spending on infrastructure and poverty reduction: why this will help business
• Reducing the size of the federal government and improving its ability to deliver—is this possible in Nigeria?
• Controlling state spending and improving project implementation: what can the federal government achieve?

Over the past few months I have lurked around and/or participated in interesting blog posts on Africa & development made by people such as Thomas Otter, Dennis Howlett, Jeff Nolan, Michael Krigsman, Jason Busch, Soji Apampa, James Governor to name a few, all of whose opinions I respect very much.

So do please leave a comment or send me an email. How can the Nigerian government take best advantage of the historic $100 per barrel windfall to build and diversify their economy and secure peace? What would you do if you were the Nigerian President or Minister for Finance?

Chris Anderson, Editor in Chief of Wired Magazine and proponent of the Long Tail theory - the idea of selling less of more - has raised some green ire with a recent post on his blog. He has made a somewhat controversial if not dubious argument that his company’s print publishing is more carbon efficient than web publishing. Wired is part of the Conde Nast stable of magazine publications

 Chris’s argument goes something like this -

• trees take carbon out of the air and do so more rapidly during growth phases - carbon negative 
• assume magazines use only paper sourced from sustainably managed forests and therefore harvested trees are replanted on a two to one ratio - carbon neutral
• assume the paper pulp processing mills utilize hydro electric power - carbon neutral
• assume the printing process is super efficient - slightly carbon positive
• assume distribution by rail and the US Postal Service and since these are scheduled routes and services only minimal, marginal carbon costs apply - slightly carbon positive
• assume the magazine reader is upper middle class suburban dwellers (not sure about this one) and therefore more likely to ensure the magazine is recycled or landfilled where the final carbon emission is sequestered - carbon neutral
• Next Chris assumes presenting the same content over the web with webservers running 24/7, with 100 million minutes a month Wired readers spend on their computers and the energy consumption of the infrastructure in between is equal to the carbon cost of production and distribution of a paper magazine.

But the big difference is …………although it generates no more or less carbon than magazine publishing, web publishing takes no carbon out of the atmosphere. ………  So by this analysis dead-tree magazines have a smaller net carbon footprint than web media. We cut down trees and put them in the ground. From a climate change perspective, this is a good thing.

But wait a second, Infoworld reached the opposite conclusion in April 2007 when it announced the magazine would cease to print and shift solely to the web.

The world of traditional print publishing takes a heavy toll on our planet, much of which derives from the energy involved in simply cranking out paper. According to a 2002 study by the Energy Information Administration, a division of the U.S. Department of Energy, the paper industry emits the fourth highest level of carbon dioxide among manufacturers, after the chemical, petroleum and coal products, and primary metals industries.

Chris makes a reasonable point that in a carefully managed process, it maybe theoretically possible to harvest trees at the right time and after a short stint in the form of a magazine the paper can be recycled or landfilled with the associated carbon captured and sequestered. However, his controlling assumptions are completely flawed as it does cost significant carbon to harvest these trees, print & distribute the magazines and haul away the waste for recycling or to the landfill. He ignores also the pollution caused by the paper milling and ink production processes. Chris’ assumptions about server energy burn are also outdated.  

Its well worth reading Chris’ post and the many informed comments to get a sense of how complicated it can be to account for carbon without established rules. But here we see two publications serving similar markets who independently evaluate the environmental economics and come to opposite conclusions. Emerging carbon markets are in dire need of a common framework to account for and financially cost carbon emissions. Without this we are likely to see those who can squeeze financial costs associated with production without investment claim the green halo and those who can only do so with capital investment play with the numbers. Not least, consumers who are currently prepared to pay a premium for carbon off set will soon tire of paying extra based on accounting alchemy such as this.

 I agree with Chris’ comment:

Companies are increasingly being asked to calculate their carbon footprint, and if they’re public, publish it. Good idea? Perhaps. But it’s harder than you might think…………

Governance and information technology is becoming a serious issue in professional sports. This year Formula 1 team McLaren was fined US$100 million for spying on Ferrari then McLaren in turn accused Renault of information theft. Now Tennis is bracing for an integrity crisis.

Allegations of bribery have been building up over the past few years and the sport’s governing bodies met recently to form the Tennis Integrity Unit currently in review mode. According to a report in Australia’s Daily Telegraph a dossier has been put together featuring 140 suspect matches over the past three years. Current number four ranked player Nikolay Davydenko is under a considerable cloud of suspicion due to irregular betting patterns associated with his loss this year in Poland against number seventy four ranking Vassello Arguello. On line bookie Betfair voided almost USD$7 million in placed bets on this match. The Independent reports he was later warned and fined by umpires at the St. Petersburg and Paris tournaments for lack of effort. He is not the only one tangled up in this with many players reporting that they have been approached with inducements to throw matches for big bets. Andy Roddick Murray this summer said publicly:

everybody in the game knows [betting] goes on

According to the Independent, he later toned down his comments after a rebuke from the powers that be in world tennis. Still tennis is vulnerable to corruption, quoted in the New York times US Davis Cup Captain Patrick McEnroe said

Tennis is a very easy game to manipulate. I can throw a match and you’d never know. A trained eye can figure it out.

Pending a global governance review Tennis Australia is taking matters into it’s own hands with the formation of the Tennis Australia Anti Corruption Commission in conjunction with local Melbourne police to oversee the Australian Open scheduled for January 2008. More than 12,000 accredited attendees to the Australian Open including players, staff and media will be banned from betting during the event and the police are promising to vigorously pursue any improprieties. Tennis Australia is also promising sanctions up to and including contract cancellations and lifetime bans. The actions taken in Australia are seen as a stop gap whilst the game gets its governance house in order so we are likely to see similar restrictions throughout the 2008 tour. Tennis Australia CEO Steve Wood commented at the launch of this initiative:

This is an interim protection measure for the Australian Open while globally our sport completes a comprehensive and independent analysis of the overall threat to the integrity of tennis.

Of particular note here are the restrictions on information flow that TAAC has deemed necessary to put in place so to build a garden wall around the tournament. The use of laptops courtside and in the grandstands has been prohibited during matches and all betting websites will be blocked from publicly accessible computers on site. Steve Wood has described such measures as:

a rational and measured approach to information security

Somehow I cannot imagine Tennis Australia will be wildly successful in their efforts to place the tournament in an information bubble. They really might be better served to exploit web 2.0 technologies to improve security rather than trying in vain to restrict access to the outside world. Serious corruption tends to be fairly sophisticated and subtle so these information security measures are unlikely to be very effective. But just imagine how web 2.0 could be used to help enable resistance against corruption and improve civil security more broadly. Tennis Australia is missing an opportunity here, let us hope the global governing bodies do not make the same mistake.

Besides, having read Serena William’s blog post on the loss of her Blackberry at the Fendi store in Paris, I am rather worried about the impact of digital isolation on player morale.

Here’s what happened: after Zürich, I went to Paris to relax. As I was leaving the hotel, I decided I wanted to go to go to the Fendi store. I saw some fabulous boots there that I thought would go great in my fall repertoire. Well, I also had to use the bathroom really badly… So the driver dropped me and my friend Paul off at the corner and we walked to the Fendi store. I asked the employee if I could use the bathroom. I went to the bathroom with my purse, then came out and looked at a dress. I never sat my purse down - I just was holding it. Later, I tried on the boots and put my purse down. I liked the boots so I decided to buy them. I picked up my purse and noticed my Blackberry was missing… So I paid for the boots and then looked for the Blackberry. It was nowhere to be found. I called it and found out that it was turned off. Someone got it and turned it OFF! All of you out there that have Blackberries know that they’re not easy to turn off - you have to purposely turn them off, or they will always stay on. Every time I called it I went straight to voicemail. Someone took it out of my purse and turned it off so when I called it I would not hear it ring. Who would do this people? I mean really! It’s so upsetting, and I feel as though my privacy has just been violated. I feel raw and alone now that I don’t have my BB. My BB is out there, all alone, cold and scared. She had a great life, a warm bed and a wonderful mom that took great care of her. I wish I could just see her one more time. I did not even get chance to say goodbye.

Must have been a dreadful experience for poor Serena …… and her BB. Still, I can think of worse places to be lost even if you happen to be an inanimate, albeit, social object.

Last month at Oracle Open World, Oracle announced it’s support as an Affiliate of the Intel/World Wildlife Fund led Climate Savers Initiative.  The overall goal of the initiative is to collectively reduce power consumption by 50% by 2010 through better equipment design and power management. 

I thought the onstage announcement was profound in it’s broader implications for disruptive business model innovation as we struggle towards a lower carbon economy. Announcing the initiative Oracle Vice President of Customer Services Juergen Rottler claimed that the Oracle On Demand business had driven down its overall server count by 70 percent thanks in part to Intel technology.

Intel CEO Paul Otellini’s on stage reply:

“When you talk about reducing servers by 70 percent, it’s clearly good for your business. But I can’t help but think about what it does for mine.”

 Indeed.

I just arrived in Boston for the SAP Influencer Summit. I’m especially pleased to host a session on CSR on Tuesday afternoon. We have invited some really top notch thinkers including:

• Graham Baxter from the International Business Leaders Forum in London. Until this past summer Graham was the long time head of CSR at BP and served as board member for the ground breaking Extractive Industries Transparency Initiative.
• Steve Rochlin and Mairead Cahill from AccounAbility. Steve is Head of AccountAbility North America and Mairead is a consultant based out of the UK office. AccountAbility is the home of the AA1000 standard for CSR reporting assurance.
• Ara Avakian from the Global Reporting Initiative. The GRI, based in Amsterdam, is the de facto global standard for CSR reporting.
• Cody Cisco from San Francisco based Business for Social Responsibility. Cody, on behalf of BSR, is leading a software industry working group to shape an approach for CSR reporting and sutainability metrics relevant and material to our industry. This is an initiative to watch over the coming months.
• Simon Mulcahy from World Economic Forum. Simon is Head of IT Industries at WEF and so is the industry go to person. WEF are doing some really interesting work on CSR not least the annual Davos event. Simon runs the IT Access for Everyone initiative.
• Susan Cote Freeman from Transparency International. Susan is part of the TI Private Sector engagement team and is the main person for the North American region. Susan is particulary engaged with the TI Business Principles Programme.

It should be a good session and I hope a productive one for everyone. If you are in town, do look us up and join us if you can.

An unholy public row has broken out over Microsoft’s diversity policy. Former Dallas Cowboy, Pastor Ken Hutcherson, claims to have cut a deal with Microsoft two years ago agreeing that MS should switch from supporting local gay rights legislation in Washington state to a neutral position. Apparently, under pressure from employees, Microsoft switched back again from neutral to supporting reform and is was this that unleashed the Pastor’s wrath at the recent Microsoft AGM. In a recent interview with Daily Telegraph he said:

” Microsoft stepped out of their four walls into my world so that gives me the right to step out of my world into their world. …….They tried to turn their policy into state policy, making their policy something I had to submit to. And my playbook [the bible] tells me you don’t submit to sin.”

Hutcherson, who runs Redmond based Antioch Bible Church, has vowed to lead a takeover of Microsoft by asking his followers to buy up shares and so change the company’s ‘homosexual agenda’.

“I don’t care how big Microsoft is,” he said. “They are nothing but a feather in the wind of God. America basically got started with a tea party and Goliath, if I’m not mistaken, got taken down by David, who believed in the same cause I believe in. ”I’m going to go after the new Goliath with one little rock called a share and I’m going to make them tremble before we get through. I consider myself a warrior for Christ. Microsoft don’t scare me. I got God with me.”

It is quite common these days for social activists to buy small holdings in a target company and use the AGM to introduce minority resolutions to pressure for better CSR performance. It is part PR, part shareholder democracy in action with generally mixed results. But Hutcherson’s actions remind us that today pressure can come from any point along the political spectrum. It is crucial, therefore, to have a well defined CSR strategy outlined up front so to anticipate legitimate and material stakeholder demands and to avoid trying to react later to pressure on the hoof. This whole affair made me think again about Hugh McLeod’s porous corporate membrane (hat tip James Governor) where he talks about the dangers of the company being isolated behind the membrane unconnected to the external conversation. Arguably, membrane or not, the company also needs to clearly understand which conversations it really should have and want to have.

To their great credit Microsoft seems to be doing the right thing here to support the legislation and their employee’s expressed interests. Certainly Hutcherson did not go unchecked at the AGM. You can watch the company AGM video here. If you cue up to the 51:40 mark you can watch a question from another shareholder calling on MS to oppose Hutcherson and the company response. It will be interesting to see how this campaign shapes up. The good pastor promises to come back in force at Microsoft’s next AGM.

You can watch the full Daily Telegrah interview with Hutcherson here:

You can watch Pastor Hutcherson’s actual representation at the recent Microsoft AGM here:

It’s been a few years now since I left British Airways and whilst I have never regretted the decision I must admit I do miss it sometimes. Airlines have a tribal nature to them and grassroots employees world wide share a kind of masonic affinity. They look out for and take care of each other enroute no matter whether an employee of a competitor or partner. Colin Marshall, then BA’s CEO, once compared this tribalism to the culture of medieval Mediterranean mariners who shared bonds from port to port regardless of origin, religion or language. There was a similar dynamic in the Baltic from the days of the Hansa League and this is how Lufthansa got it’s name. In it’s day then the maritime industry had it’s own cluetrain or clueboat moment connecting and empowering people at the sharp end across the network. I digress. Suffice it to say, the smell of kerosene makes me nostalgic and I know a little too much about the business to ever be a normal passenger again. I am rarely surprised but this week I was on Air Berlin.

Air Berlin acquired DBA some time back but the old routes are still distinguishable as DBA if you look closely enough. In my day DBA was known as Deutsche BA, owned and operated by British Airways. I would have reason to get in touch with the DBA subsidiary a few times a year for CSR issues. One disclosure we would have to figure out was the percentage of sales relating to alcohol, tobacco, firearms and pornography. For some ethical investors if such sales cross a 5% threshold the stock can be excluded from the fund. Of course alcohol and tobacco are sold or available on many flights though smoking is not usually allowed. I never bothered with fire arms and pornography, I assumed it could not be distributed on board.

Well, it turns out that the DBA flights of Air Berlin distribute Playboy with the usual selection of newspapers for in flight reading. I saw it with my own eyes on the way to and from Berlin this week out of Baden Baden. I guess Playboy is at the moderate end of the scale though wikipedia distinguishes it as pornographic. I wonder which of the low cost and full serice global carriers will now follow suit. Lufhansa? American? United?  Anyway, IF I had accepted a copy of Playboy on board it would only have been to read the articles.

The Boston College Centre for Corporate Citizenship have teamed up with the Hitachi Foundation and Net Impact to form the collective Corporate Citizenship’07. I highly rate all three organisations, they bring to the party impressive intellectual firepower and a strong following. This is one to watch.

Courtesy of Corporate Citizen ‘07.

This interesting initiative from Google and Specialized bikes:

 And:

I had my first visit to a reception inside the House of Lords in London this week at the sumptuous River Room (the official State Room for the House of Lords used for the purposes of entertaining) hosted by The Baroness Whitaker on behalf of Transparency International. You can see some pictures of the room from this link from an entirely different event. Besides the impressive paintings the only other fixture of note in the room was a sculpture of Narcissus. I mark it down as quaint eccentricity, that the British do so well, to plant such a fixture in the main reception of their second chamber of parliament!

The presentation was top notch opened by Laurence Cockroft, Chair Transparency International (TI) UK followed by Lord Robertson, former Secretary General of NATO and UK Defense Minister then John Githongo, Fellow at Oxford and former Permanent Secretary for Governance and Ethics, Government of Kenya then Bob McKittrick of the UK Anti Corruption Forum and Lord Neill, former UK Government Chair of the Committee on Standards in Public Life.

Cockcroft outlines TI’s focus in the UK: the defense industry, money laundering, the construction industry and UK legislative reform. He also made a point that the international community could not hope to meet it’s commitments to the UN Millennium Development Goals without decisively tackling corruption.

Lord Robertson said corruption was morally offensive, politically corrosive and economically inefficient. In his days at NATO he said he personally measured corruption in governments by the uptake in investment in shiny suits. His wish he said was a day when such shiny suits would be a measure of sartorial rather than governance standards. A moral victory perhaps for Thomas Otter and DFOF?

John Githongo was indeed challenging - he called on the defense industry publish a list of it’s sales agents in Africa. He marked out the decline of the World Bank as a force for incentive led governance reform as it gradually looses it’s best customers: Brazil, Russia, India and China as they develop rapidly. With such a vacuum opening up he said it was all the more critical for TI and other NGOs to fill the space. Later John told me he held out great hope for web 2.0 to help bring greater transparency to business and public life so long as the information presented could be authenticated properly.

Lord Neill was in combative mood. He unpacked the UK government quandary over it’s decision to suspend investigations into foreign defense contracts in the interests of national security. Lord Neill said it was circular logic for a government not to enforce the law enacted on behalf of the people in deference to the wider public interest. This decision and growing disquiet that not one prosecution has been taken in the UK since the law was updated in 2001 will fuel debate and pressure on this issue from activists for a long time to come. There is growing unrest and public pressure on the UK government to be seen to enforce this law and make an example of someone. You heard it here first.  

Similar to Dennis Howlett’s post on The Point, one delegate at the event was really enthused about WIKILEAKS as a whistleblower resource. I checked with other NGO friends and it is indeed used widely by the activist community.

I see corruption as the sharp end of the sustainability debate and a huge, clear and present governance risk for business under current law mostly oriented around the US Foreign Corrupt Practices Act and nation states ratifying the 1997 OECD Convention. Actually, if the corruption problem can be understood and fixed from both demand and supply perspectives a lot of other good things start to fall into place.

To update on my previous post NGOs in the YouTube World: Prepare for the Onslaught. I have now received the youtube play list which I share here. You too can watch the presentations from the Obama campaign, Virgin America’s Red Campaign, problems of contemporary slave labour and others.

Other than the web where else can you see Rudy Giuliani in drag smooching Donald Trump?

http://www.youtube.com/view_play_list?p=FEB101662D961F1E&page=1

This was the rather breathless title for a side track at the Business for Social Responsibility conference in San Francisco last week. As it turned out the session was somewhat chaotic with most of the panel predictably trying to demonstrate hands on web campaigning but with poor AV and patchy wifi. Nevertheless, there were some really good moments. (I will post more on the BSR conference again)

The panel was made up with reps from Fleishman Hillard, YouTube, BSR, New Politics Institute, Carmot Strategic, Witness and BuzzLogic. Fleishmann Hillard memorably showed these videos as a, sort of,  stark warning to corporates.

 Before:

 And After:

I was a bit disappointed not to get a balance of perspective on how business and civil society can also collaborate positively together for mutual benefit. Such partnerships are becoming more common place today though they will never and should never supplant the primary role of civil society actors as advocates. But who would have ever thought, the odd couple,  McDonalds and Greenpeace could ever work together? Well they have.

I asked the panel if CEO’s should blog on CSR and the unanimous answer was ‘yes’ (though in a controlled & limited manner), even from Fleishmann Hillard. This surprised me a bit as they were tending to play to the fear factor a bit with the Starbucks videos and also given their own experience. FH UK MD Kevin Bell now seems to have taken his blog down after a fire storm of criticism last year when he discussed his PR work on behalf of the Mauritius government. Some objected to the government retaining a PR firm to shape it’s message to citizens. I guess even the PR pros have to learn some tough lessons on social media communications.

I don’t know about an onslaught but I predict a bumpy road ahead as we all figure out how to utilize social media so corporations can become more transparent and accountable corporate citizens. However, I am convinced that social media can not only be a tool for advocacy campaigning but also can be used for positive collaboration between erstwhile strange bedfellows.

Technorati Tags: Greenpeace, Fleishman Hillard, BuzzLogic, Witness, Starbucks, Carmont Strategic, New Politics Institute, BSR, YouTube, McDonalds, Oxfam

Charlotte Otter’s post tells a great story of triumph over adversity in South Africa, one woman’s struggle to beat the odds, secure an education and then go on to pass the baton and share her skills with the next generation. I highly recommend you read Charlotte’s post.

The woman Charlotte only identifies as ‘A’ now gives some of her time as a volunteer with the First Lego League (FLL) competitions where she mentors school children as they prepare in teams for a robotics competition. I happen to know something about FLL as my good colleague Stephanie Raabe leads this initiative at SAP world wide. Stephanie has done a great job developing this programme with steady growth in participation each year with now more than 90 separate SAP mentored and sponsored teams world wide. The idea is that an SAP employee volunteers to coach the team through a ten week period as they prepare for competition. Each year a new problem is set based on current global scientific challenges such as nanotechnology and energy. The students learn how to work together as a team and must demonstrate they understand the problem in it’s broader social context not just as a scientific problem. They then proceed to competition where the robot they have built and programmed is put to task on a timed problem. As one SAP coach once told me:

‘there is no way to win as an individual, they can only win as a team and that is an important lesson’ 

I went to the world finals this year in Oslo and last year in Eindhoven. I must admit I was unsure about the concept at first but you can’t help but get swept up in the enthusiasm. What I like about FLL as a corporate volunteering initiative is it’s endurance and sustainability. I like the fact that the employee commitment is sustained over a significant period of time, it is not a one off thing. Here are some flickr photos that some of our colleagues have posted. It seems right that big tech should find ways like this to share strategic capability.  

I do love a good con story and this one is as good as it gets. According to The Times a spirit medium named Nomatter Tangarira managed to convince senior Mugabe administration officials that she could bring forth an endless supply of refined diesel oil directly from a rock by tapping said rock a few times with her magic stick. No doubt the officials felt doubly blessed: miraculous enough to find oil, but to have it come out of the ground already refined was really something to behold alright. These bureaucrats were so impressed they paid her GBP1.7 million (before outrageous inflation kicked in), gave her and the rock 24 hour armed guard and assigned a high level task force to decide what to do next. It was not until the second high level task force appointed visited the rock that the ruse was discovered: a pipe behind the rock running to a distant dowser up the hill, where diesel was released on cue by a dutiful assistance assistant.

Humour aside it is sad to see how desperate things have become in Zimbabwe. I visited the country with Unicef back in 2000 and already things were pretty bad. Today inflation is running at near 4500%, 70% unemployment, 20% are facing malnutrition and this number is expected to double in the next 6 months. According to the UN World Food Programme 2.1 million people are hungry and by early 2008 this will grow to 4.1 million with the country producing just 1.29 million tons of cereal against a national requirement of 2.34 million tons. WFP also report life expectancy is now 37 years, 83% of population live on less than $2 per day and yet adult literacy is still over 80%.  

What is all the more tragic is the sheer beauty and abundance of the place, great people, great land, great resources.

Technorati Tags: Zimbabwe, UN World Food Programme, World Food Programme, WFP, Unicef

Monday’s Wall Street Journal features an interview with Ken Stern, CEO of National Public Radio from the US. NPR does what is says on the can: it is public radio. NPR solicits charitable underwriting for its programming and also receives about 12% of its total income from the US Federal Government. With such a radical reorganisation of traditional media, you might expect such an institution with a shaky capital base to be shuffling off this mortal coil. Not a bit of it - it has doubled its audience from 13 million to 26 million in the past 10 years. This is thanks in no small part to NPR’s embrace of new social media outlets.

It was interesting to read Stern’s view of NPR’s special place in public life as a truly independent public broadcaster:

‘It’s important to building civic society, it’s important to democracy, it’s important to public disclosure

Stern provides 5 top tips for moving your company into the digital age responsibly:

• Speed up. Pace of innovation is accelerating.
• Your business model may change but your values never do.
• Invest in your employees and take them with you - challenge, train and retrain
• Embrace new partnerships and alliances
• Never forget your core business

Last year Joan Kroc, heir to the McDonalds fortune left $225 million to NPR upon her death which now yields an annuity equal to 8% of NPR’s current operating budget. It is good to see this fine example of a philanthropic virtuous circle where fortunes made in the private sector are invested back towards strengthening our civil society, so necessary for a stable social climate where commerce can continue to flourish. It is also good to see web 2.0 enabling NPR’s work towards such goals.

Just saw on the BBC News website the results of a fantastic University of East Anglia study extolling the virtues of swearing at work. Not entirely surprised to learn that shared use of taboo language helps to bring a sense of team spirit and solidarity. They researchers do not, however, recommend trying to build rapport with your boss or customers with the odd expletive thrown into the pitch even if you are ‘mirroring’. This is a sharp social instrument - you need the emotional intelligence to exercise careful political judgment so as not to come off abusive or offensive. This would upset the delicate dynamic and you end up destroying not creating social equity according to the research.  

Maybe this whole movement can be legitimised like dress down Fridays. How about ‘Bad Language Mondays’ or ‘Amnesty Wednesdays’? Anythings goes, so long as you don’t hurt yourself or others.

So there you have it, a new CSR concept perhaps - swear and blind your way to career success and social cohesion. Do well and do good. Assuming the same dynamic works for information worker collaboration on web 2.0, all I need is some clever translation software and a suitable outlet for syndication of the PG version of this blog. Anything for more traffic.

Last week I attended a really interesting forum on RFID hosted by SAP and the National Chamber Foundation in Washington DC. The presentations were categorised into RFID and Food and Drug Safety; RFID and Pandemic Preparedness; RFID and Security.

One presentation that got my attention was from Dow which describes how they deploy RFID extensively to manage security and public safety up and down the supply chain. This graphic on Dow’s approach to integrated security management in the chemical industry is extraordinary in it’s detail. David Nabarro from UNDP also expounded on the value of RFID for disaster preparedness and response when relief efforts needs to be mounted and distributed quickly without the usual bottleneck delays at point of entry when imported goods and personell have to be clearly identified and cleared through customs quickly. 

Last year I had the opportunity to visit the Germany based retailer Metro Group’s Future Store near Cologne as well their exhibit at Cebit and the use of RFID is really amazing to see. You can view Metro Group’s video demo below on YouTube and in this video on their own website:

One of the toughest critics of the use of RFID and the threat to personal liberties is Katherine Albrecht and you can find her book here. You can also find on You Tube a series of videos on this topic which she has also produced.

The flipside of privacy, however, is transparency which too has an important social function. RFID already is widely used in western health care but it seems to me it has great potential to help control corruption associated with the health care sector more globally and assure the provenance of safety critical supplies. Last year’s Transparency International Annual report focused on the problem of health care and corruption. I recommend reading it, it is simply shocking and heartbreaking. TI record patient deaths in Nigeria when water was substituted for adrenaline and in Italy when faulty valves are implanted — all because of corruption along the supply chain. In this report from AccountAbility, Chris Tuppen, Head of Sustainable Development and Accountability at BT, argues that RFID technology with it’s capability to track the provenance of a finished good from all stages of composition, can and should be used for ethical assurance purposes. But in this later report Accountability ask the more challenging question regarding transparency: for whom? Are citizens to be more transparent and accountable to institutions or vice versa?

There are definitely personal privacy issues associated with RFID that need to be managed and regulated carefully. Personally I think the key thing is that people should know to the full extent possible when their activities are being tracked and have an opportunity to trade their privacy in return for defined benefits such as convenience or loyalty rewards. This is what we have done for years already even without RFID, for example frequently flyer programmes. Web 2.0 is really no different - as an information worker I am now out here in public space selectively trading some professional privacy in return for a trade in insights that may help me to do my job better. Interestingly, one member of the audience at this event unfavourably compared Facebook, asserting that minors are enticed to unwittingly surrender their privacy with little known benefit in return.

We can’t put the toothpaste back in the tube and so I suspect we will be learning how to benefit and live with these technologies for a long time to come.

…………………..who is the most corrupt of all?

Well, the annual Transparency International Corruption Percpetion Index was released today and I can reveal the top 6 least, and bottom 6 most corrupt countries in the world are: