Strategic CSR - Delaware

Within corporate tax law in the U.S., the article in the url below reports there is currently a struggle to remain the state of choice for incorporation:

"Delaware is fighting to maintain its status as the country's corporate capital. … Delaware has long reigned supreme as a home for companies' legal residence, or where they incorporate their businesses. More than two-thirds of Fortune 500 companies are incorporated in the state."

The reason for the threat to Delaware's crown is, apparently, companies not appreciating the application of the law:

"Executives of public companies have expressed frustration with the Delaware Court of Chancery, often following legal rulings that didn't go their way. Officials elsewhere are taking note."

From the states' point of view, of course, the goal is to maximize incorporation fees through a race to the bottom – appeasing corporate interests by further undermining the concept of shareholder democracy:

"Delaware Gov. Matt Meyer has signed a law that will make it harder for shareholders to sue companies, an attempt to quell threats by U.S. corporations to move their legal residences to other states. … Texas introduced a new court system for corporate matters last year. Musk is in the process of reincorporating Tesla to the Lone Star State from Delaware. Meta is considering moving its incorporation to Texas. Hedge-fund manager Bill Ackman tweeted that his Pershing Square is looking to leave Delaware and incorporate in Nevada or Texas."

Given the emphasis placed on finding the most lenient legal environment, the state of choice has varied over the years:

"A century ago, New Jersey was the incorporation capital of the country. The state lost the title, and Meyer said he doesn't want Delaware facing a similar fate because of complacency."

Although why states care so much about levels of incorporation is unclear:

"Even if companies move to incorporate and list stock in Texas, the benefits to the state beyond bragging rights are less clear. Moving a company's incorporation isn't the same as moving its headquarters; in practical terms it means the business rents a P.O. box in the state, not an office building."

More fundamentally, why any company should care that much about shareholder interests is somewhat baffling. It is as if Ford was 'owned' by everyone who purchased one of its cars, whether they bought it directly from the company through one of their dealerships, or indirectly from a prior owner. For Ford, issuing shares to raise capital is very similar to 'issuing' cars to generate revenue. In both cases, the firm is 'producing' something, with little associated rights, that can be sold initially for money, and then traded on a third-party exchange.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e  

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Delaware Punches Back at Texas Efforts to Lure Away Companies

By Corrie Driebusch

March 26, 2025

The Wall Street Journal

https://www.wsj.com/business/delaware-punches-back-at-texas-efforts-to-lure-away-companies-73a95d7a

 

Strategic CSR - Personhood

Following its groundbreaking law that granted legal rights to a river (see Strategic CSR – Personhood), New Zealand has taken another step forward in its recognition of the importance of the natural environment to its culture and heritage:

"A settlement under which a New Zealand mountain has been granted the same legal right as a person has become law after years of negotiations."

Specifically:

"It means Taranaki Maunga [Mt Taranaki] will effectively own itself, with representatives of the local tribes, iwi, and government working together to manage it. The agreement aims to compensate Māori from the Taranaki region for injustices done to them during colonisation – including widespread land confiscation."

While I appreciate the symbolic value of this decision, in terms of respecting the Maori culture, tradition, and perspective on the natural environment ("natural features, including mountains, are ancestors and living beings"), it is challenging to see the practical implications. What does it mean for a mountain to "own itself"? The value of treating corporations as legal persons is that they can own assets and be sued in a court of law. This underpins the law of contracts and property rights, which are fundamental to our economic system. Firms also form the apex of the stakeholder structure, so create value for others, rather than needing value to be created for them:

"[Government Minister] Paul Goldsmith acknowledged that … it had been agreed that access to the mountain would not change and that 'all New Zealanders will be able to continue to visit and enjoy this most magnificent place for generations to come.'"

In this case, the name of the mountain will be changed, which his meaning, but it is difficult to know how this fits into the strategic CSR perspective, given that the mountain cannot communicate discernable interests that can be met. Rather, anyone seeking to interact with the mountain will need to deal with the appointed human 'representatives' of the mountain (who no doubt have their own values and interests):

"It means Taranaki Maunga [Mt Taranaki] will effectively own itself, with representatives of the local tribes, iwi, and government working together to manage it."

Given that the mountain cannot communicate its interests to those representatives (as far as we know), we will have to rely on the genuine intent with which they interpret what is best for the mountain:

"The mountain is not the first of New Zealand's natural feature's to be granted legal personhood. In 2014, the Urewera native forest became the first to gain such status, followed by the Whanganui River in 2017."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e  

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New Zealand mountain gets same legal rights as a person

By Kathryn Armstrong

January 30, 2025

BBC News

https://www.bbc.com/news/articles/czep8gg5lx4o

 

Strategic CSR - Rights + responsibilities

Over the years, I have read many articles arguing that legal rights should be granted to animals and other natural entities, like rivers (e.g., see Strategic CSR – Personhood and Strategic CSR – Cats and dogs). The article in the url below is merely the most recent of those articles but, very usefully, it references the original source for such arguments (in the U.S., at least):

"The notion that 'natural objects' like woods and streams should have rights was first put forward half a century ago, by Christopher Stone, a law professor at the University of Southern California."

The logic advocates use to support their claims vary to some degree, but almost all, at some point, make this point:

"In April, 1972, the Supreme Court upheld the appellate court's decision against the Sierra Club, by a vote of four to three. (Two seats on the Court were vacant.) Douglas, drawing heavily on Stone's article, penned a dissenting opinion. 'A ship has a legal personality, a fiction found useful for maritime purposes,' he wrote. A corporation, too, 'is a person for purposes of the adjudicatory processes. . . . So it should be as respects valleys, alpine meadows, rivers, lakes, estuaries, beaches, ridges, groves of trees, swampland, or even air that feels the destructive pressures of modern technology and modern life.'"

In essence, 'if corporations can be persons and they are unable to talk (and do other people-like things), then other things that are unable to talk should also be persons.' In other words:

"The objection that streams and forests cannot have standing because streams and forests cannot speak was, in Stone's view, easily addressed. 'Corporations cannot speak either,' he observed. 'Nor can states, estates, infants, incompetents, municipalities or universities.' And yet these entities were amply represented—some might say overrepresented—in the courts."

But, as many CSR advocates also like to argue, with rights come responsibilities. And, one of the many advantages of granting personhood to corporations (and it really is the foundational pillar of our economic system, post industrial revolution, primarily because it permits limited liability) is that, although corporations can sue others, as persons they can also be sued themselves.

To me, this seems like a major argument against granting legal rights to animals and elements of the natural environment. If I am currently out walking my dog and it bites someone else, the victim does not sue the dog, they sue me. There would not be much point suing the dog, since the dog does not own any assets from which compensation could be paid. Equally, if I go swimming in a river and drown due to the strong currents (which would be the river's fault, now that we are assigning rights to it), then it is not much use to me (or my estate) to sue the river. The enforcement of contracts is not everything in our economic/legal/societal system, but it is a hell of a lot.

So, while there are increasing numbers of cases where advocates act on behalf of animals and the natural environment to sue for legal standing (most recently here in the U.S., Happy the elephant), I think this would create more problems than it solves. Again, pursuing the argument that responsibilities are the flipside of rights, I think we need to solve how we are going to assign responsibilities to these actors before we rush to grant them rights (especially because, in general, they have no discernible interests that we can understand or meet).

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

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A Lake in Florida is Suing to Protect Itself

By Elizabeth Kolbert

April 11, 2022

The New Yorker

https://www.newyorker.com/magazine/2022/04/18/a-lake-in-florida-suing-to-protect-itself

 

Strategic CSR - Personhood

Here is a great short documentary that I came across recently about a 2017 decision in New Zealand to award legal personhood to a sacred Maori river: https://youtu.be/YQZxRSzxhLI. The documentary begins with a Maori saying about the river at the center of the case, the Whanganui River (New Zealand's third longest river):

"The river flows from the mountain to the sea. I am the river and the river is me."

The narration then switches to the legal interpretation of the river's status, as determined by legislation passed by the New Zealand Parliament:

"Section 12: The river is an indivisible and living whole incorporating all its physical and metaphysical elements. … a living entity with the same legal rights as a person."

It is clear from the video that the river forms a central role in Maori culture:

"When you carry the weight of your ancestors, it is not an easy position to be in. In one sense, you feel them supporting you, the old people, those who have gone on. … [We see the river] as a living entity that carries our ancestors, it carries their memories, as a metaphor for our history. We are very much connected physically, virtually, and even our philosophies very much come from being a people of the river."

A specific dialogue between the producer of the documentary and the Attorney General of NZ who oversaw the passage of the legislation is instructive:

AG: "The fact of the matter is that you can't divide a river up into the bed, the water column, and the air above the river. I think you can get hung-up on these Western concepts of ownership."

Narrator: "OK, so the river's water comes from the rain, and the rain falls through farmland, and city streets, through a lot of different areas. Because, legally, the river is now indivisible, I'd imagine that everything that water touches along the way might eventually gain the same personhood."

AG: "Yes, I suppose that is right in so far as the water is part of this indivisible entity, it will flow-in, flow-out."

Narrator: "So then the larger idea would be that all of nature, in some way or another, gets spoken for."

AG: "When you think about it, why not?"

The issue of personhood appears twice in the fifth edition of Strategic CSR – in Chapter 3 in terms of defining a stakeholder (in which the Whanganui River is mentioned specifically), and in Chapters 5 and 6 in terms of the discussion around corporate personhood. The river's Wikipedia page is here: https://en.wikipedia.org/wiki/Whanganui_River

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

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Strategic CSR - Cats and dogs

The expansion of legal rights in our courts continues—from corporations (see: Strategic CSR – March 4, 2011; Strategic CSR – January 27, 2010; and Strategic CSR – October 26, 2009), to the environment (see: Strategic CSR, August 26, 2009), and now to cats and dogs:

 

"Americans have long seen dogs and cats as family members, but the law hasn't always agreed. Until the early 1900s, both animals were deemed so legally worthless that they didn't even qualify as property—and could be stolen or killed without repercussion. But as Americans began to spend millions, then billions, on food, toys and veterinary care for their pets, the law changed. Today, cats and dogs aren't just property; they are the most legally protected animals in the country."

 

Some examples of how the law now accommodates these family pets:

 

"Felony anticruelty laws in all 50 states impose up to $125,000 in fines and 10 years in prison for anyone who abuses animals. The federal Pets Evacuation and Transportation Standards Act, passed after Hurricane Katrina, requires rescue agencies to save pets as well as people during natural disasters. Judges have been increasingly willing to treat cats and dogs like people in the courtroom, allowing custody disputes over pets and granting large awards … including so-called noneconomic damages typically reserved for the death of a spouse or a child. In a few recent court cases, judges even gave dogs their own lawyers."

 

The rising amounts courts are willing to award owners against workers (dog walkers, home cleaning services, pet groomers, etc.) for any negligence that causes the loss of these animals has been steadily rising. In particular, vets are increasingly being exposed to the same malpractice lawsuits that many medical doctors face today:

 

"In 2004, a Los Angeles man won a $39,000 veterinary malpractice verdict for the death of his Labrador mix. The American Veterinary Medical Association warned that 'personhood' for pets could flood the courts, drive vets out of business and ultimately harm dogs and cats by making veterinary services prohibitively expensive."

 

Ironically, although a possible threat today, the article notes that vets were originally the cause of the rising legal status of cats and dogs:

 

"In the 19th century, [vets] would have shared the law's view that pets were worthless animals. Their work focused almost exclusively on economically valuable creatures such as horses and cows. But as these animals began to disappear from U.S. cities in the early 20th century, veterinarians often found themselves out of work. They turned to cats and dogs for the survival of their profession."

 

Where does all this lead? In addition to growing concern among vets:

 

"Firms involved in agriculture and biomedical research fear that personhood for pets could spill over to livestock and lab rats, stymying cures for human diseases and shutting down meat production."

 

A related story about an Argentinian court freeing an orangutan who was recognized as a "non-human person" that had been "unlawfully deprived of its freedom" by being held in captivity at Buenos Aires Zoo, is detailed in this Reuters article:

 

"In a landmark ruling that could pave the way for more lawsuits, the Association of Officials and Lawyers for Animal Rights (AFADA) argued the ape had sufficient cognitive functions and should not be treated as an object."

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

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Should pets be people too?

By David Grimm

April 12-13, 2014

The Wall Street Journal

Late Edition – Final

C3

http://online.wsj.com/news/articles/SB10001424052702304058204579491630809550504

 

Strategic CSR - Individual Rights

I am thinking a lot about stakeholder theory at the moment.

 

It is interesting to debate whether the natural environment, as a non-independent actor, should be included as an identifiable stakeholder of the firm. Many argue that it should and that, in fact, the environment has rights that should be protected by law. Others, however, argue that it should not be included because it is not the environment itself that speaks or feels or acts; rather, it is how the degradation of the environment affects other stakeholder groups (e.g., NGOs or the government) who then advocate on its behalf. One argument for including the environment as one of the firm’s societal stakeholders is to reinforce the importance of sustainability within the CSR debate, while recognizing that the environment requires actors to speak and act on its behalf in order to be protected.

 

The article in the url below extends this argument further, exploring the extent to which animals should have legally-defined rights:

 

“‘Beings who recognize themselves as ‘I’s.’ Those are persons.’ That was the view of Immanuel Kant, said Lori Gruen, a philosophy professor at Wesleyan University who thinks and writes often about nonhuman animals and the moral and philosophical issues involved in how we treat them. She was responding to questions in an interview last week after advocates used a new legal strategy to have chimpanzees recognized as legal persons, with a right to liberty, albeit a liberty with considerable limits.”

 

The argument, as an intellectual exercise, seems perfectly reasonable to me:

 

“Mr. Wise [founder of the Nonhuman Rights Project advocacy group] argues that chimps are enough like humans that they should have some legal rights; not the right to vote or freedom of religion — he is not aiming for a full-blown planet of the apes — but a limited right to bodily liberty.”

 

Whether the Courts can be persuaded of the practical viability of this argument, however, is another thing. Nevertheless, it does seem that, if we rationalize the idea that corporations are special legal entities with some of the rights (and, it seems, fewer of the responsibilities) of people, it shouldn’t be such a stretch to extend those legal rights to animals that are very close to actually being people!

 

“The science of behavior is only part of the legal argument, though it is crucial to the central idea — that chimps are in some sense autonomous. … Dr. Gruen sees it as a term that is fraught with problems in philosophy, but Dr. Marino [of Emory University] said that for the purposes of the legal effort, autonomy means ‘a very basic capacity to be aware of yourself, your circumstances and your future.’”

 

The danger (or opportunity), of course, is that such a ruling would open a very large door to many other complicated issues:

 

“The kind of science that supports the idea of chimpanzees as autonomous could also support the idea that many other animals fit the bill. … The issues of self-awareness and of awareness of past and future strike to the heart of a common-sense view of what personhood might be. Chimps, elephants and some cetaceans have shown that they can recognize themselves in a mirror. … There is plenty of evidence that chimpanzees and other animals act for the future. Some birds hide seeds to recover in leaner times, for example.”

 

An argument against this points out that “personhood does not mean being human.” While true, this has not stopped us extending significant rights to corporations. The difference, of course, is that it suits our purposes to do so for corporations, while it may not suit our purposes (or the purposes of some of us) to extend similar rights to animals.

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

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The Humanity of Nonhumans

By James Gorman

December 10, 2013

The New York Times

Late Edition – Final

D1

http://www.nytimes.com/2013/12/10/science/considering-the-humanity-of-nonhumans.html

 

Strategic CSR - Corporate Tax

The article in the url below captures concisely the issue with corporate tax in the U.S. The system is unwieldy and the rate is high; as a result, corporations seek to avoid it. The results can be quite stark:

 

“Taxes paid by profitable companies in the United States are often less than half the statutory 35% tax rate, according to a new study released on Monday by the U.S. Government Accountability Office.”

 

As indicated by the article’s title, five numbers, in particular, emphasize the disconnect between profits made and taxes paid:

 

“17.4% – Including state and local taxes, this was the average effective tax rate for profitable companies with at least $10 million in revenues in 2010.”

 

“$242 billion – This is the amount of corporate income taxes the GAO says was paid in 2012 … . That figure compares to $845 billion collected in social insurance taxes and $1.1 trillion collected in individual income taxes.”

 

“$1.1 trillion – In 2010, profitable companies reported an aggregate $1.4 trillion in pre-tax profits, while unprofitable companies reported losses of $315 billion, resulting in a net pre-tax income of $1.1 trillion for all corporations.”

 

“16.9% – The effective tax rate for profitable companies has … declined to 16.9% in 2010 from 20.8% in 2008.”

 

I particularly like the last number:

 

“$762 billion – Companies sometimes report different figures to the Internal Revenue Service than they do to investors. When accounting for transactions between corporate units on their tax returns, companies made adjustments in their favor to the tune of $762 billion compared to their 2010 financial statements, and negative adjustments of just $20 billion.”

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

Five Numbers Show How Much Corporations Really Pay in Taxes

By Emily Chasan

July 1, 2013

The Wall Street Journal

http://blogs.wsj.com/cfo/2013/07/01/five-numbers-show-how-much-corporations-really-pay-in-taxes/

 

Strategic CSR - BP

I found the recent BP settlement with the U.S. government regarding the 2010 Deepwater Horizon oil spill in the Gulf of Mexico interesting because of the individual indictments they contained:

“Donald J. Vidrine and Robert Kaluza were the two BP supervisors on board the Deepwater Horizon rig who made the last critical decisions before it exploded. David Rainey was a celebrated BP deepwater explorer who testified to members of Congress about how many barrels of oil were spewing daily in the offshore disaster. Mr. Vidrine, 65, of Lafayette, La., and Mr. Kaluza, 62, of Henderson, Nev., were indicted on Thursday on manslaughter charges in the deaths of 11 fellow workers; Mr. Rainey, 58, of Houston, was accused of making false estimates and charged with obstruction of Congress.”

As the article in the url below indicates, this represents a shift in emphasis. While the prosecution of individuals for wrongdoing in business settings was common up until the 1970s, after Watergate (when companies were found to be using slush funds to bribe foreign government officials, as well as to donate secretly to Nixon’s re-election campaign), Congress began to hold companies responsible for actions committed by individuals on behalf of the organization:

“Legal scholars said that by charging individuals, the government was signaling a return to the practice of prosecuting officers and managers, and not just their companies, in industrial accidents, which was more common in the 1980s and 1990s.”

This focus on the organization was reflected in legislation, such as the Foreign Corrupt Practices Act (see: http://strategiccsr-sage.blogspot.com/search/label/FCPA), and standardized throughout the judicial system in the U.S. via the 1991 Federal Sentencing Guidelines. This has meant that individual culpability has been de-emphasized for the last few decades in favor of punishing the corporation:

“[Jane Barrett, a University of Maryland law professor and former federal prosecutor] noted that it was unusual for the Justice Department to prosecute individual corporate officers in recent years, including in the 2005 BP Texas City refinery explosion that killed 15 workers, where only the company was fined.”

This decision by the government to indict two BP Managers for manslaughter and hold another one in contempt of Congress, therefore, suggests a recognition that, since corporations cannot be thrown in jail, focusing on organizational liability and letting individual perpetrators off-the-hook is an insufficient disincentive to commit harm:

“They are the faces of a renewed effort by the Justice Department to hold executives accountable for their actions. While their lawyers said the men were scapegoats, Attorney General Eric H. Holder Jr. said at a news conference, “I hope that this sends a clear message to those who would engage in this kind of reckless and wanton conduct.””

Take care

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

© Sage Publications, 2011

http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

In BP Indictments, U.S. Shifts to Hold Individuals Accountable

By Clifford Krauss

November 16, 2012

The New York Times

Late Edition – Final

B1

http://www.nytimes.com/2012/11/16/business/energy-environment/in-bp-indictments-us-shifts-to-hold-individuals-accountable.html

Strategic CSR - Tobacco

I am still processing the news, contained in the article in the url below, that tobacco companies in Australia will no longer be able to see their products with their regular, brand-oriented packaging. Instead, they will have to display extremely graphic photos and statements in large bloc lettering stating how “Smoking Causes Lung Cancer”:

“One of the world’s toughest cigarette labeling laws is set to take effect in Australia in December … . Graphic images of mouth ulcers, cancerous lungs and gangrenous limbs will dominate the front of all cigarette packages sold in the country, and brand logos will be banned, after a landmark ruling by the High Court of Australia determined that the new laws were consistent with the Constitution and did not violate the rights of Big Tobacco.”

I find this decision fascinating on two levels: First, talk about societal indictment of a particular practice!

“Australian officials welcomed the ruling, which they hope will combine with some of the highest taxes in the world on tobacco to further drive down smoking rates.”

Second, for the businesses and executives who run them, it must be increasingly difficult to justify to themselves that they are adding social value. In the lawsuit, British American Tobacco, Imperial Tobacco, Japan Tobacco, and Philip Morris Australia had all argued that new law was an infringement on their intellectual property rights—i.e., their right to sell their products under their established brands. Part of me is amazed that a government would be willing to go so far (the photos are extremely graphic), although part of me is also a little shocked at the infringement of a business’ right to operate:

“The Australian decision on the suit filed by the multinational tobacco companies was the last major legal hurdle to implementing the new rules, which require health warnings to cover 75 percent of the front of cigarette packages and 90 percent of the back starting Dec. 1. Brand logos and colorful designs will be banned, with only a small space remaining where the brand name and variant of the cigarette can be printed. Packages will be required to be a uniform shade of olive green.”

It will be interesting to see how other governments respond:

“The European Union already bans cigarette advertising on billboards, television, radio, print media and the Web. The Union also prohibits tobacco companies from sponsoring cross-border events. National governments can go further, and some member states have banned tobacco companies from distributing promotional merchandise like ashtrays and umbrellas.”

There is evidence to suggest the strict tobacco laws already in place in Australia have already made a difference:

“Partly as a result, smoking rates in Australia have declined in recent years and stood at 16.4 percent among adult men and 13.9 percent among adult women as of 2010, according to figures from the Australian Cancer Council. In the United States, by comparison, most recent data from the Centers for Disease Control show the smoking rate is 21.5 percent among adult men and 17.3 percent for adult women.”

Contrast this response, however, with the response from U.S. courts in the article in the second url below:

“A U.S. appeals court ruled on Friday that cigarette companies do not need to comply with new federal rules requiring their products to show graphic warning images, such as of a man exhaling smoke through a hole in his throat. The 2-1 decision by a court in Washington, D.C., contradicts a ruling in a similar case by another court in March, setting up the possibility that the U.S. Supreme Court will weigh in on the dispute.”

Although the images are nowhere near as graphic as the ones being imposed on firms in Australia, the logic behind the Court’s decision was that the U.S. government’s demands infringed the corporations’ right to free speech:

“’This case raises novel questions about the scope of the government's authority to force the manufacturer of a product to go beyond making purely factual and accurate commercial disclosures and undermine its own economic interest -- in this case, by making 'every single pack of cigarettes in the country mini billboard' for the government's anti-smoking message,’ wrote Judge Janice Rogers Brown of the U.S. Court of Appeals for the District of Columbia Circuit.”

Take care

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

© Sage Publications, 2011

http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

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Australian High Court Upholds Tobacco Rules

By Matt Siegel

August 16, 2012

The New York Times

Late Edition – Final

B7

http://www.nytimes.com/2012/08/16/business/global/australian-court-strikes-down-tobacco-challenge.html

Court: Cigarette companies don’t have to show graphic warning labels

Reuters

August 24, 2012

NBCNews.com

http://www.msnbc.msn.com/id/48779505/ns/health-addictions/

Strategic CSR - Diversity

The article in the first url below falls under the category of good intentions, but unintended consequences. The article reports on a recent announcement by the Obama administration to create minimum requirements (up to 7%) for the number of disabled workers as a percentage of overall employees of federal contractors. While not mandatory, those contractors who do not meet the requirements could have their contracts revoked:

The good intentions:

“The proposal could reshape hiring at roughly 200,000 companies that generate $700 billion a year in contracts with the federal government. They include defense contractor Lockheed Martin Corp., aircraft maker Boeing Co. and firms across the health-care, construction and information-technology industries.”

The unintended consequences:

“Companies have flooded the department with complaints that the rule amounts to a first-ever government quota for hiring disabled workers that would expose them to a thicket of legal pitfalls. Some employers say there might not be enough qualified disabled workers in their fields to meet that target and that they may have to fire nondisabled workers to achieve the ratio. Others say that existing federal law actually prohibits them from asking whether a job applicant is disabled, potentially forcing firms to violate one law in order to comply with another.”

The directive is particularly confusing, given that:

“The scope of what would constitute a disability also isn't clear since the Labor Department's proposal doesn't include a specific list. The Americans with Disabilities Act, updated in 2008, says that workers are disabled if they have a physical or mental impairment that substantially limits one or more of their major life activities. Lawyers who represent employers say that could include hundreds of possibilities from blindness to deafness to the less apparent such as asthma or mental illness.”

The issue of hiring discrimination against the disabled is very real and firms should be incentivized to ensure equal opportunity applies to all who want to work. It is not clear, however, that a hard and fast number will achieve the stated goals. As the article in the second url below notes, this is particularly true if the federal government itself is unable to meet the standards it is imposing on for-profit firms:

“… as HR Policy, an association of chief human-resource officers, notes, the federal government itself has only 5% disabled on its payrolls—and the Labor Department's percentage of disabled employees has decreased every year since President Obama took office, despite a sharp increase in the number of department employees.”

Take care

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

© Sage Publications, 2011

http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

U.S. Pushes Target for Hiring the Disabled

By Melanie Trottman

February 29, 2012

The Wall Street Journal

Late Edition – Final

B1

http://online.wsj.com/article/SB10001424052970204520204577251303726662194.html

The Wrong Way to Help the Disabled

By James Bovard

April 9, 2012

The Wall Street Journal

Late Edition – Final

A15

http://online.wsj.com/article/SB10001424052702304692804577281840611106300.html

Strategic CSR - Patagonia

The article in the url below reports Patagonia’s recent decision to re-structure itself as a Benefit Corporation (http://www.bcorporation.net/). It is the first company in California to do so:

“The legal status affords a company’s directors legal cover to consider environmental and social benefits over financial returns.”

In particular, Benefit (or B) Corporations are required to:

“1) Have a corporate purpose to create a material positive impact on society and the environment.
2) Redefine fiduciary duty to require consideration of the interests of workers, community and the environment.
3) Publicly report annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard.”

California is one of seven states that has passed legislation allowing B corporations (http://socentlaw.com/tag/ben-jerrys/, while similar legislation moves forward in a number of other states http://www.benefitcorp.net/state-by-state-legislative-status):

1.  Maryland        effective Oct. 1, 2010
2.  Vermont         effective July 1, 2011

3.  New Jersey    effective March 7, 2011
4.  Virginia           effective July 1, 2011
5.  Hawaii            effective July 8, 2011
6.  California        effective Jan. 1, 2012
7.  New York      effective Feb. 10, 2012

The B corporation certification is awarded by B Lab, a nonprofit organization that acts:

“… the same way TransFair certifies Fair Trade coffee or USGBC certifies LEED buildings.”

To date, B Lab has awarded Benefit Corporation certificates to 517 firms, with $2.9 billion in revenues in 60 different industries and an ambitious mission:

“B Corporations are a diverse community with one unifying goal: to redefine success in business.”

Rather than the end of a process, therefore, Benefit Corporation status is the starting point for firms to operate at higher standards of transparency and accountability. In order to enable this, B Lab places specific reporting requirements on firms to ensure accurate information about operations is disseminated to stakeholders:

“Through a company’s public B Impact Report, anyone can access performance data about the social and environmental practices that stand behind their products. … As a result, individuals will have greater economic opportunity, society will move closer to achieving a positive environmental footprint, more people will be employed in great places to work, and we will have built stronger communities at home and across the world.”

The evolution of the B Corporation reminded me of the Ben & Jerry’s case that I teach in my strategy course (Ben & Jerry’s: Preserving Mission and Brand within Unilever, 9-306-037). In particular, it reminded me of the “Ben & Jerry’s law” that was passed by the Vermont legislature in the run-up to Unilever’s acquisition of the firm in 2000. The law allowed the Boards of Vermont firms to consider factors in addition to shareholder value when deciding whether to accept a takeover offer (http://www.businessweek.com/smallbiz/content/apr2010/sb20100421_414362.htm).

More background information on this case, and broader issues related to B Corporations, can be found at: http://socentlaw.com/tag/ben-jerrys/

Take care

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

© Sage Publications, 2011

http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

Patagonia Pioneers Sustainability Legal Status

Environmental Leader

January 5, 2012

http://www.environmentalleader.com/2012/01/05/patagonia-pioneers-sustainability-legal-status/