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Printer Friendly Page Are Corporations Providing What People Want? ~ #4

Are Corporations Providing What People Want? ~ #4

By Alan F. Kay, PhD
2002, (fair use with attribution and copy to authors)
June 24, 2002

High quality poll findings, representing the whole world's population of 6 billion, have only recently become available, thanks to a remarkable collaboration of top national polling firms in over 20 countries. Global public views are beginning to emerge. For example, data over the last few years shows that people everywhere want better education, health care and environmental protection. Yet governments spend more on the military and large projects financially valuable to elites or to some special interests and of little or negative value to ordinary people. This column covers global views of corporate responsibility and illustrates how a flawed poll contributes to confusion on these issues.

Global research findings show that corporations of all kinds generally rate low with respect to how they treat their workers, the environment, and the longer term future of the world. The commercial success of many multinational corporations comes from delivering quality products and services at acceptable prices. This jibes with a majority of the global public who believe that producing quality products at the lowest price is a top corporate obligation.

Further data from Environics International, Toronto, Canada in global collaboration with top national pollsters shows that the global public's trust in values-based institutions, NGOs (civil society) and religious organizations, is much greater than public trust in global companies and in their own national governments. The net ratings ("trust" minus "don't trust") of NGOs, +36%, and religious organizations, +21%, are high compared to national governments, -8%, and global companies -9%. Other institutions score between these extremes: press and media +6%, large domestic companies +2%, and trade unions -2%. That is one of the first visible features of the emerging global picture of corporate responsibility.

In every one of the countries surveyed, majorities of people continue to think large companies should go beyond their traditional economic roles. A year ago 36% of the world's public wanted large companies to set higher ethical standards and build a better (socially and environmentally more responsible) society. Only 26% wanted them to focus on making profits in ways that obey all laws, and 32% were somewhere in between these two viewpoints. These findings exhibited a swing of the public toward seeking more corporate responsibility compared to findings two years earlier in 1999.

Scandals at Enron, Arthur Andersen, WorldCom, and Merrill Lynch, in the news over the last year show mass media increasingly critical of corporate treatment of customers, workers, and investors. Asking key questions on corporate ethics now after these scandals, would be very valuable. I expect wide demand for increasing corporate responsibility will be the reaction of people around the world to the proliferation of unethical corporate behavior.

The UN has responded to the public's growing awareness of the need for corporate responsibility. Secretary General Kofi Annan's UN Global Compact which asks corporations to engage with its 9 principles of good corporate citizenship (on human rights, workplace standards, and the environment) now researches their actual performance. Many mutual funds, pioneered 25 years ago by the Calvert Group and Pax World Fund, screen corporations for ethical standards before they invest. Such socially-responsible investments represents over $2 trillion in the USA alone.

One reason for the mistrust of global companies is lack of credible information on their social and environmental practices. Here is another glimpse of the emerging picture of corporate mistrust worldwide. The percent of the world public that finds information sources on corporate social and environmental practices as the most credible are in decreasing order: investigations by interest groups or journalists, 32%; corporate reports verified by independent bodies, 27%; corporate reports verified by government, 18%; and unverified corporate reports, 9%.

When polling is not done consistently on the same basis, erroneous and confusing conclusions emerge. Business Week (6/24/02, 338) compared the amount of the US public's trust in corporations, in the wake of major scandals hammering US stock markets. The comparison was based on a question asked five times in the last 2 1/2 years. You might expect the Business Week surveys to show willingness to invest would drop along with trust, but they did not. In fact, when asked most recently, 6/7-9/02, for the first time a majority said their investment policies would not change.

How come? The questions were asked of investors only! Those dropping out of investments were not allowed into the survey and every one of them would say their investments had dropped, not stayed the same. If they had been included in a random sample, the balance would have slipped significantly toward decreasing willingness to invest. The sample, biased by leaving out those no longer investing, created the erroneous result. The difference between good and bad polls can seriously mislead the public and political reformers.

 

 

>>> 2.5  The Polling Critic

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