Tel. 416-924-4449
Fax. 416-924-4094
Discussion of Corporate
Accountability: Presentation to the Commission
Our organization is spearheading a global initiative that is involved with the activity that this commission seeks to address, and we are both happy and proud to share our learnings and observations in regard to the subject of Corporate Accountability.
I am writing in anticipation of my review of the Commissions documents, to indicate my perception of some of the problems prior to addressing the Commissions direct questions.
We would like to share some of our specific experiences with the notion of Accountability, and then we will outline a number of initiatives that we have undertaken in order to affect Corporate Accountability.
Looking back over time, we are struck by the necessity for the defining of language around the notion of Accountability as this notion is not too distinct from the notion of Responsibility. Back in the early 80's in a global think tank (Planetary Initiative for the World We Choose) we addressed this issue and were struck by the inability of institutions and individuals to recognize the relationship between rights and responsibilities. We followed this one issue for almost twenty years. Sadly, little progress has been made notwithstanding our personal attention to this issue in many conferences including the Vienna Conference on Human Rights in 1993 and years later at the World Futures Society in 1996. To-day we are quite struck by a similar dichotomy existing in the language around Accountability. Certainly work need be done in this particular area to identify the similarities, and the obvious conclusions that will flow from making the connection between accountability and responsibility.
In particular in the media sector, we find Media very quick to identify its right of Freedom of Speech, but, virtually all media completely ignores its responsibility to society in the nature of the information and perspective that it foists upon the public consciousness.
We note the difficulty in achieving responsibility from Media related businesses in their attempt to bring forward news in a responsible manner. We believe that there is a specific necessity for corporate media organizations to understand that their claim to the "right" of freedom of speech, has attached to this right, a very clear responsibility to the well being of society in the manifesting of that right. This brings the focus on accountability of the media to its constituency: the public good. In our proposed model, we are asking Media corporations to dedicate 1% of its media to our 1% Solution program.
Another issue, is the terminology of Accountability. What does it mean? Who is accountable to whom for what? We might choose to look at this commission. Who has authorized the Commission to look how deep at what issues? This brings to mind two aspects of accountability that I have attempted to bring forth over the past number of years. One issue has to do with an issue I will bring forward as a proposal for the future, but this proposal began as an invitation to the Institute of Chartered Accountants to discuss the issue of the 1% Solution in their professional dialogue within the context of the profession of Chartered Accountants. I should mention that at the time I had the formal designation of Chartered Accountant. After many attempts to bring Accountants into the discussion it was clear that they would not engage in the discussion, and I was left no choice but to resign from the Institute on this point of Principle. It should be pointed out that the Certified General Accountants (CGA) profession was also approached to engage the discussion with the same result. But to-day, I do not address you as a Chartered Accountant, but rather as a former Chartered Accountant. This begs the question as to whom is the Institute of Chartered Accountants accountable to for not discussing the issue brought forth by one of their members, on an issue of importance, not just to the profession, but also to society in general. We also note that this Commission does not have a representative of the Institute for Chartered Accountants, and wonder why this is the situation given the implied skills of Chartered Accountants and the notion of Accountability. In fact, as recent as February 21, 2001 when I called the Institute of Chartered Accountants of Ontario, they had no awareness of this Commission. Hopefully by the time of the Toronto Meeting they will choose to address this Commission.
We also note in the field of book publishing that there are over 600 titles of books (database Amazon.com) that contain the word Accountability in its title. We approached Canada's foremost bookseller (Indigo) with this information and suggested that we identify a category on accountability as a marketing tool for these 600 plus books. We even proposed a marketing strategy of how to bring this information forth to their customer base in a positive and informative way. We believed that by creating such nomenclature, books on the subject could be both marketed more effectively, and also be categorized into the area of Accountability that were being referenced. i.e. Medicine, health, government, business, environment, etc. While the President's office indicated a lack of interest in this idea, the President had no difficulty in acknowledging she had overpaid $30 million dollars for a corporate acquisition of a competitor. This amount is more than double our full Research Proposal and more than three thousand times the cost of what we had proposed in our marketing strategy. I believe that one of the outcomes of this Commission, would be to identify the notion of Accountability as a descriptive category of Books.
We would like the Commission to be aware of the progress that Canada has made in the field of Philanthropy. I would like to state that my knowledge is limited in this field, but I have some information that is noteworthy to consider when one looks at the Imagine Program that was originally created to stimulate Corporate Giving. When this initiative was originated, as I reflect on this 5% (of profits) was considered to be the necessary contribution to achieve corporate responsibility. I believe this percentage lasted for less than two years when the organization was pressured by foreign investors to reduce the contribution to 3%. Canadian corporations followed suit swiftly, and today I believe the percentage is down below 2%. This is unnacceptable corporate behaviour and a profound manipulation of what it meant to be a "good corporate citizen". If one has ever approached major funding institutions for support (Royal Bank for example), their formulas create a disincentive for creative sustainable human activity. Their model is a make work project for accountants and has little to do with philanthropy. Most, if not all corporations use their philanthropy attached to their own closely held foundations that support the marketing and promotion budgets of the parent corporations to an extent that makes a mockery of the notion of tithing the common good. How do we change this in our Culture? The word tithe is little understood, and the notion of giving is not understood in all the varying levels in the nature of giving. There are levels of giving that are expressed in religious contexts and I am not here to address the varying levels, but one can clearly state that the current practice of Corporate tithing is the lowest form of giving as defined by most traditional beliefs. (Judao/Christian) and one would not be wrong in questioning their activity as giving at all.
Prior to writing our submission,
We approached the Canadian Chamber of Commerce. An organization that represents
170,000 Canadian businesses. The reasons I approached the Chamber was three
fold:
1) to determine if they were planning a presentation to this Commission.
2) to involve the Chamber in a fund raising initiative to enable under funded
organizations or individuals to make a presentation to this Commission.
3) to bring the 1% Solution to the attention of the Chamber for their membership
to discuss.
You may find it of interest to note that their plate is full and no activity is anticipated at the time of my writing. As a closing remark in my discussions with the Chamber, I asked a question regarding Canadian businesses tradition of discussing business and transacting business in US dollars (as opposed to Canadian dollars). My perception of the reaction of the Senior Vice President, Policy to my question was that he did not understand the importance of this concept. I would state to the Commission that this is important, and that we ought to consider in our business strategies the idea that we, as Canadian business, transact our business in Canadian Dollars and report our International transactions in Canadian dollars.
We were somewhat surprised
that the Canadian Chamber of Commerce is not considering a presentation to
the Commission, nor is it interested in the four ideas I brought to their
attention. . Does this not speak to the very issue of Corporate Accountability?
Having identified these situations we would like to now broach two related
ideas that are inter-related that this commission ought to be aware of.
Firstly is the notion of our 1% Solution. This is a global program that involves voluntary participation of corporations, institutions, organizations, and individuals intended to build the infrastructure to achieve a Culture of Peace. Our program is attached. This is a multi faceted approach to the development of Accountability in all sectors of our economy. It involves a global voluntary tithing process operating as a brand label program.
Our program is far reaching in the thinking paradigms that are presented. We are talking about transformation. We are talking about global transformation. We are talking about Accountability. When you, in the context of this commission address the term Accountability you must ifdentify a number that relates to your constituency. I suggest that the number 6 billion be in your assessment. If you do anything less you must qualify your opinion, much like an accountant who expresses an opinion on a financial statement using the language of GAAP. Generally Accepted Accounting Principles. GAAP in a globalized world includes six billion people. Your commission must address this in its deliberations. We would also like to bring to your attention a word to consider instead of Globalization. Globality. Why? Globalization is something that is done to you - and there seems to be a great deal of opposing forces to globalization. However, most that are opposed to globalization, are not opposed to globality because we know that we must consider the whole of humanity. We recommend that this commission give some thought to this distinction.
While it may be a dilema for any Nation State to Address the notion of a six billion person world, it behooves this Commission to be clear in its report whether it deals with the world - or the G20, or the G7 (8) or less.
Having stated this as a self evident truth, it means that we are going to have to train a whole new body of accountants to evaluate corporations' financial statements. This is built into our 1% Solution strategy, as we intend to create a new classification for accountant - G.A. Global Accountant. The main perspective that this new designation will bring rise to the expression of an opinion on a corporations behaviour within the context of global responsibility - through participation in the 1% solution. These accountants will form a constituency that will be be Accountable to the 6 billion people on the planet, and will identify whether or not a corporation is participating in the 1% solution at an appropriate level. This designation will be honoured both by the participating business community and by those that are working towards a sustainable future.
This designation, along with the development of Socially Responsible Spending (SRS) ( to go along with the Socially Responsible Investment (SRI) will be a major step towards developing corporate Accountability.
We believe that Corporate
Accountability will change as a result of the individuals in society demanding
a higher level of Accountability, and this will grow from the grass roots.
We have to begin this change in the education systems. We believe that a shift
of awareness will be the driving force for this change and for this reason,
we have enunciated two Proclamations that are the forerunners of this corporate
shift.
1) All Educators both formal and informal are educators for World Peace
2) All Educators for World Peace will shift buying habits of individuals,
corporations, institutions, schools, organizations, to support the 1% solution.
It is expected that the proclamations included in the program of the Culture of Peace will be brought forth by governments, institutions and civil society world wide and we trust that this commission will look to endorse those proclamations and bring them to the attention of the Corporate Community in order that Canadian corporations can effectively position themselves to be leaders in the development of this global initiative.
We trust the above is sufficiently informative to this commission to take in the information and in its report recommend assistance to our program at an institutional level in order that we may move our programs forward from the base of Canada as it would be beneficial to Canada to be the HOME base for this educational activity.
We do want the commission to be aware that we have institutional support for our activity, expressed directly to us from the Secretary General of the World Francophonie Community, from the International Association of University Presidents and from a number of International Organizations that are supporting our proposal..
We look forward to contributing further to the commission on the development of its final position paper on this most important issue.
To summarize our position:
We would like to see this Commission recommend the development of the designation
of Global Accountant and the values relating thereto.
We would like the Commission to assist in the further development of the 1%
Solution Research study that is already proposed and in process of moving
forward.
We would like to see the Commission assist in bringing forth the Proclamations
included in our presentation
We will be pleased to answer any questions if our illustrative examples are
not clear.
International Association
of Educators for World Peace
2 Bloor Street West
Suite 100-209
Toronto, Ontario
M4W 3W2
Tel. 416-924-4449
Fax. 416-924-4094
POST READING Commission
Report.
Next iteration: Having read the Commissions documents , we write to address
the basic questions that the Commission brings forth. In overview, it strikes
the writer that our 1% Solution Research study addresses each of the Six points
that the Commission seeks to shed light upon. In short our program is validated
by the nature of the questions. Certainly our program addresses some of the
issues very directly.
re# 1) As to the the notion of "independent social audits" - our
Global Accountant strategy addresses this directly.
re# 2) Making social responsibility and stakeholder considerations part of
business will not require government intervention, but rather marketing considerations
of use of the Brand Label in society and the requirement of an opinion of
a G.A. will bring greater societal function than is currently being offered
by the mindsets of the current accounting Institutions in the expression of
opinion on Financial Statements.
re# 3) Is addressed directly by the Brand Label Strategy. Of course the strategy
is in its initial phases, and does not propose operational details like time
period for compliance etc.
re:# 4) in terms of corporate democracy, our proposal does not directly address
this issue, but it is inherent in the educational values that is is involved
in process. The Institutionalizing of the process of our program, will lead
us to other processes whereby involvement of various stakeholders will be
integrated. Most of existing proposals are responding to the adversarial nature
of our processes. When we shift the process, considerations involved with
stakeholders will also change. That is not to negate the proposal suggested
in the question.
re: # 5) in general terms, the same can be said of Electoral Democracy and
we agree fundamentally with the principle of barring corporations from reinbursing
individuals for their political contributions.
re# 6) Globalized economy. Our proposal works well for Canada in particular.
As we sit in the shadow of a declining American Economy, rather than be buried
with their failing economic strategy, we can participate with the rest of
the world. We in Canada may set the standards for Globality. We will have
a competitive advantage with every country and we will be selected because
of our strategy and our level of Accountability to our six billion family.
Our model will be transparent, and while debate will continue on which is
the absolute right thing to actualize, in the process, we will be responsible
to the whole planet, and we will not be incapacitated by the deafening pleas
of our brothers and sisters around the world who just want to have clean air,
clean water and a healthy growing environment.
As a final note I would
like to bring to the attention of the Commission the areas that I feel the
Commission does not appear to spend enough thought on.
Firstly, in the area of Media Responsibility. Media conglomerates are proliferating
and utilize many public domain rights. Media does not take responsibility
for its activity and certainly does not appear to support ideas of social
Accountability. Media must uplevel its standards on reporting, community involvement
and participation in the 1% Solution contributing 1% of its activity towards
a Culture of Peace.
Secondly, the banks. Canadian
Banks have reduced their compliance to Philanthropic standards negotiated
by foreign corporations who viewed our standards as a "tax". While
foreign corporations can be forgiven for their short sighted behaviour, certainly
Canadian Banks can seek no such refuge. Their corporate tithing coul be in
the 10% range, should be in the 5% range (in the existing system) or at a
rate to be negotiated when the 1% Solution is institutionalized. We recognize
that 1% of Gross may be too high a cost to this sector, but that does not
mean that the bank should be exempt, nor should this sector be permitted to
continue with its insignificant corporate philanthropy policies.
Thirdly, and a very difficult notion to deal with in the context of Accountability, and that has to do with the notion of separation of Church and State. We agree that Church and State ought to be separate. We understand that tax considerations are given to the process of tithing from Individuals to the Church. We do not disagree with this either. We do want to have this commission be aware of the distinction between the Church and Spirituality. This IS a separate issue, and ought to be considered such. We do not have the language to bring it into your discussion of Accountability. We do however note the importance of the distiction between religion and spirituality. There are many movements around the world that are looking into this distinction as there has been a lack of spirituality in business constructs. We look to see this change in the future and we further note that it is changing. Spirituality in the Workplace is a growing concept.. We trust that this distinction may find its way into your report, even as a footnote. It is clear from the International scene that such a distinction is being enunciated, and it behooves us in Canada to be aware of this and develop the understanding and processes that may bring spirituality into the workplace.
Fourthly, education. In Canada we suffer from the BNA Act on the International stage in the discussion of Education. Virtually all international initiatives have the word education reworked to read - awareness and training. There must be some process of Accountability that we might adopt that will enable educators to be more global in their perspective. Certainly Universities are attempting to bridge that gap, but we believe that primary and secondary schooling ought to encourage the developing of a global perspective through the use of wholistic teaching, training, and thinking models. These models are more efficient and more effective than many of the existing pedagogical structures.
Some other areas where attention ought to be paid by this commission that is notably absent in the discussion paper: Triple Bottom Line, Quality of Life Indexing, and Salaries of individuals (executive, and minimum wage relationships). I could expand on these particular issues, but I would trust that these ideas are discussed by other social and economic groups in greater detail than this overview can afford.
I attach my recent reply to the Minister of Finance who chose to misinterpret our 1% solution in order that he could respond to our proposal on the 1% Solution. Who is the Minister Accountable to?