Canada’s Corporations: Ready for Prime Time?

May 12, 2013 at 11:24 pm  •  Posted in Penny's Pen by

In a 2003 Ottawa Citizen article, I wrote that just as Canadians constantly assess our country’s political role internationally, we must also be cognizant of our corporate image. Our brands and companies carry our pride and our flag as well as any Olympic athlete or renowned artist. Then, I was concerned that too few Canadian companies were involved with the UN’s Global Compact, dedicated to the improvement of corporate citizenship globally, by way of recognized principles and ‘best practices’ in the fields of human rights, labour standards, environmental practices and corruption. At that time, Talisman was the target of concern, a company which learned a tough lesson and in the process, knicked our flag.

One decade later, I have reason to dig that article out again.

Canadian mining companies, Canadian retailers and a Canadian engineering firm are all embroiled in headlines which we never would have believed. Allegations of kickbacks, fraud, bribery, environmental degradation, improper use of security forces leading to rape, and now the worst shame of all, the loss of over 700 lives ( and the numbers are still rising) in the tragic Bangledeshi fire in which at least one Canadian brand has acknowledged responsibility and has promised to ameliorate the audit practices of their supply chain. ( Governance challenges in Bangladesh however, remain a huge stumbling block.  A Reuters article reports that 30 of their MPs are in fact, garment manufacturers. Making the rules/laws could appear to be a morass of conflicted self-interest).

Are our Canadian companies ready for the prime time in the globalized/Twitter world? Have we paid enough attention to warning signs? Do we want to confront tough issues which require the attention of not only consumers and shareholders, but of our corporate directors ( a silent lot) who arguably have a fiduciary duty to shareholders as well as to their boards.

Some would argue that we think too much of ourselves. That Canada alone, will not change the way developing countries govern.  Others argue that in order to dialogue and change, we must remain in countries which need help, in order to improve their economy. (This is certainly appropriate for Bagladesh.  Ian Bremmer, the President of the Eurasia Group, a company which specializes in the management of political risk, notes that the garment industry of Bangladesh is worth $20bn and employs 3.2 million individuals. In particular, the rate of female employments has been raised from 26.1% in 2002 to 36% _ a good sign).

These arguments are valid but they miss an ethical and moral point. Whether Canada can change the world does not mean we should not try. And it definitely, does not mean we should ignore standards which we ourselves would not want for our own workers. In 2004 amendments to the Criminal Code were passed, mostly in response to the terrible 1958 Westray disaster in Nova Scotia. This federal legislation, passed to focus on corporate accountability, establishes a legal duty for all persons directing work to take reasonable steps to ensure the safety of workers and the public. Is it too much to ask that Canadian companies, when they are operating overseas, make a concerted and real effort to ascertain that other workers have those same standards?

Today, there are only 77 Canadian companies, universities and associations signed up to the Global Compact. However, it’s worth noting that some of these companies have been dedicated leaders in sustainability and CSR practices for years. Hudson’s Bay, under their former CEO, George Heller, aggressively pushed the retail sector many years ago for enhanced oversight of supply chain. Mountain Equipment Co-op is a stellar leader in ethical sourcing and environmental protection. Both Nexen and Suncorp have been involved since the inception of the UN project and to their credit, some of our gold companies have signed on. Gildan Activewear, which does not appear to be a member of the GC, nevertheless, has demonstrated great concern about their practices and VanCity in BC has been a leader for years. GE also has consistently been mentioned as a good corporate citizen.

But in spite of examples, we are still not registering on global lists. SustainAbilty, founded in 1987, a leading and respected consulting company, just published their 2013 index of top sustainable leaders. There are not any Canadian companies listed in the top 10. (Unilever is number one, followed by retailers Patagonia and Puma). To make matters worse, Transparency International, the global organization dedicated to fighting corruption) has over recent years, has accorded Canada various ratings. ( Between the SNC allegations and the Charbonneau’s inquiry into business and political corruption in Quebec, it‘s difficult to believe our rating will go up anytime soon).

But there is hope. A new global “kid on the block” is making good waves. Following the Global Compact’s direction, Professor John Ruggie of Harvard’s Kennedy School of Government was tasked to find an implementation model that both business executives and human rights activists could take to heart. Following 6 years of hard work, the Guiding Principles ( GPs) on Business and Human Rights were announced last year. The principles rest on three moral and practical pillars of Respect, Protect and Remedy. Already, they are making a difference as both companies and countries implement their “best practices”

But where is Canada’s corporate “tone from the top”? Why do corporate leaders only speak after a disaster? It’s too late for over a thousand lives lost but not it’s too late to prevent other tragedies. Canada can help to change the world – no, not alone – but we owe it to ourselves to try.