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News & Events

From left: Harlan Loeb of Edelman, Kellogg Professor Daniel Diermeier and retired Royal Dutch Shell executive Roxanne Decyk spoke on a panel at the Kellogg-Aspen Business & Society Leadership Summit on Feb. 28.

Aspen conference

5 things companies need to know to avoid a "near-death" experience

Experts at the Kellogg-Aspen conference share how to go from activist target to change agent

By Kate Proto

3/4/2014 - At the Kellogg-Aspen Business & Society Leadership Summit, corporations, NGOs and academics came together to discuss how companies and activists must collaborate to create regulations for a global economy. Phil Radford of Greenpeace shared that there are times when "you have to give a corporation a near-death experience" to effect change within industries.

Here are five things that could help your company move from activist target to change agent.

1. Recognize you do not have the public's trust

According to Edelman's annual trust survey, among the four main types of institutions (government, business, media and NGOs), NGOs are now the most trusted organizations in the world, while trust of businesses and government is increasingly dropping.

“The trust gap is growing, and the role that NGOs have been playing in this space has only been increasing,” said Kellogg’s Daniel Diermeier.

2. Got global operations? Take a close look at your supply chain

Harlan Loeb, head of global crisis & risk management at Edelman, shared that "companies need to know they will not exist if they don’t have more adaptive and resilient operations and take a far more active role in policy."

The Rana Plaza factory collapse in Bangladesh and FoxConn practices in China show how companies all along the supply chain can be held accountable in the court of public opinion. This sometimes requires greater action from groups caught in their partners’ scandals.

Kellogg’s David Austen-Smith noted that, most likely as a result of FoxConn fallout, “Apple is leading the Electronic Industry Citizenship Coalition, which is basically designed to get smelters in Africa to be conflict-free.”

3. The bigger the company, the more likely a target

Chris Jochnick of Oxfam said NGOs' resource scarcity "drives the decision to look for large actors who can influence the corporate sector most broadly." Other companies might be engaged in more harmful practices, but the attention – and the responsibility – will fall on the industry leader.

As Kellogg’s Brayden King pointed out, “What social media can do is create a mini-stage where NGOs can build enough hype that CNN and the Financial Times pay attention.”

4. Welcome NGOs through the front door, or they'll come in "through the roof"

Diermeier pointed out that sometimes, indignation exists among corporate players when it comes to NGOs. “Some have a ‘Who invited you?’ mentality,” Diermeier said.

But as Ben Packard, former vice president of Global Responsibility at Starbucks and current director of Corporate Engagements at The Nature Conservancy noted, “There are a lot of stereotypes between sectors. When talking about governance gaps, people need to know it is more than just carrots and sticks. There are new ways to create value, doorways to open.”

5. Consider collaboration within your industry to be a "pre-competitive issue"

“Companies are beginning to see sustainability as a pre-competitive issue – something they can work on together, set standards and learn from each other,” said Jason Clay of World Wildlife Fund. “Because they have decided that the reputation of the worst company affects every company in the sector. How they make and sell their products, that’s competitive. Whether they’re given a license to operate in a country, that affects them all. And they all need to address those issues to protect themselves.”

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As Diermeier shared in his summit remarks, “We're living in an age where business has arguably become the main driver of social, economic and political change in the world. That means businesses are being held accountable for the consequences of this change.”