The economic crisis, increased rules and regulations, and heightened scrutiny of boards’ roles have corporate directors feeling pressure to be more effective in the boardroom. PwC’s 2011 Annual Corporate Director Survey (the Survey) of 834 corporate directors offers insight into the biggest corporate governance issues facing directors today. Because 67% of respondents represent companies with more than $1 billion in annual revenue, the Survey illustrates the current boardroom thinking of many of the largest companies in the world.

The corporate governance landscape has changed over the past few years, and as it continues to evolve, directors are working to adapt. Their responses to the Survey indicate that executive compensation, risk management, strategy and succession planning are key areas of future focus. They are also concerned about information technology security and fraud.

"Say on pay” was one of the big stories from the past year, according to the Survey, as it was the first year shareholders had an advisory vote on executive compensation, thanks to the Dodd-Frank Act and the Securities and Exchange Commission’s say on pay rule. Nearly all companies passed their say on pay votes, but directors are still paying attention to shareholder concerns about executive compensation — 72% said they would reconsider executive compensation, even if shareholders voted in favour of their company’s compensation plan. Directors are trying to be more open about executive pay, as well. Nearly half said they changed their Compensation Discussion and Analysis (CD&A) to be more “plain English” so shareholders could better understand the details of the compensation plans. Fewer directors said boards are having trouble controlling CEO compensation — 44% this year compared to 58% in 2010.

Directors also seem to recognize the importance of transparency in general, as they increased communications with employees, major shareholders, analysts, proxy advisory firms, and the media over the past 12 months.

Risk management was an area of particular concern for the directors in the Survey. While more than 83% of directors said there is a clear allocation of responsibility for overseeing major risks on the board, only 19% said their board is very effective at monitoring a risk management plan that mitigates corporate exposure. Even fewer (11%) said their board is very effective at overseeing the company’s strategic use of technology and related risks. More than 40% of directors said it is difficult to add directors with risk management expertise, while more than 52% said the same about adding directors with technology expertise. Fifty-seven percent of directors want to increase their focus on risk management issues in the coming year, and nearly 38% want to devote more time to information technology issues.

Board members themselves are becoming tech savvy. More than 36% said they are using tablets in the boardroom, and 38% said they wished their boards would use them.

Strategy and succession planning are issues directors want to spend more time discussing in the boardroom — 59% want to focus on strategy this year, the same as 2010. The frequency of strategy discussions is also notable. More than half of directors are talking about their company’s strategic plan every six months, while 44% discuss it at least once a year. Regarding CEO succession, more than one-third (36%) of directors said they are not satisfied with their company’s CEO succession plan. And 59% of directors want to spend more time on the issue this year, up from 50% a year ago.

Diversity continues to be a challenge for boards, as more than half of directors say it’s difficult to add gender diversity. More than 65% say it’s difficult to add racial diversity.

In summary, directors are responding to stakeholder concerns, but they know they have more work to do. They recognize the continued need to adapt as the governance landscape evolves in order to enhance their effectiveness as overseers.

Don Keller is a partner in PwC's Center for Board Governance which provides thought leadership, points of view on contemporary governance issues, and training to boards of directors and the governance community.

This article was first published on the Harvard Law School Forum on Corporate Governance and Financial Regulation and is re-published with the author's permission.

Any professional boxer worth his salt will tell you the rules of the game matter. Fighters box in weight classes with specific rules like no hitting below the belt. It's boxing after all; not a gladiator match. Democracy could take a few lessons from boxing, especially now that corporations have the same First Amendment rights as living, breathing citizens. Over the past few weeks, a growing consensus among shareholders, corporate leaders and corporate law experts has emerged. All are urging increased transparency for corporate money in politics.

What are the key rules of the game in a modern American election? Who can be a candidate, who can vote, and who can spend money on the election. It was this third rule that changed last year. Before 2010, corporations were barred from spending in federal elections and in roughly half the states. The Supreme Court changed this in Citizens United allowing them to purchase as many political ads as they could afford. So if democracy were a boxing match, now we have flyweights in the ring with super heavy weights. This is why so many election watchers consider Citizens United to be an electoral game changer.

But election wonks are not the only ones worried about the impact of corporate dollars in American elections. Corporate law experts have also voiced their objections. Corporate law professors including Bebchuk and Coates at Harvard, Jackson and Gilson at Columbia and Klausner at Stanford have expressed concern that the Supreme Court has fundamentally misunderstood how corporate democracy works. Or as Former Chancellor William T. Allen stated at a recent symposium called Accountability After Citizens United, "normatively, I believe business corporations should not be in the business of making political contributions. It's not what the institution is designed for."

While the Supreme Court in Citizens United envisioned a world where shareholders could hold managers accountable for political spending, corporations have several clever legal ways to hide their role in politics from the public. This lack of transparency has been noted by Professors Schepers and Gardberg at Baruch who recently released a corporate political disclosure index. They found that on average those companies spending the most on politics were disclosing the least.

Our capital markets are premised on transparency of information so that investors can compare firms apples-to-apples and invest in the best fit. Keeping big corporate political expenditures hidden from investors may distort markets. Furthermore, shareholders can't hold managers accountable for political spending that they don't know about. The ability of shareholders to object to spending that they can't see is like asking them to box blindfolded.

This week the Committee for Economic Development (CED) is urging companies to stay out of the political thicket. CED is a nonpartisan organization of more than 200 business executives and university presidents, and is a thought leader in the business world. CED is also urging that if companies engage in politics then, they should do so transparently.

Meanwhile shareholders have also quickly engaged on the issue of corporate political spending post-Citizens United. One problem is corporate political spending may trigger costly objections from customers or business partners. The boycotts of Target over its political expenditures in the 2010 Minnesota governors race showed this to be true. Nearly a year later, shareholders were still voicing their objections to this spending at Target's annual meeting in 2011. The reason why Target's shareholders knew about this spending was Minnesota has some of the best political disclosure laws in the country. (Minnesota's good law was recently upheld by the Eighth Circuit, but it was reheard en banc last week).

This is why we need common sense corporate law solutions to address the multiple problems created by Citizens United. There is legislation which would address this problem called the Shareholder Protection Act. It has been introduced in both Houses of Congress and it would give shareholders not only the ability to see corporate political spending, but also the ability to have a say through a vote at annual meetings. The bill is based on the UK's Companies Act, which requires shareholder authorization of corporate political expenditures before the money is spent, as well as clear disclosure of where the money went. And this will have an impact not just on corporate law. If the investing public can see the source of corporate political spending, then so will voters who could take this information into account at the ballot box.

Of course, legislation can take a long time to come to fruition especially with our current fractured Congress. In the meantime, investors can file shareholder proposals (under Rule 14a-8) directly with companies requesting more transparency and accountability. One such proposal won over 53% of the vote this year at Sprint. Another approach is to send the Securities and Exchange Commission (SEC) petitions requesting a new rule for publicly traded companies. A petition was recently filed by 10 corporate law professors urging the SEC to adopt a new disclosure rule on corporate political spending.

With corporations on the American political scene for the foreseeable future, we need to adopt new sensible rules of the game so that we have fair, clean fights in elections to come.

Ciara Torres-Spelliscy is an Assistant Professor at Stetson University College of Law and the co-author with economist Kathy Fogel of "Shareholder-Authorized Corporate Political Spending in the United Kingdom".  This article was first published on the Huffington Post and is republished with the author's permission.

The New Year is a time for reflection, so it was heartening to see Goldman Sachs come out with 63 pages of resolutions.

The investment bank published its “Report of the Business Standards Committee” last week, a document in which it reiterated its principles and announced the formation of many new committees. Goldman will be an open book, the firm pledges, disclosing more clearly how much business the firm does for itself (not as much as all those detractors think) and how much it works for its clients (every waking moment).

Goldman suffered a brutal year, paying a $550 million fine to settle federal claims of civil securities fraud and being vilified at a Senate hearing. Even the $15.38 billion the firm has set aside for compensation in 2010 wasn’t enough to salve the pain. Goldman would like our love, too. And so the powerful investment bank has embarked on a journey of self-improvement, a great American ritual from Ben Franklin to Elizabeth Gilbert. Goldman’s report should have been titled “Eat, Pay, Trade.”

In a video that accompanies the report, Lloyd C, Blankfein, the chairman and chief executive, said the firm conducted a “thorough self-assessment,” followed by a “recommitment to core values and principles.”

It’s language that “reads straight out of a Tony Robbins retreat manual, not your usual business document,” said Christine B. Whelan, a University of Pittsburgh sociologist who has studied the self-help industry.

Of course, releasing the report is a public relations stunt. Some of it was welcome, like the increased financial disclosure. Some may fall by the wayside, like most New Year’s resolutions. Some seems as disingenuous as any piece of professional flackery.

Goldman’s effort fits neatly into what the historian (and former New York councilwoman) Eva S. Moskowitz has called the therapeutic gospel, a doctrine so ingrained in American society that few of us consciously recognize it. The gospel consists of three tenets: Happiness is the supreme goal, problems stem from psychological causes, and those psychological problems are treatable.

The therapeutic gospel is all about me and my problems. Goldman thinks its problems stem, if not from psychological issues, then from attitudinal ones. Significant management and operational changes are starkly missing from Goldman’s leaf-turning exercise. Instead, Goldman has decided that its troubles emanate from not having treated clients nicely. Or, more likely, Goldman thinks its problem is that the world thinks Goldman didn’t treat its clients nicely.

But that wasn’t the problem with Goldman Sachs in the fall of 2008. Creating collateralized debt obligations and betting against their clients was unseemly, but it wasn’t the cause of the global financial crisis. Goldman’s leverage — and the leverage at other major financial institutions — was the real issue.

Goldman’s business model was broken because it made a classic banking mistake: It lent long and borrowed short. All banks are susceptible to runs. Bear Stearns and Lehman Brothers had theirs, deservedly. By the fall of 2008, it was Morgan Stanley and Goldman Sachs’s turn. Goldman took taxpayer dollars and was granted access to cheap Federal Reserve money. Goldman insists that it would have survived the crisis anyway. We’ll never know whether it would have, because the fact is that Goldman received assistance.

Goldman, like all the other major investment and commercial banks, had become too big and intertwined, making the financial system too fragile.

In other words, the flaws in the financial system were structural, more like the problem of poverty and not based on character. As such, they require solutions beyond pledges of better behavior.

Unfortunately, despite a hulking financial reform law, the American financial system still has largely the same structural issues that it had before the crisis. Neither Goldman nor the government shows any inclination to face these issues. What about investors?

The covenant that equity investors have struck with investment banks goes something like this: Deliver high returns and we will allow employees to take about half of the revenue for themselves as compensation. It was always a bad bargain, made worse by the financial crisis. Lehman investors were wiped out. Bear Stearns investors took huge hits. (Whether investors have learned from that experience, or whether they have learned to expect bailouts, is debatable.)

Despite Goldman’s reputation in some corners as Evil Genius, its shares are actually suffering in the marketplace because investors worry about its volatile and unpredictable results from quarter to quarter. These concerns were validated when Goldman reported Wednesday that trading and securities services profit took a big hit in the fourth quarter, dropping 31 percent. The stock slid 3 percent by mid-afternoon in response.

Investors prefer annuities to swing-for-the-fences profits. Compared with pure asset managers and investment banks that specialize in either advisory work or making markets, Goldman stock trades at a discount these days. Goldman’s price-to-earnings ratio stands at less than 10, while Lazard (a pure advisory firm), Jefferies (a market maker) and BlackRock (an asset manager) trade at significantly higher multiples.

Investors often prefer to look at a price-to-book ratio to value financial firms; even on that measure, Goldman is far below its peak valuation.

Could there be an argument that Goldman should break up into three smaller, more focused companies? It would be better for the financial system, and just might lead to the self-improvement that Goldman is searching for.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

Investment banking giant Goldman Sachs Group Inc., seeking to repair damage to its reputation suffered in the aftermath of the global financial crisis, said its management and board had adopted and begun implementing 39 new policies and practices that represent a “fundamental re-commitment” by the firm to “reputational excellence” and increased transparency and disclosure.

“In particular,” the firm said, “our approach must be: not just ‘can we’ undertake a given business activity, but ‘should we.’”

The new policies and practices are described in a 63-page report prepared by a Business Standards Committee set up by the firm last year.   Goldman said the committee “operated with oversight by the Board of Directors, which established a four member Board Committee to provide additional focus and guidance. “ In addition, the firm said it engaged two consulting firms to provide independent advice to the committee.

In July 2010, Goldman agreed to pay a record $550 million penalty and reform a number of its internal business practices to settle Securities and Exchange Commission charges that the firm misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.

The SEC had alleged that Goldman misstated and omitted key facts regarding a synthetic collateralized debt obligation (CDO) it marketed that hinged on the performance of subprime residential mortgage-backed securities.

Among other changes to its business practices, Goldman said it would change its financial reporting methods to provide greater insight into the percentage of the firm’s business derived from proprietary trading.

“Our clients must be at the heart of the firm’s decision-making, thinking and committee governance, both formally and informally,” the firm said. “Above all, we must be clear to ourselves and to our clients about the capacity in which we are acting and the responsibilities we have assumed.”

Goldman said it was establishing a new Client and Business Standards Committee “to place our client franchise at the center of our decision-making processes and to reflect the important interrelationships between clients, business practices and reputational risk management.”

It has also established a New Activity Committee “to consolidate and strengthen existing processes for approving new products and activities and to assess the important question of not just ‘can we’ undertake a given business opportunity, but ‘should we.’”

Goldman said an internal global program to explain and implement the new policies and practices “will represent a large investment of time of our senior management team over the course of 2011.”  The firm said its annual employee performance review and compensation processes would include increased emphasis on “reputational risk management” as well as a focus on “leadership, culture and values.”

The new normal in this economy is shaping up to be anything but normal. Businesses that have thrived for decades as industry icons are now permanently upended by the forces of the Web, social media, and new technologies that are crashing over the economy like a tidal wave.

Industries are experiencing systemic failure as a result of the digital revolution, coupled with an economy stuck in reverse. As noted in the book Macrowikinomics: Rebooting Business and the World, many industries have simply come to the end of their natural lifecycles, and business is going to have to be reinvented around a new set of principles including transparency, integrity, and collaboration.

As a result of these changes, the role of the CEO must evolve as well. The next generation of business leaders will require new talents and a different set of skills to successfully grow business over the next decade. A modern CEO will focus on creating a business culture that's expansive, mapping a social purpose to the creation of goods and services. The new CEO will also change the way we think about leadership, and create a bulwark against the tide of business challenges coming our way over the next decade.

Here are three key characteristics for the modern CEO:

1. No Fear Communications-- The Modern CEO must shake off the "analysis paralysis" and listen and engage with social media. While it sometimes seems impossible to manage the fire hose of information, social channels provide what CEOs need most - unfiltered feedback. What's more, social media is the gift that keeps on giving. It's an early warning system, an instant feedback loop, and a brand sentiment barometer. Although CEOs are increasingly discussed in online venues, few are actually using social media to spread their own message. In a Weber Shandwick Study, nearly two-thirds of CEOs were not engaging online at all, yet those who are enjoyed a better reputation with customers. CEOs need to blog, tweet, fan, follow, and friend their way into the hearts and minds of stakeholders.
2. No Fear Ambition-- A Korn Ferry Study challenged organizations to identify future CEOs by distinguishing between blind ambition and true potential, the latter often being harder to identify. Today's CEO has to be comfortable in the digital realm, with ambitions to embrace mobile and social technologies and be willing to take a company in new directions. TechCrunch notes that it is critical that Chief Executives have the right kind of ambition. That is, ambition for the success of the company rather than ambition for themselves. In 2011 we need to take this one step further. A Modern CEO needs to have ambition for the success of its employees, suppliers, the company, the community, and the planet.
3. No Fear World View -- To achieve success today, CEOs need to cultivate an external world view which guides the company in the broader context. For the Modern CEO, The Triple Bottom Line has become the ubiquitous measure of success: People, Planet, and Profits. The Edelman 2010 goodpurpose® Study provides excellent insights into the rapid globalization of Corporate Social Responsibility (CSR). Consumers in developing countries are leading the way in their drive to buy from companies that are sustainable, and demonstrate a global consciousness. Consumers in Brazil, China, India and Mexico are all more likely to purchase and promote brands that support good causes, outpacing peers in the west. U.S. companies can take lessons from these emerging markets, where eight out of ten consumers expect brands to donate a portion of their profits to support a good cause.

The characteristics of a great CEO will continue to evolve as society changes, and for a while it will be rough sledding. There is no doubt that a change is imminent however, as consumers and shareholders demand it. Right now 64% of consumers believe that it is no longer enough for corporations to give money; they must integrate good causes into their everyday business. While CEOs still need to set vision and strategy, going forward that vision will be mapped to the social purpose that the company actually serves. These are the realities of a global, interconnected world.

Ann Charles is CEO of BRANDfog, offering social media and Corporate Social Responsibility strategy for CEOs, and founder of The Great Leaders Conference, celebrating Great Leaders in CSR, Social Advocacy and Sustainability.

Imagine that you're the CEO of a Fortune 500 company, running a multi-billion dollar organization with its many moving parts. One day your Google alert shows an article stating that your company's operations in Asia are employing child labor, with young children working long days in harsh conditions. By the next morning there are 62 articles and 305 mentions of this story. By afternoon there's a Facebook boycott with 10,000 fans. The Twittersphere has lit up with Tweets and hashtags like #slavelabor, #boycott, and #savethechildren--terms that are now unfortunately tied to your brand. You've been "Inter.outed," a term used to describe how a company is "outed" on the Internet for doing very bad things.

We've all heard the horror stories about how brands can be derailed through negative social media. Remember the Domino's Pizza nose-picking YouTube video, and "Motrin Mommies" digital disaster? Recently, The Gap was caught with its khakis down in a logo design backlash. In less than 48 hours of social pressure, the Gap withdrew its new logo. There are also more serious examples. Whole Foods suffered a Facebook, Twitter, Flickr, and YouTube boycott as well as bloggers who labeled them "A-Hole Foods" after the CEO stated that not everybody deserves health care. BP now has a worldwide Facebook boycott of more than 600,000.

While these boycotts can damage a brand, until now business has not yet experienced the full force of Internet vengeance. There exists certain lawlessness on the Web, and individuals are only starting to understand the mighty influence they wield when they mass together in groups. Internet communities are still in their infancy, and users have yet to grasp the full depth of the power they have on the Web.

The New York Times reported on "cyberposses" in China, who dole out online vigilante justice by hunting down and punishing people. Internet vigilantism is often activated not for illegal behavior, but for socially reprehensible behavior. "The Kitten Killer of Hangzhou," for example, became the target of cyber sleuths who tracked her down and outed her. She lost her job, her apartment, and was made to leave town.

It's not much of a stretch to imagine that Internet vigilantism will soon cross over from individuals to organizations. Social activists use every media channel available to express disapproval for unfair or dishonest business practices. Users could easily turn to online vigilantism to punish companies that have attracted their wrath. The web is a great repository for track records, and has a long memory. If resentment over exorbitant Wall Street bonuses juxtaposed against illegal housing foreclosures ever boils over, vigilante groups could easily launch cyber-attacks on the banks they deem responsible. If a company employs sweatshop labor, is toxic to the planet, or mistreats its employees, tech-savvy users can crash servers, take down websites, and disrupt e-commerce business. Moreover, they can wage a ferocious battle for the hearts and minds of consumers to damage brand reputations.

So what is a CEO to do?

In this brave new world, CEOs need to prepare for the era of total transparency. Here are five steps a company can take to protect itself by strengthening its relationship with stakeholders:

• Clean house. Make sure your company is acting in good faith with customers, partners, and suppliers.

• Examine the supply chain, and make sure you are in compliance with all environmental and employee issues.

• Elevate your corporate social responsibility (CSR) programs to front and center. Integrate socially responsible initiatives directly into the core DNA of your company.

• Humanize your brand. Use Twitter, LinkedIn, and blogging to address issues directly, take user concerns seriously, and respond quickly and thoughtfully with no marketing spin.

• Always tell the truth.

On the web, all transgressions are trackable, and no corporate misdeed will ever be forgotten. Companies must embrace the new culture of transparency for survival, since Netizens are willing to fight hard for anything they believe in--even if it's just a logo.

Ann Charles is CEO of BRANDfog, offering social media and Corporate Social Responsibility strategy for CEOs, and founder of The Great Leaders Conference, celebrating Great Leaders in CSR, Social Advocacy and Sustainability.

In a demonstration of how perception can sometimes trump reality, Johnson & Johnson topped a list of companies perceived by American consumers as having the best reputations for corporate social responsibility (CSR) practices.

The Corporate Social Responsibility Index, developed by the Boston College Center for Corporate Citizenship and the Reputation Institute, attempts to measure how companies' reputations are affected by public perceptions of performance related to citizenship (the community and the environment), governance (ethics and transparency) and workplace practices.

The 2010 CSR Index is based on a survey of 7,790 online U.S. consumers conducted in January and February 2010.

Johnson and Johnson has since admitted - months after the CSR Index survey was conducted - that it misled regulators and consumers by using company-paid contractors to buy defective Motrin painkiller products from store shelves rather than announce a recall.

In testimony before a Congressional committee only two weeks ago, company CEO William Weldon said, “This was not one of our finer moments.”  The “phantom recall” is reportedly the subject of a U.S. criminal investigation and at least one shareholder lawsuit.

The 2010 CSR Index shows the following companies in the top 25 positions:

1. Johnson & Johnson
2. The Walt Disney Company
3. Kraft Foods Inc.
4. Microsoft
5. PepsiCo
6. Apple
7. Hershey Company
8. SC Johnson
9. Kellogg
10. Google
11. Caterpillar
12. Intel
13. Publix Super Markets Inc.
14. JC Penney
15. Green Mountain Coffee Roasters
16. Campbell Soup Company
17. Marriott International
18. Anheuser-Busch InBev
19. UPS
20. Adobe
21. AmerisourceBergen
22. General Mills
23. Clorox
24. Eastman Kodak
25. Fidelity Investments

Companies with the largest year-over-year gains in the Index’s top 50 companies included Johnson & Johnson, Apple, Caterpillar, Intel, Adobe, Dell, AMD, Unilever, Goodyear, Dunkin’ Brands, Texas Instruments and Starbucks.

“Looking at the rankings by industry sectors, it appears the public has positive attitudes about companies that provide them with creature comforts,” with the beverage, consumer products and food manufacturing industries topping the rankings, the Index report said. Companies that fell most in the Index ratings “were in industries plagued with larger reputation challenges” such as automotive and financial services, according to the report.

The report said that many of the companies in the leading industry sectors “are also successful communicators of their CSR efforts and link those efforts with their brand. Communicating about corporate citizenship efforts becomes even more important in an age of skepticism when only two in 10 consumers trust what companies say in their advertising.”

It has been fascinating to watch over the last decade as more investors around the world actively embrace the importance of companies acting responsibly on environmental, social and governance (ESG) issues.  And equally, if not more important, we have seen companies globally step up and confirm the importance of being a responsible corporate citizen and its central importance for protecting and building shareholder value.

Walden Asset Management recently conducted research on how companies see their roles in this evolution. The wide ranging quotes compiled below all connect to the premise that being a responsible company is good for the bottom line.  What’s significant about the quotes is that they all come from the companies themselves, drawn from several dozen corporate social responsibility reports (CSR) including a wide range of industries.

Please understand that including a quote from a company does not mean that I or Walden Asset Management automatically think this company is a “living model” for good CSR reporting or performance.  However, these quotes do illustrate the expanding belief that CSR has become vitally important for a company’s business, and that transparent reporting is, as one CEO said, one of “the prices of doing business today.”

Special thanks go to Carly Greenberg, a Summer Associate at Walden, who painstakingly reviewed dozens of CSR reports to gather this information.

Industry: IT

Intel

From the President and CEO statement, Paul S. Otellini

“Corporate responsibility is about doing the right things right.”

“Our approach has created value not only for our stakeholders and society, but also for Intel.  We have reduced costs through energy conservation investments, minimized risks by proactively working with our communities and supply chain, and enhanced our reputation as a leading corporate citizen by building trusted relationships around the world.” (pg. 2)

HP

“As one of HP’s seven corporate objectives, global citizenship has long been integral to the success of our business. We’re responding to pressing issues, such as mitigating climate change, using energy more efficiently, enriching education and improving healthcare, by providing solutions that are transforming how people live, work and connect.” (pg. 3)

Dell

From the Letter from CEO, Michael Dell

“Dell has a full-time commitment to being a responsible corporate citizen. It’s a commitment driven by the types of goals, strategies and accountabilities that characterizes every part of our business.” (pg. 4)

From the Text of the Report

“We live in an increasingly complex world. That reality, combined with the financial downturn of the global economy and the issues facing our planet and our communities, means business as usual is not enough. To make a meaningful difference, we must inspire and innovate….

"During times like these, we must continue to build trust with customers and stakeholders by demonstrating our positive impact on society and the planet and developing meaningful measures for reporting our progress. Corporate responsibility is a critical component of Dell’s overall business. We are committed to being a responsible corporate citizen.” (pg. 6)

Xerox

From the Letter from the CEO, Ursula M. Burns, and Chairman of the Board, Anne M. Mulcahy

“Despite the toll the recession has taken, we are pleased to report that it has not caused us to waiver from our belief in the need to behave responsibly as a good corporate citizen in the communities and countries in which we operate. There are two broad reasons for that – a belief that good citizenship is the right way to behave and an equally important belief that behaving the right way is a good thing for our business.” (pg. 2)

“The more we have integrated sustainability into our business operations, the more it has become a part of our DNA. We like to think of ourselves as a leader, still pushing the boundaries of what is possible.” (pg. 2)

“We were an early leader in the sustainability movement because we thought it was the right thing to do for the environment. But we discovered something else along the way. Every one of our innovations ended up either saving us money or creating new markets and new revenue. We found, in other words, that we don’t have to choose between the environment and profit. We can do both.” (pg. 3)

“Conducting our business with integrity and transparency builds credibility and attracts investors.” (pg. 4)

“Nurturing a greener world through sustainable innovation and development saves money, creates value and helps develop new markets.” (pg. 4)

Industry: Energy

Shell:

From the CEO introduction statement, Peter Voser

“Safety, environmental and social performances are now closer to the core of our business plans and decisions.” (pg. 1)

“I believe sustainable development works best when it is thoroughly integrated in our business decisions at the very earliest opportunity…That is exactly how it must be if we are to meet the complex challenges ahead in the most effective and responsible way.” (pg. 1)

From the interview with CEO Peter Voser, interviewed by Aron Cramer

“Sustainability is central to the way we do business, our business principles and our long-term strategy, so we take a very far-reaching view, not a short-term view.  It means to me that we help to meet the growing energy needs of the world in economically, environmentally, and socially responsible ways.  You can’t have one without the other two” (pg. 7) –Peter Voser

“We wanted to embed sustainable development as deeply into the business as possible” (pg. 7) –Peter Voser

Exxon Mobil:

“It is our view that successful companies are those that see business objectives and sustainability objectives as interlinked.” (pg. 2)

“For a number of years, our business lines have been incorporating sustainability considerations in their operations and sharing the outcomes with stakeholders.” (pg. 2)

“Our disciplined approach and long-standing commitment to corporate governance have contributed to our continued success during the global recession of 2009.” (pg. 15)

“We believe that an unwavering commitment to high ethical standards and business integrity is critical to our competitive advantage and shareholder value.” (pg. 16)

Industry: Utilities

Duke Energy

From the Letter from the Chairman and CEO, Jim Rogers

“In tough economic times, when every aspect of our business is under scrutiny, some might ask whether we can afford to focus on sustainability. To that I respond: Can we afford not to?” (pg. 4)

“Sustainability – operating our business in a way that is good for people, the planet and profits – is, in my opinion, no longer optional. It is the strategic and decision-making approach we are following at Duke Energy to create long-term value.” (pg. 4)

“At Duke Energy, sustainability describes the way we work; it is a competency that leads to improved risk management, efficiency and innovation for today’s complex, resource-constrained and connected world.” (pg. 4)

Industry: Telecommunications

AT&T

“At AT&T, when we talk about 'sustainability,' we’re not just talking about the environment. We’re talking about a broad array of initiatives that will make our business and communities stronger well into the future.” (pg. 13)

Verizon

From the Message from the Chairman and CEO, Ivan Seidenberg

“Our corporate responsibility process helps us assure that our practices keep pace with the evolving needs and expecta­tions of our customers.” (pg. 7)

“We have built a sustainable model for incorporating corporate responsibility into the way we manage our business.” (pg. 7)

Industry: Food & Beverage

The Coca-Cola Company

From the Chairman and CEO Letter, Muhtar Kent

“In the midst of the global financial downturn, the economic, environmental and social implications of business are more important than ever. There’s no question that the world is undergoing a massive resetting of priorities, values and expectations.”

“The strength and sustainability of our brands are directly related to our social license to operate, which we must earn daily by keeping our promises to our customers, consumers, associates, investors, communities and partners. It is an honor, and a responsibility that we take very seriously.”

From the Text of the Report

“LIVE POSITIVELY^™ is our commitment to making a positive difference in the world. Through redesigning the way we work and live, we consider sustainability as part of everything we do. As we act with an eye toward future generations, we will focus on driving business growth and creating a more sustainable world.” (pg. 12)

Kraft

From the Message from the Chairman and CEO, Irene B. Rosenfeld

“To build and sustain brands people love and trust, one must focus—not only on today but also on tomorrow. It’s not easy…but balancing the short and long term is key to delivering sustainable, profitable growth—growth that is good for our shareholders but also good for our consumers, our employees, our business partners, the communities where we live and work, and the planet we inhabit.” (pg. 5)

Industry: Materials

Alcoa

From the Message from the Chairman and CEO, Klaus Kleinfeld

“During these tough economic times, we recommitted ourselves to integrating sustainability as a core value for Alcoa; protecting the health and well-being of our employees and our communities; conducting business with the highest code of ethics; preserving the environment and our natural resources; and earning our license to operate each and every day.”

The Dow Chemical Company

“In short, we are committed – through chemistry – to the betterment of global humanity. And it is this commitment that drives all of our strategies for growth and profitability.” (pg. 3)

From the Letter from Chairman and CEO, Andrew Liveris

““Setting the Standard for Sustainability” is our desire to have corporate citizenship inherent in everything we do as a global corporation, directly supporting our vision of being the largest, most profitable and most respected chemical company in the world.” (pg. 20)

From the Statement from CEO presenting overall vision, Andrew Liveris

“We see sustainable development as an opportunity to tap new markets that create value for our customers, consumers and the planet.” (pg. 23)

” By integrating sustainability elements into every facet of our business – from our product offerings to our energy use – we are creating a better future for our Company and the world.” (pg. 23)

Industry: Consumer Services and Products

Procter & Gamble

From the President and CEO Statement, Bob McDonald

“In fact, our growth strategy for the coming decade is linked tightly to our Purpose. We will grow P&G’s business by touching and improving more consumers’ lives in more parts of the world … more completely.

"To execute this strategy and fulfill the Company’s Purpose, we must grow responsibly and sustainably. As a result, Sustainability is at the heart of P&G’s business model. Keeping Sustainability at the core of our business fuels innovation and strengthens our results.” (pg. 4)

“We’re a company that focuses on growth now and for generations to come, and therefore Sustainability should and will be a focus area for me.” (pg. 4)

Nike

From the Letter from the CEO, Mark Parker

“We saw that doing the right thing was good for business today – and would be an engine for our growth in the near future. With each new discovery and partnership, we willingly gave up old ideas to shift our thinking toward a better, smarter, faster and ultimately more sustainable future – financially, environmentally and socially.” (pg. 4)

“All companies face a direct impact from decreasing natural resources, rising populations and disruption from climate change. And what may be a subtle effect now will only become more intense over the next five to ten years. Never has business had a more crucial call to innovate — not just for the health and growth opportunities for our companies, but for the good of the world.” (pg. 5)

“We see sustainability, both social and environmental, as a powerful path to innovation, and crucial to our growth strategies.” (pg. 5)

“And for all the athletic and cultural and financial successes of the company, believe our work in sustainable business and innovation has equal potential to shape our legacy.” (pg. 5)

“There is now only one path and it leads to greater sustainability, equity, growth and prosperity.” (pg. 5)

Wal-Mart

From the Letter from CEO, Mike Duke

“I meant we would make sustainability a priority throughout our entire company and we would act with a sense of urgency.” (pg. 3)

“It shows that even during the economic crisis, our company does not slow down on sustainability or even just stay the course; we redouble and strengthen our efforts.” (pg. 3)

“When we look at the world today and the trends that will shape the world in the future, we see that sustainability is no doubt one of Wal-Mart’s greatest opportunities to make a difference for our business, our communities, our customers and the planet.”  (pg. 5)

Kimberly-Clark Corporation

From  the “Choices for a Sustainable Future” section

“Put simply, sustainability is critical to our future success. It’s an enormous challenge. But we choose to do it, and to work with those who support positive change, because it’s the right thing to do. That’s one choice that will never change.” (pg. 3)

From the Message from the Chairman and CEO, Tom Falk

“Sustainable business practices are woven into the fabric of our Global Business Plan. We challenge ourselves every day to look for ways to sustain the resources we enjoy today for generations to come. That’s why Kimberly-Clark is focused on setting and achieving sustainability performance metrics for our brands and facilities. And through our resource stewardship, we are demonstrating to our stakeholders that sustainability isn’t just the right thing to do, it’s also good business.” (pg. 4)

Industry: Automotives

Ford

The letter from Executive Chairman and Chairman of the Board, William Clay Ford Jr.

“We continue to aggressively search for new ways, both big and small, to improve our economic and environmental sustainability. Often the actions we take accomplish both goals.”

“Creating a strong business and building a better world are not conflicting goals – they are both essential ingredients for long-term success.”

From the Letter from President and CEO, Alan Mulally

“We also know that the successful companies of the 21st century will be those that understand global sustainability issues and offer viable solutions. Through a decade of work and a disciplined reinvention of our Company, we have built sustainability into our business model.”

Industry: Pharmaceuticals

Pfizer

From the Letter from the Chairman of the Board and CEO, Jeff Kindler

“In times like these, some companies might choose to focus simply on running their businesses and think of their corporate responsibility work as a luxury that can wait for better times. Not Pfizer. We believe successful companies can’t do one without the other.” (pg. 5)

Industry: Capitol Goods

Caterpillar

From the CEO and Chairman’s Message, Jim Owens

“We’re making sustainable development part of how we do business. In 2007, in the midst of our growth period, we set bold aspirational goals for 2020, and abandoning those goals, in the face of dramatic economic challenges, was simply not an option. This isn’t a passing fad that we only care about during prosperous times. It’s a serious commitment. And it’s a real business opportunity, now and in the future.”  (pg. 2)

“Good things happen when we integrate sustainability into our products, services and solutions. We improve our competitiveness and create and capture customer value. We save money, reduce our environmental impact and improve employee satisfaction. And by partnering with others, we can help ensure sound policies that promote sustainable development and innovation.” (pg. 2)

“In the next decade, the most successful companies will be those that integrate sustainability into their core businesses. That’s what we’re doing at Caterpillar, and we are also helping our customers do the same.” (pg. 3)

“Some of Caterpillar’s fastest-growing businesses are those focused on the sustainability of materials and resources.” (pg. 3)

“In fact, the economic downturn has helped secure sustainability’s place at the core of our strategy. It’s not something extra that we do during good times. It’s something that creates and captures value for the company, our customers, investors, employees, suppliers – and really, the world.”  (pg. 4)

Industry: Industrials

General Electric Company

From the Letter from the Chairman of the Board and CEO, Jeff Immelt

“Successful companies can only create solutions to some of the world’s toughest problems by working collaboratively. Business must engage — with communities, governments, customers and each other — because the status quo is not an option. It is not only possible for a global business leader to be a good citizen, but a requirement.” (pg. 4)

“Based on a commitment to integrity, a commitment to performance and a commitment to learn and grow stronger, GE is creating a better company coming out of this reset — a renewed focus that is better for GE, and also better for our world.” (pg. 4)

Trade Associations and Consultants

BSR Report 2009: Innovating for Sustainability

From the Letter from the President and CEO, Aron Cramer

“2009 presented numerous challenges for the entire world, not least for all of us dedicated to sustainable business. At the start of the year, many observers thought companies would consider corporate responsibility to be an expendable luxury that could be cut along with other discretionary budgets. 'Sustainability,' they predicted, would be redefined as 'basic economic survival.'  Fortunately, these predictions did not play out. Rather, 2009 showed us that sustainability can—as we had argued—help pull business out of the recession.” (pg. 1)

“Despite the difficulties presented by the economic conditions, it is clear that sustainability remains as important to business—and to the world—as ever before.” (pg. 1)

From the Text of the Report

“What’s more, revived economic growth is again exacerbating existing challenges related to climate, water, and biodiversity.  Long after the recession passes into history, these trends will be shaping economic conditions. They are the reference points that business should consider in shaping their strategies.

More and more companies recognize this. As a result, they are making sustainability not just a program, but, in fact, the defining feature of success in a fast-changing world.” (pg. 5-6)

“While calmer economic conditions have returned, the road to tomorrow’s prosperity is not the same as what came before. The businesses that assert leadership, take a comprehensive approach, use sustainability as a driver for innovation, and champion sustainable consumption will not only become the sustainability champions, but also the most successful companies in the years ahead.” (pg. 11)

Accenture Report: “A New Era of Sustainability”

This report summarizes findings from a survey of CEO’s globally

From the Forward by Georg Kell, Executive Director UN Global Compact, and  Bruno Berthon, Managing Director Accenture Sustainability Services

“It is a decade that, CEOs believe, could usher in a new era where sustainability issues are fully integrated into all elements of business and market forces are truly aligned with sustainability outcomes.” (pg. 2)

“Today’s CEOs are more convinced than ever of the need to embed environmental, social and corporate governance issues within core business. But they are also convinced that good performance on sustainability amounts to good business overall: The imperative to act has shifted from a moral to a business case.” (pg. 2)

From the Text of the Report

“93 percent of CEOs see sustainability as important to their company’s future success.” (pg. 10)

“Demonstrating a visible and authentic commitment to sustainability is especially important to CEOs because it is part of an urgent need to regain and build trust from the public and other key stakeholders, such as consumers and governments—trust that was shaken by the recent global financial crisis. Strengthening brand, trust and reputation is the strongest motivator for taking action on sustainability issues.” (pg. 10)

“Our survey found widespread agreement among CEOs about what the next era of sustainability will look like: It is one where sustainability is not only a separate strategic initiative, but something fully integrated into the strategy and operations of a company.” (pg. 11)

“96% of CEOs believe that sustainability issues should be fully integrated into the strategy and operations of a company (up from 72% in 2007).” (pg. 14)

“80 percent of CEOs believe that the economic downturn has raised the importance of sustainability as an issue for top management.” (pg. 16)

“74 percent say that the downturn has led their company to align sustainability more closely with core business.” (pg. 16)

“Also bolstering the continued commitment to sustainability during the economic downturn has been demand for sustainable products and services.” (pg. 18)

From “Industry perspectives: Belief in the importance of sustainability varies considerably by industry”

“Fully 100 percent of automotive CEOs identify sustainability issues as important or very important to their future success. This finding reflects how environmental concerns present both a challenge to the industry and an opportunity to serve a new market with low carbon alternatives such as e-vehicles.” (pg. 19)

“CEOs from the energy and utilities sectors also see sustainability issues as critical to their future success.” (pg. 19)

“Wolfgang J. Ruttenstorfer, CEO and Chairman of European oil and gas company OMV, said, ‘I regard these issues as bringing competitive advantage in the long term; a transparent approach clearly oriented toward values, human rights and environmental objectives is the only right approach that will be  appreciated in the long term.’” (pg. 19)

“Support is especially high in the banking industry, for example: 68 percent of CEOs note that sustainability is “very important” to their success…a commitment to environmental and social issues may be a prominent part of restoring brand value as the financial industry struggles to regain the trust of consumers.” (pg. 19)

“CEOs in the communications and electronics & high-tech sectors are the least likely to identify sustainability issues as critical to their future success— just 22 percent and 31 percent of those industries’ CEOs, respectively, cite sustainability as very important to their future success…leading companies in these sectors are beginning to think beyond the direct physical impacts of their business on sustainability issues, and are looking to shape a vision of the role that they can play in society by driving sustainable development…providing companies around the world with new technologies and ways of working that will help them achieve their own environmental objectives.” (pg. 19)

KPMG

This report published every 3 years; following statements are from the 2008 report.

From the Forward

Message from Global Head of Citizenship and Diversity, KPMG International, Lord Michael Hastings of Scarisbrick CBE

“As you will see in the results, there has been an important shift in this direction with CSR reporting becoming the norm instead of the exception within the world’s largest companies. Three years ago only 50 percent of companies surveyed included CSR in their reporting, in this survey the number jumped to 80 percent. More companies report the information as it relates to specific objectives and more companies include this information in their annual reports.” (pg. 5)

Message from Global Head, KPMG Sustainability Services Partner, KPMG in the Netherlands, Wim Bartels

“But would these reports pass the “greenwash” test? For the first time in the 15 years we have been doing this survey, we think they just might. Nearly all of the Global 250 companies that report also publish a corporate responsibility strategy with defined objectives.” (pg. 5)

From Text of the Report

“One of the most significant findings of the 2008 survey is that corporate responsibility reporting has gone mainstream - nearly 80 percent of the largest 250 companies worldwide issued reports, up from about 50 percent in 2005.

National trends - National level companies trail the G250 with only 45 percent of the total sample issuing reports, but numbers vary from less than 20 percent in Mexico to more than 90 percent in Japan.” (pg. 7)

“Now that some of the world’s largest companies have been able to quantify the business case for corporate responsibility and reporting, it is likely that the practice will spread through countries and sectors to the smaller players.” (pg. 7)

“Reporting is necessity if companies are to know and understand their social and environmental impacts, and how to minimize the dangers and maximize the opportunities associated with new and emerging challenges.” (pg. 10)

““In these challenging times it is now perhaps more crucial than ever for companies to show their commitment to transparency through sustainability reporting. Effective public disclosure of economic, environmental, and social performance can enable a company to rise above the rest and take advantage of the opportunity to position itself as a forward-thinking leader among an increasingly sophisticated constituency of stakeholders. No longer is publishing a sustainability report merely a matter of mitigating risk to reputation and costs. More than ever, employees, investors, and consumers are looking to the companies from which they buy, invest in, and work for to join them in addressing the critical sustainability issues of the day in innovative ways.” (pg. 17)--Judy Henderson Board of Directors, Global Reporting Initiative

The Securities and Exchange Commission officially launched its long-anticipated rule-making inquiry into the U.S. proxy system.

SEC staff members at a July 14 meeting outlined a concept release seeking public comment on proposals to “promote greater efficiency and transparency in the U.S. proxy system and enhance the accuracy and integrity of the shareholder vote.”  And SEC Commissioners, with no debate, unanimously approved issuing the concept release for a 90-day public comment period.

However, the mid-July concept release isn’t intended to address a number of corporate governance issues included in the Dodd-Frank financial reform bill still pending in Congress.

Proxy voting issues under examination involve so-called “proxy plumbing” issues of particular interest to institutional shareholders and major corporations.

“OBO/NOBO” rules on disclosure of names of beneficial owners

Currently, shareholders can keep their names secret through use of brokers or banks --  Objecting Beneficial Owners or OBOs.   Such an arrangement prevents companies from contacting such investors directly, in turn, companies argue, raising costs and reducing shareholder voting.  Shareholders who prefer to hear from companies directly are called Non-objecting Beneficial owners, or NOBOs.

Brokers and banks, however, want to maintain confidentiality of customers as well as collect fees for forwarding proxy materials and help make lending of shares easier.

Some investors, meanwhile, prefer secrecy as part of an investment strategy.  The SEC study seeks comment “on whether to preserve, eliminate, limit, or discourage the use of objecting beneficial owner status.”

The role of proxy advisory firms

Advisory firms have become increasingly influential, helping investors keep track of thousands of shareholder meetings, analyzing tens of thousands of corporate and shareholder proposals, providing services to expedite actual proxy voting, while weighing in at the same time on corporate governance and ethical behavior issues.

(The largest advisory firm, RiskMetrics Group, was acquired earlier this year for about $1.55 billion in cash and stock by MSCI Inc.)

The SEC wants to address, among other issues, whether advisers serving both corporations and investors are disclosing possible conflicts of interest.  Three of the seven major proxy advisors are registered with the SEC as investment advisers.

The SEC’s fact sheet says the proposal also seeks comments on enhancing regulatory oversight over the formation of voting recommendations, and requiring eventual public disclosure by proxy advisory firms of their voting recommendations in Commission filings.

Accuracy of proxy voting

As far back as 1997, the SEC was exploring low retail-investor participation in proxy voting, as well as technical problems with over- and under-voting.

The concept proposal asks wither over-voting or under-voting is a problem, and, if so, whether broker-dealers should disclose how votes are allocated.  It also seeks comment on whether vote tabulators, securities intermediaries and proxy service providers should provide each other with access to vote data to confirm votes have been received and tallied correctly.

Proxy voting by institutional shareholders

Some  major investors often lend securities, but such loaned shares can’t be voted until the shares are recalled. The SEC wants to explore whether agenda items at shareholder meetings should be announced earlier so that holder can decide whether to get involved in voting the shares.

Addressing “empty voting”

The SEC wants to explore whether, due to setting a  “record date” determining whether a shareholder can vote, the practice means “holders without an economic stake in the matter can influence the outcome of a vote.”  That is, a holder may have sold the shares after the record date, but still can vote on issues of corporate concern.

Removing barriers to retail investor participation

The proposal  seeks to examine several ideas to improve retail investor voting participation including:

• Improving investor education
• Enhancing brokers’ Internet platforms
• Permitting advance voting instructions for retail investors
• Enhancing investor-to-investor communications
• Improving the use of the Internet for distribution of proxy materials

A fell text of the SEC's fact sheet on the rule-making into the proxy system is available here.

The mere fact that federal agencies had to produce plans for how they will be more open to citizens is huge step for government transparency. But some of those plans look more promising than others.

An audit of agency open government plans released today (May 3) by a consortium of transparency groups found that while some agencies outlined concrete steps for improvement, others lack specifics about how or when the agency will be more open.

NASA was commended by transparency groups for doing more than required with its open government plans. (NASA file photo)

Among the weakest plans, according to the audit, were those from some agencies that should be leading the charge: the Department of Justice, which coordinates Freedom of Information Act (FOIA) reporting and training, and the Office of Management and Budget, which issued the directive requiring transparency plans.

Under the December directive, agencies were to complete several tasks and post transparency plans on their new open government Web sites by April 7.

Open government plans were to include an outline for the timely publication of data and information about how agencies process FOIA requests. Agencies also were to describe how they would make it easier for citizens to participate in agency activities.

Openthegovernment.org, which coordinated the audit, has put all of the open government plans online, along with the audit results and a ranking of the agencies.

The overachiever among the agencies was NASA, which scored bonus points for doing more than required. Other plans cited as models for other agencies by the audit include the Department of Housing and Urban Development and the Environmental Protection Agency.

At the back of the class: The Department of Justice, which proposed broad actions with "very few timeframes provided," according to the audit. It also failed to list currently available data sets or any plans to post in the future.

The plan from OMB lacked "details of proposed actions to be taken, with clear milestones, to inform the public of significant actions and business of your agency." The Department of Energy’s plan lacked information about "how it would measure improved transparency" or "how it would sustain and improve the initiatives."

OpentheGovernment.org is calling on some agencies to beef up their plans by later this month. The group will take another look at those plans in early June.

"The plans in general begin the process of moving the Executive Branch toward greater openness," said Patrice McDermott, executive directive of OpentheGovernment.org.

"While the change will inevitably be easier in some agencies than others and some are farther along, we encourage all agencies to challenge themselves to meet the promise their plans represent and to go beyond those commitments," she said.

Write to Jennifer LaFleur at Jennifer.LaFleur@propublica.org.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.