We can all complete paperwork attesting to our robust policies and procedures – including those who go on to disgrace themselves and their businesses, says Peter Knight

What have the UN Global Compact and the UK’s Co-operative Group got in common? Both consider themselves the priesthood of business morality and display a compulsive obsession with administrative detail.

For the Co-op, this has led to tragic business failure jeopardising the jobs of 90,000 people. For the Global Compact, insulated from reality by the dysfunctional UN system, an irrelevant future of designing ever-longer forms awaits its functionaries.

Why worry about these two mostly unfit organisations and their myopia? Because they point to the dangers faced by business if it tries to conform to the ever-stricter diktats of those such as the Global Compact, the Global Reporting Initiative and the Carbon Disclosure Project.

These organisations and their mainly academic supporters are the vampire bats that flutter about the business community, intent on sucking its entrepreneurial spirit while injecting a particularly virulent virus that turns us into form-filling fanatics.

If we are to deal effectively with the environmental threats that face us, we need a healthy, pioneering business community that will identify and seize opportunities to find solutions.

Business won’t do that if the form-filling virus runs rampant. And it must be remembered that with so many Masters of Business Administration in place, companies are highly susceptible to the virus that encourages a tick-box mentality. It’s time to issue face masks for the C-suite.

For those who live outside the tiny place called the UK, here is the Co-op’s sad story. As with similar mutual societies around the world, the Co-op runs businesses from funeral parlours to supermarkets, insurers and banks. It employs about 90,000 people in these various enterprises and holds a special place in British society, feeding and burying (very profitably) the good working people and sharing the profits among society members.

The Co-op differentiated itself in the market with its much-trumpeted ethical stance. Its supermarkets sell fair trade products, conform to strict environmental standards and have “Responsible Driving Reduces Emissions” emblazoned on its delivery trucks. The Co-op Bank refused to deal with supposed sinners (arms manufacturers, purveyors of gambling, environmental scoundrels) although the supermarkets sell plenty of naughty booze and cigarettes.

An ethical tome?

In the rarefied world of sustainability reporting, the Co-op stood out for its truly vast sustainability report. It was the sort of publication that would make Georg Kell of the Global Compact quiver with excitement. The report ticked every conceivable box from human rights to fair pay and diversity statistics. When printed, the weight of the report frightened those that delivered it and terrified office managers short of filing space.

But this high church of ethical business was rotten at its core. A spectacular failure of corporate governance led to egotistical (and often corrupt) executives roaming unchecked while making self-serving decisions that led to the implosion of this once venerable society.

It was this behaviour that led eventually to the literal breaking of the Co-op Bank. A few months ago the bank’s chairman – a Methodist minister – was caught on video buying crystal meth and other illegal drugs in the back streets. This was after he had admitted to a parliamentary sub-committee that he did not really understand banking at all.

The final ignominy was for the bank to seek funds from the very markets it found so unethical. The Co-op Bank is now mostly owned by an American hedge fund and the chief executive complains of a great sucking noise from London as the financial community extracts its interest for loans that are propping up the rest of the group.

Of course, anyone reading the Co-op’s forest of sustainability reports would not have learned any part of this story, or been alerted to the corruption, ineptitude and stupidity of those who ran the group. Of course not, the reports were products of an organisation deeply infected by the form-filling virus.

Then the other day I printed what I thought was a single page document – the Global Compact’s criteria for those who want to qualify as its “advanced” reporters. I made a mistake when I hit print: there are, in fact, 22 pages of requirements with a lot of repetition of the word “robust”. Robust labour management policies and procedures. Robust human rights management policies and procedures. Robust environmental management … You get the picture.

The last section of this preposterous list of requirements is entitled Business & Peace. It’s time we let these form-filling bats rest in peace. Please pass a robust face mask.
Peter Knight is chairman of the Context Group.


Co-operative Group  reputation  UN Global Compact 

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