Trust Digest 44 (March 25, 2014)


TED 2014: NSA May Start Transparency Reports
The National Security Agency may release transparency reports on the amount of surveillance it is doing, according to its deputy director.
Key Words: TED Talks, NSA, Transparency
Trust Issues: Regulation, Transparency


When the Best Employees Quit, Can You Handle the Truth?
When prized employees leave a company, bosses almost always act surprised. From the comforts of the corner office, it’s easy to believe that you’re providing a great work environment and all the career-advancement opportunities that workers or managers might want. But maybe senior executives just can’t handle the truth.
Key Words: Employees, Retention, Satisfaction
Trust Issues: Communication, Motives


Obama Mending Fences in Riyadh
The Saudi-American bilateral relationship has been seriously strained in the past three years by tensions underlying the Arab Awakening, and President Barack Obama has serious fence-mending ahead of him when he meets with King Abdullah in Riyadh in March. The relationship is not broken and both sides still need each other.
Key Words: Saudi Arabia, International Relations
Trust Issues: Communication, Stakeholders


How Corruption is Strangling U.S. Innovation
For all the talk of the fiscal cliff, however, I believe the US is facing a much more serious problem, one that has simply not been talked about at all: corruption. But this isn’t the overt, “bartering of government favors in return for private kickbacks” corruption. Instead, this type of corruption has actually been legalized. And it is strangling both US competitiveness, and the ability for US firms to innovate. The corruption to which I am referring is the phenomenon of money in politics.
Key Words: Corruption, Innovation
Trust Issues: Responsibility, Regulation, Stakeholders


Don Knauss of Clorox, on Putting Your Followers First
You can run an organization based on fear for a short time. But trust is a much more powerful, long-term and sustainable way to drive an organization. The other thing I’ve learned is that you’ve got to assume the best intent of people, and that they’re really trying to do a good job. I’ve seen organizations that are based more on fear than trust because senior management really thinks people are trying to get one over on them, that they’re just punching a clock. People really are trying to do a good job, and they want to be proud of where they work.
Key Words: Trust, Clorox
Trust Issues: Responsibility, Competence, Stakeholders


What Great Corporate Wellness Programs Do
In a recent HBR post, “In Defense of Corporate Wellness Programs,” doctor and entrepreneur Rajiv Kumar took on the doubters about the value of workplace wellness programs. But as designers and researchers who have spent the better part of two years creating a system of healthy living for a huge national populace, we think he didn’t take his defense far enough. Not only are wellness programs valuable for the organizations and their employees, as his data states, they are our biggest hope for fixing a national health crisis.
Key Words: Corporate Wellness
Trust Issues: Responsibility, Benevolent Concern, Stakeholders


AmEx Boosts CEO Chenault’s Pay 11% to $24.4 Million
American Express Co. (AXP), the biggest credit-card issuer by purchases, paid Chief Executive Officer Kenneth Chenault $24.4 million for 2013, an 11 percent increase over the previous year as the firm’s stock and profit soared.
Key Words: Executive pay
Trust Issues: Responsibility, Competence, Motives


America's 100 Most Trustworthy Companies
The companies that make this list garnered the 100 highest scores for trustworthy behavior over the four quarters of the previous fiscal year. The company with the strongest AGR—“Aggressive Accounting and Governance Risk,” the final composite by which companies on the list are scored—is Casey’s General Stores, a mid cap Iowa-based chain of convenience stores and gas stations that achieved an AGR of 99 out of a possible 100. Houston-based Oceaneering International holds the best AGR, 93, among large cap companies, while mechanical products operation Altra Industrial Motion Corp., with an AGR of 97, holds the best score among small cap companies.
Key Word: Trustworthiness
Trust Issues: Competence, Integrity, Reputation


Business Success beyond the Short Term: CEO Perspectives on Sustainability
In PwC’s 17th Annual Global CEO Survey, 75% of CEOs agree with this saying that satisfying societal needs (beyond those of investors, customers and employees) and protecting the interests of future generations is important. This is reinforced by consumers – in the Edelman Trust Barometer 2014, 84% of respondents believe that business can pursue its self-interest while doing good work for society. It’s a green light to embed sustainability into everyday strategy.
Key Word: Sustainability
Trust Issues: Stewardship, Responsibility


Frenemy Mine: Building Trust between Colleagues
I’ve been feeling somewhat guilty about my post last week regarding the Edelman Trust Barometer and perceptions about the legal profession. Several lawyers have since asked if I have any advice on how to build trusting relationships within their own firms, never mind on behalf of the profession. I’ve heard laments bemoaning the loss of collegiality, too… in business, the larger question to ask is what kind of relationship is needed in order for the exchange to be productive.
Key Word: Trust
Trust Issues: Responsibility, Communication


The Ethical Work of Norway’s Sovereign Wealth Fund
In Norway, the Ethics Council of the state’s Sovereign Wealth Fund (SWF or the Fund) released its 2013 Annual Report and announced that it was examining the operations of French oil giant Total, in the disputed Western Sahara, to determine whether its activities there are unethical and warrant exclusion of Total by the Fund. Days later, Norway’s Prime Minister proclaimed that the Fund would be investing a greater proportion of its wealth in renewable energy; the Fund is also considering exiting oil, gas and coal investments altogether, for environmental reasons (the arguable hypocrisy of which has been noted). Norway operates what is by far the world’s largest sovereign wealth fund, with approximately $840 billion in assets under management, so its investment decisions are powerful.
Key Words: Norway, Sovereign Wealth Fund
Trust Issues: Integrity, Ethics


Rainforest Alliance Reinstates IKEA's FSC Certification
The Rainforest Alliance (RA) announced this week it has lifted the suspension of the Forest Stewardship Council (FSC) certificate of Swedwood Karelia LLC, a subsidiary of IKEA, following an independent appeals committee evaluation of the company’s 2013 annual audit. Swedwood’s certificate, related to nearly 300,000 hectares (700,000 acres) in the Karelia Forest in northwestern Russia, was recently suspended as a result of a series of non-conformances with the FSC standards identified during Swedwood’s last annual audit. Karelia is one of the last remaining old-growth forests in Europe.
Key Words: Rainforest Alliance, IKEA
Trust Issues: Responsibility, Stewardship


$80 Million for 6 Weeks for Cable Chief
Robert D. Marcus became chief executive of Time Warner Cable at the start of the year. Less than two months later, he agreed to sell the company to its largest rival, Comcast, for $45 billion. For that work, he will receive nearly $80 million if the deal closes, a severance payment that amounts to more than $1 million a day for the six weeks he ran the company before agreeing to sell. “It’s not unprecedented, but it is rare and troubling,” said Robert Jackson Jr., an associate professor at Columbia Law School. “There’s something stunning about such big paydays for such a small amount of work.”
Key Words: Executive pay
Trust Issues: Accountability, Ethics


Turkish Attempt to Ban Twitter Appears to Backfire
Turkey's attempt to block access to Twitter appeared to backfire on Friday with many tech-savvy users circumventing the ban and suspicions growing that the prime minister was using court orders to suppress corruption allegations against him and his government.
Key Words: Twitter, Turkey
Trust Issues: Communication, Transparency, Regulation


Permanently Temporary: The Truth About Temp Labor
Temp labor is one of the fastest growing industries in the US. Increasingly, temp workers are part of a business strategy to keep costs down and profits high. From mega-retailers to mom-and-pop shops, temps are hired to do some of the hardest and most dangerous jobs. While more and more of the American workforce is comprised of temporary workers, they're largely hidden from public view. Many of these workers stay silent, often having their livelihoods threatened if they speak out. Wanting to get a glimpse of this invisible workforce, VICE News traveled across the country, scouring warehouses, temp agencies, and temp towns in search of the people, who make our world of same day delivery possible.
Key Words: Temporary Labor, Immigration
Trust Issues: Accountability, Ethics, Stakeholders


Amazon China Unit Closes Vendor after Report of Fake Cosmetics
The China unit of Amazon.com Inc. (AMZN), the world’s largest e-commerce company, closed a third-party online store after state media reported that fake cosmetics were being sold.
Key Words: Amazon, China, Counterfeits
Trust Issues: Responsibility, Competence, Stakeholders


Report Highlights High Cost of Irish Bank Bailout
Ireland was advised by Merrill Lynch at the height of the global financial crisis in 2008 that recapitalising Irish banks could cost a maximum €16.4bn – barely a quarter of the sum taxpayers have so far spent bailing out the country’s financial institutions. The difference between Merrill Lynch’s estimated cost of a bailout and what has been spent so far illustrates how the Irish government and its advisers underestimated the scale of the problems inside Ireland’s banks after the collapse of Lehman Brothers sent financial markets into disarray.
Key Words: Ireland, Merrill Lynch, Bailout
Trust Issues: Regulation, Risks, Competence


10 Businesses with Huge Stakes in General Electric Company's Success
John Mackey, co-CEO of Whole Foods and a champion of the concept of conscious capitalism, describes suppliers as the "most neglected of the major stakeholders at most companies." For me, that comment alone triggered an interest in the topic. If suppliers are typically hung out to dry by most companies, then finding a company that is fostering those relationships could speak volumes about its approach to running a business.
Key Words: General Electric, Suppliers
Trust Issues: Accountability, Stakeholders


Larry Page: I Would Rather Give My Billions to Elon Musk Than Charity
Google CEO Larry Page has an unusual idea about what should happen to his billions should he die. Instead of giving it to a philanthropic organization, he'd rather hand over his cash to Elon Musk, the founder of Tesla, SpaceX, and SolarCity. In a conversation with Charlie Rose at a TED conference on Wednesday, Page said he wanted his money going to capitalists like Musk — those with big ideas for changing the world — according to a report at Wired.
Key Words: Charity, Larry Page, Google, Corporate Responsibility
Trust Issues: Responsibility, Benevolent Concern


Give Impact Investing Time and Space to Develop
Impact investing has captured the world’s imagination. Just six years after the Rockefeller Foundation coined the term, the sector is booming. An estimated 250 funds are actively raising capital in a market that the Global Impact Investing Network estimates at $25 billion.
Key Words: Impact Investing
Trust Issues: Responsibility, Integrity, Benevolent Concern


The Art of Currency Manipulation: How Some Profiteer by Deliberately Distorting Exchange Rates
A frequent charge in foreign exchange markets in developing countries is that of manipulators being at work. Since to buy is to raise prices and to sell is to lower prices, the question that naturally arises is whether the widespread charge of market manipulation is valid. The paper shows that (whether or not “widespreadness” has any merit) it is possible for a player to manipulate and profiteer. By using some simple principles of game theory, the paper outlines a strategy that a manipulator may use. The aim of this paper is not to provide a manual for the manipulator but to enable the regulator to understand the art and develop policies to curb manipulation.
Key Words: Currency manipulation
Trust Issues: Accountability, Ethics


The Four Keys to Being a Trusted Leader
…trust arises when someone is seen acting selflessly. This may not sound like news – indeed the centuries-old concept of servant leadership is based on it. But if it also sounds vague and hard to apply to your own leadership setting, let’s break it down further. People in an organization perceive selflessness when a leader concerns him or herself with their safety; performs valuable service for them; and makes personal sacrifice for their benefit.
Key Words: Trust, Leadership
Trust Issues: Responsibility, Competence, Communication


Don't Drink the Water: West Virginia after the Chemical Spill
Sharon Satterfield, a grandmother of six in Charleston, West Virginia, doesn't touch the water. "It's still not all right," she says, standing in her son's modest ranch-style house, almost two months after a toxic chemical spill shut down the drinking water supply of 300,000 residents in and around the state capitol — one of the largest incidents of drinking water contamination in U.S. history.
Key Words: Freedom Industries, West Virginia Chemical Spill
Trust Issues: Responsibility, Accountability


How Big Business Can Take the High Road
Americans have been so cynical about big business for so long that it’s hard to fathom that some people at large corporations have begun to accept that trying to take the high road — whether it’s policing child-labor laws among Pakistani suppliers or installing unrequired smoke detectors in a Chinese factory — can sometimes help their bottom line.
The author, however, places the issue in a context far broader than mere profits. “What we are actually talking about here,” she quotes one of these “corporate idealists” as saying, “is the fundamental question of our age: How does a global business operate?”
Key Words: Corporate Responsibility
Trust Issues: Responsibility, Benevolent Concern, Reputation


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