Potash Corp. — Excellence in Governance
February 6, 2009
Sometimes you come across a website that clearly stands out from its peers.
In Corporate Governance matters, I suggest the Potash Corporation.
There is so many noteworthy items here that I may need to do a second post on this company.
The first item to note is the comprehensive Corporate Governance menu. Click on Goals and Performance and you view something that is rare on websites: the company’s goals for its Corporate Governance practices, and a performance evaluation.
Note you can also view performance for the last three years: now that is transparency.
Next, navigate to Core Values and Code of Conduct and you will view one of the best displays of this vital issue.
Actions speak louder than words. Each of us is judged not by what we say by but what we do. This is a simple yet vitally important principle. It is why we must live up to the Code every day and in all that we do.
All of our stakeholders have an investment in us. We won’t let them down.
This is very telling since Potash clearly understands that Ethics is more than simply publishing a Code of Conduct. There is more:
- Launch Core Values and Code of Conduct
- Core Values and Code of Conduct (PDF 334 KB)
- Core Values and Operating Philosophies with William J. Doyle
The first links to a popup of the core values and code of conduct, including the certification required from each employee that they have read and will comply with this document; the second is a PDF version of this.
The third item links to a video of the CEO’s views on a variety of matters including Integrity, Listening to Stakeholders, Code of Conduct and more. There are also media choices such as Quicktime, Windows Media and Real Player, to ensure that it can be easily viewed by everyone. A brilliant example of setting the “Tone from the Top”.
Finally, visit Why Invest? 6 Keys to Understanding Our Business, where Potash does a great job of explaining the business, industry and their competitive advantage.
Anglo American Integrates Governance & Social Responsibility
December 31, 2008
Prior to the financial crisis, I read some academic papers about a trend toward convergence of Corporate Governance and Social Responsibility. Then I came upon Anglo American PLC, a mining and natural resource company.
Note how the About Us integrates references to Governance and Responsibility.
The Governance description includes a reference to Extractive Industries Transparency Initiative (EITI) –
EITI exists to improve transparency in generating and spending of revenues from the extractive sector. The basic concept is straightforward: oil and gas and mining companies should declare in participating host countries the payments they make to the government – either individually or aggregated by an independent third party.
Once audited to international standards, these figures are then available for comparison against the host government’s own separate declaration of the revenues received. This two-pronged process reduces opportunities for revenue leakage.
To date, over 20 countries – including several in which Anglo American operates or has interests – have declared their intention to implement EITI principles. We applaud their commitment to transparency.
There is also a link to Good Citizenship Business Principles which includes the company’s commitment to Corporate Citizenship and access to –
Demographics, Twitter and Virtual Meetings
November 11, 2008
While browsing through some archives recently, I came across … ArcelorMittal using Second Life to hold retail investor meetings – or at least, to hold a mixed reality meeting, with some people present in real life, and others present in a virtual life.
Now, I’ve talked before about using live chat for retail investor meetings, and I’ve mentioned companies using Second Life for recruiting before.
But the use of Second Life for investor meetings is interesting, and – not surprisingly – this caused a fair stir a few months ago.
Not only is the use of this technology for this purpose interesting, so too is the underlying reason: that ArcelorMittal have an aging group of retail shareholders. Apparently the average age is over 65, and, quite rightly, ArcelorMittal have identified this as a problem. (Good for them for recognising this – HR data was covered by Infohrm at their recent conference, but shareholder data is very important too).
I wonder how successful this venture was for ArcelorMittal? Apparently 50-70 avatars (or representations of people) came to the event. I’d like to know the numbers that turned up to the real-life section of the event – and how many of the people that came to the Second Life version were already investors, or were seriously interested in investing.
Is Second Life really full of people who might invest – using real life money – in ArcelorMittal?
There is some information available about age-ranges, and some on how many people regularly use Second Life, but no clear indication of whether these are likely to be investors.
However, Quantcast tells us that 56% of Second Life visitors, at least in the US, earn less than $60k/year (27% earn less than $30k), and that 33% are under 18.
Possibly not ideal investor recruitment territory, then.
Nevertheless, ArcelorMittal deserve kudos for trying this out. But what else could be tried?
The average age of shareholders in the UK is (or was, back in 2006) between 35-54, and 42% of shareholders are classed as A/B (or middle/upper middle class).
The Twitter demographics from Quantcast seem to indicate that Twitter users are more likely to be shareholders: the average age of Twitter users is higher (only 1% of under 18′s), they are wealthier (29% earn over $100k/year compared to 20%) and better educated (63% college-educated compared to 52%).
Now, Twitter isn’t the same as Second Life, but it can be used as part of an online conference, so that the audience is at their desk (as for a webcast), and can see what you are displaying (perhaps a mix of webcast/video/audio/slides) and simultaneously see and participate in the related Twitter stream of comments and questions.
This takes some doing, for all parties:
The company has to
- arrange for technical control of multiple media streams
- chair the meeting of those people physically present
- incorporate the questions and comments being raised by those not physically present.
In order for this to work, the company would have to have someone dedicated to watching the Twitter stream, and summarising it for the chair, who could then invite responses from the Board members/IR team.
The participants who are not physically present have to handle multiple input streams simultaneously. Possibly, the participants who are physically present could have the Twitter stream presented on a large screen too, so that everyone has the same material available … and the same quandary about multiple simultaneous input streams. It isn’t easy to watch a webcast and simultaneously keep on top of the discussion happening on Twitter. I know, I’ve tried!
However, if your potential market is using Twitter, then I think it is worth a try – and I think ArcelorMittal is up to the challenge. I wonder if they’ve considered it?
Front Seat Sustainability
July 17, 2008
I’m a bit of a DIY throwback, more inclined to bodge my own solution than use hardware provided by well known home improvement stores.
Most things which go up are usually held together by a bit of cardboard wedged in just there and I seem to have developed the use of badly fitting screws into something of an artform.
Then there’s the issue of tools. There’s many I don’t have so I regularly rely upon a strange concoction of screwdrivers and chisels to get most jobs done. Occasionally I use a sledgehammer, when the frustration gets too much.
It’s taken DIY many years to reach the stage where every shed contains a toolbox of the properly calibrated tools and each home a person with the knowledge to use them properly.
Business is embarking upon a similar cycle for the development of sustainability practices. At the moment it’s in bodge mode, with everyone patching things independently of each other, hoping that that’s what’s needed.
A Socio-Economic Assessment Toolbox
However some businesses are taking the lead and publishing the methodologies which underpin their practices, making the tools they use available to all.
Recently Caisse d’Epargne released their financial products certification methodology, as described in Squirrels of Sustainability. Similarly, Anglo American have released their Socio-Economic Assessment Toolbox (SEAT) into the public domain for any company to use.
Its primary purpose is help individual Anglo-American operations to measure and improve the impact they have upon the communities within which they operate.
To achieve this, eight steps are identified for an organisation to go through:
- Profile the current operation
- Profile the community and identify key issues through dialogue with key stakeholders
- Identify and assess current impacts, management measures and social initiatives
- Share results of the assessment with stakeholders and get recommendations for management action
- Develop Key Performance Indicators and associated management and monitoring plans
- Improve contribution of non-core activities to local community
- Post operation closure planning
- Prepare report and feedback to the community
The toolbox itself consists of 23 tools which can be deployed to fulfil these steps.
Many of them are fully comprehensive, such as the one to follow when establishing social investment programmes (pictured). This tool alone consists of over 30 steps spanning the three phases of planning, implementation and monitoring.
Sharing is Better
The most praiseworthy part of the whole venture is that Anglo American has chosen to publish their toolbox without restraint for downstream use.
This flies in the face of accepted business practice where companies either don’t share their solutions, or they seek to licence them and so generate further revenue streams.
Conversely, the need to establish sustainable business practices in a critically short period of time demands that companies collaborate freely and openly with one another.
The publication of toolboxes such as this is one way of achieving this. There is nothing particularly complicated about the tools and much of what they describe is pretty straightforward.
However, other companies also need to change their approach so that they understand the inherent value toolboxes such as this have within them. The basic planning and identification of considerations and outcomes is common to most industries and sectors.
In this way companies across business sectors can start to work together to build sustainable business practices, refining processes and methodologies and creating genuinely broad based foundations for the future.
Thankfully, DIY is not my profession otherwise my bodging ways would quickly lead to future customers hearing how inept I am and seeking other people to put up their shelves.
Similarly, businesses who don’t engage with one another in a true spirit of co-operation may find their reputation failing, and with it their ability to continue in business.
Digging Deep for First Impressions
July 15, 2008
“Great Uncle ‘Erbert’s coming for dinner!” called my Mum.
“Not Great Uncle ‘Erbert!” yowled her children. He was old and grizzled with white facial hair which seemed to clump together for warmth in random places before hibernating up his nostrils every night.
The wind whistled around the gaps in his misshapen teeth and there was always that strange smell which I later came to associate with men’s public toilets. We tried to avoid him whenever possible.
In the same way, environmentalists avoid the mining industry whenever possible.
This is not surprising: an industry which digs large holes in the ground and then sloshes toxic chemicals all over the contents is unlikely to go down well with the green movement.
What is more mining companies, unlike Great Uncle ‘Erbert, are not fictional. In fact, they operate predominantly in developing countries and so should have a lot to say about their sustainable practices on their websites.
Wide Ranging Content
Anglo American is one of the largest mining companies in the world. Their operations stretch across the Americas, Europe, Africa and Australia and include household names such as De Beers and Tarmac.
Like any good corporate website, it has a link from its top banner to its sustainability section. This immediately places the issue on the same footing as Investor and Media Relations.
In addition, this link automatically expands to be a menu, allowing the visitor to gain access with a single click to topics ranging from Anglo American’s sustainability reports to its approach to HIV/AIDS.
Within the section here are links to a whole slew of policies, speeches and presentations, a discussion of “Good Citizenship” and descriptions of the eight international schemes Anglo American plays a part in.
There’s also a page dedicated to the sensitive issue of the transfer of a share of ownership, management and benefits of business interests in South Africa into the hands of those previously excluded under apartheid.
Most intriguing of all is the Anglo American’s Social-Economic Assessment Toolbox (SEAT). This methodology has been deployed in over 16 countries to support and engagement with local communities.
This will be covered in more detail in a future post.
Burying The Facts
Antofagasta is another FTSE 100 mining company. Formed from the Bolivian Railway Company, it mixes railway and water interests in South America with being one of the largest copper producers in the world.
On the corporate website sustainability is part of the Investor Relations section, accessible throughout the site from drop down menus from the website’s title bar.
But the single page isn’t much to look at on arrival. Two links to extracts from the Antofagasta’s Annual reports and, a little bizarrely, a link to the Spanish-language website of one of its mines in Chile.
This means the content does have one thing in common with the Anglo American site: both are devoid of any firm figures concerning their sustainability measures.
This is a shame because the PDF documents both supply are stuffed full of the kinds of facts and figures which analysts love to pore over.
In addition, the Anglo American sustainability report contains 16 Key Targets covering environmental, governance and social aspects of the company’s performance.
Similarly, the Antofagasta report contains details of various awards the company’s installations have won alongside their progress towards ISO 9001 certification.
No need for Mining
These are almost unforgivable errors in a major company’s web-based presentation of its sustainability credentials.
It may be too much to hope all companies will have data-mining tools implemented on their websites, allowing analysts to investigate their raw data as best they see fit.
However, one of the traditional ways of presenting your best side is to publish a table showing progress towards a static target. Both companies have missed a golden opportunity of doing this.
Companies need to get wise to the data they have within their control and use it as effectively as possible within a web based environment.
Visitors to the Anglo American website would leave with the distinct impression of “all fluff and no substance”; those to the Antofagasta website may think the company just didn’t care.
These first impressions last. Great Uncle ‘Erbert may have been a leader in particle physics, but because he never told us we simply think of him as a smelly old man.
Similarly companies, especially those involved in naturally unsustainable past-times such as mining, need to be careful. Otherwise the truth may be lost to bad first impressions.
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