Corporate Governance Award — Colgate
November 10, 2008
Colgate, the $12.2 billion maker of household, oral hygiene and personal products, received the 2007 Treasury and Risk publication Corporate Governance Award. This seemed to slip under the news radar,perhaps since Chairman Reuben Mark avoids media interviews. Still, this was a notable event. I was impressed when I visited Colgate’s Corporate Governance site.
First impression was that there is a comprehensive display of financial filings. In addition, as you look further there are more noteworthy items under their Principles:
- Open communication between and among directors and management fosters effective oversight. ( This is lacking in many companies.)
- Established policies guide governance and business integrity. Our Board plays an active role overseeing the integrity of the financial statements of the Company. (Bravo!)
- Good governance is the responsibility of all Colgate people. (This is exceptional and is a key component of effective Corporate Governance)
- Good governance thrives from continuous improvement. (Indeed)
Colgate provides links to documents that further describes each of these principles and in the Governance Commitment in Action section, there is a further elaboration of what actions the company is taking relative to each principle.
But wait, there’s more, Board members and their backgrounds are clearly displayed and How To Contact Board members is clearly defined. It is not surprising that Colgate received the award and they provide a model for other companies to follow.
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Generation Y Weighs in on Green Brands
November 10, 2008
Two buzz topics - Gen Y and green brands. Put them together and you get an interesting list of brands that the sought after 20-something audience likes and thinks are actually making positive efforts to help the environment.
In a study conducted by Outlaw Consulting, 100 Gen Yers living in New York, Los Angeles, San Fransisco and Miami were surveyed and asked which brands were their favorite “green brands” and why. The results showed the following:
Financial Crisis + Recession (Usually) = Layoffs
November 7, 2008
Once again business conditions are difficult and once again companies respond with a hair trigger reaction: employee layoffs. According to the US Labor Statistics, layoffs are approaching peak levels since 1995 –
What happened to that idea that ‘our people are our most important asset?’
There are alternatives to layoffs, however too often corporations, especially large corporations, feel they must appease investors by taking ‘bold’ financial steps. But there are some exceptional exceptions. An article on Salary.com identified some creative alternatives to layoffs.
|
Company |
Strategy |
| 415 Productions | The company offered either an overall 5 percent pay cut, or a four-day work week reflecting the appropriate decrease in pay. |
| Acxiom Corporation | A 5 percent mandatory pay cut, plus an additional 5 percent volunteer pay cut is tempered with increased stock options. |
| Charles Schwab Corp. | The company guaranteed a $7,500 bonus for any affected employee who gets rehired within 18 months. In addition, company founder Charles Schwab and his wife have created a $10 million educational fund for these workers. The fund will cover as much as $20,000 worth of tuition over two years at accredited academic institutions. |
| Texas Instruments | The chip maker began “lending” several human-resources staffers to vendors for as many as eight months, with the intention of bringing them back to their original jobs at the end of that period. The supplier reimburses Texas Instruments for the staffers’ salaries during the loan period and agrees not to offer them a permanent job. |
Then there’s Lincoln Electric in Cleveland, Ohio USA who proudly state –
Guaranteed Employment after three years of service. The company has not exercised its layoff options in the U.S. operations since post war 1948…We will distinguish ourselves through an unwavering commitment to our employees and a relentless drive to maximize shareholder value.
And they delivered, Lincoln has consistently outperformed the S&P 500 over the past 5 years.
I had repeated personal encounters with layoffs when I worked at AT&T. In the 1990s, there were repeated massive layoffs at AT&T. I was given a unique opportunity to work with a small team whose mission was to develop an alternative to layoffs. We developed a proposal for an internal contingent employment unit. Instead of using outside contactors and temps, we would give these assignments to our employees who faced losing their jobs. When I left AT&T in 1998, the unit called “Resource Link” had over 2000 employees.
Finally, Challenger, Gray & Christmas, the noted authority on layoffs, has a worthy blog that offers advice to both employees and employers.
Even Category Leaders are at Risk in a Weak Economy
November 7, 2008
Over a year ago, I wrote a post on a blog about branding that I used to write where I pointed out that Toyota might be the automotive category leader, but based on my experience at the time with a local dealership, Toyota was also quite arrogant about that position in the marketplace. In that post, I suggested that Toyota should rethink its brand strategy to remain in the leadership position in the long-term, because no matter how great a product is, consumers won’t stick with it if they don’t feel valued by the faces of that brand.
So today, I read an article on BusinessWeek.com that talks about Toyota’s tumbling profits. It seems even the arrogant, untouchable category leader is at risk in a weakened economy. The question is, will Toyota change its brand strategy from one of arrogance as in, “we’re doing customers a favor by letting them buy our cars,” or will the typical road of finding places to cut costs and reduce value to both employees and consumers be followed? I think we can assume the latter will be the likely path taken by Toyota, but of course, that remains to be seen. Read more
Economy Down, Bargain Brands’ Value Perception Up
November 5, 2008
As one might expect, when the economy takes a nosedive, consumers’ perceptions of bargain brands go up, and their perceptions of luxury brands go down.
In a recent study of over 1 million U.S. consumers over the age of 18, conducted by YouGovPolimetrix, the power of consumer confidence was demonstrated as luxury brands took a value perception hit while bargain brands like Wal-Mart took a leap. Read more