Davos elite's largesse fails to appease critics
Davos, Switzerland: Under-fire businessmen are falling over themselves in Davos to show how sharing and caring they really are as they try to repair the tarnished image of the privileged "1 percent" but their detractors remain unconvinced.
"CEOs have a bigger job than ever because they both have to perform for their shareholders and perform for the world at large," said Mark Penn, chief executive of public relations firm Burson-Marsteller who advises top executives and politicians.
"For the clients I work with today, every one of them understands that companies have to be socially responsible ... This has gone from something that a lot of companies dismissed to recognised table stakes for every company."
Senior managers at the World Economic Forum (WEF) are debating what they can do to help address recent social unrest fuelled by the economic crisis as indebted governments cut spending and raise taxes to try to balance their budgets.
"There is a big push from this generation to go beyond profit," Liesel Pritzker Simmons, heiress to the Hyatt hotel fortune, said at a lunch event in Davos hosted by Swiss bank Credit Suisse to discuss trends in philanthropy.
"It`s not just that it is the flavour of the month or that it`s cool. After experiencing the recent crisis at a relatively young age, I don`t have confidence in traditional capital markets," said Pritzger, who helps run an educational charity.
JPMorgan Chase & Co Chief Executive Jamie Dimon attributed noble motives to his bank`s decision not to pull out of investments in the troubled eurozone, saying the commitment "was largely social, and partially economic".
A study released this week by the Edelman public relations firm showed that trust in chief executives fell 12 points to 38 percent, its biggest drop in nine years, although confidence in government officials was even lower on only 29 percent.
"Business is now better placed than government to lead the way out of the trust crisis," said Richard Edelman. "But the balance must change so that business is seen both as a force for good and an engine for profit."
Force for good?
Among the companies putting their money where their mouth is in Davos is Dutch food and chemicals group DSM, which announced on Thursday it was donating USD 1 million to the World Food Programme (WFP) to help fortify rice with vitamins.
"With almost one billion people going to bed hungry every night, it is more important than ever before that we leverage private sector expertise to provide vulnerable populations with the right food," said WFP Executive Director Josette Sheeran.
Philanthropist-in-chief Bill Gates pledged a further USD 750 million to the troubled global AIDS fund on Thursday.
But Occupy protesters camping in igloos in Davos, who were turned back on Friday when they tried to enter the forum conference centre, are not convinced.
"I don`t think these people are genuinely evil or bad. But this isn`t the solution. We should empower people and not make them dependent on philanthropy," said activist Laurent Moeri. "Social corporate responsibility is just a way to attract customers. I`m very ambiguous about that."
Klaus Kleinfeld, head of US aluminium producer Alcoa, said businesses should not pretend to be good corporate citizens if they are not: "You will be quickly found out."
Leftist and environmental campaigners named British bank Barclays and Brazilian mining company Vale as the winners of an annual award in Davos on Friday for the worst case of corporate misbehaviour.
"It is not fair to paint all corporations with exactly the same brush," said Kumi Naidoo, head of Greenpeace International.
"But on balance, at best corporations are taking baby steps in the right direction. At worst, they are pulling back and preventing movement on human rights and particularly on environment and climate change."
The campaigners accused Barclays of pushing up global food prices by speculating on commodity markets. They said Vale was responsible for human rights abuses, inhumane working conditions and environmental damage.
Barclays Capital denied it was responsible for rising food prices: "A considerable number of studies have demonstrated that financial flows have little or no impact on commodities prices. The factors influencing food prices are complex and multiple."
Burson-Marsteller`s Penn, White House pollster under former President Bill Clinton, published a "corporate reputation index" of 6,000 companies on Friday which showed some industries -- like banking -- still have a serious image problem.
"The technology industry generally was given very strong ratings because it is seen as innovative and visionary," he said. "Banking and oil scored the worst and clearly have the most remedial work to do on working on their citizenship and corporate reputation."
Howard Buffett, the grandson of billionnaire investor Warren Buffett who runs a foundation that promotes food security, said pressure would only rise on companies to clean up their act as competition intensifies to attract the best employees.
"The emerging workforce will continue to demand more and more," he said. "It`s just a way of thinking for folks our age."