The Blog

Jeff DeGraff: The Innovation Do-Over List

2012-02-10T20:30:45Z

Each year around this time the calls and emails start -- magazines, associations, think tanks. "What are the most innovative companies in the world?" Of course the first challenge is to discern what exactly they mean by innovation so I can pander to their readership or membership -- elegant product design, profound social impact, money making or over the top kookiness. Actually I do what most academics do -- develop criteria, consult the research, talk to the good folks down at the lab before coming to the realization that it's really just a beauty contest. Do I go for the miracle drug collected from the asparagus residue in the handlebar mustaches of the dancing Peruvian Emperor Tamarins or that new phone app that scans your lover's pupils from afar to determine if they are in the mood?

Recently I've been thinking about what products, services and organizations haven't made my list but are due for a makeover -- no -- a complete do-over.

First, there is endless and pervasive road construction. The infinity of this activity challenges the space-time continuum but provides an almost spiritual sense of continuity. Things may pass but road construction will never end. The entirely of the activity seems otherworldly to me -- drunken orange cones stumbling out of line, barrels with the blinking yellow eye of Sauron seeing you, plumes of cement dust rising like the mist on some post apocalyptic Mount Wudang and of course the noise of breaking infrastructure. When I get to a particularly nasty stretch of road under construction, I wonder: If we can make a dream liner out of composite materials that will fly for decades through the most inclement of weather, why can't we make a road that will last more than one winter? If we can tear down a block of historical buildings in Hong Kong and replace them with the 'skysore' like the Lippo Centre in less than a year why does it take eons to gentrify a bit of the turnpike? If we can design uniforms for the Oregon Ducks that can be seen from outer space, why can't we create one for the workers who are constantly at risk in this most dangerous of professions? Yah, I know it's complicated and expensive. What isn't these days?

Second, there is the great cable mystery that Hercule Poirot could not crack. I walked into a Radio Shack shortly after Christmas to find a cable adaptwr from my HDTV to the soundbar that Santa brought. What followed was an esoteric discussion with several technicians that would rival the assembly of the Large Hadron Collider at CERN. Schematics were reviewed, databases searched and owner's manuals perused -- you can't get there from here. When a hard solution was finally plotted the cost the morass was more than the speakers I was trying to connect. Maybe that's the catch. Give away the razor and stick it to them on the blades. I would love to see one standard universal connector or adapter but of course it's less an issue of technology and more of free trade running naked through your living room. How un-American. Next thing you know there will be one world standard for electrical outlets and flush toilets -- the end of democracy as we know it.

Third, I believe there should be a Congressional hearing about hotel check-in times. It's a scandal. I traverse this planet with the best of them and can state as a fact that arrival times are incongruous with the 3:00 p.m. bewitching hour. Wander around the streets of Jakarta for half a day after you've been in flight for 27 hours and you will understand the importance of the matter. My Michigan colleague Gordon Hewitt points out that hotels suffer from the dominant logic that housekeeping directs all other functions in the hospitality industry -- no on-demand service, no handheld technology to keep availability up the minute, no price premium for an extra three hours of shut eye. Lose the jacuzzi and just get me in a room when I arrive -- try not to knock three minutes after I drift off.

Finally, I too believe the BCS (Bowl Championship Series to the disinterested) is in serious need of a do-over but not for the conventional reasons -- "That's-not-the-two-best-teams-two teams-from-the-same-conference-shouldn't-play or I-hate-authority-and-will-turn-any mention-of-rules-into-a-Constitutional issue"; it's the usual. No, my objection is that more and more these aren't student athletes no matter how many Kodak moment ads the NCAA puts on in between Go Daddy commercials. According to the NCAA 2010 Federal Graduation Rate Report as well as the University of North Carolina at Chapel Hill's College Sport Research Institute's 2011 Adjusted Graduation Gap Report (college football fans are really into statistics) many of the top football programs have abysmal graduation rates for eligible seniors. This means they are not talking about superstar players who come out early to join the NFL. More so, several of the top conferences are actually slipping backwards. A case in point, a year ago, two teams with graduation rates hovering around 50 percent played for the national title. I know it's all about the money -- duh. So let's fix it at the root by changing the algorithm used to calculate the rankings by simply weighting the score to include audited graduation rates. I can see it now -- Duke and Northwestern playing for it all next year. This idea has been kicked around in various forms for years. So I guess it's less about the innovation and more about the willingness to shall we say Just Do It.

I know I've missed quite a few -- the communist plot known as shrink wrap, the problem of rogue ketchup and other anarchist condiments and the impending Malthusian catastrophe from the proliferation of grocery store and coffee shop discount cards. Innovation isn't just about what we need to start -- it's equally about what we need to stop.

Jeff DeGraff is a Professor of Management and Organizations at the Ross School of Business at the University of Michigan. To learn more about his book Innovation You and PBS Special by the same name, visit his web site at www.innovationyou.com or follow his blog on innovation at www.jeffdegraff.com.

Connie Cuellar: 80,000 Michigans To Lose Unemployment Benefits Without An Extension

2012-02-10T20:23:37Z

Time is running out in Washington as unemployment benefits are set to expire for nearly 80,000 Michigan workers on March 6. Members of We Are the People held rallies at eight congressional offices across Michigan Friday, Feb. 10, to urge elected leaders to pass an extension for jobless benefits.

"Federal workers and other middle class Americans should not be used as pawns in a partisan game," said Zack Pohl, spokesman for We Are the People, a statewide coalition of seniors, students and workers fighting to protect Michigan's middle class. "It's time for Congress to start working together to build an economy that works for everyone, not just the top 1-percent."

Last December, a group of about 50 protesters from WATP visited Rep. Candice Miller's (R-MI) office in Shelby Twp., Michigan, and five other congressional offices, to demanding that Republicans end the Capitol Hill stalemate and approve a 2012 extension of unemployment benefits. Miller did vote to extend the benefits last year and the group hopes she will do so again before time runs out.

She said today she does intend to extend the benefits.

"The House and Senate are currently negotiating a full-year extension of the payroll tax credit, as well as reforming and extending unemployment benefits," Rep. Miller told this blogger.

"I am watching these negotiations carefully and will support the full year extension of the payroll tax credit. I also support extending the unemployment benefits with some needed reforms and appropriate offsets so we do not increase our nation's deficit."

With the nation facing record deficits, Republicans argue extending benefits must be offset by a federal budget adjustment that pays for the price tag of an extension.

"We need to spur the economy and keep it growing," said Pohl. "Maintaining the unemployment insurance program does that. Jobless benefits go straight back into the economy--they support local businesses, help create jobs, reduce the demand for public services and cost taxpayers less in the long run."

Sara Metz, Communications Director with the Michigan State AFL-CIO, said this assistance is critical to helping families make ends meet during extended periods of joblessness, and House Republicans are proposing costly and burdensome barriers that would make it even harder for jobless Americans to find work.

"The House and Senate are currently negotiating a full-year extension of the payroll tax credit, as well as reforming and extending unemployment benefits," said Rep. Candice Miller. "I am watching these negotiations carefully and will support the full year extension of the payroll tax credit. I also support extending the unemployment benefits with some needed reforms and appropriate offsets so we do not increase our nation's deficit."

Connie Cuellar is an independent writer covering politics in Michigan. If you would like to contribute as a citizen reporter to The Huffington Post's coverage of American political life, please contact us at www.offthebus.org.

Mohamed A. El-Erian: "Half-Time in America" Highlights Our Political Dysfunctionality

2012-02-10T19:42:26Z

Viewed as a standalone, the controversy generated by the Clint Eastwood Superbowl commercial is really silly. Yet it points to something profound that has and, if left unaddressed, will continue to undermine America's ability to regain economic dynamism, create ample jobs, and deal with growing inequalities.

In the event that you are one of the few who missed it, Clint Eastwood starred on Sunday in a commercial that NBC aired at half time. The message was powerful.

Yes, America has stumbled, with people out of work, hurting and scared. But, by pulling together and acting as one, Americans will come from behind and win. "That's what we do."

The concluding remarks were particularly potent: "This country can't be knocked out by one punch. We get right back up; and when we do, the world will hear the roar of our engines."

Given that it was financed by Chrysler, the commercial's direct reference was, of course, to the impressive recovery in Detroit's car industry. But the intention, and the impact, went well beyond that. What Detroit has done, America as a whole can and will do.

Coming on the heels of a series of favorable economic data releases -- which will hopefully persist though this is far from certain unfortunately -- the ad spoke to the hope that America is recovering and that our economy is building encouraging momentum. This is particularly important for the job market where we need to improve on the 243,000 positions created in January to meaningfully address our unemployment crisis, tackle the problem of long-term joblessness, counter the mounting obstacles to youth employment, and stop the worsening of income and wealth inequalities.

You would think that this feel good message would be a unifying one for our political class. Far from it.

Several Republicans complained this week that Clint Eastwood was implicitly supporting Barack Obama. After all, the commercial could be interpreted as suggesting that, under President Obama, America has turned the corner and is now embarking on a path to prosperity -- something that most Republicans dismiss.

Democrats were quick to counter. On the contrary they shouted. If anything, "Half Time in America" was pro-Republican. It could easily be viewed as implying the need for a change in game plan and personnel substitutions -- similar to what a losing team would discuss in the locker room at half time in order to regain control of the game and win.

This morning on CNBC's Squawk Box, Clint Eastwood shared his views. His message was direct and unambiguous: Take the commercial for what it is -- a message about Americans' ability to overcome our problems and march forward to a better future.

It is easy, indeed tempting, to dismiss all this political squabbling as indicative of the silliness that is inevitable during an election season. I certainly would like to do so. Yet I fear that it goes well beyond that.

This is yet another illustration of the deep political dysfunctionality that continuously undermines DC's willingness and ability to move forward with the much-needed revitalization of the economy. The longer this continues, the greater the costs and the harder the solutions.

In the short-term, the cyclical economic bounce of the last few months -- powered by large injections of global central bank liquidity and a once-for-all decline in the personnel savings rate -- would end up suffering the same fate as in early 2010 and 2011: fizzling out rather than handing off to durable engines of investment, growth and jobs. In the longer-term, America would find it even more challenging to overcome structural impediments that, each day, are getting more deeply embedded in the construct of our economy.

For the sake of both current and future generations, let us hope that Clint Eastwood's "Half Time in America" commercial will be remembered for more than just igniting yet another round of political bickering and finger pointing.

Adele Scheele: Making Meetings Mean Something

2012-02-10T19:22:00Z

For some companies, the usual Monday morning meeting is becoming unusual. It is revamping itself, becoming a stand-up, short-lived check-in. For those who still endure the old sit-down conference table version, the format is unbearably predictable: the boss unceremoniously starts the meeting by reading the agenda, reciting the latest sales report, warning of anticipated obstacles, and then spends the remainder of the time discussing the pet peeves and projects of the few most vocal employees excluding everyone else. Or else there are the endless arguments over old issues that never get resolved.

For many of us, coping with meetings is more stressful than doing the actual work -- it often feels like not much is accomplished. Sixty to ninety minutes of tortuous boredom leads to anger, which, in turn, leads to withdrawing to keep from exploding or else becoming a comedian to camouflage emotions. Most of us are stuck in a frustrating situation we feel unable to change. Maybe the only people who don't bristle during routine, energy-sapping staff meetings are the managers who call them and those unlucky ones whose jobs are even more unbearable than the meetings.

Instead of increasing your blood pressure or clenching your jaws, why not try to turn the situation around to our own advantage? Here are some tactics that can lead you to a more effective meeting outcome and better mood:

1. Start by changing your own role. Play host early and greet people by asking each about some recent good news. Share yours too.

2. During meetings, compliment any good idea out loud and suggest ways it might benefit your group. If two ideas offered are similar or complementary, suggest a way to incorporate both.

3. When factual disputes arise, suggest an immediate decision on principle, rather than fact.

4. When the old, unresolved issue rears its ugly head again, suggest a way towards resolution; perhaps a debate. Offer to find someone who can act as a debate coach, working with your group divided into opposing teams. In a short time, perhaps only two hours, a rational decision can be forged to everyone's relief.

5. When you want to introduce an idea, be strategic. Don't bring it up by the usual method -- flinging it into the middle of the table and hoping that others will respond. Nobody does. Ideas, even good ones, usually fall flat. Instead, prior to the meeting, garner support from your leader and several members of the team so that you are backed up and can ensure better results.

6. Invent more roles to play during different meetings. Ask questions to elicit action or piggyback on a good idea or project. Just don't play antagonist or devil's advocate more than once.

7. Summarize what has already been agreed to; note new agenda items from stray conversations for subsequent meetings.

8. After a major project, suggest that each team member tell what he or she has contributed. Then go around again asking them to tell what they would do differently if the project were repeated. Record their remarks from what they've learned and see how you can use them next time. Don't be deterred by flack by others who think you are overstepping; try to get them involved too. You might talk to your manager about how to gather what's been learned to make the next projects more effective.

9. Of course, not every plan will work every time. But it's worth a try. More than a try. Not only does trying keep your anger quotient and your blood pressure down, but it gives you a chance to realize what the rest of your group craves -- someone willing to change things so that they will work better. Let that someone be you!

Make your luck happen!

Jed Kolko: The Robo-Signing Settlement: Breaking the Usual Rules of Housing Policy

2012-02-10T18:54:16Z

The robo-signing settlement is the latest -- and potentially the largest -- piece in the U.S. housing policy puzzle. Even though it's partly punishment for banks' wrongdoing, it is also another answer by the government to the question of how it can help the housing market.

Our own housing policy survey last December showed strong bipartisan support for two key elements of the robo-signing settlement: refinancing by underwater homeowners (82 percent of Democrats, 69 percent of Republicans), and loan modifications to reduce principal balances (74 percent of Democrats, 61 percent of Republicans).

With the robo-signing settlement, as with any housing policy, I look at three questions:

1) Is it big or small? Relative to other housing policies, it's big. It calls for much more money for loan modifications than HAMP has cost so far, and it could mean money or relief for close to two million current and former homeowners. HAMP and HARP have each helped roughly one million homeowners so far. But relative to the housing crisis, it's small. The loan modifications could yield tens of billions in principal reductions for one million homeowners -- but that's a sliver compared with the 11 million homeowners today who are over $700 billion underwater. And the cash compensation of $1,500-$2,000 for up to a million people who lost their homes will hardly make them whole.

2) Who pays? Usually it's good politics to keep quiet about who pays for housing policy, but not with the robo-signing settlement. It's good politics for the government and the attorneys-general for everyone to know that the banks are paying for their robo-signing sins. In contrast, most housing policy announcements hide -- or at least don't broadcast -- who is paying, whether it's investors who implicitly bear the cost of refinancing or taxpayers who implicitly bear the cost of many other policies.

3) Does it reward risk-taking or bad behavior? Delinquency is a disqualification for refinancing but is almost a requirement for getting a principal reduction. The largest piece of the robo-signing settlement is for principal reduction for borrowers who are "either delinquent or at imminent risk of default." This is opposite of the refinancing rules laid out in HARP and the State of the Union address, which require borrowers to be current on their payments because that shows they're "responsible." So much for a coherent message from the government to homeowners about moral hazard. This issue could be fuel for election debates on housing policy: Republicans are much more bothered by rewarding bad behavior than Democrats are. In our December survey of consumers, 61 percent of Democrats agreed that "helping people keep their homes is the right policy even if it helps some undeserving homeowners," but only 38 percent of Republicans agreed.

David Woolner: FDR Alleviated Americans' Anger and Suffering Through Action

2012-02-10T18:47:22Z

The news that President Obama has decided to establish a special new task force to investigate abusive and fraudulent lending practices during the housing boom, coupled with yesterday's announcement of a $26 billion settlement aimed at providing relief to struggling home owners, will certainly be greeted as welcome developments by the millions of Americans still struggling under the weight of the Great Recession. But with many of the details of the practical application of the settlement still to be worked out, and with the task force having just been established, it is too early to tell how much relief will actually reach desperate homeowners or how many banks and/or individuals will face prosecution.

Given the devastation caused by the reckless and often fraudulent behavior of many of the nation's leading banks, and the overwhelming need to stabilize the housing market and provide relief to millions of homeowners, one would hope that these measures would, at the very least, be as effective as the actions taken by the government roughly 80 years ago when we faced a very similar economic crisis.

Most Americans are well aware that the Great Depression was initiated by the collapse of the stock market in the fall of 1929. It was a collapse that came about in large part because of the bursting of a large speculative bubble that had built up over time in the reckless and virtually unregulated financial climate of the 1920s. What is less well known or understood are the many other factors that played a role in the onset of the Great Depression: the decline in agricultural prices, the maldistribution of wealth and income, the collapse of the banking sector, and an equally important urban mortgage crisis. Indeed, by the time Franklin Roosevelt took office in March of 1933, it is estimated that approximately 50 percent of all urban mortgages in the United States were delinquent or in foreclosure and that an average of 1,000 homes per day were being lost.

To deal with the housing emergency and to get to the bottom of what led to the economic crisis in the first place, FDR did two things. First, he fully supported the activities of the 1932 Senate Committee on Banking and Currency that was established to investigate the causes of 1929 crash. Once in office, he moved quickly to provide relief to home owners through the establishment of the Home Owners Mortgage Corporation (HOLC).

Thanks in large part to the zeal of Ferdinand Pecora, who was appointed to head the Senate committee investigating Wall Street in January 1933 and was quietly encouraged to carry out his work with vigor by President-elect Roosevelt, the "Pecora Commission" would uncover a whole series of unscrupulous practices in the banking and financial sector. These included interest-free loans to top executives at National City Bank (now Citibank); National City's disposal of bad loans to Latin American countries by packing them into securities and selling them to unsuspecting investors; and J.P. Morgan's list of influential "friends," including former President Calvin Coolidge, all of whom were given the opportunity to purchase stock at sharply discounted prices.

These disclosures, coupled with additional revelations about excessive salaries, bonuses, and the fact that many financial elites -- including the head of National City Bank -- did not pay any income tax in the past year, outraged the public and helped inspire the Roosevelt administration and Congress to push through some of the most important banking and financial reforms in American history. These included the Glass Steagall Act, which separated commercial from investment banking and gave us the Federal Deposit Insurance Corporation, and the 1934 Securities and Exchange Act, which created the Securities and Exchange Commission.

In the meantime, to meet the urgent housing crisis, the HOLC, which was established within FDR's first 100 days in office, provided direct relief to families facing foreclosure by buying out their existing mortgages and replacing them with new ones. The new ones weren't based on the typical non-amortized loan of seven to ten years, but rather on the far more affordable amortized mortgage of between 25 and 30 years. Over the course of its brief three-year history, the HOLC refinanced over one million homes -- roughly 20 percent of all the urban mortgages in the U.S. In the process, it revolutionized American home ownership through the institutionalization of the 30-year mortgage. It also did not cost the American taxpayer any money, as the HOLC turned a small profit when it finally closed its books in 1951.

Taken together, the measures inspired by the Pecora Commission and the relief brought to millions of American homeowners helped restore investor confidence, resuscitate the financial sector, and lay the foundations upon which our banking, financial, and housing sectors rested from more than half a century.

In making yesterday's announcement, President Obama alluded to both the new task force and the bank settlement by stating that with these measures "we begin to turn a page on an era of recklessness that has left so much damage in its wake." Eighty years ago, the twin combination of a federal investigation and direct action by the government helped alleviate the anger and anguish of the millions of Americans who suffered as the result of the greed and avarice of the wealthy few. Let us hope that the president's new task force and the agreement with our nation's major banks will do the same.

Cross-posted from New Deal 2.0.

Dennis M. Kelleher: First Bank Fraud, Now Political Fraud

2012-02-10T18:38:22Z

First the banks committed massive fraud in originating and packaging mortgages, leaving the country littered with millions of little mortgage time bombs set to explode in the years after they lined their pockets and made their get-away. The poster child for this unconscionable conduct is Countrywide (now owned by Bank of America) and its CEO Angelo Mozilo, but they were just one of many, many culprits.

Then when those mortgage time bombs exploded a few years later, those very same banks committed more massive fraud, this time by improperly charging homeowners fees and other costs, commencing unjustified foreclosures, and knowingly and intentionally filing false documents in court to foreclose on people when they never even bothered to check to see if they owned the mortgage they were trying to foreclose on.

That is lying, cheating and stealing that would get anyone else in this country thrown in jail for many years. And, this was even worse than that because they filed falsely sworn documents in courts throughout the country as a routine practice. That is perjury (not that any of this is called criminal; no, these crimes are covered up with euphemisms). This is very, very serious criminal conduct that was engaged in for years by the biggest banks in this country as a routine business practice. People go to prison for many, many years for crimes much less serious than that and these crimes merit long prison sentences and crippling fines. But, not if you're a big bank.

That is why people are so mad in this country. There is one standard for hard-working people and there is another standard for the wealthy, well connected, powerful, and, almost always, the big campaign contributors. The law gets applied to the former, often mercilessly and ruthlessly, but the law doesn't apply to the latter, who get off time and again for nothing, next to nothing or by paying a window-dressing fine usually with other people's money.

As if that isn't enough insult and injury to the American people, almost always you have politicians, prosecutors and sundry others racing to the microphones to claim a great victory for "punishing" those wealthy, well connected, powerful, and, almost always, the big campaign contributors. It is as if they think the country is populated by idiots who cannot see through the transparent PR political fraud that they spin to cover the fact that the big shots and their buddies are getting away with it again.

Yesterday was no different as 49 state AGs, the U.S. AG and the White House all raced to the cameras to tout their claims that the mortgage settlement with 5 banks was a great victory for victimize homeowners. $26 billion, they all blared, coming to a neighborhood near you. Wahooo! Finally, relief, justice and help to beleaguered homeowners and other victims across the country.

The problem is that the facts, the actual terms of the deal, as near as they can be determined from what little information was disclosed, suggest that this great victory isn't going to help hardly anyone. True, it does appear to be better than nothing, but is that really the standard? And, none of those politicians said it was merely better than nothing. No, they claimed that this is going to help millions of homeowners across the country.

First, only $5 billion of the settlement was cash (a mere $1 billion from each mega-bank, which is nothing to them) and the other $21 billion will come in the form of mortgage modifications, which isn't anything like cash and will cost them almost certainly less than half of that cost.

Second, as many have pointed out, $26 billion (even if it was real) isn't much and won't help much. For example, as a New York Times story today shows, even if all $26 billion was actually used as claimed, it will help, at most, 10 percent of the 20 percent of homeowners under water and even those homeowners aren't likely to be helped much. Don't miss the graph. Nothing beats seeing how little the help will be. There are approximately 11 million homes under water by an average of $50,000. The huge victory will help at most 1 million for an average amount of $20,000. So, nothing for 10 million and the 1 million will get to reduce the amount underwater on average to $30,000. It's like saying rather than drowning in a lake 50 feet deep, you get to drown in a lake that is only 30 feet deep. And, people are taking victory laps?

You don't believe any of that and still think what the politicians said about punishing the banks was true? If this was a real punishment, then the stock of those banks would have taken a hit. They did not. The announcement had no effect. You could say that was because the settlement had been talked about for some time so the cost was already priced into the stock days before, but there wasn't any hit during that time either.

Thus, the markets confirm the facts of the settlement and rip the PR spin off the political fraud that compounds the banks' fraud and, once again, victimizes the American people by falsely raising their hopes for relief and dashing -- again -- the claims that the criminals, liars, cheaters and scammers were finally going to be held accountable. Sadly, this is yet another example of the double standard that has been so painfully obvious to everyone in this country since the 2008 financial crisis: pain on Main Street, bonuses, bailouts, and arrogant whining on Wall Street, and nothing but PR spin from Washington, D.C. and elected officials.

Mathias Terheggen: The Wealth Gap Challenge

2012-02-10T18:33:05Z

Philanthropy and the wealth gap challenge

Economic growth and the question of its "if and when" is a very popular topic these days. Analysts have been providing outlooks on 2012's economic development. But in their attempts to foresee the future one thing is already clear: regardless of how the economies will develop, the outcome is going to be more positive for those who already have and earn a lot compared to the financially less fortunate. This phenomenon, the "wealth gap," is not new and we have become used to the fact that, with few exceptions, particularly in developing countries the wealth disparity is growing steadily. What is new though is that within developed economies -- among them are some of the strongest globally -- the wealth gap is widening too.

Countries as diverse as the U.S., Italy and Germany all have grown their Gini-coefficient, a measure of income inequality, over the last 30 years. And even Hong Kong, whose economy grew by over 6% at 3% unemployment last year, not only holds a global record for growing the number of millionaires but also, or maybe therefore, one for the highest income inequality ratio among developed economies.

An ever-growing challenge

This has given rise to substantial concern. While low levels of economic inequality are desirable to maintain an impetus for individual economic development, a large wealth gap is known to discourage individual economic efforts which, in turn, results in lessened economic power for large parts of the society. Public upheaval and political revolutions as seen during the Arab Spring are only the most blatant symptoms of the detrimental effect on societies caused by limited economic opportunity and unfair wealth distribution. With low-income households statistically producing a higher number of off-spring, strong income inequality virtually results in an increasing number of children slipping off into poverty, poor healthcare and education. The generation responsible for long-term economic growth is hence disengaged, and a society's ability to innovate from within itself jeopardized. Ultimately, this will limit the future economic potential also of those on the more fortunate side of the wealth gap, too.

Donating doesn't do the trick

The economic crisis of 2008 caused a tightening of public budgets which, in turn, has resulted in reductions of social welfare. This has led to a more critical public view on the financially successful, and so the wealthy nowadays have both an intrinsic and an extrinsic motivation to re-consider their role in dealing with the wealth gap and related social issues. It comes by no surprise that therefore the past years have seen many wealthy go public with their social engagement and openly demand more substantial measures to foster social equality from their peers. The public response has been very mixed with reactions reaching from friendly acknowledgement to acid accusations of fig-leaf efforts.

A closer look at the role private philanthropy can play in closing the wealth gap might therefore be appropriate. One myth to make away with at the outset is that donations to the poor won't solve the wealth gap challenge. While total global private giving is estimated to exceed USD 600 bn annually, this amount represented less than half of the wealth transferred from the bottom 80 to the top 20 percent of households in the US during the financial crisis from 2007 to 2009 alone. Hence, private philanthropy by wealthy individuals must play a different role if it means to prevent societies from getting destabilized.

An entrepreneurial approach

Indeed, philanthropy can have a catalytic role in encouraging and supporting social innovation: being liable to their own preferences and requirements only, as opposed to donors like most public fund-raising non-profit organisations, philanthropists can take higher risks like funding interventions and organizations in early stages of development. Philanthropists can afford the risk for a project to default, e.g., through a project owner's unexpected death, knowing that the draw-back will be off- set by other successful initiatives within their portfolio. In addition, today's private donors are increasingly seeking ways to make their social engagement not only more strategic and long-term in order to achieve systemic change, but they go far beyond their mere financial contributions. Building on their professional success they leverage their knowledge and network, engage non-financial capacities like companies and employees, and most importantly, they apply their mind-set and experience as an entrepreneurs and investors to their philanthropy. Addressing social issues with an entrepreneurial approach including the idea of revenue generation through the provision of social products and services has resulted in efficiency and scalability and triggered some of the most remarkable recent trends in the social sector. On the giving side Venture Philanthropy and Impact Investing have taken giving beyond grants towards actual investments that include the expectation of a financial return for the investor. The ratio of social versus financial return generated by the investment may vary depending on the social investor's priorities. But the mere fact of making an investment, rather than giving money away, has a groundbreaking effect on the recipient's commitment, not least as it is an explicit sign of trust in the recipient's abilities. All these trends yield social interventions that often address social issues that weren't addressable before. But in all cases they increase the efficiency and effectiveness thereby growing the social impact.

Enabler and catalyser

It is through this role as enabler, supporter and advocate of social innovation that private philanthropy addresses the wealth gap challenge: not only do they deliver new social interventions, but by using their extensive networks and acting as figures of public influence they promote what ultimately will be adopted by larger non-profit organisations and, increasingly, by governments. Especially the latter are turning towards private philanthropy on their search for social innovation that enables the public sector to fulfill its social mandate while minding the costs. The recent launch of a program by the German bank for economic development, KfW, that provides financing to social entrepreneurs under the condition that they can secure additional funding by private donors, is an apt example of governments trying to harness the innovative power of private philanthropists. These interventions will increase the ability of the less fortunate both in developed or developing countries to have access to appropriate healthcare and education. This will help lay the foundations for future economic growth and participation in it: by linking private philanthropy of the wealthy to the economic participation of the less wealthy, the social fabric that makes for a stable, fair society is strengthened.

Transparency to gain momentum

Private philanthropy will not balance societies that are otherwise challenged in their social cohesion through an overly inhomogeneous distribution of wealth and income. But it can, if done credibly, be a starting point for systemic change -- all the while shaping the future of the wealthy, too. Transparency on individual efforts could create the desired momentum as it allows for discussions on objectives and priorities as well as for collaboration. However, given the reputational risk and the challenges of building a successful philanthropic track record, such transparency may at first only be acceptable within the peer group. Closed conferences, of which there aren't too many yet, but where leading philanthropists, experts and social-sector professionals gather to exchange knowledge and further their philanthropy, have proven to be a very effective means. Very often such gatherings boost alliances around a shared theme of interest, they build scale and subsequently become visible to the broader public including private, public and civil sector organizations.

Nathan Gardels: Democracy Is Not Self-Correcting

2012-02-10T17:51:13Z

Recently, I wrote an article posted here about the protests in Italy against the "undemocratic" government of meritocrats in Italy led by Prime Minister Mario Monti. Many responders, following the German philosopher Jurgen Habermas, worry that Europe is entering a "post-democratic" phase, not just because of a government like Monti's, but because European institutions, such as the appointed European Commission, are seen to be beyond the accountability of the public.

Behind such sentiments is a suspicion of delegated authority of any kind in democratic societies. My response is to consider this:

The argument against the delegated authority of meritocracy based on experience and expertise is that it can get it wrong without adequate feedback. Without the capacity to self-correct it can end up oppressing the people instead of serving them.

The argument for one-person-one-vote democracy always is that it gets is right because, like the free market,it is self-correcting. But that is no truer for democracy than for the market, as we saw in the 2008-09 financial crisis.

Democracy, both representative and direct, also has its rigidities (ideology, populism, self-interest of voters, money as free speech). Often the accumulation of individual choices produces unintended consequences against the public good. As I pointed out in my earlier article, after a series of direct democracy initiatives to curb property taxes and punish criminals, California now spends more on prisons than higher education, thus undermining the foundations of its future.

What matters for good governance is an open society -- freedom of expression and the rule of law to protect feedback -- not whether the system is meritocratic, democratic or a hybrid.

Is China's "monitory webocracy," where the Communist government is acutely responsive to the public clamor over weibo on everything from tainted milk or toys to train wrecks to pollution, any less self-correcting than American democracy where the Wall Street banks that precipitated the financial crisis and were bailed out because they were "too big to fail" are now even larger and remain unregulated?

R. Paul Herman: Warren Buffett's Billions at Risk; Berkshire Hathaway Is Lowest-Rated on Sustainability

2012-02-10T17:03:01Z

Co-authored with analyst Maximilian Lichtenheld of HIP Investor.

Warren Buffett is known as the "Oracle of Omaha," but does his view towards sustainability warrant this title in the 21st century? Not according to the "HIP 100" investment index and portfolio. Berkshire is rated dead last of the 100 largest companies in the U.S. based on low sustainability results and lack of information on its conglomerate's actions and results.

Why? Because Warren Buffett, vice chair Charlie Munger and the Board of Directors -- including Bill Gates --have yet to embrace sustainability, the concept that human, environmental, social and governance factors can drive increased profitability and shareholder value. The shareholders and Board voted down a proposal at last year's shareholder meeting in Omaha to quantify the risks related to pollution and carbon emissions, as well as rejecting the need for setting goals to reduce them. This is strange: because reducing waste and greenhouse gases leads to lower costs, fewer liabilities and reduced risk.

At that shareholder meeting, Buffett stated that climate change is not a material risk to Berkshire. Yet $30.6 billion, or 29%, of Berkshire Hathaway's operating company revenue is heavily contingent on the issues related to climate and energy. Berkshire's earnings growth has not met analyst projections as the reinsurance businesses of BRK suffered heavy losses due to extreme weather.

Moreover, the potential impact of climate change on BRK's equity holdings (partial rather than full ownership, like Coca-Cola, Kraft and Wells Fargo) is even higher. Approximately 40 percent of revenues are facing increased risk, representing about 1 in 4 employees, according to our analysis at HIP Investor.

An analysis of BRK's operating companies resulted in a peculiar result as sustainable business practices are incorporated at home construction and manufacturing firms, yet two of the biggest insurers, GEICO and General Re, appear not to pursue any strategies considering environmental impacts on their business models. Including these factors could lead to more sustainable profits with a largely reduced exposure to high-impact risks. The industry finally has to recognize that "black swans" risk becoming the "new normal."

Another crucial aspect that might be detrimental to BRK's performance is also rising prices of clean water. The Coca-Cola Company, in which BRK holds a major equity stake, uses 2.36 liters of water to produce 1 liter of soda -- consider that next time you drink a soda. In India, the water-to-soda ratio amounts to 4:1, resulting in the waste of 75 per cent of water input. As water is the main ingredient for all beverages, even a slight increase in its price could lead to a fall of profits. An improvement in water efficiency might incur capital expenditures in the short run, but will reduce costs in the long run, serving as a competitive advantage.

Some of Berkshire's businesses are actively expanding in the alternative energy sector, such as Mid American Energy Holding's acquisition of the Topaz project, one of the world's largest photovoltaic power plants, for $2 billion. Imitating this strategic expansion across the conglomerate could be quite beneficial for BRK.

For BRK's last fiscal quarterly statement, ending October 2011, Berkshire said "profit from underwriting insurance fell 83 percent to $81 million amid the most costly hurricane season since the record storms of 2005." As profits associated with the insurance subsidiaries fell by more than 77 percent on investments, it is time for Berkshire's board -- which includes Bill Gates -- to accept the importance of climate for business.

A study by the Intergovernmental Panel on Climate Change (IPCC) entitled "Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation" (SREX)' supports the notion that extreme weather occurrences are going to increase in frequency, hugely affecting BRK's potential for generating sustainable revenues in the insurance and re-insurance businesses. "Extreme events will have greater impacts on sectors with closer links to climate, such as water, agriculture and food security, forestry, health, and tourism," requiring economies to adapt and not stick blindly to a status quo. If weather-related disasters increase in frequency, profits could quickly evaporate, unless the issue of climate change is actively included in company strategies.

Other reinsurers, namely Swiss Re, do acknowledge the impact of climate change and estimate that the associated market accounts to $5 billion, which consists of various over the counter contract weather derivatives, as well as other insurable risks regarding renewable energies. However, the acceptance of the changed circumstances does not only create new markets, but allows to incorporate these changes into the risk models. Ignoring the tremendous risks of climate change can be lethal for a firm.

If BRK would take steps to counter these challenges through systematic implementations of sustainable business practices across all operating companies, as well as pushing for sustainable changes at their equity stakes, then revenues could be more stable, avoiding losses and positively impacting society.

Warren Buffett's potential impact on sustainability would go far beyond BRK though, as typically his investments are widely followed and influence investors in their decisions. Once this self-reinforcing cycle is initiated, economies and firms could become more sustainable in performance, hence they could weather economic shocks better. Volumes on IBM trading doubled days after Buffett announced his investment in the company in 2011. Forging ahead on sustainable firms could thereby lead to a large multiplier effect for the entire industry.

Will Buffett become more "HIP," supporting the theme that solving human, social and environmental challenges can increase the potential for more profit? Will BRK survive without adapting to more sustainable business practices? That is up to Mr. Buffett, Charlie Munger and the Board -- but it will determine whether BRK can continue its 20th century leadership into the 21st century.

Co-author Maximilian Lichtenheld is an Analyst at HIP Investor Inc., an MBA candidate at London School of Economics (LSE), and the Founder and President of LSE's M&A (Mergers&Acquisitions) Society, President of LSE's Swiss Society and Vice-President of the Austrian Society.

NOTE: This is not an offer of securities nor a solicitation. The information presented is for information and education purposes, and does NOT imply any investment recommendations. Past performance is not indicative of future results. All investing risks loss of principal. The authors, HIP Investor and HIP's clients may invest in the securities mentioned above, including in the HIP 100 Index portfolio. Details and full disclosures are at www.HIPinvestor.com

Van Jones: Bank Settlement: $25 Billion Down, $675 Billion to Go

2012-02-10T17:02:11Z

This week a $25 billion settlement was announced in which big banks pay up for a portion of their bad deeds in the home foreclosure crisis. Everyone is trying to determine whether this is a good deal or a bad deal.

Here is how I score it. This deal represents small progress on a small problem. Now it's time to make big progress on the big problem.

Don't count on finding many good points in the deal itself, because there aren't a lot. In fact, the main win can be found in what's NOT in the deal.

A truly horrible deal would have let the banks write a small check and then seal the door on all further investigations and pursuits of accountability. This deal does NOT do that. Because this settlement limits legal immunity for banks, this deal does not automatically let the banks off the hook for all of their wrong-doing. Except for a few issues like robo-signing, state attorneys general can still fight for more compensation and relief for the banks' victims. Government officials can proceed with investigating and prosecuting banks for their role in crashing the economy and the housing market. In other words, the door is still open to solve the much bigger problems we face. Our fight for justice can, and will, continue.

That is small comfort, perhaps, but it was hard won. So we should honor the hard work of New York State Attorney General Eric Schneiderman, California Attorney General Kamala Harris and others, including many grassroots progressive organizations like New Bottom Line. They fought courageously to prevent a total sweetheart deal for the banks. This outcome is the result of determined activism, and without this heroic effort, the deal would have been drastically worse.

That said, there is a reason why many progressives and housing advocates are furious, and why many struggling homeowners are left wondering, "How does this help me?"

Millions of homeowners and families are still suffering under the tremendous weight of a debt blanket that is smothering the economy.

This $25 billion settlement helps only a fraction of those homeowners and addresses only a very limited set of fraudulent behaviors. A number of homeowners will get some cash payments, but the amounts are negligible compared to the pain and injustice they have experienced. The actual total cash paid out by the banks is only $5 billion dollars, to be split among the nation's largest banks -- hardly a stiff penalty considering that the six largest banks in the U.S. paid $144 billion in bonuses last year. And enforcement mechanisms remain murky.

We must not forget the more than 14 million homeowners (one in five) whose homes are underwater, beneath a crushing total $700 billion in negative equity. We must not forget the more than 4 million families who have lost their homes. We must not forget the millions of families who are in some form of foreclosure proceedings on this very day.

These are the Americans who have suffered and continue to suffer. They are worried today, like yesterday, whether they will still have a home to live in tomorrow. They are the ones who must choose every month whether to pay bills or to feed their children.

Here are three things that must happen next:

1) The U.S. Department of Justice and state attorneys general must investigate and prosecute banks more aggressively than ever, at a much larger scale than anything that has happened to date.

2) We must force banks to make massive principal reduction of hundreds of billions of dollars, to immediately relieve the 14 million homeowners in the country who have underwater mortgages.

3) We must change laws and regulations to prevent this kind of crisis and fraud from ever happening again.

Two weeks ago, I called for hundreds of billions in principal reduction for homeowners. This would free up Americans to start new businesses, spend money on worthwhile products and services, and invest in their children's futures. We still need to address the $700 billion in negative equity, which in turn is only part of the nearly seven trillion dollars in total lost equity created by the banks' irresponsible, and in some cases, illegal practices.

We need a solution at the scale of the problem, so that families can get back on their feet, the economy can get working, and people can reach for their American dreams again instead of watching them drown.

That is why I say: $25 billion down, $675 billion to go.

Denice Kronau: Early Warning Signals to Help You Know If You Are Losing Your Passion for Work

2012-02-10T16:45:59Z

How do you recognize when you are working too much and for the wrong reasons?

Who today truly keeps their perspective of what's normal or acceptable when it comes to work? Surviving the economic crisis of 2009 has pushed the limits of what is normal working behavior. The rules are changing, and more and more of us are working longer hours, giving up weekends, taking on impossible deadlines, doing work we hate -- because of downsizing and fear of being laid off. And none of this is satisfying or rewarding; it's the work equivalent of the Bataan Death March.

Can you remember when you worked lots of hours because it was fun? Can you remember how it felt to finish a high-quality project on time, even if it meant long nights and weekends? You walked away from those moments knowing you had created something important, and most likely, you had done it together with your colleagues, so the shared experience of success was even more rewarding. In the months that followed, "Remember when we knocked that project out of the park?" would bring a smile to everyone's face and a renewed sense of energy for the task at hand.

This energy is the fuel for sustaining your passion for work. Without it, work is hard and definitely not fun. There's a series of questions you can ask yourself to see if you've emptied your work gas tank and are running on fumes:

How will you feel when this (project, task, trip, event) is over? Exhausted or energized?
If you didn't need the paycheck, would you still do this? And if you would still do it, would you truly enjoy doing it?
How many of your work hours, in percent of time, do you spend looking forward to the tasks at hand, or dreading them?
Said another way, out of one hour, how many minutes are you happy?
Is Sunday night the worst night of the week? Do you dread hearing the alarm clock ring on Monday morning?
Do you find yourself settling for "good enough" when you used to take pride in the quality of your work?
Do you fantasize about getting sick or breaking your leg just to get some time off from work?
Do you get disproportionately angry when work intrudes on your time off? (Also known as "Why are those idiots calling me now?")
Do your family and friends see this reaction and wonder what happened to the person they used to know?
Do things you used to take in stride now overwhelm you?
Do you negotiate with yourself about quitting --"If (your most painful thing) happens, then that's it, I'm leaving!" -- and yet you never seem to pull the trigger?
Do you negotiate time not working with yourself? "I'll just watch the Today Show for 10 more minutes, and then I'll work on emails." Have you regressed to when you were five years old and you wanted to watch TV just five more minutes, Mom!

Any one of these questions can be true at any given time for all of us. It's when two or three or four are true that it's clear that our passion for work has been replaced by a sense of obligation and even dread. Obligation is a bad coach; it never inspires us or gives us the energy we need to be happy at work.

Published on www.ezinearticles.com on Feb. 19, 2010 and in my book.

Andrew Winston: Apple's Greatness and Its Shame

2012-02-10T16:31:56Z

Is there such a thing as too much profit? A disciple of Milton Friedman would say "never." The idea that companies should only maximize shareholder value has had a stranglehold on the business world for decades. It's time to rethink this assumption.

A couple of weeks ago, Apple reported breathtaking earnings. In the fourth calendar quarter of 2011, Christmas shoppers snapped up 15 million iPads and 37 million iPhone 4Ss. The world's most innovative company brought in $46 billion in revenues, $13 billion in profit, and an eye-popping $17.5 billion in cash flow. Apple is the only company competing with, and now beating, Exxon for the title of "most profitable company ever."

Right when Apple's earnings came out, the New York Times also hit us with two powerful articles about Apple's supply chain that revealed some deeply troubling issues for the company's business model. The first, "How the U.S. Lost Out on iPhone Work," painted a dim picture of U.S. competitiveness by demonstrating what Chinese suppliers are willing to do to get Apple's business. But the second article, "In China, Human Costs are Built Into an iPad," shows us the enormous human cost of getting work for cheap. It's a horrifying picture of life at the now infamous Foxconn facilities.

Combine Apple's incredible earnings with the reality of life in its supply chain, and it's clear that the tech giant could afford to do much better by workers. It's not sustainable for any company to continue relying on people with such limited rights and life prospects.

But is it fair to pick on Apple? Yes, to some degree, since other companies with deep connections to China have done better on working conditions (a Times source name checks HP, Intel, and Nike for example). In the spirit of being balanced, a few points: (1) even with a few good actors, worker treatment is a systemic challenge common to electronics, apparel, and any other sector with complex, worldwide supply chains; (2) Apple has put some effort into improving supplier conditionsand CEO Tim Cook replied last week to the concerns; (3) Consumers also take on some responsibility-we should be demanding more transparency and information about how our products are made (I'm targeting myself here as well since I'm typing this on a MacBook Pro).

But Apple too should be doing far more.

We'll only fix the problem if the largest, most profitable, and most powerful brands demand better treatment for all people who work on a product. The most damning quotes in the Timespiece come from former Apple execs: "Noncompliance is tolerated... If we meant business, core violations would disappear" and "Suppliers would change everything tomorrow if Apple told them they didn't have another choice."

So am I suggesting companies pursue unprofitable paths? Hardly. These labor challenges are complicated, but any argument that it would be too expensive to pay people better and give them much better working conditions is absurd.

Some reasonable estimates from The Atlantic place the cost of materials (of a mid-level 32GB $600 iPad) at about $325. Labor is a whopping $10. If we assume, very conservatively, that iPhone assembly costs the same, then in the fourth quarter, Apple spent about $500 million assembling iPhones and iPads.

Let's imagine that Apple tripled expense on assembly to ensure better pay and worker treatment. The total additional cost: $1 billion. The cost of an iPad or iPhone would go up $20 or -- and here's a radical thought -- Apple would make a little bit less money. I'm not remotely saying Apple shouldn't be profitable.

But would anybody in their right mind be disappointed with $16.5 billion in quarterly cash flow instead of $17.5 billion?

Am I making a complex issue too simple? To check my thinking, I spoke with a former Nike exec with deep experience in supply chains and China. Here's his view:

"Someone needs to break the cycle...why not Nike -- or Apple? I don't see that as an oversimplification at all. The current "low cost" business model is not really low cost. Isn't one purpose of business to create the prosperity needed to increase the number of consumers capable of buying the goods we make? In fact, I would argue that what Apple is doing now is against the best interests of the shareholders... I've never heard a lucid explanation of what I'm missing."

This is about what we value in the world. Consider IKEA, one of the most sustainability-minded large companies in the world. The Swedish furniture giant has its own challenges (some history of labor issues as well and concerns about the sustainability of its short-lived products, for example), but the company has stated clearly that it's about "low prices...but not at any price."

Why is that a radical idea? I refuse the notion that maintaining a moral compass is anti-business, anti-competitive, or naïve in some way. Smart, innovative, lean companies can make plenty of money and do the right thing. And, frankly, since companies have an awful lot of the rights of humans, they should share some of the moral responsibility as well.

Our system of competition yields amazing results -- incredible technological innovation provided in massive quantities very quickly. But these marvels often rely on very real human costs. The whole system has some deep flaws that we must fix.

Apple prides itself on changing the game. So just imagine a world where the company applied its staggering innovation and design skills to create the iSupplyChain or iWorkingConditions. Everyone, including this fan of Apple products, would be a lot iHappier.

(This post first appeared at Harvard Business Online.)

Tulsi Gabbard: Banks Sink to New Low by Foreclosing on Deployed Troops

2012-02-10T16:21:56Z

Imagine being deployed on the other side of the world in a hostile environment cut off from your family and friends and then discovering that your house -- the place you dream every night of returning home to -- has been foreclosed.

That nightmare is all too real for some of the brave men and women in our armed forces today.

There is currently a federal investigation into whether Bank of America, Wells Fargo and eight other major banks illegally foreclosed on 4,500 active duty service members. This investigation comes on the heels of J.P. Morgan Chase's confession last year that it illegally overcharged more than 4,000 troops on their home loans and foreclosed 14 of them. These are just the cases we know about.

As irresponsible and wrong as the behavior of these financial institutions have been in regard to the near economic collapse of our country, their handling of military family mortgages marks a new low.

Home mortgage banks who knowingly overcharge our military community should be held fully accountable for their actions and prosecuted under the law. Having served on two combat tours to the Middle East with the Hawaii Army National Guard, I know firsthand how essential it is that our service men and women be completely focused on the missions at hand. They should not be distracted and wasting one second of thought on whether the criminal practices of their mortgage lender back home would foreclose on their home, and put their family on the street.

The Servicemembers Civil Relief Act restricts mortgage lenders from foreclosing on active duty troops and caps their interest rates. But the number of troops who have been overcharged and foreclosed on clearly proves that the law isn't getting the job done. It's repulsive that our troops are exposed to this nonsense while they serve on the front lines.

If the people of Hawaii's 2nd Congressional District choose me to represent them in our nation's capital, I would not only fully support existing bills to protect my fellow troops from harm from financial institutions, but would go even further and try to make it impossible to foreclose on active duty service members even six months after the return from their deployments.

I would also ensure that all applicable laws are being enforced by demanding briefings from the U.S. Treasury, U.S. Department of Justice and the Consumer Financial Protection Bureau who are tasked with regulating and prosecuting financial institutions who violate the law -- as so many of them have repeatedly done when it comes to the Servicemembers Civil Relief Act.

Representatives from those agencies would get to know me very well, because, as a war veteran myself, this mission is personal.

Take Julia Rowles, whose husband, Marine Corps Capt. Jonathan Rowles, was deployed when their bank threatened to foreclose on their home:

I was left alone to deal with [J.P. Morgan] Chase and their problems. We have two children. One of them was born premature...Yet at the same time, I'm dealing with Chase, getting their phone calls, getting their harassment. This constant harassment and constant ignorance for the [Servicemembers Civil Relief Act] benefits to service members is ridiculous.

We can and must do more to protect military families like the Rowles'.

Just as we provide our troops with the best possible protection on the battlefield, we have a commitment to look out for them and their families while they're away. I'm running for Congress because we're failing to meet that obligation and it's putting our service members and their families under considerable and unfair strain. Join me and let's do something about it.

Mike Bellamente: Sustainability Runs Deep in Ethics Ranking

2012-02-10T16:19:06Z

Of those named to Ethisphere's "2011 100 Most Influential People in Business Ethics" last month, readily apparent is the occupational diversity of the field. Rare is the occasion that one sees the likes of Michelle Obama (#53) and Stephen Colbert (#48) listed alongside the Annie Kishens (#36 - Director of CSR for PepsiCo India) and Leo Bonannis (#50 - CEO of Sourcemap) of the world.

The more subtle point to be drawn, however, is the unique cross-section of environmental thought leaders represented in the rankings. A sign that eco-consciousness has become a mainstay in what is deemed ethical business practices, the 2011 list included several professionals either loosely or intricately tied to corporate sustainability trends.

While former Timberland CEO Jeff Swartz (#24) made it his mission to embed resource conservation into his company's psyche, sustainability blogger Marc Gunther (#66) was keeping companies honest through the written word. Joe Keefe (#82), President and CEO of Pax World Investments, made his mark by way of innovative sustainable investing solutions, while Annie Kishen pioneered a pledge to make Pepsi's operations in India water positive by replenishing more water than is consumed.

Although few operatives of environmental stewardship penetrated the top-quartile of the list of 100 -- not surprising when up against the likes of corruption activist and hunger striker Anna Hazare -- the increasing visibility environmental movers and shakers is cause enough for optimism.

Below is a list of honorees recognized for ethical contributions related to the environment (full disclosure -- the author of this article was awarded a spot on the list). To view the complete list of the 2011 100 Most Influential People in Business Ethics, click here.

The Ethisphere Institute is a "leading international think-tank dedicated to the creation, advancement and sharing of best practices in business ethics, corporate social responsibility, anti-corruption and sustainability."

• #24 Jeffrey Swartz - CEO, Timberland
Category: Business Leadership

• #36 Annie Kishen - Director of CSR, PepsiCo India
Category: Business Leadership

• #45 Mike Bellamente - Project Director, Climate Counts
Category: Thought Leadership

• #50 (tie) Yalmaz Siddiqui - Director, Environmental Strategy, Office Depot
Category: Design and Sustainability

• #50 (tie) Leo Bonanni - CEO, Sourcemap
Category: Design and Sustainability

• #66 Marc Gunther - Blogger, MarcGunther.com
Category: Media and Whistleblowers

• #82 (tie) Joseph Keefe - President and CEO, Pax World Investments
Category: Investment and Research

• #92 Jacquelynn Henke - Real Estate Green Strategy Officer, TD Bank
Category: Design and Sustainability

• #94 Dennis Smith - National Clean Cities Director, Department of Energy
Category: Government and Regulatory

• #100 Dan Phillips - Contractor and Home Builder, Independent
Category: Design and Sustainability