This week's readings focused on corporate social responsibility and investor relations. I chose to interview Andrew Hatherley because he has extensive experience in business and is currently a financial advisor. Andrew's mention of the Sarbanes-Oxley Act enacted in 2002 was a great insight into the changes that occurred in business after the Enron collapse. One aspect that caught my attention in Christopher Allen's article was when he quoted Nell Minow who said: "Markets do not run on money; they run on trust" (Allen, 2002). Once again we can refer to our readings from earlier weeks about the importance of trust in business. I shared this quote with my interviewee and, off camera, Andrew shared an interesting example. He mentioned Warren Buffet, one of the most well-known businessmen in the US, and said that Buffet does not invest with businesses he does not trust. There needs to be a level of transparency about the company's financials, in order to establish that trust.
One of the limitations of CSR in The Economist article, was that companies were criticized for "spending other people's money", in the attempt at being socially responsible. It was interesting to hear Andrew's perspective on this, when he said that the financial impact of being a socially responsible company is not very significant to the bottom line. Also from the readings we learned that the Internet has provided a new platform for the public to have better access to their investments and public financial information. It was interesting to learn from Andrew how companies handled the communications with shareholders when the Internet was not around. Also interesting to hear his perspective on the future of CSR and what causes he thinks companies will continue to support in the coming years.
Allen, C. (2002) Building mountains in a flat landscape: Investor relations in the post-Enron
era. Corporate Communications: An International Journal, 7 (2), 206-211.
Franklin, D. (2008, January 19) Just Good Business: A Special Report on Corporate Social
Responsibility, The Economist, 1-14.
I wonder how typical it is for investors to even know much about the companies in whom they invest. In the debates, the President pointed out that Governor Romney had some investments in Chinese companies, etc. Romney explained that he had a blind trust. He then asked the President if he knew about his investments into foreign companies and so forth as well. In an age of 401K's and mutual funds, how much do we really know in terms of where we are investing?
ReplyDeleteHi Brad,
ReplyDeleteI believe most companies that offer 401Ks for their employees have websites, where you can access all your investment information. I know I have received a book in the past that shows pretty detailed information about the different stock and bond options. However, I agree with you that unless this information is provided ..most people probably don't know much about where they are investing and rely on their financial advisors to handle it for them. That is probably the case for either of the Presidential candidates. They're both such high level folks, I don't think either of them can be expected to know exactly where their investments are.