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Cranfield School of Management

16th January 2013

One Word of Truth – David Grayson, director of the Doughty Centre for Corporate Responsibility on Michael Woodford’s “Exposure” (Portfolio Penguin, 2012)

“One word of truth outweighs the whole world.” Those words, from the Russian novelist Alexander Solzhenitsyn’s Nobel Prize speech, resonated with me back in the early 1970s as a teenager with an emerging political consciousness. Indeed, geek that I was, I learnt the entire speech by heart!

I was reminded of “One Word of Truth” when I read the new book, “Exposure” by Michael Woodford, ex CEO of the Japanese headquartered company, Olympus. I was given the book by a good friend as a Christmas gift. I had been intending to buy it since it was first published but somehow had not got round to getting it. If you are in a similar “good intentions situation”, don’t delay! Get “Exposure” and read it!

“Exposure” is the story of Woodford’s lonely campaign to expose a massive cover-up at Olympus designed to hide losses on an industrial scale from high-risk trading on financial instruments, which had gone spectacularly wrong.

Reviewers have previously commented that “Exposure” reads like a John Grisham thriller. Indeed, as the scene shifted regularly from Tokyo, to London, to Southend (where Woodford’s family lived) and to New York and back, you could easily imagine the screen-play for the already planned movie.

Michael Woodford experienced a dramatic transformation from Olympus’ golden boy, to CEO, to whistle-blower and outcast. He fought hard to get back the CEO role that the Olympus board had stripped him of for “disruptive management practices”. It was not to be. For now, he is writing and describing his experience in interviews and talks around the world. Will he bounce back into another CEO role or become unemployable, as some previous high-profile whistle-blowers have found? Time will tell. Meantime, “Exposure” provides important lessons for board directors as well as would-be whistle-blowers.

Woodford was ultimately able to expose the fraud and cover-up at Olypmus, by being able to show a meticulously annotated and documented audit trail of memoranda to the Olympus board. A powerful reminder to any NED (non-executive director) about the importance of keeping careful contemporaneous notes of telephone calls, meetings etc.
Woodford’s experience also shows the importance of persistence and of trusting your instincts and not being easily fobbed off by nominal superiors. For Woodford, this was especially hard because it meant confronting the man who had been at Olympus and who had selected Woodford as his successor as CEO.

There are echoes of Greek Tragedy as Woodford wrestles with the realisation that his work father-figure is deeply implicated in a multi-billion fraud and cover-up.

For fans of the transformational potential of social media and the implications that this has for the “Naked Corporation” (Don Tapscott’s argument that the new communication technologies compel organisations to be transparent), “Exposure has some compelling examples of Woodford’s use of social media, such as an on-line chat forum for a Q&A with employees.

Previous reviewers have commented on the stresses and stains that Woodford’s whistle-blowing put on his marriage and his family. Whilst this is true, it is also striking how Woodford emphasises how crucial were old friends in supporting him and his family through the tough times.

Finally, being interested in what makes the “whole person” tick and what individuals think is important to count life a success, it is instructive to see that, even as a busy CEO, Woodford still made time to campaign for road safety. A cause he explains, close to his heart as a result of witnessing a fatal road accident in his youth.

6th November 2012
Just back from the annual Asian CSR Forum (AFCSR) in Bangkok.  As with last year's event in Manila, the sense of dynamism and optimism about the future, that one experiences in Asia Nowadays, was palpable - particularly by contrast to a more sclerotic European scene.  Years ago, I used to head regularly to the USA to get a top-up of "can-do"spirit.  Today, I head east!

Over 550 delegates and more than 50 speakers from thirty countries across Asian and beyond, spent two days debating corporate social innovation.  This was a more sophisticated and rounded discussion than last year's infatuation with shared value.  Both, however, represent an advance on Asia's previous focus on "CSR" as corporate community involvement.

The conference recognised that corporate social innovation requires collaboration with NGOs, international development agencies and academic institutions as well as other businesses.  Collaboration was seen as an instinctive Asian characteristic.  I found myself wondering: if that is indeed the case, does this mean that this creates yet more competitive advantage for Asia, if Asian business can successfully exploit corporate social innovation?

Several Western governments are active in promoting an "architecture for corporate responsibility"  - the enabling environment for responsible business - across Asia.  The Canadians, for example, are doing this in Vietnam.  The German development agency GIZ has been active across Asia with a significant programme to promote corporate responsibility on China, which is now winding down after a number of years.

A whole conference track on heavy "footprint industries", i.e. the extractives sector, was a powerful reminder of how politically and socially disruptive mining can be , in countries like Indonesia and the Philippines.

In the conference corridors, I heard frequent discussions about how businesses enter or re-enter Myanmar (Burma), in a responsible manner.  Organisations like the Institute for Human Rights clearly have an important role to play here, and this is the subject of another blog.

Awareness of corporate responsibility - or CSR as it is still generally referred to in Asia - seems to be developing  fast in Asia, at least amongst leading multinationals - closely linked to ideas of business having responsibility to contribute to national development priorities in areas like access to education and tackling major health challenges like TB or HIV/AIDS.  Younger, better educated and more demanding consumers and employees are seen as a particular driver.

18th October 2012
I shared a platform  with Baroness Susan Greenfield, the scientist and broadcaster, in Belfast on October 17th, for Business in the Community Northern Ireland Responsible Business conference.  Susan gave a fifteen minute master class on the brain, how it adapts and is adapting.  she challenged us all to reflect on whether we are content with the directions the brain appears to be evolving.  specifically Susan questioned our over dependence  on and over-use of screen-based devices and social media to keep in touch at the expense of human interaction.  Important philosophical and practical questions.  Her analysis also raises important issues of Corporate Responsibility, in particular for the ICT sector and for video-gaming and similar businesses.  Do they have any responsibility for over-use of their products and services.  For example, for Ringanxiety where sufferers worry when their mobiles don't ring for a few minutes?  And for companies generally: are we condoning, encouraging or even forcing employees to over-use computers and mobile devices?  Are we explicitly or implicitly expecting employees to be "on-call" for the business too much?

David Grayson is Professor of Corporate Responsibility and director of the Doughty Centre for Corporate Responsibility at the Cranfield School of Management, UK.

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