TEST TEST TEST 
TEST 
- WE ARE JOINED BY TWO ESTEEMED 
MEMBERS OF THE
ACADEMIC
COMMUNITY.
WE ARE
GRATEFUL TO HAVE -- 
INCLUDING CALIFORNIA GREEN, HOW 
GOLDEN STATE BECOME A LEADER AND
THE MARKET VIRTUE.
MANY MY PH.D. AND SERVES AS THE 
CALIFORNIA MANAGEMENTED REVIEW.
AND WE EXTEND A VERY WARM 
WELCOME TO PROFESSOR JAMES 
O'TOOLE, WHO COMES FROM THE 
UNIVERSITY OF SOUTHERN 
CALIFORNIA MARSHALL AND FOUNDING
DIRECTOR FOR ETHICAL LEADERSHIP 
AND BEGAN THE CAREER AT THE 
BUSINESS SCHOOL AND HELD THE 
CHAIR OF MANAGEMENT AND EDITOR 
OF THE NEW MANAGEMENT MAGAZINE.
WRITING ON CORPORATE CULTURE AND
"THE ENLIGHTENED CAPITALISTS: 
CAUTIONARY TALES OF BUSINESS 
PIONEERS WHO TRIED TO DO WELL BY
DOING GOOD.
WE HAVE DONE SO MUCH WE MAY 
NEVER GET TO THE TALK.
NOW TO THE TALK.
THE SPEAKERS WILL START THE 
DISCUSSION REFLECTING ON THE 
STORIES OF CAPITALISM JOURNEY, 
INCLUDING THE INDIVIDUALS AND 
COMPANIES.
BUT PERHAPS EVEN MORE 
IMPORTANTLY, THEY'LL LOOK 
FORWARD TO ROLES THAT CAPITALISM
34R5I AND WHAT THE FUTURE HOLDS 
FOR THOSE STRIVING TO DO WELL BY
DOING GOOD.
I WILL INVITE SOME OF THE FINE 
UNIVERSITY CALIFORNIA BERKELEY 
STUDENTS UP HERE TO POSE 
QUESTIONS THAT THEY ARE 
GRAPPLING WITH BUSINESS AND 
FINALLY WE ACH TO HAVE AN 
AUDIENCE QUESTION OR TWO.
WITH THAT, I'M THRILLED TO IT 
OVER.
[APPLAUSE]
- SO THE BUSINESS ROUND TABLE 
RECENTLY ISSUED A STATEMENT ON 
CAPITALISM AND ARGUING THAT 
NOWADAYS THE COMPANIES NEED TO 
CARE ABOUT THE SHAREHOLDERS AND 
THE SOCIAL IMPACTS AND IN SOME 
WALL STREET YOUR HISTORY, THE 
HISTORY OF CAPITALISM IS SHOWING
THAT IS NOT A NOVEL IDEA, THAT 
THROUGHOUT THE HISTORY OF 
CAPITALISM THERE ARE MANAGERS
AND OWNERS THAT TRY TO INTEGRATE
SOCIAL INTO THE COMPANY.
WE SEEING HOW THESE THINGS WORK 
IT OVER TIME AND ENLIGHTENING 
CAPITALISM AND WHAT HAPPENED?
- IN THE STATEMENT BY THE ROUND 
TABLING WAS IN MANY WAYS 
ABSOLUTELY SURPRISING AND 
SHOCKING BECAUSE AT THE HEART OF
WHAT THEY SAID, WAS THAT MOVING 
FORWARD, THEY WERE GOING TO TURN
THEIR BACKS ON ONE OF THE MAJOR 
TENETS OF THE PUBLICLY TRADED 
CORPORATIONS AND PUBLICLY TRADED
SHARES AND THAT IS THE NOTION OF
SHAREHOLDER PRIVACY AND THE 
FIRST RESPONSIBILITY OF THE 
CORPORATE EXECUTIVE TO PROVIDE 
THE PROPERTIES TO THE OWNERS OF 
THE COMPANY, NO FROM NOW TAKING 
INTO ACCOUNT PUT AHEAD OF THE 
SHARE HOERLDS THE COMMUNITY, 
ENVIRONMENT AND WORKERS AND 
CUSTOMERS.
AND THAT 1700 OR 1800 PEOPLE 
SIGNED THIS DOCUMENT WAS REALLY,
REALLY REMARKABLE.
IT WASN'T UNPRECEDENTED.
AND THE HISTORY OF ENLIGHTEN 
CAPITALISM IS BUILDING ON THOSE 
EXECUTIVES WERE TALKING ABOUT 
STARTED IN 1815 IN SCOTLAND WHEN
A YOUNG MANAGER GOT TOGETHER A 
WHOLE GROUP OF INVESTORS IN 
MANCHESTER, ENGLAND, THAT WAS 
THE SILICON VALLEY OF THE 
INDUSTRIAL REVOLUTION AND A LOT 
OF MONEY TO INVEST AND PUTTING 
TOGETHER THE GROUP OF THE PEOPLE
AND BROUGHT TOGETHER THE LARGEST
COTTON MILL IN SCOTLAND AT THE 
TIME.
IT WAS A DARK PLACE.
THERE WERE FIVE-YEAR-OLD KIDS 
WORKING 12 HOURS A DAY AND 
STANDING THE WHOLE DAY AND
BREATHING THE COTTON FLUFF AND 
IT WAS AN AWFUL PLACE AND OPEN 
SEWERS AND CRAMMED TOGETHER IN 
VERY VERY SMALL PLACES AND 
TERRIBLE PLACES.
THE MANAGER SAID I THINK WE CAN 
CHANGE THINGS AND HE WAS I THINK
FLUNSED BY THOMAS JEFFERSON AND 
JEFFERSON'S NOTION WITH THE 
PURSUIT OF HAPPINESS, THAT MEANT
THE OPPORTUNITY FOR EACH 
INDIVIDUAL TO MAKE HIM AND 
HERSELF ALL THEY ARE CAPABLE OF 
BEING AND HE SAID NOBODY IS ABLE
TO MAKE THEMSELVES AS A HUMAN 
BEING IN
THESE CIRCUMSTANCES.
AND SAYING I'M GOING TO 
RESTRUCTURE THE ORGANIZATION 
EVERYTHING ABOUT IT AND TURN IT 
INTO A PRINCIPLE FOR HUMAN 
DEVELOPMENT.
HE TOOK THE KIDS OUT OF THE 
FACTORY AND PUT THEM IN A SCHOOL
AND INVENTED PROGRESSIVE 
EDUCATION AND TAUGHT THE KIDS 
MUSIC AND ART, NOT JUST READING 
AND WRITING AND PROVIDED NIGHT 
SCHOOLS FOR THE PARENTS AND MADE
SURE THAT EVERY FAMILY HAD A TWO
STORY HOUSE WITH SEVERAL 
BEDROOMS AND THE ENTIRE 
COMMUNITY WAS CLEANED UP AND THE
FACTORY WAS A SAFE AND HEALTHY 
PLACE TO WORK AND PROVIDED 
INSURANCE FOR THE WORKERS AND 
THAT IS ALL IN 1815.
IT IS HARD TO IMAGINE THAT WAS 
HAPPENING AT THAT TIME.
IT WAS PARTICULARLY HARD FOR
HIS INVESTORS TO UNDERSTAND.
BECAUSE THEY SAID YOU KNOW THIS 
COMPANY IS MAKING A GOOD PROFIT 
AND IT WAS THE MOST PROFITABLE 
BUSINESS IN GREAT BRITAIN
AT THAT TIME.
THEY SAID YOU CAN HAVE MORE 
PROFITS IF YOU DON'T CODDLE THE 
WORKERS.
THEY SAID STOPPING DO THAT AND 
INVEST THE MONEY AND LET US WHAT
TO DO WITH MONEY.
AFTER ALL, YOU WORK FOR US.
HE FOUGHT THEM AND FOUGHT THEM 
AND ULTIMATELY THEY WON AND 
PUSHED HIM OUT OF THE COMPANY 
AND WITHIN A COUPLE OF YEARS 
BROUGHT BACK THE OLD WAYS AND 
THE PROFITABILITY RETURNED.
IT WAS A SAD STORY.
ONE WAY OR ANOTHER, IT IS 
REPEATED IN BRITAIN AND IN THE 
UNITED STATES OVER THE LAST 200 
YEARS AND WE ARE LIVING IN A 
WORLD OF THE SHAREHOLDER 
CAPITALISM AND THE EMERGING OF 
THE CAPITALISM AND HOW HAS IT 
AFSHTHED THE ABILITY OF THE 
PROFESSIONAL MANAGER OR OWNER TO
ACT RESPONSIBLY OVER TIME, IN 
OTHER WORDS, WHAT HAVE WE 
LEARNED?
- WELL, IF I THINK IF WE LOOK AT
THE RECORD IT IS HARDER.
ANOTHER EXAMPLE, A
BRIEF EXAMPLE THIS TIME.
JC PENNEY.
THERE ARE STILL AROUND.
YOU WILL REMEMBER A TIME WHEN 
THEY WERE EVERYWHERE.
PENNEY STORES WERE KNOWN FOR 
INCREDIBLE ETHICS AND CUSTOMER 
SERVICE.
PENNEY FOUNDED WHAT HE CALLED 
THE GOLDEN RULE STORES, AND HE 
WAS DEDICATED TO PROVIDING HIGH 
QUALITY PRODUCTS AT THE LOWEST 
PRICE TO WORKING CLASS PEOPLE IN
AMERICA.
AND HE ESTABLISHED WHAT HE 
CALLED THE PENNEY PRINCIPLES 
SOCIAL RESPONSIBILITIES THAT ALL
OF HIS PEOPLE HAD TO THE 
COMMUNITIES, TO THEIR
EMPLOYEES AND TO THEIR 
CUSTOMERS.
AND PENNEY RAN THE COMPANY THAT 
WAY.
IT WAS A MODEL COMPANY AND ONE 
OF THE MOST RESPECTED COMPANIES 
IN AMERICA FOR YEARS.
HE LOST CONTROL AS THE COMPANY 
WENT FROM BEING PRIVATELY HELD 
BY PENNEY AND THE MANAGERS, HE 
HAD 1500 MANAGERS WITH HIM OWNED
THE COMPANY AND THEY STARTED 
SELL THE SHARES ON THE OPEN 
MARKET AND BY THE TIME PENNEY 
WAS IN HIS 60s HE LOST CONTROL 
OF THE COMPANY AND NOW PUBLICLY 
TRADED SHARES AND THAT CHANGED 
THE THINKING OF THE MANAGERS.
PENNEY STAYED ON THE BOARD UNTIL
HE WAS 90 YEARS AND THE LAST 15,
20 YEARS OF THAT, THE VOTES ON 
THE BOARD WERE 9-1 AND HE WAS 
TRYING TO HOLD ON TO THE ETHICS 
AND NOT DICTATING TO THAT OF
WALL STREET.
- SO TAUB ABOUT THE TWO DOZEN 
STORIES AND SORT OF UNHAPPY 
ENDING STORIES, YOU START OUT 
WITH COMPANYS THAT ARE 
SUCCESSFUL AND SOCIAL 
RESPONSIBLE AND OVER TIME, THEY 
BECOME MORE FINANCELY SUCCESSFUL
AND LESS SOCIALLY RESPONSIBLE 
AND ON THE OTHER HAND EVERY 
DECADE THERE SEEMS TO BE ANY 
WAVE AND GENERATION OR MOVEMENT 
OF MANAGERS AND ONNERS TO TRY TO
EXPOUND THE PRINCIPLES OF 
ENLIGHTENED CAPITALISM AND HOW 
DO YOU RETAIN THE INTEREST OF 
THE CORPORATE RESPONSIBILITY 
OVER THE CENTURIES AND SO TIMES 
THE PRESSURES ARE 3R THE 
FINANCIAL MARKETS UNDER MINING 
GOOD MANAGERS?
- IT IS HARD TO KNOW THE 
MOTIVATIONS OF PEOPLE AND I WAS 
INTERESTED IN THE QUESTION, AND 
I TRIED IN THE RESEARCH TO LEARN
WHY IT WAS THESE PEOPLE WOULD 
MAKE THEIR LIVES HARDER AND ALSO
THEIR CAREERS RISKY TRYING TO 
HAVE THE PROFITABLE BUSINESSES 
AND ONES THAT ARE ETHICAL AND 
SOCIALLY RESPONSIBLE.
THERE WERE ALWAYS JUST A FEW OF 
THEM.
BUT WHY?
AND WHEN I LOOKED IT I FOUND 
THAT THERE WERE CERTAIN THINGS 
THAT THESE PEOPLE HAVE IN 
COMMON.
A GREAT NUMBER OF THEM HAD 
RELIGIOUS MOTIVATIONS.
JAMES CASH PENNEY WAS THE SON OF
BAPTIST MINISTER WHO BELIEVED IN
THE GOLDEN RULE AND LIVED THAT 
WAY AND THE ONLY TIMES THAT HE 
EVER WENT WRONG IN HIS LIFE WHEN
HE SET ASIDE THE GOLDEN RULE IN 
THE PURSUIT OF PROFIT AND EVERY 
TIME HE DID IT HE GOT INTO 
TROUBLE.
HAAS
THAT RAN LEVI STRAUS WAS THE 
MOTIVATION IN YOUR FAMILY.
I SAID THE JEWISH RELIGION.
WE WERE SECULAR JEWS AND DIDN'T 
TALK ABOUT RELIGION IN THE 
FAMILY.
THERE IS SOMETHING IN THE 
TRADITION THAT WAS THERE AND 
THAT INFLUENCED YOU.
ABSOLUTELY YES.
BUT NOT THE TYPE OF THING THAT 
WE TALKED ABOUT AND BUT 
SOMETHING ABOUT THE JEWISH 
CULTURE THAT LED US IN THAT 
DIRECTION.
A LARGE NUMBER OF PROS TENANT 
AND JEWISHES IN THE BOOKS AND 
CATHOLICS AS WELL POINTED TO 
RELIGION AS BEING A FACTOR.
AT THE SAME TIME THERE WERE 
ATHEISTS AND AT THE SAME TIME 
THERE WERE PEOPLE LIKE BARBARA 
WHO IS NOT A BELIEVER, WHO IS A 
CHILD OF THE ENLIGHTENMENT THAT 
ARE HUMANIST AND BRADSHAW 
PRODUCED CLASSIC EXAMPLES
OF 
THIS.
HE WAS ALL BECAUSE OF THE 
INFLUENCE OF READING 
ENLIGHTENMENT AND JEFFERSON AND 
WAS VERY, VERY MUCH A HUMANIST 
IN THAT REGARD AND THAT IS HOW 
HE EXPLAINED WHAT HE WAS DOING 
AND THE MOTIVATIONS ARE VARIED 
AND SOMETIMES I JUST THINK IT IS
AN EVENT THAT CHANGES THEM.
THERE IS A COMPANY CALLED 
CONTROLLED DATA INFORMATION AND 
NO LONGER EXISTS, THEY BEAT IBM 
IN CREATING THE FIRST MAINFRAME 
COMPUTER.
THEY WERE THE PIONEERS IN THE 
BUSINESS AFTER WORLD WAR TWO AND
THEY CON TEN TRAITED ON MAKING 
COMPUTERS AND THE RIOTS IN THE 
80s IN MINNEAPOLIS AND THE CEO 
OF THE COMPANY WAS SO TAKEN BY 
THE EFFECT OF THE RIOTS THAT HE 
CHANGED THE DIRECTION OF THE 
ENTIRE COMPANY AND TRYING TO 
INTO SOCIETY'S PROBLEMS.
AND SO THE MOTIVATION THERE WAS 
ONE OF TRYING SOMEHOW TO MAKE 
CORPORATIONS THE VEHICLE BY 
WHICH THE MOST PRESSING SOCIAL 
QUESTIONS FACING THE WORLD ARE 
ADDRESSED AND THERE ARE SEVERAL 
PEOPLE THINKING THAT WAY TODAY.
- SO WE HAVE A HISTORY OF THESE 
EFFORTS MANY OF WHICH DON'T WORK
OUT BUT THE RESILIENCY OF THE 
ENLIGHTENED CAPITALIST REMAIN 
VALUABLE.
15 YEARS AGO WAS NOTING A BIG 
SURGE OF THE CORPORATE 
RESPONSIBILITY AND NOW WE ARE 
SEEING ANOTHER ONE AS WELL.
AND SO THERE IS A LOT OF THINGS 
GOING WHEN YOU TALK ABOUT THE 
BOOK, ABOUT NEW INITIATIVES AND 
NEW FORMS OF GOVERNANCE AND NEW 
ETHICS TO PUSH THE ENVELOPE AND 
FIGURE OUT WAYS OF MAKING 
ENLIGHTENED CAPITALISM 
SUSTAINABLE ABOUT AED WHAT IS IS
TENSE OF THE MOVEMENT THAT WE 
ARE IN AND RESURGING OF THE 
GREAT NEW WORLD?
- WELL, WHEN WE FIRST MET, 
DAVID, IN THE 70s, ALSO WE WENT 
THROUGH A MOMENT LIKE THIS IN 
WHICH THERE WAS A TREMENDOUS 
AMOUNT OF INTEREST AT THE 
BUSINESS SCHOOLS AND IN 
CORPORATIONS AND BY AND IT WAS 
IN THE 80s PARTICULARLY THE 
EARLY 80s AND IN THE EARLY 90s, 
ALL THAT STUFF DISAPPEARED.
AT USC WE HAD FIVE COURSES THAT 
WE OFFERED HAVING TO DO WITH 
BUSINESSES IN SOCIETY AND 
BUSINESS RESPONSIBILITY AND 
ETHICS AND THE LIKE, AND WITHIN 
A FEW YEARS THEY WERE GONE AND 
SWITCHED TO SHAREHOLDER VALUE 
AND DISAPPEARED IN THE HARVARD 
BUSY REVIEW TALKED ABOUT IT.
THEY FORGOT ABOUT IT.
- THINK YOUR BOOK, ONE OF THE 
THINGS THAT CAN MAKE A 
DIFFERENCE ARE THE CONSUMERS 
DEMANDING OR THE PUBLIC IN 
GENERAL DEMANDING THIS IN 
CORPORATIONS.
SOME CONSUMERS ARE BUT NOT A LOT
OF THEM.
FOR THE PUBLIC DEMAND, WHEN YOU 
ASK PEOPLE DO YOU TRUST TO 
CORPORATE EXECUTIVES, IT IS 
VERY, VERY LOW.
WHEN YOU ASK PEOPLE WHAT ARE THE
TEN THINGS FACING AMERICA TODAY,
THIS ISSUE DOESN'T MAKE IT.
ALL RIGHT.
SO THE PUBLIC DO SEEM TO CARE 
ABOUT THE ENVIRONMENT AND 
CORPORATIONS ARE MORE RESPONSIVE
IN THAT AREA BECAUSE THAT IS 
WHERE WE ARE GETTING THE PRUSH 
YUR AND THE EXECUTIVE SALARIES 
WHERE IT IS NOT LOOKING GOOD, 
AND SO THERE IS PRESSURE IN 
THAT.
IN TERMS OF THE BROADER KINDS OF
ISSUES THAT THE PEOPLE LIKE THE 
HAAS FAMILY LOOKED, THERE IS 
PUBLIC PRESSURE.
- DO YOU THINK THE PRIVATE MODEL
IS A VIABLE ALTERNATIVE TO THE 
PRESSURES, THE SHAREHOLDER 
PRESSURES?
- THE GOOD NEWS IS THAT I LOOK 
AT 50 COMPANIES IN THE BOOK AND 
ABOUT 25 OF THEM IN DEPTH.
AND THERE ARE
FOUR COMPANIES, THERE ARE LOTS 
OF SMALL PUBLICLY HELD 
CORPORATIONS IN WHICH THE OWNERS
ARE ETHICAL, THEY CARE OF THEIR
EMPLOYEE
S AND GOOD PRODUCTS OUT THERE.
BUT THERE ARE COUPLE OF LARGE 
ONES OUT THERE AND WHAT DO THEY 
HAVE IN COMMON?
THEY HAVE IN COMMON SEVERAL 
THINGS, A VERY, VERY LARGE SHARE
OF EMPLOYEE OWNERSHIP AND 
COMPANIES LIKE THE ELECTRIC 
COMPANY AND SRC HOLDINGS, 
COMPANIES THAT FOR A LONG TIME 
EMPLOYEES AND MANAGERS AND THE 
FOUNDING FAMILY OWNED THE 
MAJORITY OF THE SHARES IN THE 
COMPANY AND SUSTAINED THE 
CHANGES OF LEADERSHIP AND THEIR 
ENLIGHTENED PRACTICES, THEY TEND
TO LOSE IT TOO.
THE WORKER OWNED COMPANIES AND 
NOW THIS MOVEMENT CALLED -- 
CORPORATIONS ONE IS CERTIFIED 
COMPANIES AND NOW SOMETHING LIKE
3,000 OR 4,000 OF THEM ALMOST OF
THEM RELATIVELY SMALL AND BUT 
THEY ARE ALL OVER THE WORLD IN 
WHICH BASICALLY THEY GET 
CERTIFIED AND ON SIX DIFFERENT 
CRITERIA FOR ENLIGHTENED 
PRACTICES AND KEEPING THE 
CERTIFICATION GOING, BECOMES 
VERY, VERY MUCH OF THE CULTURE 
OF THESE ORGANIZATIONS AND THEY 
ARE RELATIVELY NEW.
NOW ONE OF THE MOST PROMISING 
THINGS THAT ARE HAPPENING AND 
THE MOST PROMISING THING ARE 
BENEFIT CORPORATION CHARTERS, 
WHICH ARE STATE CHARTERS THAT 
SET ASIDE THE DOCTRINE OF STAKE 
HOLDER PRIVACY, A COMPANY CAN GO
AND IN THE STATE OF CALIFORNIA 
FOR EXAMPLE, IN WHICH MANAGERS, 
EVEN IF THERE ARE SHARES AND 
INVESTORS IN THE COMPANY, THAT 
THE MANAGERS AND THE BOARD ARE 
PREE TO MAKE DECISIONS THAT 
BENEFIT SOCIETY AND THE 
STAKEHOLDERS EVEN AT THE EXPENSE
OF THE STAKEHOLDERS.
INTERESTINGLY THEY CAN BE SUED 
FOR FAILING TO DO THE GOOD 
THINGS AND THAT IS ACTUALLY 
4,000 COMPANIES IN THE U.S. THAT
AND PATGONIA IS ONE THAT HAS 
BENEFIT CHARTERS AND WHEN 
SHENARD WAS ASKED WHY ARE YOU 
GOING IN THIS DIRECTION AND WHY 
ARE YOU DOING THIS, HE SAID THE 
BIGGEST THREAT TO THE COMPANY IF
HE GOT ACQUIRED OR IF THERE WAS 
A SUCCESS SESSION IN WHICH THE 
OPTION OF SELLING A COMPANY OR 
MOVING AWAY FROM ITS COMMITMENT 
TO THE BROADER GOOD.
HE DID EVERYTHING HE COULD TO 
LOCK IN ALL THE ENLIGHTENMENT 
PRACTICES FOR FUTURE 
GENERATIONS.
IT TAKES A TREMENDOUS AMOUNT OF 
WORK TO DO AND WILL POWER AND 
TURNING DOWN A COUPLE BILLION 
DOLLARS IN CASH THAT PEOPLE WANT
TOTTED BUY THE COMPANY.
SO THAT IS ONE STRATEGY THAT 
ENABLES THIS TO REMAIN VIABLE 
AND ANOTHER ONE TOO, IN EUROPE, 
BUT NOT IN THE UNITED STATES, 
AND THAT IS OERN SHIP OF 
CORPORATIONS BY FOUNDATIONS.
HEINEKEN, MANY OF THE BIGGEST 
COMPANIES IN EUROPE TODAY DON'T 
HAVE TO WORRY ABOUT HOSTILE 
TAKEOVERS BECAUSE THE MAJORITY 
OF THE SHARES ARE HELD 
FOUNDATIONS THAT ARE SWORN TO 
COMMITMENT TO THE LONG TERM TO 
THE ENLIGHTENMENT PRACTICES.
THAT OPTION IS NOT AVAILABLE TO 
THE CORPORATIONS AS OF 1973 AND 
THERE IS A WAY OF BUILDING 
SUSTAINABILITY INTO 
ORGANIZATIONS.
THE SAD STORY ON
THIS ONE IS UNILEVER STORY, OVER
THE LAST TEN YEARS HAS BEEN 
RANKED THE MOST SOCIALLY 
RESPONSE SHL LARGE CORPORATION 
IN THE WORLD AND OPERATING IN 
180 COUNTRIES AND 500 BRANDS OR 
SOMETHING LIKE THAT AND THE CEO 
THERE WANTED TO COMMIT THE 
COMPANY TO A LONG TERM PATTERN 
IN WHICH THEY WOULD BE KNOWN AS 
THE MOST SOCIAL RESPONSIBLE 
COMPANY IN TERMS OF HIRING OF 
WOMEN AND TREATING PEOPLE WELL 
IN THE DEVELOPING WORLD AND SAFE
AND HEALTHY PRODUCTS AND IN THE 
ENVIRONMENT.
AFTER TEN YEARS, HE SAID WE ARE 
NOT THERE, WE HAVE TO CONTINUE 
TO GO.
IT IS VERY, VERY HARD TO GO.
HE WAS MAKING MONEY BUT NOT 
MAKING ENOUGH MONEY.
WHAT HE SOUGHT TO DO WAS LIST 
THE COMPANY IN AMSTERDAM AND 
MAKE THE COMPANY BASED IN A 
EUROPEAN UNION RATHER THANL IN 
ENGLAND WHERE THE PRACTICES IN 
THE STOCK MARKET AND THE RULES 
ARE SIMILAR TO THE U.S. AND EASY
FOR THE HOSTILE TAKE OVERS.
HE TRIED TO MOVE COMPANY OUT TO 
SAVE IT.
IT WAS BOUGHT
BY  -- BLOCKED BY THE INVESTORS 
AND THEY PUSHED HIM OUT OF THE 
COMPANY.
AND SO THERE WHETHER IT IS 
UNILEVER OR PATAGONIO OR WHOLE 
WORLDS THEY ARE SCRAMBLING
TO ALLOW THEMSELVES TO DO THESE 
THINGS AND NOT TO THE PRESSURES 
FROM THE INVESTORS FOR THE 
PROFITS OR SELL TO THE COMPANY 
THAT DOESN'T SHARE THE VALUES 
LIKE IN WHOLE FOODS, THEY 
THOUGHT THEY WOULD HAVE TO SELL 
TO SAFEWAY AND THE RECOURSE WAS 
TO SELL TO AMAZON WHICH IS AS 
BAD AS SAFEWAY.
SO IF WE LOOKED AND RECONVENE 20
YEARS FROM NOW, WHAT DO YOU 
THINK WE WOULD, HOW DO YOU THINK
WE WOULD LOOK BACK ON THE 
CURRENT INITIATIVES?
WOULD YOU HAVE ANOTHER CHAPTER 
OF, OR THE NEXT EDITION OF THE 
BOOK 20 YEARS FROM NOW TELL 
ANOTHER GLOOMY STORY?
- I WOULD BE 95 WHEN I WROTE IT.
[LAUGHTER] 
>>  I CAN'T IMAGINE IT.
- IN OTHER WORDS THE FINANCIAL 
TIMES WE ARE AT THE ROUND TABLE 
STATEMENTS SOCIAL IMPACT AND 
INVESTING AND SOCIAL 
RESPONSIBILITY AND ENTERING THE 
RESPONSIBLE ENLIGHTENED 
CORPORATE CAPITALIST.
- I READ A BLOG THE OTHER DAY, I
THINK WE CAN'T COUNT ON THOSE 
LARGE PUBLICLY TRADED 
CORPORATIONS WHAT WE SHOULD DO 
AT LEAST MAKE SURE THAT OBEY THE
LAW AND EXPECT A LARGE 
CORPORATIONS IS TO NOT TO DO 
HARM AND TO EXPECT THEM TO DO 
GOOD AND ALMOST IMPOSSIBLE 
BECAUSE THEY HAVE TO MEET THE 
NEEDS OF THE SHAREHOLDERS AND 
THEN THERE IS ANOTHER ECONOMY 
OUT THERE, THE
SOCIAL
INTREMENDOUS PRENEUROS AND AND 
THE SMALL COMPANIES THAT ARE 
GOING TO START.
THE STUDENTS NOW GETTING THE MBA
s IN SOCIAL ENTREPRENEURSHIP AND
FASCINATED BY THE MOVEMENT AND 
THEY DON'T WANT TO WORK FOR 
at&t, AND THEY WANT TO START 
THEIR OWN BUSINESS WHERE THEY 
CAN LIVE THEIR VALUES AND THE 
FUTURE IS LOOKING TO DO THAT.
EACH OF YOU WANT TO DO GOOD, 
START YOUR OWN COMPANY AND DO 
GOOD.
MY GUESS IF WE CONVENE 20 YEARS 
FROM NOW WE WOULD SEE SOME OF 
THE INITIATIVES WINDING UP TO BE
SUSTAINABLE AND DISAPPOINTING, 
AND BUT WE WOULD THEN SEE NEW 
IBS EMERGING.
THE EFFORTS TO ADDRESS THE 
CHALLENGES OF COMBINING 
PROFITABILITY, SHAREHOLDER VALUE
WITH SUSTAINABILITY GOALS THAT 
IS AN ON GOING CHALLENGE AND ALL
THOUGH MANY EFFORTS WON'T 
SUCCEED IT IS IMPORTANT TO KEEP 
TRYING TO PUSH THE ENVELOPE.
- THE ONE REALLY, REALLY GOOD 
THING ABOUT AMERICAN CAPITALISM 
IS THAT IT IS MONOLITHIC AND 
CORPORATIONS GO DIFFERENT WAYS 
FOR DIFFERENT REASONS, THEY HAVE
DIFFERENT FORMS OF OWNERSHIP AND
THE HEALTHY ECONOMY HAS A MIX OF
THE OWNERSHIPS AND SEE WHAT 
WORKS.
THE DISAPPOINTMENT IN BUSINESS 
COMMUNITY IS LEARNING FROM THE 
PAST.
I REMEMBER BEING IN SILICON 
VALLEY 15, 20 YEARS AGO AND WENT
TO THE FIRST CONFERENCE ON 
SOCIAL RESPONSIBILITY, AND THEY 
THOUGHT THEY HAD INVESTED THE 
CONCEPT AND THAT THEY WERE THE 
FIRST ONES AND TOTALLY UNAWARE 
OF WHAT WHAT HAPPENED IF HEWLETT
PACKARD AND AWAY AND LEVI.
THERE IS A LOT OF STUFF THERE.
THIS IS WHAT THE STORIES TELL 
US.
- DAVID, WITH RESPECT TO 
LEARNING THE LESSONS OF 
ENLIGHTEN CAPITALISTS, LET'S 
TURN TO THE STUDENTS TO ASK 
QUESTIONS.
IT SOUNDS LIKE A CHALLENGE TO 
LEARN THE LESSONS.
WE PUT THE STUDENTS AT THE ENTER
IS OF EVERYTHING, WE HAVE THREE 
BRIGHT STUDENTS MICHELE, YOU CAN
COME UP FIRST AND POSE A 
QUESTION TO THE ESTEEMED GUESTS 
HERE.
PLEASE, MICHELE.
[APPLAUSE]
- HELLO.
THANK YOU FOR THIS DISCUSSION.
SO MY QUESTION HAS TO DO WITH 
THIS IDEA OF RESILIENCE OF 
INTEREST AND PRINCIPLES OF GSR.
IT SEEMS LIKE WE NEED IDEA 
LOGICAL SHIFT AWAY FROM THE 
LIMITLESS FINANCIAL GROWTH 
EPITOMIZED BY THE QUARTERLY 
RETURNS TO THE SUSTAINABLE 
CREATION GOOD FOR SOCIETY.
HOW MIGHT WE CAPITALIZE ON THE 
CURRENT MOVEMENT AND CREATE 
STRUCTURAL CHANGES TO 
INSTITUTIONALIZE?
- I THINK WHEN I WROTE THE
MARKET FOR VIRTUE, THE ONE AREA 
WITH THE POTENTIAL IS ON THE 
ENVIRONMENT.
THAT IS TO SAY THERE ARE A LOT 
OF OPPORTUNITIES FOR COMPANIES 
TO ACT MORE RESPONSIBLY FOR THE 
ENVIRONMENT AND FINANCIALLY 
VIABLE AND MAKES BUSINESS SENSE.
ALL THE COMPANIES THAT HAVE 
PLEDGED TO REDUCE THE CARBON 
FOOTPRINT AND ET CETERA, THERE 
ARE EXCITING THINGS GOING ON, I 
DO THINK IN THE LONG RUN PUBLIC 
POLICIES THAT PROMOTE 
RESPONSIBLE BUSINESS DECISIONS 
ON THE ENVIRONMENT ARE VERY 
CRITICAL AND WHEN YOU LOOK AT 
CORPORATE RESPONSIBILITY THE 
MOST RESPONSIBLE THING TO DO IS 
LOBBY FOR THE REGULATIONS TO 
MAKE THEM RESPONSIBLE.
- WE WROTE AN ARTICLE A COUPLE 
OF YEARS BACK CALLED THE TWO AND
A HALF CHEERS FOR CAPITALISM AND
I INSISTED ON THE EXTRA HALF.
HE WANTED TO GIVE THEM TWO.
WE TALKED ABOUT HOW SENSEFUL 
REGULATION CAN BENEFIT 
CORPORATION AND BENEFIT SOCIETY.
A KEY EXAMPLE IS CATALYTIC 
CONVERTERS.
I SPENT TIME AT USC AND THAT IS 
DOWNTOWN LOS ANGELES AND I WAS 
UNDER GRADUATE THERE STARTING
IN 1973.
AND IT WASN'T UNTIL A STRANGE 
WEATHER PATTERN IN 1975 THAT I 
NOTICED THE THE MOUNTAINS ALMOST
COUNSEL INTO DOWNTOWN LOS 
ANGELES AND THE SMOG WAS SO 
THICK.
NOW IT IS RELATIVELY CLEAR 
BECAUSE OF THE CATALYTIC 
CONVERTER.
HOW DID THAT COME ABOUT?
NO SINGLE COMPANY WOULD PUT IT 
IN BECAUSE IT WOULD HAVE GIVE 
TENNESSEE OTHER GUYS THAT DIDN'T
DO THE COMPETITIVE ADVANTAGE.
SO WHEN THE ETA CAME ALONG AND 
WE'LL MAKE EVERYONE DO IT, FORD 
AND GENERAL MOTORS AND CHRYSLER 
DIDN'T COMPLAIN BECAUSE EVERYONE
HAD TO DO IT.
THAT TYPE OF LEGISLATION IS VERY
IMPORTANT AND FINDING WAYS TO DO
THAT SORT OF THING IS A REAL 
CHALLENGE AND CREATES A 
CHALLENGE.
- THANK YOU.
MICHELE IS A MASTERS AT UC 
BERKELEY AND PROUD TO HAVE HER
ON THE STUDENT ADVISORY 
COMMITTEE.
DALTON, PLEASE COME UP, A 
CANDIDATE AND CO-PRESIDENT OF 
THE BERKELEY HAAS NET IMPACT 
CLUB.
[APPLAUSE]
- THANK YOU FOR COMING AND 
SHARING THIS REALLY IMPORTANT 
DISCUSSION WITH US TODAY.
SO WE TALKED ABOUT THE 
ALTERNATIVE OWNERSHIP STRUCTURES
AND TALKED ABOUT HOW FOR A 
PUBLIC CORPORATION SHAREHOLDER 
IS A REAL THING AND RIGHT NOW 
PUBLIC CORPORATIONS ARE A VERY 
SIGNIFICANT PORTION OF THE 
ECONOMY, I WANT TO FOCUS ON THAT
INVESTOR PERSPECTIVE.
THERE IS A MOVEMENT WITHIN THE 
IMPACT INVESTING ON FOCUSSED ON 
THE GOVERNMENT AND SOCIAL 
ENVIRONMENT ISSUES AND ETHICAL 
MOVEMENTS AND ACTIVITIES ARE 
ACTUALLY ALIGNED WITH A LONG 
TERM VALUE OF THE COMPANY, DO 
YOU THINK THAT THE FOCUS CAN 
CHANGE THE WAY THE INVESERS 
PRESH KWUR THE COMPANIES?
- I'M SKEPTICAL BECAUSE I THINK 
THE RELEVANT IMPORTANCE OF ESG 
FACTORS IN TERMS OF SHAREHOLDER 
EARNINGS REMAINS RELATIVELY 
MODEST.
THEY CAN BE IMPORTANT BUT NOT 
IMPORTANT ENOUGH.
ON 
MONDAY,- 
IT WAS SO PROMISING THIS ETHICAL
INVESTING STARTED IN THE 80s AND
WHEN THEY PUT IN THE FIRST 
FUNDS, I WAS INVESTING AND E 
THEY WERE ONE THE FIRST TO 
INTRODUCE THE FUNDS.
HOW DO YOU DEFINE, IT ENDED UP 
THAT THE
PORTFOLIO LOOKED LIKE A RANDOM 
PORTFOLIO WHEN YOU LOOK AT THE 
ESG FUNDS THE BIGGEST PROBLEMS 
IS VIRTUE.
SOME OF THEM, WHAT THEY
CALL VIRTUE NO ALCOHOL OR 
TOBACCO OR GAMBLING OR 
COAL.
DOES THAT MAKE AN ETHICAL 
COMPANY.
NO, EACH OF THESE FUNDS, IT IS 
ARBITRARY WHAT THEY PICK AND 
DON'T PICK.
YOU TALK ABOUT THE COAL.
A FUND IS A NORWEGIAN SOVEREIGN 
FUND AND SAYING THEY ARE NOT 
DOING COAL ANY MORE AND THE 
MONEY IS BASED COMING FROM THE 
OIL AND GAS COMING FROM.
UNTIL THEY COME UP WITH NEW 
DEFINITIONS, IT IS NOL GO NG TO 
CHANGE BEHAVIOR.
THE CEO OF VANGUARD SAID FROM 
NOW ON WE ARE NOT, WE ARE 
DISINVEST THE BAD GUYS, AND AND 
INVEST IN THE GOOD GUYS AND 
THOSE TWO COMPANIES WERE THE 
LARGEST SHAREHOLDERS IN GUN 
MANUFACTURERS IN THE U.S. AND 
WHEN IT WAS POINTED OUT, THEY 
DIDN'T INVEST.
ANOTHER ISSUE IS AS LONG AS THEY
MAKE MONEY, IT IS OKAY.
BUT IF RUNNING A UNION PENSION 
FUND AND SAY TO THE RETIREES YOU
ARE NOT GETTING AS MUCH MONEY 
THIS YEAR, WE ARE GETTING RIDS 
OF THIS PROFITABLE COMPANIES 
BECAUSE THERE ARE PROBLEMS WITH 
POLLUTION, THE UNION LEADERS ARE
GOING AGAINST THE INTERESTS OF 
THE WORKERS ON THESE THINGS 
BECAUSE THEY HAVE TO KEEP THE 
PROFITS UP FOR THE EMPLOYEES.
NOBODY INVESTS FROM PURELY 
SOCIAL PURPOSE.
OKAY.
IF THEY DO IT IS A PRIVATE 
INVESTMENT AND SOMEONE PUTS 
THEIR MONEY IN
ENTREPRENEUR.
UNTIL THAT CHANGES, I'M 
SKEPTICAL.
- I WILL ASK OUR FINAL STUDENT 
NANCY TO COME UP HERE.
I'M LOOKING AT THE CLOCK AND 
MIGHT HAVE TIME FOR A QUESTION 
OR TWO.
GET THE WHEELS TURNING FOR A 
QUESTION HERE.
AND NANCY IS A MASTERS OF 
GOPMENT PRACTICE CANDIDATE AT UC
BERKELEY AND PROUD BECAUSE NANCY
A STUDENT ADVISORY BOARD MEMBER.
PLEASE, 
NANCY.
[APPLAUSE]
- THANK YOU BOTH SO MUCH FOR 
BEING HERE.
I READ THE BOOK OVER THE PAST 
TWO WEEKS AND LEARNED A LOT AND 
THIS ISSUE
IS IMPORTANT TO
ME.
I'M REALLY HOPING YOU CAN ANSWER
THE STUDENTS AND PROFESSORS 
HERE, AND THAT IS ENLIGHTEN 
CAPITALISM CAN BE TAUGHT IN 
BUSINESS SCHOOL OR ENGRAINED 
EARLIER INTO THE D.N.A. OF THE 
FOUNDER, AND ALSO, IF IT CAN BE 
TAUT HOW WILLING ARE THE SCHOOLS
TO INCORPORATE THE ETHICS IN THE
COURSES?
- THE NUMBER OF BUSINESS SCHOOLS
NOW OFFERING MBAs IN SOCIAL 
ENTREPRENEURSHIP GROWING AT A 
VERY, VERY FAST RATE AND THIS IS
A TRUE PHENOMENON AND I KNOW AT 
USC WE HAVE BEEN DOING THIS FOR 
ABOUT 7 YEARS AND WE HAVE ABOUT 
40 NEW MBA STUDENTS WHO WOULD 
GET DEGREES IN SOCIAL 
ENTREPRENEURSHIP AND OFTEN
THAT IS HAPPENING.
THAT IS A
VERY CAN IT BE TAUGHT?
I TAUGHT LEADERSHIP AND ETHICS 
MY ENTIRE CAREER.
IF YOU ASKED ME TO REALLY SAY 
CAN YOU TRAIN THEM INTO AN 
ETHICAL PERSON, I DON'T IF I 
DID.
I DO KNOW ONE THING IT IS WORTH 
TRYING THAT IF WE AS PROFESSORS
WE TRY TO BE ETHICAL LEADERS WE 
WOULD FAILED THE RESPONSIBILITY.
DESPITE
EVERYTHING THAT I HAVE SAID, I 
STILL TEACH AND SAY TOUGH DO 
THIS, TRY IT, I ENCOURAGE YOU, 
GO OUT AND DO IT.
RIGHT.
JUST UNDERSTAND THAT IT IS A LOT
HARDER THAN IT LOOKS.
YOU KNOW, TRYING TO BE GOOD, IT 
IS NOT EASY.
AND LOOK, TRYING TO DO GOOD IS 
HARD TOO.
IT IS POSSIBLE.
AND THAT YOU TRY TO DO IS THE 
MOST IMPORTANT THING AND WE TRY 
TO TEACH PEOPLE TO DO IT, IT IS 
THE HOPE FOR CAPITALISM, IT IS A
HOPE FOR THIS NATION.
- OPPORTUNITY FOR QUESTIONS, 
PLEASE, WE HAVE MICS, GO TO MIC.
START HERE, STAY WHO YOU ARE.
ALEX, A FIRST MBA YEAR AT HAAS.
THE BUSINESS ROUND TABLE 
DEFINITION IS HIGHLY VAGUE AND 
DO YOU THINK THERE WILL BE A 
STANDARDIZATION ON THE METRICS 
OF WHAT BEING A GOOD COMPANY 
MEANS AND DEFINED BY DIFFERENT 
COMPANIES IN DIFFERENT WAYS?
-
I STARTED LOOKING AT GOOD 
COMPANIES IN 1973 AND IF YOU 
ASKED ME TO DEFINE THESE 
ENLIGHTENED COMPANIES AND WHAT 
DO THEY HAVE IN COMMON, WELL, 
YOU KNOW, THEY ARE GOOD IN A 
NUMBER OF WAYS AND NOT JUST ONE 
WAY IN WHICH THEY ARE 
RESPONSIBLE AND A LOT OF THE 
WAYS THEY ARE RESPONSIBLE ARE 
WAYS THAT ARE VERY, VERY HARD TO
MEASURE.
IT IS HARD TO MEASURE ETHICAL 
BEHAVIOR AND HARD TO QUANTIFY.
SO I THINK THERE ARE PROFESSORS 
THAT SPEND ALL THEIR TIME COMING
UP MEASURES.
AND IN 1973, GENERAL MOTORS ALL 
OF COMPANIES TRIED TO QUANTIFY 
THEIR SOCIAL IMPACT OF THEIR 
ACTIONS ON SOCIETY.
THEY FAILED.
WE WORKED WITH ARCO AND THEY 
TRIED TO DO IT AND SPENT A LOT 
OF MONEY AND PAID GUYS LIKE US 
TO HELP THEM DO IT.
THEY COULDN'T DO IT.
WHEN THEY TALKED ABOUT WHAT THEY
DID, IT CAME OUT SOUNDING VAGUE 
AND GENERAL AND ANY ATTEMPT TO 
QUANTIFY IT FAILED AND THEY 
WOULD PEOPLE THERE RUNNING THE 
NUMBERS.
AND SO IT IS HARD.
IT IS REALLY VERY HARD.
- HI.
I'M ALSO ALEX AND PART OF THE 
MBA PROGRAM.
THE STORY ABOUT THE CATALYTIC 
CONVERTER RESONATES WITH ME, AND
HOW CAN WE DO WHEN WE HAVE AN 
ADMINISTRATION THAT BELIEVES IN 
SMALL GOVERNMENT?
- I THINK THE CURRENT 
ADMINISTRATION SUPPORTING SUCH 
AN INITIATIVE IS -- THAT IS 
DISCOURAGING.
WHAT IS MORE ENCOURAGING IS THE 
STATE REGULATION, INCLUDING IN 
CALIFORNIA WHERE THE CATALYTIC 
CONVERTERS BEGAN AND UNTIL WE 
HAVE A BETTER ADMINISTRATION IN 
WASHINGTON WE HAVE TO RELY ON 
THE LOCAL COMPANIES TO PRESSURE 
THE COMPANIES AND CREATE THE 
SPACE.
CATALYTIC CONVERT MEANS YOU 
CAN'T USE THE LEADED GASOLINE.
THE REDUCTION IN THE LEAD IN THE
AIR OVER THE LAST 30 YEARS, NO 
50 YEARS, IT IS ONE OF THE MOST 
IMPRESSIVE PUBLIC HEALTH ISSUES 
IN HISTORY.
PEOPLE THINK OR ARGUE SOME OF 
THE DECLINING CRIME IS DUE TO 
LOWER LEAD LEVELS IN BLOOD, SO 
THIS IS A BIG REGULATION HAS 
MADE A BIG DIFFERENCE AND IT IS 
TRAGIC THAT THE IMPACT OF PUBLIC
POLICIES IN THESE AREAS LOOKS 
MODEST AND DISCOURAGING.
- WE HAVE AN EXAMPLE IN THE 
COMING MONTHS IN CALIFORNIA, 
THIS SPEAKS TO THE QUESTION THAT
THE STUDENTS RAISED AND THAT IS 
THE FUTURE OF PG & E.
PEOPLE ARE TALKING ABOUT TURNING
IT INTO A CONSUMER COOPERATIVE.
HOW IT IS STRUCTURE AND GETTING 
FROM POINT A TO POINT, THE 
FINANCE PROFESSORS WILL BE KEPT 
BUSY AND GETTING THE CONTRACTS 
FOR DOING THAT.
NONE THE LESS, PEOPLE ARE MOVING
IN THAT DIRECTION AND LOCAL 
INITIATIVE THAT COULD HAVE 
BENEFITS NOT ONLY IN TERMS OF 
REDUCING FIRES, BUT ALSO IN 
LOWERING THE COST OF ENERGY TO 
ALL OF US AND HAVING POSITIVE 
IMPACT ON THE ENVIRONMENT AS 
WELL.
IF IT IS DONE RIGHT.
SO WHEN YOU LOOK AT THE 
EXPERIMENTS AND THESE SORTS OF 
THINGS, YOU FIND SOME HOPE AND 
YOU HAVE TO ENCOURAGE ALL OF OUR
ELECTED OFFICIALS IN NORTHERN 
CALIFORNIA, REALLY EXPLORE THIS 
AND REALLY DO THE RIGHT THING.
- THANK YOU SO MUCH.
I'M JENNIFER AND STUDENT FROM 
GERMANY AND ASPIRING SOCIAL 
ENTREPRENEUR AND OUR REGULATIONS
AT HOME IS ONE THING AND DOING 
STUFF ABROAD IS HARD AND I WAS 
RECENTLY ATTENDING A PANEL WHERE
A [INDISCERNIBLE] AND GERMANY IS
FAMOUS FOR RESPECTING THE 
WORKERS RIGHTS AND COME TO THE 
UNITED STATES TO EXPLORE THE 
SITUATION OF WORKERS PROTECTIONS
BECAUSE YOU MENTIONED HEINEKEN 
THERE WAS A HUGE SCANDAL ON HOW 
THEY INVESTED IN AFRICA AND WHAT
REGULATIONS DO YOU ENVISION FOR
THIS?
- I THINK IT IS IT HAS VOLUNTARY
AND THE CORE MISSIONS ARE HALF 
FOCUSSED ON CONDUCT MON
AMONG THE SUP PLIERS IN OTHER 
COUNTRIES.
THAT REALLY REQUIRES PUBLIC AND 
CONSUMER PRESSURE TO PUT THE 
SPOT LIGHT ON THE FIRMS TO 
BEHAVIOR BETTER.
THE WHOLE SWEAT PHENOMENON IS 
DISCOURAGING AND IT IS LARGELY 
WHEN IT COMES TO CLOTHING, THAT 
IS THE MAIN MANUFACTURING ITEM 
IN DEVELOPING COUNTRIES, PEOPLE 
WANT INEXPENSIVE CLOTHING AND 
THE LACK OF CONSUMER PRESSURE ON
THE FIRMS IS DISCOURAGING AND 
PUBLIC MEDIA PRESSURE PLAYS A 
ROLE.
NIKE, PEOPLE WORKING FOR THE 
NIKE SUPPLIERS ARE IN BETTER 
SHAPE THAN IN 1990.
- ANOTHER EXAMPLE IS LEVI AND 
WHEN HAAS RETIRED HE TOLD ME ONE
OF THE THINGS HE WAS MOST PROUD 
OF WAS THE STRICT STANDARDS THEY
HAD PUT IN PLACE EVENTUALLY IN 
ASIA, IN PLANTS WHERE THEY 
CONTRACTED TO HAVE THE JEANS 
STITCHED AND SEWN AND THEY WERE 
EMBARRASSEMBARRASSED.
THEY INITIALLY GO IN AND TREAT 
THE PEOPLE AS WELL AS IN THE 
U.S., THAT IS NOT WHERE THEY 
STARTED BUT THEY ENDED UP THERE 
AND IN THE BOOK I DESCRIBE THE 
PROCESS HE HAD TO GO THROUGH 
FROM WHERE THEY WERE HAVING REAL
SWEAT SHOPS AND TERRIBLE PLACES 
TO NOW SOURCING FROM QUITE 
RESPONSIBLE BUSINESSES.
ALSO, THE APAIR EL INDUSTRY IN 
THE UNITED STATES AND SET 
STANDARDS AND HAS THE TOY 
INDUSTRY IN AMERICA THAT USES A 
LOT OF UNSKILLED LABOR IN ASIA 
WAS EXPLOITED BADLY AND NOT AS
FAR ALONG AS THE CLOTHING 
INDUSTRY.
- I AM A SOCIAL ENTREPRENEUR.
MY QUESTION IS REALLY SOMETHING 
THAT WE CREATED BY TRYING TO 
MEASURE IMPACT ON SOCIETY RATHER
THAN TRYING TO ASK THE QUESTION,
COULD WE JUST SAY THIS IS GOOD 
FOR LONG TERM BUSINESS AND 
COMPETITIVE ADVANTAGE.
[INDISCERNIBLE] AND LONG TERM 
VIEW SEEMS TO SUCCEED.
- I THINK THAT ISN'T ALWAYS THE 
CASE.
IN THE SHORT RUN THEY WORK 
TOGETHER.
FOR THE LONG RUN, WHAT SEEMS TO 
HAPPEN IS THAT THE SOCIAL 
DIMENSIONS BECOME MORE 
MARGINALIZED AND FINANCIAL 
PERFORMANCE BECOMES THE FOCUS.
THE BROAD STORY OF THE STORIES 
IN YOUR BOOK IS ABOUT IN THE 
LONG RUN, IN THE SHORT RUN YOU 
CAN PULL IT OFF.
IN THE LONG RUN IT IS HARD TO 
REMAIN PROFITABLE AND 
RESPONSIBLE.
- ESPECIALLY IF IT IS A PUBLICLY
TRADED COMPANY.
THERE ARE SOCIAL ORGANIZATIONS 
THAT I LOOK AT IN THE BOOK, OR 
STARTED OFF SOCIAL RESPONSIBLE.
THE BODY SHOP, TOM CHAPELS, 
TOM'S OF MAINE, AND A COUPLE OF 
OTHERS.
BEN AND JERRY'S.
FOR A WHILE THEY WERE ABLE 
REALLY TO DO THE RIGHT THINGS 
AND THEN THE FOUNDERS WERE 
GETTING OLDER AND WHAT HAPPENS 
THEY LEFT, HOW CAN KEEP THIS 
GOING?
AND THEY ENDED IN ALL THREE 
COMPANIES SELLING THE COMPANIES 
TO LARGE COMPANIES THAT GAVE 
THEM THE ASSURANCE OF CONTINUING
THE PRACTICES AND NONE OF THEM 
DID THEY DO SO.
AND I DON'T KNOW IF THAT REALLY 
ANSWERS YOUR QUESTION, BUT WITH 
TOM'S OF MAINE IS ONE THAT I 
THINK THAT ENTREPRENEURS ARE 
GOING TO FACE.
THE STRUGGLE WENT ON IN HIS OWN 
SOUL BETWEEN GETTING REALLY RICH
AND CONTINUING TO DO THE RIGHT 
THING.
HE STRUGGLED FOR YEARS AND WENT 
ALL OUT, BEARS HIS SOUL AND 
WAKING UP IN THE MIDDLE OF THE 
NIGHT,  DO I WANT TO BE RICH AND
ON AND ON.
AT THE VERY END, HE DECIDED TO 
GET RICH.
[LAUGHTER] 
- SPECIAL THANK YOU TO THE 
SPEAKERS HERE.
THE BOOK IS INLIGHTENEDiST.
[APPLAUSE]
- THANK 
YOU, ALL.
- ONE
THING, WE HAVE GOT, COME SEE 
HIM.
