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ACCOUNTABILITY
CORPORATE ACCOUNTABILITY
A fund raising message ... but why no visible impact on decades of corporate misbehavior? ... Price gouging by the wealthiest corporations
Power is a human right
CHALLENGE EXPLOITATIVE CORPORATE PRACTICES LIKE PRICE GOUGING!
Peter Burgess COMMENTARY
This e-mail message has come to me to ask for a donation ... a gift of money. I understand that 'not-for-profit' organizations need to pay their bills and for that they need money, but this type of fund raining is annoying ... especially when it is the only time the organization is in touch.
The subject of 'accountability' has been part of my approach to getting things done for all of my career. For me, it is a foundational concept within the bigger field of management which is also about getting things done. Early in my career in the 1960s there was a sea change in the practice of management in the corporate world which was to accelerate in subsequent decades as computers enabled more and more management information to be collected, analyzed and acted upon. One of my early jobs as a very young financial 'Controller' in an American company was to get a main-frame computer to do something useful. IBM had installed the computer mainly to run inventory control but it failed abysmally to do that and there was nobody left in the company that had anything good to say about the computer and computerization. I gave the computer some very simple accounting tasks ... like handling the fixed asset accounting, which had less transactions in a year than the failed inventory control system had in an hour. Surprise, surprise, the computer did this new job very well and people in the company started to understand that, maybe, the computer had potential. Step by step I expanded the accounting work that the computer was doing ... and eventually it was running the main reporting for the accounting department. This was a punched card based system that was used way before other forms of data input were invented, and this constraint meant that this computer system could never be effective for the original fast moving warehouse level locator data system. Our company's work with this computer system was assisted by the Harvard based consulting firm Management Analysis Center (MAC) and I served as the link between our computer, our company and the consultants. All of this was written up as 'cases' for the Harvard Business School around 1968.
One of the lessons learned from the experience just described was that success comes from understanding all ... or as many as possible ... of the issues that are constraining better performance and more progress.
Accountability is a word that is used a lot ... but accountability is rarely practiced. For most of my active career I have almost always had push-back when I have tried to get aqccountability more into the mainstream of management and oversight.
In another company setting, I was tasked with corporate budgeting and top-level corporate planning. Senior management was quite happy when my efforts were focused on the cost effectiveness of operations in the subsidiary companies, but as soon as it became apparent that the same approach applied to the head office would result in a lot of change, I found myself looking for a new job!
In yet another company where I was CFO and the company and our industry was in a serious crisis because of the fuel price inflation brought about by OPEC and the Arab oil embargo. We were a shrimp fishing company based in the United States and operating in some 26 jurisdictions around the world. The increase in fuel prices had turned what was once a reasonably profitable operation into a business that would be 'out of business' in a matter of a few months. I did more 'high level' assignments for that company in the first six months of my employment than most senior executives will do in a total career. This included making a presentation at a Congressional Hearing on the state of our industry, negotiating with our bankers to refrain from cutting our credit line for inventory financing even though the realizable value at current market prices of our inventory had just dropped to around 20% of their loans outstanding, and helping our various operations around the world to do what the local managers knew what was needed but did not have the money to get essential things done. One of our fleet operations was based in Monrovia, Liberia where we based 18 trawlers. When I flew in ... quite late on a Friday evening ... I could see most of these trawlers moored in the harbour. I was met at the airport by the Fleet Manager and taken to the top hotel at the time in Monrovia and booked into the best suite in the hotel. The fleet manager bade me farewell and told me he would pick me up on Monday morning! Saturday morning, I woke up refreshed, and early in the morning took a taxi to the port where our trawlers were based ... surprising everyone when I walked into the office. Two hours later I had been shown around the facility including the spare parts warehouse, all the port facilities, the procssing plant and cold stores as well as crawling around several of the trawlers and finding out why they were not fishing.
It turned out that my predecessor CFO had never allowed the fishing operations to write off spare parts inventory that was useless (because for example the engine type was no longer being used) and while the accounts showed a healthy level of spare parts inventory, in reality the useful inventory was near zero. As a result 15 out of 18 trawlers were in port waiting on spare parts because there were none available in the inventory. We spent the rest of Saturday and then Sunday to compile a list of what was needed to fix all the trawlers waiting for parts. Late on Sunday this list was telexed to our head office in the USA and a phone call made to the President of the company. He understood fishing operations and the US office set about getting the parts that were needed. They started to arrive by air on Thursday and by the end of the week the fleet was getting back to fishing and enabling the company to earn revenue.
All the people involved in the fishing operations knew the problems and to a great extent knew the solution. Too many people in management know about top line profit performance, but have no idea what it takes to achieve the best possible performance. What I learned early in my career was that profit performance is the aggregate of a lot of subsidiary decision
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Two questions:
- Why don't I know very much ... anything ... about this Corporate Accountability organization?
- Why doesn't the organization Corporate Accountability know about me?
Even though there is a very impressive technology based communications ecosystem that now exists, most of the communication is very primitive ... in other words dumbed down to suit consumers and drive a certain set of management metrics that suit the operating organization which is usually an investor owned for-profit maximizing business.
You got on my radar because you sent me a fund raising e-mail via ActionNetwork.org. I don't know at what point in my history this organization got me on their radar ... it might be a very long time ago, or it might be quite recently ... I don't know.
My interest in 'how the world works?' goes back to my student days in the UK in the 1950s. The history of the industrial revolution was very interesting to me as well as the events and impact of World War II. There were business schools in the USA but not in the UK, so I constructed my own educational journey with Engineering and then Economics at Cambridge, followed by some Management Training in heavy industry in Sheffield and then 'Articles' at the Chartered Accountancy firm of Cooper Brothers & Co in London (now PriceWaterhouseCoopers). As a student I was able to travel a lot on a very low budget both in Europe and North America. I migrated to Canada and then the United States in 1967 at which time I was able to earn more in one month in the USA than I could earn in a year in the UK. This was the huge wealth of the USA compared to Europe at that time, and it bothers me immensely that today a young person is probably better off in much of Europe than they are in much of the United States.
The issue of accountability has been on my agenda from very early in my career. I wanted everyone with responsibility within a corporate organization to be 'accountable' for performance and the related use of corporate resources. Later I had the same mind-set when I was working as a consultant for the World Bank, the United Nations and other international organizations ... a mindset that did not make me many friends. For me 'acountability' is an essential part of what makes Management Netrics a powerful element in the efficient performance of everything. When a system or process of accountability is missing, the chances are high that cottuption will be in play. s
Peter Burgess
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Price gouging by the wealthiest corporations
Dear Peter,
As inflation rises, people struggle to put food on the table and pay their bills – yet corporate profits continue to grow. Unscrupulous corporations are taking advantage of these uncertain and difficult times to pad their own pocketbooks.
Together, we can push back. Food, water, heat, and utilities are all basic human needs. At Corporate Accountability, our valued monthly donors are challenging corporations who put profits before people.
Monthly donors sign up to automatically make a gift each month to challenge corporate abuse of power. This ongoing support ensures that we have the resources and flexibility we need to demand and achieve lasting change. That’s why we need 70 new pledgers to join us by September 30.
Corporations seem to be using rising inflation rates as an excuse to increase prices, all to generate massive profits for shareholders. In fact, from 2020 to the end of 2021, corporate profits increased by 14% according to the Bureau of Economic Analysis.
Here’s just one example: while gas prices reached the highest prices ever recorded in the U.S., massive transnational oil and gas corporations were raking in record profits. In the second quarter of 2022, ExxonMobil brought in $17.9 billion in net income, the largest quarterly profit the corporation has ever seen.
Of course this hurts people trying to make ends meet. But here’s the real kicker: this practice only makes inflation worse. You can help Corporate Accountability as we challenge exploitative and extractive corporations deepening this crisis.
As a monthly donor, your gift allows Corporate Accountability to be bold in our actions and plan strategically for the future. It’s convenient and easy, and you can change or cancel your gift at any time.
Help us reach our goal to recruit 70 new monthly donors by September 30, and a generous donor will match your first monthly gift with an additional $150.
It’s time corporations are stopped from spuriously raising prices and inflating shareholder wealth during a crisis. Everyone should be able to afford basic human needs. Together, we can stop opportunistic price gouging by wealthy corporations. Please don’t wait until the deadline – start a monthly pledge today to support this work.
Your monthly gift today will be matched with $150. Join us and make a difference.
Onward,
The team at Corporate Accountability
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Corporate Accountability stops transnational corporations from devastating democracy, trampling human rights, and destroying our planet. We are building a world rooted in justice where corporations answer to people, not the other way around -- a world where every person has access to clean water, healthy food, a safe place to live, and the opportunity to reach their full human potential.
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