CEOs roundtable discussion: Does giving pay?

How can businesses become more involved globally?

HASSENFELD: We have to begin to learn that our views on the rest of the world are not necessarily the right ones. We have a tendency to put our values and our culture, and our religious viewpoints, on other societies. That's where businesses can do a better job globally. We all have to learn to partner up. Who are the best people in each country to partner with in the discipline that we want to affect?

I think business has got to be proactive and not reactive in areas of their expertise. If we do things right in, let's say India or China, we're seeding our name for the future, and therefore, for the shareholder down the road. Business should, once in a while, get its hands dirty.

After Hurricane Katrina, there was a water company that went in and provided bottled water, and an express delivery firm that went in to help distribute it. Is there a need to formalize this, perhaps to create a kind of corporate SWAT team that could be deployed at a moment's notice to help victims of disasters?

HASSENFELD: Let me cite some interesting numbers. One year after the tsunami, we sent a team over to the areas that were ravaged and funded a study. And as of January 2006, a full 79 percent of the $13 billion raised to help victims hadn't been spent yet. Government, non-governmental organizations, and corporations all must work together. Each does something really well. Corporate tends to do well in logistics; NGOs know local needs really well, and so on. It's like if you're sending things to Pakistan because of the earthquake, you don't send ham. (laughter) Business groups should develop rapid deployment logistics teams and they should be formal and should be housed somewhere. And they should be made up of people who are able to interconnect on a global basis knowing, first of all, that there most certainly is going to be another natural disaster somewhere in the next six months. We live in a world now where there is going to be another disaster somewhere, ongoing, so let's mobilize now.

GARNIER: It's true that one thing that business should be considering is forming more coalitions. Instead of GSK doing one thing and Prudential doing something else, for example, there could be some very important opportunities here for collaboration. This isn't being done now, and I think that's the next chapter of effective philanthropy.

ROTH: What J.P. [Garnier] just said reminds me of your early meetings, Bob [Forrester], when Paul Newman was sitting in the room with Newman's Own, and he would look around and say, "Well, you business leaders are very efficient, you're very bright, you have a lot of resources. Why can't we put our resources together without having a hidden agenda of our own, in order to solve common problems in the world?"

HASSENFELD: I know we could do more. Too often, you know, especially in disasters, we tend to overreact too quickly. So we in business have to try to find a home for a rapid deployment crisis group that basically can say, okay, in Bangladesh, these are the goods, this is how we’re going to distribute them, this is how we’re going to work with the government and these are the companies, whether they're multinational or local, that have the following resources which can be utilized in an emergency. One of the things I don't like to see is when company A gives $100 million to this crisis, but what's company B and C going to do? And then once the money is given, how is it being deployed? There's often plenty of money on Day One, but not enough six months, a year, two years, and three years out. There is a lot of trauma that children go through that people don't hear about after the aid workers leave, the cameras leave, the newspaper reporters leave. How do you support the kids after everybody has left?

Brand America is taking more of a beating now globally than in the past. Can corporate philanthropy help to mitigate America's image problem overseas?

Dan Demetriad / Contribute magazine Arthur F. Ryan

RYAN: I think, you know, a little bit of brand America is the United States government, not necessarily America or American companies. We do business in a lot of countries, and we've not felt any direct effect from any of it. So there is a separation up to a point. But many countries have not had the same backing in philanthropy, certainly from the corporate side—especially in Asia. We have found that it has been very beneficial to share our understanding of problem-solving on a local level. We can take ideas that have worked in Newark or in Jacksonville or Minneapolis and make them work in Tokyo. Of course, we have to adapt them to specific markets, as we have many people in our Tokyo office, and all but three of them are Japanese citizens. So you have to work with your own employees, wherever they are, and ask them, okay, how do we make this work? The response can be extraordinarily positive. We have a program that we started a few years ago to recognize kids in middle schools and high schools who do volunteer work in their communities. We also now do that program throughout our communities in Asia, and we've gotten the Prime Minister of Japan to come to it, as well as the President of Taiwan. Their recognition wasn't our principal purpose for doing this volunteer recognition program. But your point is a good one.

MALKIN: I do have a comment. About a decade ago, I was brought to Japan to lecture in about ten cities on corporate philanthropy. The impetus was that the then-CEO of Mitsubishi was a year ahead of me at Harvard, and he felt very strongly that Japanese companies which were becoming very important to the United States would have to adapt to what was being done in the United States—and be socially responsible, and this led to several Japanese companies setting up corporate foundations. Back then, it was all about bringing this idea back to Japan. And so I'd go from city to city in Japan, preaching the gospel of corporate philanthropy. It was interesting. I was advised, I recall, not to get upset because Japanese executives sit with their eyes closed; it means they're listening. They're not sleeping when you talk. (laughter) But the response was very good. Since then, they have recognized the value of corporate philanthropy and I think the Japanese are making a very conscious effort in the United States to have a positive image through things that they're doing that are socially responsible.

Dan Demetriad / Contribute magazine Robert H. Forrester

FORRESTER: First of all, Peter, I hope that the reason for people having their eyes shut in Japan is the same for people in Europe, because I just came back from making a presentation in Milan, and a lot of people seemed to have their eyes shut in the audience. (laughter) I was invited over there to make a presentation to the Cariplo Foundation for Scientific Research. There is a lot of philanthropy in Europe and outside of America, it's very different. Cariplo is a $7 billion asset-based foundation which is one of the many spinouts of the Italian banking sector, and it's the third largest foundation in Italy. So it's a pretty good- sized charitable foundation. They're certainly not nearly as well organized (as in the U.S.) and philanthropy is still not part of the culture: they have to do some serious renovation of the existing corporation and taxation infrastructure and policies. But what's very, very encouraging to me is how this concept is moving to places outside of the United States. I think American businesses are the envy of the world in this area, as are big global companies like GSK. There's actually a group now in Italy that is trying to replicate CECP. We're talking to very serious top executives there who are saying they've got to do this and make it part of the way they do business. As you go abroad, particularly at a time when America is in disfavor because of some of the things that are happening in Washington, in the area of philanthropy and the area of our nonprofits, we're increasingly the envy of the world.

What about China, obviously a huge market? How well can this uniquely American notion of philanthropy translate to places where the concept isn't always shared by authorities nor fully understood?

FORRESTER: I don't think nonprofits are legal in China. But if a country is going to be competitive in the global market, ultimately, it's going to have to have a third sector in it.

RYAN: In China, it's a very small group of very wealthy individuals who are doing things, some of them who've come back from being schooled in the United States and who are, perhaps, ingratiating themselves with the government to create things for the public good. But I think corporate philanthropy, as we know it, will take many, many, years to develop in a place like China because of its history and culture—but that doesn't mean it can't happen, or won't.

One last question. It's about governance. Some nonprofit boards more resemble social groups than tough watchdogs over a charity's finances and strategies. Can the for-profit world help charities become better stewards of donor dollars?

FORRESTER: There are certain nonprofits that were started as advocacy groups that took a position that business people (give bad advice), so that's a hard one.

GARNIER: I want my director boards to be active in some nonprofit capacity because it opens their world a little bit. I was touring with someone from the Children's Health Fund here in New York. They provide medical services to runaways in bad parts of the city. I can tell you, a day like this changes you. It's good. People who have enormous responsibilities for thousands of people in a corporation also should have a humanistic dimension to them. They should be open to the world, and they shouldn't live in their ivory towers. Getting out there with a nonprofit is as good as it gets in terms of getting managers to see the realities of the world in which we live. So I think it's a win-win.