Bill George, former Chairman and CEO of Medtronic, Honored for Outstanding Citizenship 

The Caux Round Table has attempted to facilitate the engagement of public and private decision-makers around high standards of responsibility with the publication of ethical principles for business and for government.  When challenged to respond to concerns over lower standards of citizenship that undermine fidelity to such principles, the Caux Round Table suggested certain principles for good citizenship.

In the United States, keeping constitutional and republican traditions of democracy and free markets demands high standards of citizenship, no more so than now under conditions of financial crisis and economic recession.

Therefore, in Minnesota, The Caux Round Table annually organizes an event to recognize and celebrate these standards.  This year, we honored Bill George, the former Chairman and CEO of Medtronic, for his years of responsible leadership in business and civil society.

Mr. George now teaches management at the Harvard Business School.  Earlier this spring, in response to the financial crisis, several students of his initiated an MBA oath to do no harm.  Their idea has gained considerable traction, and has been promoted through social networking sites such as Twitter and Facebook.  This is a testament to Bill's ongoing commitment to high standards of citizenship.

The 2008 recipients of the Caux Round Table's Citizenship Award were George and Sally Pillsbury.

President Obama's Proposal for Financial Regulatory Reform Advance Caux Round Table Recommendations

“President Obama’s proposals for reform of American financial institutions and products advance the Caux Round Table’s proposals for preventing future financial crises,” said Stephen B. Young, Caux Round Table Global Executive Director.

Young added that in September 2008 as financial institutions were in full meltdown, the Global Governing Board of the Caux Round Table proposed a seven point reform plan to respond to this failure of financial capitalism.

Three of the seven CRT proposals called for higher standards to be applied to boards of directors and three more called for realignment of executive remuneration, control of systemic risk and better regulation of financial market instruments and a final recommendation pointed to better international supervision of financial markets.

The Obama Administration has proposed reducing systemic risk accumulation for the financial system by:

• creating a new financial services oversight council to identify emerging systemic risks
• new authority for the Federal Reserve to supervise all firms that could pose a threat to financial stability
• stronger capital and other prudential standards for all financial firms
• registration of advisors to hedge funds and other private pools of capital

The Obama Administration has proposed better regulation of financial market instruments as follows:

1. enhanced regulation of securitization markets with more transparence, stronger regulation of credit rating agencies, and a requirement that issuers and originators retain a financial interest in securitized loans
2. comprehensive regulation of over the counter derivatives
3. protect consumers of financial products from abuse with a new Consumer Financial Protection Agency

"These welcome proposals by the Obama Administration go far in the direction recommended by the CRT and, happily, vindicate CRT analysis and concerns over what went wrong with Wall Street,” said Young.

Caux Round Table Welcomes the Sponsorship of Juridica Investments Limited for its 2009 Global Dialogue 

Juridica seeks to promote the Rule of Law by financing complex litigation and arbitration efforts which otherwise might not be brought to vindicate claims for redress of injury and abuse of power.  Investment in Juridica funded litigation and arbitration efforts is possible.  For further information, please contact Richard W. Fields at fields@juridica.co.uk   

2009 Social Capital Achievement Country Rankings

The Caux Round Table recognizes that economic development does not occur independently from social, cultural and political institutions. Wealth creation is not an isolated, autonomous, self-referential process within communities; it is a dependent variable, subordinate to the dictates of prior conditions. Markets are organic phenomena; they grow strong and vibrant only in facilitating environments. The Caux Round Table recognizes this dependence of wealth creation upon surrounding conditions as Kyosei, or dependent co-arising. Read the full 2009 Report here.

New Publication: CRT Global Executive Director, Steve Young, has just published a chapter on The global economy from a moral point of view in the book Humanism in Business, Cambridge University Press, 2009, edited by Heiko Spitzeck, Michael Pirson, Wolfgang Amann, Shiban Khan and Ernst von Kimakowitz.  Young looks at moral points of view grounded on revealed religions, natural law, and custom/mythic beliefs and practices to conclude that a common reference point from which to critique the global economy is stewardship. [external link to Cambridge Univ Press]
 

  OPINION ESSAYS
Social Capital and Wall Street (Stephen B. Young, Global Executive Director, Caux Round Table). A very important thesis about how to create the wealth of nations holds that certain cultural preconditions shape the scope and intensity of capitalist success. When these preconditions are in effect, wealth is created; when they are missing, wealth is, relatively speaking, scarce and hard to create.  The social nature of capitalism as a system demands an appropriate cultural context. Some values as carried into market and investment behaviors promote robust capitalism; other values don’t. Read more here.

Is there an Agency Problem? (Stephen B. Young, Global Executive Director, Caux Round Table). I want to call your attention, as we turn from crisis management to building more viable global institutions of financial intermediation, to a sophisticated cynicism that opposes more resolute commitment to business ethics and corporate social responsibility.  I am not referring to the common mistrust of private enterprise on the grounds that working for personal profit is inconsistent with securing a greater good for society. This is the perennial tension posed by philosophers and religious leaders between the claims of virtue and the attractions of self-interest. Rather, I am referring to a more academically polished elaboration of that argument which is called “the agency problem.”   Read more here.

Moral Capitalism: An Oxymoron or Scientific Possibility? (Professor N. Doran Hunter, Research Fellow, Caux Round Table) When discussing with my colleagues at the university the possibility that science might be on the cusp of declaring that the human brain is hard wired to make moral decisions, a gasp of rational unbelief and theological skepticism fills the room with miasmic laughter and Augustinian bemusement. Wait a minute, you idealistic innocent they say, haven’t you experienced life, followed the stories in the newspapers, read theology and history, and absorbed the philosophers of the Western experience? Yes, I respond, but the advocates of neuroscience and game theory are suggesting, and rather strongly, that there does seem to be in the contemporary human brain a “deep moral structure driving … certain common values … and an intuitive moral sense” that can direct human activity.  Read more . . .

Trust Matters - Restoring Confidence in a Time of Crisis (John Dalla Costa, Founder, Centre for Ethical Orientation). When the leaders of the world’s biggest economies met in London for the G-20 summit in April, they pledged to work together on six priorities to deal with the global economic crisis. Acknowledging “the greatest challenge to the world economy in modern times,” the official communiqué specifies cooperation among nations to “restore confidence” and “rebuild trust.” Such are the forces of this economic catastrophe that no country or company can escape the black hole of suspicion. Some of the proposed measures are obvious, including more transparency, better regulation in financial markets, and greater accountability for outcomes. But these in fact are remedies very similar to what was adopted after the “dot-com bust” seven short years ago. The laws and reforms put in place to reverse the widespread mistrust failed miserably in preventing the excesses that led to the current crash in credit and credibility. Read more here.

The Economic Crisis and Ends, Educators, Intentionality and Stakeholders (Dr. Thomas A. Bausch, Professor and former Dean, College of Business Administration, Marquette University). One of the best definitions of economics is as “the science of original sin”. By using that term I reveal my Judeo/Christian heritage, but I would not be surprised if a concept similar to “original sin” exists in most of the major religions of the word. The concept of some basic disorder in human beings captures the concept of scarcity which is core to any definition of economics. Although in no way do I deny resource limits, much of scarcity is facilitated by narcissism, unlimited desire or greed for both money and power, as well as the limited abilities and frailty of the human race that undergird demand and supply leading to opportunities for individuals, groups, institutions and nations to exploit each other. Economists have long argued that only the market system can harness legitimate economic drive and temper human excesses. Read more ...

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CRT Seven Point Plan for G20 Leaders

CRT Chair Lord Daniel Brennan released to the press the attached statement and a seven point plan for reforms which will prevent future systemic crises in our global financial networks. The substance of the recommendations was tabled at the 2008 Global Dialogue in Madrid last September. The recommendations have been extended and refined thanks to the work of Noel Purcell of the CRT's Global Governing Board.
  

CRT Principles for Business re-formatted to help business decision-makers exit from the current financial crisis.

The current crisis of global capitalism - first in financial markets and now in a recessionary downturn in consumption and production - reveals the dependency of business on an underlying social culture of trust and responsibility. Principles are needed to restore vitality to global financial markets and to guide business owners and managers. 

Responding to this immediate need for clear and forceful principles for business decision-making, the Caux Round Table Global Governing Board has reformatted the CRT Principles for Business to make them more easily applicable to today's challenges. To read the reformatted seven Principles for Responsible Business conduct and related Stakeholder Management Guidelines, click here.  
 

Recovery of Corrupt Assets 

As CRT Chair Lord Daniel Brennan, QC, proposed in 2006 the flight of wealth from poor and developing countries, money usually obtained immorally or illicitly or sent abroad illegally (so-called "dirty  money") retards not only the economic growth of such countries but also their development of more just and accountable political regimes respectful of human rights and democratic norms.

Under CRT leadership, a Steering Committee was formed last year to study and propose the formation of a private-sector organization to seek out, recover and repatriate the proceeds of grand corruption which are "stashed" in wealthy countries, often with the use of secrecy or tax-haven jurisdictions. CRT Global Executive Director, Steve Young, is the facilitator of the Steering Committee, which met recently to review a proposed business plan drafted by Chris Pierce. The Committee hopes to have a proposal ready for public consideration by the late Spring. 


 

Global Dialogue for 2009
 
"Arising out of the Ashes - Building A New Global Capitalism".
 12 - 14 July, 2009  Mountain House, Caux, Switzerland

Never has the Caux Round Table hosted a Global Dialogue in more momentous times than ours today. Global capitalism is in the midst of an historic crisis that challenges our faith in all aspects of "business as usual".

Much has gone wrong; many are suffering; and the fault lies with many who abused the trust placed in their wisdom and ethics as business leaders and prudential regulators of financial markets.

Never have the Caux Round Table Principles for Business had such importance and relevance to global prosperity. The Global Governing Board of the Caux Round Table has therefore decided to focus the coming Global Dialogue for 2009 on the theme of "Arising out of the Ashes - Building A New Global Capitalism".

We expect to have the dialogue sessions on the first day of discussions to examine causes of the crisis and then to devote the second day's work to recommendations and proposals. The Global Governing Board expects that a commentary with action recommendations will be issued at the end of the Dialogue. The dialogue will commence with dinner on the evening of July 12 at Mountain House in Caux, Switzerland and will conclude on the evening of July 14th. Reservations for participation in the Dialogue will be made with my office and companion reservations for accommodations will be made by participants directly with Mountain House.

Registration forms will be available in January 2009. If you are planning to attend, please contact Wai Wong-Lai as soon as possible at Wai@cauxroundtable.net (Our practice is to honor reservations on a "first come, first serve" basis.) PDF Flyer