Global Compact keeps fishing the bodies out the river

The Global Compact has recently announced that it has expelled a total of 3,123 companies since 2005. I've said it before, but in the light of this stat, it bears repeating. This is not a good thing. Rather than fishing all these bodies out the river, it's time someone at the Global Compact found out who was throwing them in.

There are around 7,000 companies in the Global Compact. That makes the number that are no longer in as a result of expulsion to be a massive percentage of those that have at some point joined.

Now, from my point of view, having a percentage that large says more about the Global Compact than it does the businesses that joined.

If I was running that particular show, I would be asking myself why the drop-out rate was so large? And my starting assumption would be that the recruitment process was faulty.

I've seen it before. People are motivated to sell membership. They stress the benefits. They underplay the costs. They get the initial sale - but because the deal was mis-sold it doesn't last. That doesn't matter to the guy that made the sale - it's somebody else's problem.

In its recent announcement, the clue is there. "It is encouraging that the number of new companies joining the Global Compact significantly exceeeds the number of explusions." Indeed. But if I'm right, the percentage of those newcomers that ultimately get expelled will remain high. It's not so encouraging if the fact that high rates of new recruitment means that membership is still being mis-sold.

CSR membership organisations - some of them with real commitments and obligations - do not see such high drop-out rates. I'm not aware of a single one, although I'm sure there's probably some crisis-hit example out there somewhere.

So how is it that so many sign-ups to the Global Compact walk away?

Do we think that when they sign on the dotted line, they are just doing so for fun? Or do they think they're going to be getting a level of support to take action they don't get? Or does the requirement to report get underplayed at the point of sale? Or what?

What is simply not good enough is the Global Compact trumpeting its high expulsion rate as a badge of honour. I know some NGOs have criticised the organisation for not having enough teeth to enforce standards on its members, but reaction to that criticism has led it to see virtue where it should see failure.

Posted on: 14 Feb 2012

Tags: Global Compact expulsions

Comments

7 comments for this post


  • Michael Solomon
    14 Feb 2012
    Weblink: http://www.profitthroughethics.com

    Enjoyed this article. Yes, expulsion rate is rather strange as a badge of honour, but that is not really the full picture. With the line "CSR membership organisations - some of them with real commitments and obligations - do not see such high drop-out rates. I'm not aware of a single one...", you seem to be suggesting CSR membership organisations, in contrast to the Global Compact, are good because they don't expel their members...?? I would imagine the public (the perennially underserved/overlooked/abused stakeholder in CSR) would find the "pay, stay as long as you meet the minimum requirements, if not, you are no longer welcome" model considerably more credible than the "pay, stay as long as you keep paying, we have no minimum requirements re performance" model.

  • Mallen Baker
    14 Feb 2012
    Weblink: http://www.businessrespect.net

    Hi Michael - thanks for the comment. No, I'm not suggesting that membership organisations are inherently good because they don't expel their members, only that the Global Compact stands out from amongst its peers with a huge miss rate when it comes to the obligations people think they're signing up for at the start and what they're prepared to match up with. There are certainly some with more onerous requirements than simply to pay the bill. But even without the comparison, which I admit runs the danger of comparing apples and oranges, the point still holds.

  • stefan crets
    22 Feb 2012
    Weblink: http://www.csreurope.org

    Thank you for (again) this interesting blog. I would personally believe that inclusion/exclusion as such is a very hard nut to crack. Are you only working for the leaders or trying to create a movement for the better ? Important is that the members show willigness to work together (and report in case of the GC), to improve their own performance. The role of a membership organisation is to make this possible, to give the support, the servics that add value to this perspective and to follow through on all the members.

  • Grainne Madden
    20 Mar 2012
    Weblink: http://www.gmjassociates.com/home

    I think there is potentially another issue here - that company management is not that bothered about whether they are in or out. Is there a sense of them having bigger problems to deal with at the moment and this "nice goody two shoes fluffy stuff" not being top priority? That worries me and also points us towards asking what business value is being sold at sign-up.

  • Mallen Baker
    20 Mar 2012
    Weblink: http://www.businessrespect.net

    Hi Grainne Thanks for the comment. I think the problem must be specific to the Global Compact, else other membership organisations such as CSR Europe, World Business Council, BITC etc would be losing members at the same rate. Of course, the businesses that form the membership of those bodies tend to be the leaders and strongly committed, whereas the Global Compact has perhaps been pulling in more mid-rank companies who can be persuaded but may not have the settled will. I would say that makes the manner of how they are recruited to be even more the focus.

  • Astrid von Schmeling
    20 Mar 2012
    Weblink: www.onestoneadvisors.com

    Thanks for a very interesting piece Mallen. I think that the UNGC's credibility is teetering for more than just expelling its members. Instead of just kicking companies out, the UNGC made an attempt to structure expectations on corporate signatories, too, by nuancing memberships' COP reporting -- from basic to advanced. The thing is, the UNGC Advanced Level COP was half thought-through. It should have been better aligned with GRI’s 3.1 guidelines and taken tools like the Ruggie ‘Protect, respect and remedy’ framework into stronger account. But they didn’t. As a result, the UNGC has been playing a game of catch up ever since the Advanced Level COP's 24 criteria were published last Feb.. It was issued in two versions over the span of one reporting cycle! I write more about this in my blog at: http://onestoneadvisors.com/fresh/

  • Joanne Frank
    21 Mar 2012
    Weblink: http://www.scope5.com

    As alluded to above, this raises the question of how much pressure companies feel to be accredited or have membership in a CSR organization for the sake of appearances. The Global Compact's statement about expelling participants is troubling. Are the companies on the shame list now more likely to implement a CSR program, or do they just see their expulsion as a PR effort that backfired?

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