It seems that the good ol’ Kiwi DIY gene is to the fore when it comes to answering that question. Of course we’re good. We behave in a way that is responsible: to our shareholders, employees, communities, suppliers and the environment. We don’t need some external body checking us out, thank you.
In a world increasingly conscious of the need to breed good corporate citizens, is that enough?
It all hinges on what ‘doing good’ means in today’s business environment. And there’s some suggestion that corporate ideas around goodness have matured.
Waikato Management School’s professor Juliet Roper pinpointed the change when she presented a paper at a Reputation Institute conference in Amsterdam earlier this year. In her address, Roper cited a 2007 BusinessWeek Online article, ‘Beyond the Green Corporation’.
According to Roper, BusinessWeek had noted how big corporations have shifted both their practices and their attitudes regarding sustainability reports.
Significantly, these reports were said to have moved from “a concern with corporate image” to a far greater understanding of the strategic advantage of improving both social and environmental practices.
That’s all very well but, given current economic belt-tightening, shouldn’t companies focus on financial survival first? And, realistically, how much dosh do some firms have left over for all this other stuff?
Maybe we are at a cross-road. More and more companies know they need to pay serious attention to triple, or quadruple, bottom line reporting. Yet fewer of them can afford to do much more right now than fret over the financials.
Journalist and author Rushworth M Kidder turns this argument on its head. In his latest book, The Ethics Recession: Reflections on the moral underpinnings of the current economic crisis, he argues that, with each passing day, the current economic crisis is shifting from issues of money to issues of integrity.
As he sees it, behaving well – and being able to prove it – is more, not less, important now.
This line of logic is clearly close to Jane Arnott’s thinking. As the local country manager for GoodCorporation, Arnott is spearheading a drive for New Zealand companies to adopt a “straightforward and transparent” method to measure their impacts in a credible way.
Unlike other organisations that may focus more narrowly on, say, customer relationships, environmental concerns or financial stakeholders, GoodCorporation runs across the whole range: pulling it all together into one holistic view.
“Imagine the beauty,” she says, “of putting your company up for sale and being able to say, ‘here are the annual accounts, and here is a report which goes across 64 business practices straddling everything from ethics and social responsibility to sustainability’.”
Arnott draws a direct link between the global financial crisis and the rise of corporate social responsibility. She argues that we need to be mindful and manage our business relationships in relation to two key global drivers.
“The first is what has happened with our financial markets and this has led to a breakdown in trust,” she says. “Trusting relationships are critical for longevity of any relationship. To understand the level of trust in your relationships is to get a better insight into the culture and values of your operation.
“The second driver is environmentalism. Green marketing has proved to be a tool to differentiate companies and their products but we are getting more and more exaggerated claims and less and less clarity.”
There are obvious parallels between this scenario and increasing concerns that New Zealand is in danger of losing its ‘clean green’ image due to lack of systematic regulatory control.
In her conference paper, Roper warns that “without integrity”, New Zealand’s branding of itself as ‘100% Pure’ is a high-risk strategy.
If, at both the national and organisational level, we are to move beyond rhetoric to practice, it makes sense to be able to prove our credentials. Here’s where the Kiwi DIY gene kicks in. At some organisational level, we’re baulking at the idea of calling in someone else to tell us how good we are.
For a start, it’s not cheap. We’re now into serious ‘how long is a piece of string?’ territory here. At GoodCorporation, for example, dollars are dependent on the number of employees and the extent to which a company would need to tailor an existing survey to its own specific purposes.
Arnott says a GoodCorporation audit and assessment of a company with fewer than 50 people may cost around $5000 to $10,000. Scale that up for a larger company and costs can grow to anything from $45,000 to $70,000 to over $100,000.
Ross McDonald lectures on ethical issues and the relation between business functioning and social outcomes at Auckland University’s Business School.
He agrees the Kiwi DIY gene is alive and kicking. But he questions the extent to which our organisations have thought through their reluctance to submit themselves to third-party verification of their goodness.
Rather than having any developed rationale against such a move, says McDonald, most organisations still haven’t clicked to the idea that an external check would be important, or even relevant, to them.
McDonald reckons the fact that the notion isn’t yet on the table for discussion stems from a lack of broad foresight. “We don’t appreciate how much the world is changing and how much these dimensions of organisational performance are becoming important issues overseas.”
Arnott points out that “with the best will in the world”, human nature still means we can be very “biased, self-selective and self-serving” in judging our own performance.
“We normalise things over time. If you’ve worked in a company for years, you begin to accept certain styles of behaviour, patterns of interaction and ways of doing things. So having a third party come in opens the way for more objective, dispassionate benchmarking to occur.”
Arnott sees a “massive opportunity” for whole business sectors to re-establish trust and to repair reputational damage.
There’s our dairy industry, for starters, which took a battering from negative publicity around Fonterra’s melamine debacle in China last year.
Then there’s the finance sector. “There’s no downside in being the first finance company to have an ethical audit and assessment,” says Arnott.
Gill Cox is well versed in the numbers side of the business. He has been a member of the New Zealand Institute of Chartered Accountants (NZICA) for around 40 years and a company director for some 18 years. He, too, sees a clear and growing convergence between a company’s financial performance and its ability to meet wider societal ethical standards. To his mind, any New Zealand company that wants to be a long-term player must meet those standards.
He describes Kiwi corporations’ DIY approach as the “classic New Zealand way”. “We know we’re right. We know we do it well. We know we’re ethical and moral and have huge integrity,” he says.
“But the question I ask is, if we’re so right why would we have a problem with someone else checking it? Other people in other countries will get a higher level of assurance by someone else measuring us against some objective standards.”
Cox suggests pressure from international markets will drive some of our larger organisations to take the plunge: enticed, perhaps, by the possibility of gaining early adopter status here too.
McDonald sees the plethora of choice and lack of an absolute set of standards as both a blessing and a curse.
“In one sense, there’s a problem. And the sort of work that Jane Arnott and GoodCorporation have been doing is very constructive in terms of putting a good degree of well-thought-out structure around those things,” he says.
“But in other ways – particularly when it comes to responsibilities towards the community, for example, it’s difficult to set in stone a certain set of outcomes that organisations must achieve.”
McDonald believes we’re setting ourselves up for trouble if we define desired outcomes in overly concrete terms.
He also worries that the process may become unwieldy or cumbersome. “It can undo various innovations that might sit outside the box: because the more we tend to bureaucratise these things, the more we tend to simplify them. And the approach can become a bit of a sledgehammer.”
McDonald argues that if organisations are acting in the right spirit, they can identify good programmes, initiatives and innovations that are very constructive by their own criteria.
“But the most important thing that lies behind that is the genuine spirit to do good. When that is the case, ways can be found to do it well.”
So does this take the argument full circle? Does this mean we can throw out any idea of third-party verification and merely assert that our organisational spirit is noble, genuine and good?
Nice try: but not quite. McDonald says third parties play an important role in validating outcomes. As with any business practice, organisations need to know whether or not their “doing good” is effective.
McDonald’s suggestion? Don’t sit around waiting for some external organisation to appear with a magic set of criteria to which you must conform. Instead, become actively involved in developing standards yourself.

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Wools with ethical pull
When trying to pick an accreditation system, listen to your customers. And to your customers’ customers. That’s the advice from Gretchen Kane, international marketing manager for New Zealand Merino (NZM).
As the marketing arm for our country’s merino wool fibre producers, NZM positions itself as a top-notch operator, dedicated to high quality and ethical behaviour.
So how does it not only ‘do good’ – for want of a better phrase – but actually prove it to people on the other side of the planet?
Kane says a ‘good’ company listens to its market and understands what its customers and end-consumers are demanding.
“For us, both markets are clearly signalling that factors of sustainability such as environmental care, social responsibility, the way that a business treats its employees and animal welfare… all of those things are becoming really important.”
In 2005, New Zealand Merino introduced its Zque ‘ethical wool’ fibre brand. The brand combines natural performance wool with an accreditation programme that ensures environmental, social and economic sustainability, animal welfare and traceability back to source.
Now, says Kane, Zque is NZM’s major communication strand and, as such, is positioned to be clearly visible to the market.
“We call it a substance brand because in today’s market we believe our customers and consumers want a higher degree of verification around good practice or best practice or however you want to coin it. Essentially, people want proof.”
NZM backs up its Zque brand with a series of other initiatives. These include third-party auditing systems and on-farm accreditation, verifying the impact of merino farming on bio-diversity and investigating ways to improve animal welfare.
Kane says NZM is now in the “very early stages” of looking at the GoodCorporation audit and assessment programme.
“Often we find third-party auditing is viewed much more credibly in the market. So using an existing standard that already has credibility is a good approach to take.”
Kane understands how companies can be put off by the sheer number of accreditation systems from which to choose.
NZM, she says, has only investigated a few business audit systems but it has delved into the pros and cons of a lot of supply chain accreditation systems.
“You have to find out which set of standards is going to fit with your company and the way you do business. Which one is going to give you direction for growth, improvement and change? Will the system evolve over time?
“Yes, there’s some risk in being a market leader. When we introduced Zque it took a while to get any payback or additional traction in the market. But that has certainly come through for us now… and the world has gone in the direction that we anticipated.”

Ruth Le Pla is a freelance business journalist and a former editor of NZ Management.