Marc Gunther

Kleenex--Wiping Out Forests?

In my CNNMoney.com column today, I look at the battle being waged by Greenpeace and the Natural Resources Defense Council against consumer products giant Kimberly-Clark. The environmentalists charge that K-C has failed to follow best practices in its sourcing of wood, and in particular uses wood pulp from ancient Canadian forests to make throwaway products like Kleenex and toilet tissue. The company's bigger problem may be that it misled the public and its shareholders about its practices. Here's how the column begins:

NEW YORK -- Question: When you wipe your nose with a Kleenex, are you helping wipe out ancient forests?

Answer: That depends entirely on who you ask.

The environmental groups Greenpeace and the Natural Resources Defense Council say that Kimberly-Clark, the world's largest tissue manufacturer, has failed to keep its promises to protect ancient forests in Canada. Kimberly-Clark calls itself an environmental leader. Be warned: digging through the competing claims in this controversy is not easy.

But one thing's evident: Kimberly-Clark's credibility has taken a hit, and that's a problem for the $16 billion a year consumer products firm whose brands include Kleenex, Huggies, Scott, Pull-Ups, Cottonelle, Viva, Kotex and Depend.

You can read the column here.

HP, Spies and Leaks

While there are many things not to like about Hewlett Packard’s investigation into leaks by its board of directors, I’m struck, above all, by the likelihood that the entire enterprise was utterly unnecessary. Among other things, it turns out that the so-called leaks that HP devoted time, money and management attention to were barely worth bothering with in the first place.

My belief, as I’ve written, is that the best way to avoid this kind of thing is to permit directors—and encourage lead directors or independent board chairs—to be more open with reporters. If directors are to be held accountable by shareholders, they need to be able to talk publicly about what they do. They shouldn’t talk about proprietary information, but neither do CEOs when they talk in public. Directors should be able to talk, in general terms, about how the company’s doing, how they approach their work, their oversight of the CEO, etc. Otherwise, they are being paid handsomely by owners who have no way to know whether they are doing a good job. Of course, if this were coupled with shareholder access to the proxy ballot, and competitive elections for director (i.e., true shareholder democracy), all the better.

As for HP. The article that apparently got CEO Mark Hurd and his team of snoops all lathered up ran on CNET in January. It’s pretty harmless. Reginald Brown, a lawyer at Wilmer Hale who represents George “Jay” Keyworth, the so-called leaker, sent me a copy of the CNET story along with about 30 pages of background material that demonstrates that just about everything that Keyworth told reporter Dawn Kawamoto was already on the public record. One quick example.

Kawamoto reported:

"Though HP’s direct sales technology is expected to undergo changes, one thing that’s not likely to happen is a merging of the HP and Compaq PC brands, the source said."

Here’s what Todd Bradley, an HP executive said a month earlier on a conference call with analysts, posted at HP’s website:

As far as, Andy, your question about Compaq and HP, we’ve done and are completing a lot of work to understand what those two brands stand for because they do stand for different things. I think, as we go forward.. you’ll see much better delineation between the two.

Then again, CNET’s Kawamoto did reveal the following about HP's January 2006 management retreat:

Those in attendance worked from early morning to late evening, with few breaks given beyond meals, said a source with the company. "By the time the lectures were done at 10 p.m., we were pooped and went to bed," the source said.

For this, HP spied on directors, reporters and its own employees. Makes you wonder not just about CEO Hurd's ethics, but about his judgment.

What Disclosure Won't Do

The Carbon Disclosure Project yesterday released its 4th annual mega-report at a well-attended event at Merrill Lynch's HQ in downtown Manhatta. Lots & lots of data, about more than 900 companies' carbon emissions, energy usage and practices regarding climate change. Al Gore gave a good talk and Sir Adair Turner, a British environmentalist, delivered a long speech that won't inspire a feature documentary.

But all the talk and the reams of information don't add up to much in the way of real change, as I wrote in my column at CNN Money.

Transparency at Timberland

Last winter, I wrote a column about Timberland's plan to attach "nutritional labels" to its shoes. The company says that all of its shoeboxes now carry the label, "so you know exactly what went into making the shoes you put on your feet." The labels aren't perfect--it's hard, for example, to know how much energy should go into making a pair of shoes, but they are a laudable effort by the company to be more open about its business.

McBlogging

When I wrote a long story about McDonald’s and corporate responsibility for FORTUNE in 2003, my colleague at the time, Joe Nocera, said that the most responsible thing for McDonald’s to do would be to shut down. He was kidding, but he was expressing a view of Mickey D’s shared by liberal elites. What other U.S. corporation has been the target of two Hollywood movies in recent years—Morgan Spurlock’s documentary Super Size Me and Fox Searchlight’s upcoming Fast Food Nation?

The truth is, McDonald’s takes CSR seriously. It offers healthy choices in its restaurants, has worked with environmentalists for more than a decade around issues ranging from packaging to sustainable fisheries, does lots of charitable work, etc. The company is far from perfect—there’s a raging and very complicated controversy about its ties to exploited migrant workers who pick tomatoes in Florida, and giving away Hummer toys in Happy Meals isn’t exactly green practice. But there’s no doubt in my mind that Bob Langert, who runs the corporate responsibility operation at McDonald's, is one of the people inside corporate America who is changing things for the better.

Bob and a colleague, Catherine Adams, have been writing a blog for McDonald’s, and it’s worth a look. It’s an effort by the company to be more transparent and open. Some of what Bob writes strikes me as spin—he defends the Hummer giveaway by saying it’s just a toy—but he also offers insight into the tensions that face a company that’s trying to change its business to meet the rising expectations of consumers and critics. Fitting the blog-writing into his schedule isn’t easy, Bob tells me via email, but he says he’s enjoying the writing.

I am always thinking about my next blog, and the next one. I wish we had more comments, more dialogue, but there is a fair amount of blog activity outside my own blog on what I write, so I think that is good.

Corporate blogging's catching on. I think that before too long, any company that wants to connect with its many stakeholders will have one. The challenge will be to make them authentic--and not just spin.

In Defense of HP's Leaks

You've read by now about the soap opera at HP's board. My colleague David Kirkpatrick thinks chairwoman Pattie Dunn should resign, and I agree. But there's a larger point to be made here about corporate boards' obsession with secrecy. And their lack of accountability.

I dealt a lot with this problem while covering Disney during the Michael Eisner era. Shareholders, I thought, were entitled to know what Disney directors thought of the CEO, his performance and his pay. I tried many times to call, write and email board members. Almost always, no one responded. Eventually, one board member agreed to talk with me privately, for which I will be forever grateful. But why wouldn't anyone else even return my calls?

Mind you, I wasn't looking for leaks or seeking inside information. (Though getting some would have been great!) I was merely asking for directors to speak with me, preferably on the record, about how well they were doing the job for which they are well paid by the owners of the company. I knpw directors, as a rule, don't talk to the press. But they should.

And you know what? If we had true shareholder democracy -- where owners can nominate directors, who would run in contested elections - boards would all of a sudden be more transparent and more accountable.