RyanAir, the airline I love to hate is in hot water. Not content with running a business that feels more like an overpriced mobile shopping mall, RyanAir has been ordered to withdraw an advert deemed socially unacceptable by the Advertising Standards Authority. The advert, which featured a model clad in attire more like you’d expect to see on a porn DVD cover, was run in the the Herald, Daily Mail and Scottish Daily Mail. It prompted 13 protests. This from the BBC:

After an investigation, the watchdog ruled the advert breached the advertising code’s rules on social responsibility and decency.

“We considered that her appearance and pose, in conjunction with the heading ‘Hottest’, appeared to link teenage girls with sexually provocative behaviour and was irresponsible and likely to cause serious or widespread offence,” the watchdog said.

RyanAir, refused in what has become something of a pugnacious attitude towards any regulator. It claimed the Advertising Standards Authority was acting as censor. Neville Hobson, quoting from responses to the report views RyanAir’s cavalier attitude characterises the episode as something of a PR disaster:

It also displays a little arrogance where some humility might go down better: referring to the regulator as a “bunch of unelected self-appointed dimwits” is hardly going to get you much sympathy.

Commenters to Neville’s post broadly agreed. They said however that in the end, RyanAir’s posture almost guarantees they get plenty of free media coverage (sic) but that people will still check out their prices and book flights.

It seems to me that if a company doesn’t care then it is difficult to see what can be done. The obvious answer is massive financial penalties embodied in law with no right of appeal. Some will argue that smacks of interference. Maybe so but if that’s what it takes to bring a brand into line then I’m for it.

Perceptions matter but when management chooses to stick two fingers up at regulators, then you have to wonder who is the more cynical. The brand or those who buy from them? More to the point, if it doesn’t cares about who may be offended by its advertising, then what other liberties might it be taking?

In the meantime, I try hard to avoid flying with this airline. It blames government at every turn for higher airfares yet often seems determined to wring the last penny out of its passengers.

Last year, Shai Agassi, best known as SAP’s product leader became impatient at the thought of waiting five years for the top job. He left and turned his attention to alternative fuels. Last week at DLD in Munch he met up with an old friend of mine Mark Charmer who leads the eco-group The Movement Design Bureau. Mark isn’t impressed by past credentials and that shows up clearly in his blog post about their discussion:

When we talked on Tuesday in Munich, Agassi demonstrated naivety on the complex interplay of social and cultural factors changing how people move. His rhetoric is full of the need to power the commute, but any argument that information technology is dramatically changing structural factors shaping where, when, why and how we work gets short shrift:

“I

I recently listened to Lisa Nolan talk about doing business in China. Lisa runs Lizal Inc, a US based full service merchandise manufacturer for brands like Coach and Wal-Mart. The company has manufacturing offices in Guandong and Taiwan. The business employees between 4,000 to 8,000 people depending on the season. Lizal can take anything from a napkin drawing to a fully specified drawing and turn it into goods that span everything from event promotional items to high end retail goods.

China’s economy is booming, helped in part by $27 billion worth of exports to Wal-Mart stores. But doing business in China is not simply a matter of setting up shop, hiring cheap labour and supplying goods. According to Lisa, there are many compliance issues that American companies have to overcome: “US companies take compliance very seriously. If a light over an exit sign at your factory isn’t working you can get written up as being in breach of compliance requirements. A lot of times it is the little things that catch you out.”

The compliance rules of some companies are so strict that making it over the barriers is not only onerous but costly: “In some cases, compliance can eat up 30 per cent of your first year’s revenue. That’s tough but the long term rewards are worthwhile - if you’re prepared to do what customers require.” Asked why companies are so stringent, Lisa says that in recent years, brands have become aware of the potential reputational risk to which they expose themselves. Last June, the New York Times asserted that:

Over all, the number of products made in China that are being recalled in the United States by the federal Consumer Product Safety Commission has doubled in the last five years, driving the total number of recalls in the country to 467 last year, an annual record.

These are emotive issues that capture the public’s attention so for Lisa, staying in line is one of her most important agenda items.

During our conversation, Lisa said that her business is subject to third party audits as a way of ensuring her facilities are in line with what is agreed. “Sometimes these involve outside accountants who check our payroll records to ensure we’re paying a proper wage to our staff.” This led me to speculate whether auditors might be getting two dips at the same pot. I asked Lisa if she knows whether the information gathered for customer audit was available to financial auditors for her own company accounts. She thought they were separate issues - which they are - but it strikes me that auditors could save their clients money if those kinds of record were passed across as part of the annual financial audit review process.

The biggest problem faced by manufacturers is that each brand has its own compliance rule book. This means there is a separate set of procedures to overcome for each company supplying brands which drives up compliance cost. Some companies are looking towards SA8000 as a way of providing a single international compliance standard for social accountability. Of her own company, Lisa says “We’re still researching to see if that certification is something that would benefit us.”

Given the hurdles, is it all worth it? “Our customers are very protective of their supplier facilities. Many companies take one look and say they won’t bother. We on the other hand have benefited greatly from doing as we’re asked. It’s all about the rewards that go with a good reputation for doing the right thing.”

Davos aka the World Economic Forum is underway. This annual get together of the great, the good and not so great or good is being fanfared with the strapline: The Power of Global Collaboration. Sounds wonderful doesn’t it until you realise what is not on the agenda. This from Bob Jacobson at Corante who is not attending:

So how real is the Davos commitment to innovation?

First, what options and alternative are permitted to be discussed at Davos? Is creating and funding a global economic safety net, as the UN has proposed, on the table? What about a more equitable distribution of global wealth? How about rich nations taxing themselves for their disproportionately enormous economic and environmental demands on already terrifically strained physical and social environments, then putting the revenues in a global fund to deal with real global problem-solving? Is unbridled immigration from poor nations to rich an open option? A world government? A universal social democracy? Corporations devoting 25% of their income (not just five percent of their profits) to fighting climate change? Not surprisingly, these options are non-starters at Davos.

Pretty damning stuff but Rob makes good points. From the relative comfort of our homes global problems often seem far away and irrelevant. It is all too easy to turn a blind eye yet I am starting to come across companies that take this stuff seriously. Later this week for instance, I plan to publish a story about how compliance around worker rights matters in a global economy and how some well known brands are taking this seriously. Similarly, I’m seeing more companies asking important questions about sustainability. It is happening in the most unlikely of places.

Read what James Farrar has to say about a recent trip to Nigeria. He paints a rosy picture but one tinged with a healthy dose of reality. As he says:

I think the changes we are seeing with the rapid development in BRIC and N11 countries is more fundamental and we have to look beyond on our own western bias to understand them.

We do well to listen to people like James.

As promised and given that yesterday’s dog and pony show by Apple CEO Steve Jobs was somewhat underwhelming, I thought readers might be interested in Greenpeace’s latest ’smack ‘em between the eyes’ approach to raising issues. While the video (which I can’t embed right now - sorry) might be regarded as borderline work safe, they make a powerful message of which we should take note.

Speaking of which, when was the last time you thought about switching off a server at a holiday period or at a weekend? Never? I can hear the howls of abuse coming from IT already about the damage to be done to machines, the time it takes to load corporate software etc etc. If that’s true then why are you not looking at the economies to be derived from cloud computing?

In the meantime, until the sunshines out of your derriere…

Governance, risk and compliance which conveniently contracts down to a Gartner compliant TLA - GRC - is one of the hottest topics in the enterprise world today. If the Enron, Tyco and other financial scandals were not enough, the popularity of all things ‘green’ has put GRC close to the top of agenda in many CXO offices. But as always with a new acronym, people want to know what it means. Read more