GRI Equity - integral investing

The major issue that rose up in November is global food/agriculture management: Most importantly liberalisation of regulation of genetically modified seed took place, despite much negative press and in the face of scientific evidence - the result will be catastrophic loss as now being seen on some farms in the US which have been using GMO for two decades. Also trade liberalisation of agricultural commodities is known to be the simplest course of alleviating poverty in emerging economies but the Doha trade round appears stalled by bureaucracy.

In Europe the payout agreed in November to a tiny minority of businesses (subsidised sugar farmers) for a long time predictable event is further evidence of unacceptable failure of ethics and governance which is costing EVERYONE ELSE a multiple of the nominal payoff (i.e. the millions in subsidies). And the allowance of GMO is plainly criminal in light of the evidence and recent news such as that from California that "roundup ready" seed has made land unusable after transgenic pollination. There is more on this in the section on Holonics and LOHAS.

And the reality that smacked us in the face is the unnecessary inequalities within our developed economies which provided the fuel for emotional and violent eruptions in France. Yesterday it was Theo van Gogh, today it's the suburbs of Paris. The problems in France are symptomatic of the problems of privilege. Its the same as ghetto violence in South Central LA. Its not about race. Who in France or any other European country can claim to be of the blood of that country, except in metaphorical terms. Even the Queen of England is of Germanic lineage! The most that can be said is that we come from our mothers. The problems in France are to do with greed and envy. People in communities are naturally distressed if they have no opportunity but the neighbour appears to have it easy. Only when the economy of France, or anywhere else, is buoyant enough to support the whole population, and does so reasonably equitably, tension will subside. But the potential for tension is rising with immigration from the south, both Africa or Mexico/South America. Young men in Africa have no jobs (often they have been eroded by agricultural subsidies) but see TV and other media telling them they might have a chance over the border - so they risk their lives to move to the European suburbs. In Ireland we saw problems is of the same cause but different symptoms, where immigrants get jobs because they perform better than "locals" - the strife over Irish Ferries changing its ship staff from Irish to central European is the high profile illustration.

More practically one should ask: Why is there so little tension in the global village? Because the millions starving in Africa are not next door. They are coming closer - refugee migration is significant and growing. But until they are within our lives, like the people next door, we'll continue to nail their farmers to the floor with subsidies, destroying their food systems to grow wheat for our fat little children (I have 4), paying $/€ 2 a day to have our shirts and jeans stitched in China while demanding a minimum wage because otherwise we can't afford modern conveniences.

To be fair, its not our fault. We just do as we're told. If things are going to change it has to be the rich who modify their behaviour. Oh, you mean like me? Like the hundreds of delegates going to Hong Kong for Doha to stay in fine hotels, eat luxurious food and decide to continue to subsidise rich farmers? Or like Bob Pitman of the US whining and arm twisting and bribing a deal for China to rein in their booming clothing and textile shipments to the United States until 2008? Ah well! as we like to say in Ireland, another fat country with massive agricultural subsidies (see box).

In his final speech as president of the Royal Society, the UK's top scientist, Lord May of Oxford urged scientists to speak out against fundamentalism, especially the climate change "denial lobby", warning that core scientific values are "under serious threat from resurgent fundamentalism, West and East".

"Ahead of us lie dangerous times. There are serious problems that derive from the realities of the external world: climate change, loss of biological diversity, new and re-emerging diseases, and more. Many of these threats are not yet immediate, yet their non-linear character is such that we need to be acting today. And we have no evolutionary experience of acting on behalf of a distant future; we even lack basic understanding of important aspects of our own institutions and societies. Sadly, for many, the response is to retreat from complexity and difficulty by embracing the darkness of fundamentalist unreason."

Lord May notes that fundamentalism applies not only to organised religions but to lobby groups on both sides of scientific debate such as climate change and GMO debates. The climate change "denial lobby" and non-governmental organisations (NGOs) opposed to nuclear power are not exempt from a denial or misrepresentation of scientific facts, he told reporters in London. The huge problems with nuclear power had to be weighed against the problem of putting more carbon into the atmosphere and the future potential of land and sea turbines, he said; "rather than ruled out of discussion on what you might call some fundamentalist belief system".

He also noted another danger to the enlightenment of science comes from the growing network of fundamentalist and lobby groups in the US that campaign for creationism to be taught in science classes. He called on scientists to take a more active role in speaking out against so-called "intelligent design" and other threats to modern scientific values. "The only thing I can see scientists doing is being more energetic as citizens - getting out there and trying to convince people that that's not a very wise way to behave," he explained. "That's no easy recipe."

By strange coincidence in November, I came across The Declaration of Interdependence published at the Earth Summit in 1992. It is timely to recognise the fundamental dynamic of interdependence as a higher order system characteristic than independence in modern times when global interdependencies are so critical to our lives, even life. Today we behave as if ignorant of this new dynamic, though the wind of change is felt everyday noticeable by new and more used vocabulary of organic, integral, sustainable, ethical, interdependent, ... holonic. It reflects the critical thinking needed in this world where our daily actions are rocking the biosphere.

Geopolitics

Conciliation attempts in Palestine/Israel seem to be slowly bearing fruit as intractable positions are slowly released. The compromise on Gaza border security (in which the UN will manage transit with Israeli authorities in an observation post some quarter of a kilometre away) was successfully catalysed by the US. And the metamorphosis of Ariel Sharon from a war mongering general to an enlightened peace negotiator is heartening. It will take time and many more little steps to help the region, but positive momentum has been built.

The issue of Taiwan's independence from China was enflamed. The US President visiting Asia hailed Taiwan as an example of a society that had embraced freedom to boost economic prosperity. China responded that the U.S. shouldn't meddle in Taiwan and should refrain from supporting independence for the island. At the APEC summit of Asia-Pacific leaders in South Korea (another country of a people divided) Taiwan's representative Lin Hsin-i, said "Taiwan is a sovereign country, as President Bush said. People are concerned over whether there will be peaceful development of China or whether China will use military hegemony."

But China has a dangerous role model in our superpower. The US, the spokesperson for democracy, has made its own human-rights record a subject of legitimate debate. While in Asia the US President called on China to expand its social, political and religious freedoms! In Panama, the US President tried to explain to why he would veto a bill banning torture, but no “We do not torture.” The US Vice-President tried to exclude US spies from a ban on torture. The US Secretary of State is trying to explain that the US is not torturing prisoners at its secret prisons in Asia and Eastern Europe—though of course it cannot confirm that such prisons exist.

The trial of Saddam Hussein is becoming a tragicomedy. Three defense lawyers have been assassinated. The trial has been delayed several times. Saddam complains of brutality and a lack of access to simple amenities for preparing his case. A big question is why the trial is not being held in an independent location, such as the Hague as with previous military trials, such as those after the Second World War and recent atrocities in Bosnia-Herzegovina. According to an AP-Ipsos opinion poll, 57% of Americans do not think the administration has high ethical standards and do not think their President is honest! (The survey of 1,000 adults has a margin of sampling error of plus or minus 3%.)

Members of the Human Rights Foundation conducted their first meeting in New York in November, stating that their goal was to spread human rights and democracy throughout the Americas. Controversially, they said that traditional human rights groups such as Amnesty International and Human Rights Watch are pursuing an ideology opposed to free market capitalism and undermining the changes necessary to spread liberty around the world. They will no doubt find that ideals have value which can command economic flows as they get stuck in to their new project.

The German parliament has elected the leader of the conservative Christian Democrats, Angela Merkel, as the country's first female chancellor. But the big news is that she is appropriate for the job in hand and already appears to be building conciliation and momentum.

Risk and Terror

US forces in Iraq have used incendiary white phosphorus against civilians and a firebomb similar to napalm against military targets, Italian broadcaster RAI reported. A documentary showed images of bodies recovered after a November 2004 offensive by US troops on Fallujah, which it said proved the use of white phosphorus against men, women and children who were burned to the bone. White phosphorus is used by the military to conceal troop movements with smoke, mark targets or light up combat areas. The use of incendiary weapons against civilians has been banned by the Geneva Convention since 1980. But the US did not sign the relevant protocol to the convention.

In the US itself fear has not been managed well. Jose Padilla, a US citizen held without charge for more than three years as an enemy combatant, has been charged with planning to undertake "violent jihad". But the indictment does not mention that allegation, accusing him and four other people of conspiracy to kidnap, murder and maim US citizens overseas. He was arrested in Chicago in May 2002 on suspicion of planning to explode a radioactive "dirty bomb". The charge came as another American Ahmed Omar Abu Ali, 24, was found guilty of nine counts including plotting to kill President Bush and to hijack a plane and was convicted of belonging to al-Qaeda.

The death of two Japanese teenagers is believed to have been caused by the antiviral drug Tamiflu, which is being stockpiled by governments around the world as a defense against bird flu. According to Health Ministers and other medical sources, it appears that the drug induced hallucinations and dramatic shifts in behaviour in the boys, which led them to commit suicide. Whether or not this is melodrama or science, the uncertainty is another illustration that knee-jerk reactions and solutions are not sufficient to the problems created by over indulgent consumerism. Better systems are needed, in this case, such as incorporating animal welfare in agriculture and food production.

Investment, Finance & V. C.

By coincidence, since focusing our business and culture on holonics last month, two leading publications have referenced this emerging science. Booz Allen Hamilton have devoted a website, orgdna.com to a model which uses some whole systems thinking to describe organisation types and behaviour and how to improve them. The CMA also published their balanced scorecard approach - another tool to broaden business analysis (discussed below). And the Venture Capital Journal published a cover story on the use of coaches and psychologists to manage internal problems: "VCs are increasingly turning to professional therapists and mediators to achieve the elusive objective of managing their internal struggles. These clubby capitalists haven't gone suddenly soft. They are on a self-improvement swing with no end in sight, thanks to their heightened appreciation that not addressing underlying tensions at one's firm can have far worse implications than seeking outside help." You can see a summary of Astraea's model of emergent intelligences in organisations and people here.

When global liquidity starts to decline, according to the laws of economics, either GDP growth will slow or financial markets will suffer, or both. Niels C. Jensen, Partner of Absolute Return Partners says that "It is virtually assured that a significant deterioration in global liquidity will cause some sort of crisis somewhere. It always does." As GaveKal quips, "We are rapidly moving to a period of more fools than money. And in such times, fools and their money are soon parted."

The worry that inflation will erode the value of bonds and shares, may be offset by currency strength. And safe haven commodities have done well to date, but may be leveling off.

The new German coalition unveiled its policy, which has some bold initiatives. Here are some key points: A 3% rise in VAT, higher income tax for top earners, no protection from dismissal for the first two years in employment, pensions are being frozen, subsidies for first-time home owners are being scrapped and for the first time since the war, the budget deficit will not adhere to Germany's constitutional rules. The conservative leader also said she wanted to treat smaller members of the European Union more fairly, and to maintain strong ties with neighbouring Poland and France. More good news for Germany.

Japan's economy continues to be buoyant and investors are flowing in. Goldman Sachs for example has made around 8 significant direct investments in Japan this year. The Nikkei share index has touched the 15,000 mark for the first time in five years, as strong demand for domestic shares continued. Recent data shows industrial output up, improving production and household spending, and more people seeking work. Industrial production rose 0.6% in October from a month earlier. Analysts are optimistic about the outlook for output, after a period in which companies seemed to have been selling off stock rather than boosting production. A separate government report showed that spending in households with a wage-earner rose by 1.3% in October from a year earlier. Japan's economy has bounced back this year as a pick-up in consumer spending and capital investment has made up for a slowdown in exports, particularly to China. In November the OECD upgraded Japan's economic outlook, saying its domestic demand is recovering, along with corporate profits and employment. The OECD expects Japan's economy to grow at 2.4% this year and 2% in 2006, up from previous forecasts for 1.5% growth in 2005 and 1.7% next year.

We came across a smallbusinesseurope.org, a useful site of information particularly relevant to EU regulation and economic conditions. The Issue Tracker is comprehensive in itself. It does have a UK perspective which means UK particularities are covered, but covers general EU subjects well.

Responsible Investing

A report commissioned by UNEP FI and prepared by Freshfields attorneys dispels the persistent myth that laws prevent fiduciaries from considering environmental, social, and governance issues. The often used excuse that fiduciary duty precludes environmental, social, or governance (ESG) considerations in institutional investment decisions was demonstrated to be false by a report released at the United Nations Environment Programme Finance Initiative (UNEP FI) Global Roundtable last week. The report, entitled A legal framework for the integration of environmental, social and governance issues into institutional investment, was conducted pro bono by Freshfields Bruckhaus Deringer, a London-based global law firm.

Venture Capital

When I first started in VC 20 years ago I was attracted by the stories of creative business development and the passion of the players - my first job included work for Richard Onians looking at an investment in Richard Noble, land speed record holder who was building a private jet business. Perhaps I was naive, but professional VC seems to have changed to become over-focused on windfall type returns. It seems to be attracting more "finance types" with little sensitivity to the breadth of needs of growing a business that adds value and succeeds for generations. Tom Hicks seems to have come to similar conclusions.

Tom Hicks, the 59-year-old LBO dealmaker who helped popularize the “build-and-buy” model of investing and founder and former chairman of Hicks, Muse, Tate & Furst, has changed his stripes and sounds like an integral investor. Hicks is concerned with what he terms The X Factor. This means that he would not be satisfied with a 2x over 3-year return that would translate into strong IRRs for most private equity firms. Instead, he is looking for 10x over a 10-year holding period. He has left HMTF but now invests via his family office. Why would he rather invest via a family office than through another HMTF fund (pre-marketing is just gearing up for HMTF VI)? The basic answer, he says, is that the fund structure itself had become too constrictive. LBO firms, he believes, are forced to bow at the idol of IRRs, because high paper returns are required to feed the beast (i.e., raise the next fund). “We have a much longer-term investment holding period than HMTF or other LBO firms,” Hicks explained. “Our goal is to build long-term value, not IRRs.”

For an anecdotal review of the PE industry including comments on Refco and the PE overhang, see a BusinessWeek article here. And this NY Times article is another view, perhaps a little more rigorous, offering another perspective on the PE market. Take both perspectives with a pinch of salt. Having just participated in a PE survey I am particularly alert to the fact that there is no black and white, but a spectrum of colours and success is mostly dependent on particular choices at the front line, especially in the world of VC, not on revising one's mission statement or another cosmetic change.

As noted above, the Venture Capital Journal this month explores how VC firms are turning toward professional therapists or mediators to handle particularly thorny problems. Find the preview here, and a full list of November stories here.

Homegrown Naturals Inc., a Napa, California-based owner of natural and organic food brands, has acquired Annie’s Naturals, a North Calais, Vt.–based maker of all-natural and organic salad dressings and condiments. No pricing terms were disclosed for the deal, which was facilitated via an additional investment by Homegrown majority shareholder Solera Capital.

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Interest Rates and Currencies

The decline in global liquidity alluded to in the section above may also lead to a strengthening of the dollar as in the past. Ed Yardeni (yardeni.com) shows a strong negative correlation of liquidity with dollar strength, and scenarios for this should be built in to your strategic planning.

Commodity prices have been climbing. Precious metals have often been a safe haven in times of uncertainty. Gold prices have passed the $500-an-ounce mark, It is at its highest level since February 1983. More gains are predicted as investors look to protect themselves against inflation fears. Platinum topped the $1,000-an-ounce level. Industrial metals have also been under pressure as strong demand from Asian economies for metals has been squeezing supply at a time when producers are finding it difficult to boost output. The copper market has also been trying to interpret stories and data from China where industrial demand and significant trading positions have created price uncertainty. Whether your prognosis is for short or long term seller or buyer what is evident is that volatility is up, in fact basic risk is higher because of the deterioration in market information.

Trade and FDI

The Doha round is increasingly embarrassing for us all. To quote Jean-Pierre Lehmann, Professor of International Political Economy and Founding Director of The Evian Group:

In 1937, Cordell Hull, at the time President Roosevelt's Secretary of State, wrote of his "belief that enduring peace and the welfare of nations are indissolubly connected with friendliness, fairness, equality and the maximum practicable degree of freedom in international trade". This has often been quoted. From the ashes of World War Two, the architects of the global trading system sought to prevent a repetition of what had occurred mainly through the strengthening of both principles and institutions of international economic activity.

To that end, the principle of non-discrimination, which is THE core principle embedded in the GATT and the WTO, has been rightly described as perhaps the most enlightened, innovative and radical contribution to global governance that occurred in the whole of the 20th century.

As we stand on the threshhold of the 21st century, perhaps one of the greatest causes for alarm is the erosion of the principle of non-discrimination and indeed the acute intensity of discrimination in many different pernicious ways.

Let me give the more flagrant and alarming:

1. Discrimination Against Developing Countries

This point does not require too much elaboration as it is - or certainly should be! - well known. The playing field is heavily tilted against developing countries in all sorts of ways, by no means only in agriculture, but also in labour intensive products. There is in fact here a double-discrimination. Poor countries are discriminated against because of high tariffs and other barriers, while poor citizens of industrialised countries are made to pay more for essentials (such as clothes) than would be the case if tariffs were lower. Just one out of countless examples: in 2002, imports of gems and jewellery into the US amounted to $17.1 billion for which tariffs of $181 million were paid; in the same year, imports of baby clothes amounted to $1.9 billion, for which tariffs amounted to $187 million. This is wrong, wrong and wrong. Gems and jewellery are luxuries, baby clothes are essential. Economics cannot be divorced from ethics. Every effort must be made by everybody (including you!) to press governments to cease these discriminatory practices.

2. Discrimination Through Growing Bilateralism and Preferential Trade Agreements (PTAs)

There has been an immense proliferation of these PTAs in the last few years, partly due to the understandable deep frustration with the apparent paralysis of multilateralism. However, just as multilateralism aims to uphold the principle of non-discrimination, PTAs are by definition discriminatory. The spread of PTAs intensifies discrimination against poorer countries. Thus, in South-East Asia, for example, all trading powers will be keen to sign a PTA with Singapore (as many are doing), but Laos and Cambodia will be shunted aside. The same applies to Chile in Latin America as opposed to Bolivia or Paraguay. In an article in the Financial Times ("Bilateral deals destroy global trade", 4 November, 2005), Dr Victor Fung, Chairman of Li & Fung and Co-Chairman of the Evian Group, pointed out how "bilateralism distorts flows of goods, throws up barriers, creates friction, reduces flexibility and raises prices". The most likely scenario of a continued stalemate of Doha will be the replacement of the non-discrimination based multilateral system with a plethora of discriminatory PTAs. Is this what we want? If so we should be clear that we will be perilously regressing to a 1930s scenario.

For more please go to eviangroup.org

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Energy

Oil prices continue to hover around $ 60 a barrel. While winter in the northern hemisphere started off mildly, we still have three months which can get bad and can force the price up.

The International Energy Agency launched its World Energy Report 2005. William C Ramsay, deputy executive director of the agency, said world energy resources are adequate but that a lack of investment has led to tightening of supplies in recent years. The report gives an optimistic outlook for future prices, saying that by 2010 a barrel of crude will average around $35 at 2004 prices. This is just below the $36.33 average at which oil traded that year and almost half the $65 peak reached in September of this year. However, world energy demand is projected to increase by over 50pc between now and 2030 and an investment of $17 trillion will be needed over that period to secure supplies to consumers. It says the world has seen "years of under-investment" in both oil production and the refinery sector. The IEA adds that oil prices will "substantially" rise unless there is extra investment in oil facilities. The need for consumers to use alternative fuels continues to increase.

Whether or not you believe we have reached Peak Oil (Hubbert's Peak in Oil) it is imprudent not to include this scenario in strategic planning.

Matthew Simmons, chairman of Simmons & Co. International, an energy-industry investment-banking firm, says, "This is a [fuel] shortage where demand exceeds supply. The two shortages in the '70s were artificially induced." Back then, OPEC was powerful and disciplined enough for Middle East oil producers, angry about U.S. support of Israel and the Shah of Iran, to be able to simply turn down production. But now a confluence of trends has made oil shortages inevitable, not optional." (Time article here.)

Car makers seem to be waking up, or at least trying to catch up with Toyota and Honda in the alternative fuel market (though GM may be past resuscitation). At the 2005 Tokyo Motor Show car makers practically ran over one another promoting their versions in attempts to catch up with Honda and Toyota, the technology's pioneers. Russell Long a hybrid owner: "If petrol was 10 cents a gallon I would still buy a Hybrid. Guys who drive Hummers need to understand those vehicles are symbolic of what is wrong with this country [USA]."

Perhaps this humourous (though crude!) repartee will encourage planning for alternative scenarios: "I went to the Service station the other day and asked for five dollars worth of gas. ... The clerk farted and gave me a receipt."

Climate Change and Environment

The latest annual World Energy Outlook report from the International Energy Agency (IEA) also says that global greenhouse gas emissions will rise by 52% by 2030, unless the world takes action to reduce energy consumption.

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IT

The international arguments over the future of ICANN and the internet continue. The US body which oversees the workings of the internet is being challenged over its handling of the .com domain. The Internet Corporation for Assigned Names and Numbers has decided to allow the private firm Verisign to maintain control of .com forever. World Association of Domain Name Developers, a trade body for internet businesses says the deal between ICANN and Verisign breaks US anti-trust laws. It has filed a lawsuit against the two parties in San Jose, California, alleging the deal creates a monopoly of the .com market. The agreement "provides for the automatic renewal of the agreement and thereby precludes competitors from ever entering the .com and .net domain name registration market", said the filing. The filing also accuses the two sides of price-fixing, arguing that the deal allows Verisign to raise prices at double the rate of inflation.

Fear. You can just feel it in the air, can't you? There is fear everywhere that Google has become too powerful. As John Battelle notes, the tide of public opinion is starting to turn from loving Google to fearing them. He notes in a Web Pro News article that "History is about to repeat itself. A successor to Google's throne is waiting in the wings - it's Wikipedia, King Disruptor III. Like its predecessors, Wikipedia is powerful because it provides access to largely accurate information that can be hard to find. This king, however, is unlike any other because it operates in a completely democratic way. It's run by the people, without any grand financial ambitions."

As announced recently, Microsoft is trying to allay fears about its strong control over document formats by sharing some new technology called Open XML. In an effort to convince users that they will not be locked into closed document formats once they buy Microsoft products, the company plans to submit the file formats of its forthcoming Office 12 suite to the European standards body, ECMA International. Microsoft is only doing this because they are facing competition from the likes of Adobe and the emerging OpenDocument standard. They would certainly prefer for the world to use their proprietary file formats, such as .doc (Word), .xls (Excel) and .ppt (PowerPoint). As long as most people are using these closed formats, it becomes more difficult for alternatives, such as OpenOffice.org and StarOffice. Although we have been surprised by the unsolicited interest in open software from clients who are long time Windows users - in fact, two requested we install open software (Mozilla and OpenOffice.org) on their systems in November.

(Interestingly the World Business Council for Sustainable Development have made available a WBCSD site toolbar for Mozilla/Firefox.)

Yahoo China has relaunched with a slimmed down home page mirroring other Chinese portals. It is being run by alibaba which took over Yahoo's business in August, so any privacy issues in future will be clearly of Chinese origin.

November saw a massive rise in reporting about the Sony "rootkit" debacle. If you haven't been following the news, here's what happened: More than 50 music CD titles sold by Sony/BMG secretly install deep into your computer in a hidden way using what Sony calls "cloaking" software, which is designed to prevent unauthorized copying while appearing to just be installing a simple CD player. This trojan horse is a serious violation of user trust and maybe even the law. (Remember, this happens to the people that paid them $15 or more for the CD!) But that's just the beginning of this story. It turns out that the product is riddled with security holes, whereby others could potentially take over the infected computer (this is what's called a "rootkit") and repeated attempts to remedy the situation have just made things worse. You can read the entire saga here, but be forewarned that it's a torturous novel of corporate missteps. The whole issue looks very hard core, independent, X mentality - control behaviour and restrict information. But it is changing the industry. They can not be trusted, MP3s are being given away, copying of CDs is being accepted as a consumer right by the music industry.
If you have been affected or might be, this site has relevant tips.

The dreaded monopolist has committed publicly to the new focus that it must pursue in order to remain vibrant. The massive spend on the release of Xbox 360 and its global launch is a milestone in its history as Microsoft attempts to become an entertainment company instead of a software developer. The super profits gleaned from its strangle hold on the the market for PC operating systems is funnelled in to marketing their gaming product. The strategy will be successful because money talks, but the fundamental drivers of consumer power, that is open source systems, will continue to demand cultural change within the organisation.

In November we saw a testament for blank DVDs that reads "If you don't mind spending 75c per disk ..." showing how irrelevant this cost has become. Ten years ago we were still in floppy 1.4 MB land at higher prices. And these tools (CD, DVD etc) have applications at home and work. The changing dynamic has put much more in the hands of the consumer. Enjoy using it!

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Holonics and LOHAS

Holonics * Health * Environment * Education * Living

Holonics

Norway has said it might close down companies that fail to meet proposed boardroom quotas for women. The new coalition government in Oslo said it was considering introducing a law which would require 40% of boardroom posts to be filled by women. Norway's previous government drew up the law, which it threatened to apply if companies failed voluntarily to meet minimum quotas by 1 July this year. "It is a question of power," the spokeswoman said, insisting that several surveys had found that companies where both genders were strongly represented on the board were more profitable. "For a woman to get in a man must get out. It is not difficult to find qualified women."

In Japan, Princess Sayako has lost her royal status after she married modest urban planner Yoshiki Kuroda, in a ceremony in Tokyo. This is another sign of rapidly enlightening culture.

Peter Drucker died in November at the age of 96. His writing is good and his thinking has served management and industry well for over half a century. Although he did erroneously conclude that ethics do not matter this was in an era when it did not seem to while today governance is highly regulated and ethics are priced in to company valuations, his books are worth reading - most managers still look for the critical thinking he displayed.

Health

The British Heart Foundation has launched a major new campaign aimed at educating children about the benefits of eating healthily. But rather than calling for bans on unhealthy foods, the Food 4 Thought campaign also uses the ‘yuk factor’ to turn kids off food made with poor quality ingredients. To get the message across a series of hard-hitting billboards show the gristle and connective tissue used in some cheap cheeseburgers and chicken nuggets. The BHF has identified three critical areas for change: Stop the marketing of unhealthy food and drink products to children; Ensure nutritious food is affordable, accessible and appealing for children and parents; Provide children with opportunities to learn practical cooking skills.

Marks & Spencer is to remove hydrogenated fats from its food range after consumer concern over additives. Its range will be clear by next year, a move welcomed by the Hyperactive Children’s Support Group.

The Grocer magazine reports that Tesco intends to cash in on the growing wave of interest in healthy eating with the launch of its new Wholefoods range. Cuckolding to Natural Products editor Jim Manson, with major food brands now promoting their wholefood credentials — witness the battle between Weetabix and Cheerios — it’s no surprise that the major retailers have spied a market opportunity. And with Whole Foods Market soon to arrive in the UK and sales of pulses, seeds and nuts remaining strong in specialist natural food outlets, Tesco clearly wants a share of the health conscious pound. The sting in the tail of the Tesco announcement comes in the comment from Tesco’s commercial director, Carolyn Bradley. According to Bradley it’s being able to buy wholefoods “at Tesco prices” that is the big difference here. As Tesco likes to say ‘Every Little Helps’ — and as it’s suppliers like to say ‘Every Little Hurts’ (see www.tescopoloy.org for the reasons why).

An investigation into the outbreak of the lethal H5N1 strain in exotic birds at an Essex, UK quarantine centre showed that most other birds, including chickens, escaped infection. This means that the virus could be much less contagious in birds in Britain than previously suggested.

Young people all over the UK are to be targeted with an uncompromising message as part of a new campaign being launched by animal welfare group Viva! Their honest and refreshing No More Excuses is the straight talking theme of the campaign which is aimed at pricking the conscience of people who say they care about animals, the environment, global starvation and obesity — but do little about them. The Viva! campaign aims to show that going veggie can have a positive impact on all these issues. As well as national advertising, posters and eye-catching theatre it aims to harness the persuasive skills of passionate young people who are fed up with a lack of action on these global concerns to tell other young people that “enough is enough”. “Gone are the days when people had some kind of excuse for not going veggie,” says Andy Davies, Viva!’s youth campaigner. “We know the truth now — that people are healthier not eating meat and that livestock production is destroying the world, its people and animals. It’s so unbelievably cruel that people can no longer get away with saying they love animals and then eat them — there’s no excuse!” (See the cartoon The Meatrix here.)

Environment

This month has seen a lot of GMO news. But this story deserves top billing: The Russian scientist planned a simple experiment to see if eating genetically modified (GM) soy might influence offspring. What she got, however, was an astounding result that may threaten a multi-billion dollar industry. Irina Ermakova, a leading scientist at the Institute of Higher Nervous Activity and Neurophysiology of the Russian Academy of Sciences (RAS), added GM soy flour (5-7 grams) to the diet of female rats. Other females were fed non-GM soy or no soy at all. The experimental diet began two weeks before the rats conceived and continued through pregnancy and nursing. Ermakova’s first surprise came when her pregnant rats started giving birth. Some pups from GM-fed mothers were quite a bit smaller. After 2 weeks, 36% of them weighed less than 20 grams compared to about 6% from the other groups. But the real shock came when the rats started dying. Within three weeks, 25 of the 45 (55.6%) rats from the GM soy group died compared to only 3 of 33 (9%) from the non-GM soy group and 3 of 44 (6.8%) from the non-soy controls.

Swiss voters backed a call for a five-year ban on genetically modified organisms in Swiss agriculture. Almost 56 per cent of voters approving a people's initiative for a temporary ban on GMOs. All the country's 26 cantons backed the proposals by environmentalists and consumer groups. The ballot on the GMO moratorium comes after parliament passed a new law in 2003, which allows GM crops in Switzerland under certain conditions. Supporters of the proposal argue GMOs are neither in the interest of consumers nor of Swiss farmers, and that a moratorium is an opportunity for farmers to improve their marketing for natural production methods.

The European Commission authorised Denmark to pay compensation in cases where farmers with conventional or organic production suffer economic losses when genetically modified (GM) material is found in their crops. This is the first case where the Commission has authorised such state aid. The compensation will be granted only if the presence of GM material exceeds 0.9 % and is limited to the price difference between the market price of a crop that has to be labelled as containing GM material and a crop for which no such labelling is required. The compensation is entirely financed by obligatory contributions from farmers who cultivate genetically modified organisms GMOs.

Local to us, the Irish Minister of State Brendan Smith, Department of Agriculture and Food, with special responsibility for Organic Farming is ignorant of the issues as demonstrated by an inability to answer simple questions on the subject at an organic association meeting to which he was speaking.

Percy Schmeiser, the farmer found guilty in 1998 of having Monsanto's genetics on his land after Roundup Ready canola was found to have contaminated his crop, has again discovered RR canola growing in his field. He contacted Monsanto in September to ask them to remove the 'volunteer' plants. The company offered to hand pick the offending plants from the field once Schmeiser signed a legal release that all farmers with unexpected volunteer plants are required to sign. The document forever releases Monsanto from any lawsuits associated with their products and forbids the grower from disclosing the terms of the settlement. For Schmeiser, that was too much. He said, "I flatly refused to sign any release that would take my freedom of speech or my rights away." Schmeiser has removed the plants himself, some of which were spreading seeds onto his field. He filled a half-ton truck with his first clearing attempt. In a letter to the company, he estimated that damage to his farmland this year and the next is expected to exceed $50,000. He said he will send an invoice to Monsanto for the cleanup costs.

in Australia, New South Wales Legislative Council Ian Cohen says that agriculture ministers meeting in Tasmania have sold out farmers that wish to remain GM-free. "Organic farmers wanting to produce GE free canola products are in real trouble," Mr Cohen said. "They are going to have to undergo expensive testing procedures to ensure their crops have not been contaminated. "The Governments should have been trying to contain the contamination by ensuring next year's seed stock was completely GE free. Instead the Federal and State Governments have legalized ongoing contamination. NSW Minister for Primary Industries Ian Macdonald should be ashamed that he has sold out NSW farmers.

Fred Kirschenmann, a notable contributor to "The Future of Food" - the film that's increasingly reaching a mainstream audience in the U.S. with its troubling questions about food production and GMOs, is no longer the director of Iowa State University's Leopold Center for Sustainable Agriculture. This sudden purge at the top has called the Center's much-prized independence from industrial agriculture into question. Kirschenmann says the interim dean who forced him out has claimed the Leopold Center was neglecting "key stakeholders". But she has never clarified "who those stakeholders were." When asked if she might have been referring to agribusiness interests, Kirschenmann says simply, "You can draw your own conclusions." Kirschenmann has consistently argued for the urgent need for agriculture to go forward "into a more intelligent, diversified farming system." GMOs, Kirschenmann has said, are "simply another tool to make the monoculture work a little longer" in the face of the increased pests and diseases that monocultures encourage. For Kirschenmann GMOs are at odds with a more intelligent style of farming. The Leopold Center's research has thrown up unwelcome findings. Even before Kirschenmann became director, its survey of approximately 800 farmers in Iowa showed that while over half chose GM soybeans because they believed they produced higher yields, the actual data from their farms showed the exact opposite.

A blast at a Chinese plant in mid-November sent the equivalent of 10 tanker-loads of toxic chemicals into the Songhua river. About 100 tonnes of lethal substances entered the Songhua as a result of the blast in Jilin. The leak has also passed through the city of Harbin, the capital of Heiliongjiang and home to nearly 4 million people. All taps were off in Harbin for several days. The water supply may be restored but the devastation to local habitats and environment will be long lasting. An 80 km stretch of water was contaminated with benzene levels 10 x higher than considered safe. Some people have been trying to steal water to fuel their heating systems, while others were still fishing, despite the threat to their health. The toxic leak is now expected to reach the Russian border in about the second week of December.

High intensity naval sonar poses a serious threat to whales, dolphins and porpoises that depend on sound to survive, says a report by the UN Environment Programme. The study lends the first official support to allegations by environmental groups that military manoeuvres are responsible for the increasing incidence of mass whale beachings.

Education

Animal geneticist John Hodges has issued a warning to University of Alberta agriculture students: incorporate ethical standards into practice or risk a bleak future. Hodges warned that biotechnology, combined with capitalistic economics, is reshaping crops and livestock in ways that must inevitably affect people. Already, 45% of chicken breeds are at risk of extinction, as intensification of production zeroes in on the cheapest inputs for the highest outputs. Also, 43% of horse breeds, 23% of pig breeds, and 23% of cattle breeds are all at risk. The result is a serious loss of biodiversity. "This intensification of production is leading us into crisis," Hodges warned. He offered students the challenge of the future. "You're going to have to do some fresh thinking. Society is searching for its new moral and spiritual values." High-production agriculture is already contributing to obesity and pollution. Sustainability is becoming a vital issue.

In the US, attempts to get creationism accepted as science continue, but are finding increasing resistance. Dover voters ousted the local school board, which had tried to introduce the concept as an alternative to the theory of evolution. Pat Robertson, the televangelist who recently advocated assassination of Chavez, made another astounding statement telling his TV show, The 700 Club, that the town had turned its back on God. "I'd like to say to the good citizens of Dover: If there is a disaster in your area, don't turn to God, you just rejected Him from your city." These statements are not only un-Christian but also unethical and if made by another might be seen to be intended to incite violence and bring the speaker under threat of the new Home Security regime.

Living

Authorities in New Orleans are investigating claims that medical staff carried out "mercy killings" on a number of terminally sick patients in the aftermath of Hurricane Katrina. Louisiana's Attorney General has opened an investigation into allegations that range from abandonment of patients, to euthanasia at six hospitals and 13 nursing homes. At least 140 patients died at such facilities during the storm or its aftermath, when conditions rapidly deteriorated from a lack of electricity, running water and medical supplies. Investigators have indicated they wish to interview more than 70 employees at one hospital alone and have issued these staff with subpoenas. Since Katrina devastated the city and the surrounding area two months ago, there have been rumours and unconfirmed reports that a number of elderly patients stranded in some of the city's hospitals were "euthanised" by doctors or nurses to end their suffering. This will bring the ethics of life and death in to the spotlight which is healthy for all. These difficult issues require critical thinking and the benefit of science rather than criminality based on superstition. At the beginning of the year the case of Terri Schiavo brought many Americans emotionally into this sphere of thought. This investigation in Louisiana may have a more profound impact as many highly qualified individuals obviously made difficult choices in desperate circumstances, potentially moving themselves from MD to prison. Peter Singer's work offers enlightenment to those wishing to expand their thinking.

Christine Loh, CEO of Civic Exchange, comments on the Hong Kong Government's decision to use the Tamar site for government offices and lists some of the challenges from various quarters. Whatever you think, watching how the Tsang Administration takes the matter forward offers insights into its governing style and sense of aesthetics. Unfortunately, Loh's conclusion is accurate and all too grey: the government is subjugating pedestrian access, green space and clean air for the sake of cars. It seems that, uncharacteristically, Hong Kong has missed the boat - they are still thinking like a relatively poor Asian trade port, rather than a modern, international hub which has excellent public transport, a dense central business district but a lack of green spaces and continually deteriorating air quality. No wonder businesses are moving elsewhere in Asia, like Singapore and Shanghai.

The Catholic church is to allow previously active homosexuals to become priests if they have been celibate for two years. Who says Benedict is conservative? This is a most encouraging development showing an enlightened leadership in the vatican which is committed to pragmatic rejuvenation of the institution. It will provide an alternative view to the conservative fundamentalism rooted in middle America.

The Catholic church is also preparing to abolish limbo, their place between heaven and hell reserved for the souls of children who die before they have been baptised. The Church's 30-member International Theological Commission is expected to recommend dropping the concept from Church doctrine. Limbo has been part of Catholic teaching since the 13th century and is depicted in paintings by artists such as Giotto and in literary works such as Dante's Divine Comedy.

UK alcohol licensing laws were changed in November to extend closing times. Opponents fear binge drinking will worsen. Supporters say the opposite. A brief transit through London appears to support the later as pubs remaining open provided a social gathering place late at night . The problems of alcohol abuse are more closely related to family, education and opportunity, rather than accessibility - as US prohibition showed us.

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Activities, Books and Gatherings

November became much busier than expected as we were asked to deliver three new projects in short order. It has been lots of fun though some of the winter garden chores took a back seat. I should be able to catch up in December ...

Early in the month we were encouraged into the GM debate publicly with publication of our letter to the Irish Farmers Journal followed by an interview on local radio. Both exciting and unexpected events in our local community. The continuing coverage in global media of the dangers of GMO following liberation of regulation in Europe has been surprising, though it is unlikely to be reaching many who were previously unaware of the issues (outlined above in Holonics and LOHAS).

Spiral Dynamics by Don Beck and Christopher Cowen was finally cracked and is worth reading for any manager, executive, politician or change agent. It may be a little obscure if you have no idea at all about emergent values and modern psychology, but the authors offer examples throughout the text to help ground the reader's thinking.

Several Pratchett's were consumed in November, including his latest, Thud!. Thud! uses a novel design which I've never seen before, including the incorporation of a children's book Where's My Cow? which is also newly published and has been read by my children! Thud! also presents a paradox of today - we fight for peace. A brilliant piece of work by Dr Pratchett. The Johnny Maxwell books were also re-read: Johnny and the Dead, Johnny and the Bomb and Only You Can Save Mankind. I had forgotten how well he plays with concepts of time travel, death and ethics. Great for teenagers, but they opened my thinking too. As Johnny finds out - if you don't save mankind, who else will?! Pratchett is in the league of Asimov - though Pratchett's writing may be better and the relevance to modern life and frontier science more acute. Required reading for enlightened thinkers with imagination and a sense of humour.

"Om" in the corner office continues to attract followers with the publication of Resonant Leadership which relates stories of executives who have learned how to get in touch with themselves and reaped the benefits in personal and organisation performance.

The Battle for the Soul of Capitalism by John C. Bogle has been published. Bogle is the founder of Vanguard the fund manager which strives to offer structures and fees that are economical.

Potential and budding young entrepreneurs (and parents and teachers) may enjoy hotshotbusiness.com a game website by Disney and the Kauffman Foundation. You can play the game in Opportunity City to begin to learn of some of the ups and downs of starting up.

Our experience with Linkedin.com a web-based network tool has grown organically and gently since we joined a year or so ago. It has been non-invasive and helped screen introductions. If you are not yet a user, it may be worth reviewing, especially if you are involved in international or multi-discipline business or services.

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GRI Equity Review - November 2005

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