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Shareholders Squeeze Cisco on Human Rights
Comatose51 writes "According to this article at Wired, Boston Common Asset Management, has filed a shareholders resolution asking Cisco to 'adopt a comprehensive human rights policy for its dealings with the Chinese government, and with other states practicing political censorship of the internet.' Cisco so far has asked the SEC to omit this proposal from the agenda for the next annual meeting, claiming that it already has a comprehensive human rights policy in place and that 'Cisco does not participate in any way in any censorship activities in the People's Republic of China ...' However, 'a report from the OpenNet Initiative watchdog group last April singled out Cisco for allegedly enabling the Chinese government's notorious "Great Firewall."' As a shareholder in Cisco, I would like to see this issue discussed and voted on."
In every other discussion on /. about companies in China, we're told that it's the shareholders that force them to operate there. It's nice to see someone who's socially responsible for once.
As a shareholder in Cisco, I would like to see this issue discussed and voted on.
And as executives, the members of the board would like to see this swept under the rug as quickly and quietly as possible. Remember that such a resolution would impede the company's ability to do business in the single fastest growing tech market in the world.
IIRC, I read in a recent issue of IEEE Spectrum that Cisco was also a winner of one of six huge contracts to rebuild China's Internet infrastructure. I highly doubt the Chinese government would have chosen Cisco if they did not have the ability to sensor as the Chinese government on it. If you can lay your hands on that copy of Spectrum, they specifically discuss the censorship issue and speculate as to whether or not Cisco is party to it.
So does Google and so does Yahoo!. But then, Google is held in such high regard here that we can only say such things about them in hushed tones.
Cisco does not engage in censorship. They simply make equipment which can be used to engage in censorship. Similarly to a company that makes matches that can be used for arson, or Proctor and Gamble whose Clorox bleach can be used as poison.
There is no way to tell Chinese government what they can and can not do at this point. It would be nearly fatal to impose stiff tariffs, too. So bend over and hand the Chinese that bottle of vaseline.
You misunderstand the stock market system. The stock market system is about making the executive and management of a company responsible to a large number of stakeholders. It's easy to hold them responsible to a small number of people, but once you get millions of stakeholders, it's a bit more difficult.
In a way though, you're right - it all gets down to "maximizing shareholder value." Except it's the shareholders who decide what they value - not you (likely an armchair stock analyst without any Cisco stock), the executive, the management, or the employees.
If some shareholders feel that protecting their freedoms is valuable, and they feel that one of the ways Cisco can do that is by refusing to allow those freedoms to be curtailed - at least on such a massive scale as China - using their technology, then the appropriate course of action would attempt to bring the issue to a vote.
Barclay family motto:
Aut agere aut mori.
(Either action or death.)
No, if you're talking guns and murders, it would be more like this conversation between a gun salesman and a customer:
Customer: "I'm looking for a gun, can you suggest one?"
Salesman: "Okay, well, what do you need to use it for?"
Customer: "My wife has been having an affair, and I need to off the bastard who's getting on her."
Salesman: "Oh, good, well, I have the perfect choice right over here..."
Cencorship constitutes a gray area in politics. Can you prove to me that their censorship violates human rights? If it's gone too far, can you show me how far is too far and prove to me that the lives of the people are worse because of this? I don't want theories or political arguments--I want data. We have cencorship in the United States, you know, but you don't see Cisco turning on our government, do you?
It's called "Socially Responsible Investing". One of the interesting things I learned at the Great Hudson River Revival is that there are many different mutual funds out there that invest in socially and environmentally responsible companies.
And yes, some of these funds do "beat the street" when it comes to performance. It may take a little work, but you might be able to convince your employer to make it possible for you to put pre-tax money into these funds. (For a 401(k) for example)
Google search: SRI investing
--You will rephrase your request for me to go to hell. Goto statements are not acceptable programming constructs
The interesting similarity is this pair of conversations:
China: I need a router.
Cisco: What sort of router?
China: A router that can filter all mention of free thought and democracy.
Cisco: Ah, you want the UberWhip9000.
Parent: I need a router.
Best Buy: What sort of router?
Parent: A router that can block off large portions of the internet.
Best Buy: Ah, you want the SuperRouter9000.
So, really, the Chinese government is one giant safety mom, with a billion kids. That minivan must get really poor gas milage.
"Because Science" is one step from "Because old book". Try "Because of my experiment testing my falsifiable assertion".
for 18 months I can tell you the great firewall is a serious problem. Not only does it block news and political sites (as well as tons of other stuff that can only makes you say huh?) but the increased latency makes VoIP and IM quite spotty.
It slows down the entire internet outside of china, even if the website is not being blocked.
Even if you pay for a proxy server outside of China, this is a serious pain that impairs any Internet related business.
I will never buy Cisco products, or any other company that is involved in it.
Perhaps it would be better to boycott companies that are big buyers of Cisco products? This worked pretty well in Forcing the South African Aparteid Goverment to change.
Anyway, after living in China I am not convinced they are on their way to a huge bubble and collapse. Sure, I see tons of new buildings and businesses, but there are also tons of scams and empty buildings. I wonder if they will not soon overdevelop beyong their capacity to use? Well, I guess we will just see.
Peace, or Not?
That sounds like a great idea.
Unfortunately, it seems that now some companies have succeeded in making lots of money, they are the ones telling the government how to behave.
Arguably, some power still lies with the people because they are the ones who buy the companies products... but then you remember we are talking about multinational companies with foreign customers. These foreign customers include other governments - meaning that you effectively have foreign governments (i.e. China) wielding power over the US government. Don't you just love capitalism!?
I've thought about your position, and it seems attractive, but then I remembered a counter-example.
This is exactly the same argument the military equipment and weapons manufacturers use as to why they should be able to sell their guns to anyone with the money, and be able to sell any weapons, such as landmines, to anyone.
Similar arguments are used by companies using what is near slave labour (and in some cases, actual slave labour through contractors) - if they can buy goods for the cheapest possible price, wouldn't they be remiss to the shareholders
to not take advantage of it?
We have a duty, through government, to prevent our national companies from doing significant harm as part of their business plan, and I think shareholders should also have the right, if not the duty, to put pressure on the company they own to also act in a more socially responsible way.
In the end of the day, the shareholders own the company. If a majority of them think not helping censor free speech in china is more important than making the most money possible, then all power to them.
Remember kids, it's all fun and games until someone commits wholesale galactic genocide.
US shareholders would do best to get their own government's act cleaned up before getting all uppity over China...
Add public trading to the mix, and the importance of customer service is diluted. Short term value extraction becomes the most important thing, and goals of course shift, as you note.
Of course, some functions need the capital that (almost always) only an IPO can provide, and many industries are the sorts in which a failure to IPO means you're doomed. Cisco is certainly in this category. But when buying Cisco (or Walmart), one should remember that you're implicitly funding their behaviour. What that means to you? I dunno. For me, I don't shop with either of them. Does this mean I pay more for soap? Probably. It also led to me learning how to make soap. I don't do it any more, but it was neat to learn. I also build network hardware for clients most of the time - they don't need Cisco gear, and I'm good enough at it now that it actually works out cheaper to use OpenBSD on decent hardware. For places where redundancy and optimization is important, we bid it out for the client (Cisco included), and Cisco almost never wins on cost benefit.
Lesson? Small, hungry companies provide better service and product, and the attitude of dealing with the devil you know just means you don't learn anything new. Oh, and that economics dictates everything, but that doesn't invalidate rational exploration of alternatives - heck, some people even call that 'innovation'.
I forget what 8 was for.
And again, this is not what's going on. If this passes, Cisco isn't telling China not to censor. It's telling China that Cisco won't be a part of it.
This is the convenient cop-out that often allows people to justify their participation in the nefarious deeds of others. Maybe "someone else" would sell the routers. Heck, there'd be a market, right? But neither Cisco nor Cisco's shareholders are responsible for what "someone else" does. They are responsible for what Cisco does. That's what is at issue here.
If Cisco bowed out and "someone else" stepped in, well, at the very least, the routers would be more expensive (because the supply is smaller, as the major supplier is not selling). This impacts the Chinese policy, at least a little. Maybe at some point someone in China would decide that the monetary cost wasn't worth it. Meanwhile, activists would see that their policy could work, and might use a similar one to force the "someone else" to stop working with China, too. As well, it's not outrageous to think that a "boycott complicits" movement will lead to local governments and universities and so on buying only from companies that don't aid in Chinese censorship. And bam! Now Cisco is deriving an actual monetary benefit from their policy.
It's not as cut-and-dried as you want to make it seem. The process seems in fact to be handling the concerns of the shareholders quite well -- at least, until the execs at Cisco get the SEC to allow them to muzzle the proposal.
But then, that would be ironically appropriate, wouldn't it?
Dance with the Devil long enough and you grow cloven feet, too.
The Mongrel Dogs Who Teach
Do you feel the same way about IBM's collaboration with the Nazis, where their technology was used to track Jews and other undesirables for extermination or punishment? Or any of the other American businesses who collaborated with Nazis? What a company that sold medical equipment that was used for torture to Saddam? After all, it was just business. IBM just saw an opportunity to profit from fascism.
And isn't the desire for profit one of the major motivations of fascism? Business is not politically neutral. Businesses have effects on society, and should live within the laws and values of a society. Excusing such actions because it happens outside the US is like approving of human rights violations because they did not happen on US soil. How can a country ask another country to abide by its standards on human rights, if it is not willing to hold companies that operate from that country, to participate in said violations of human rights?
... and then they built the supercollider.