Earlier this afternoon I attended a presentation at Cal Poly by the Chairman of Oracle, Jeffrey Henley. The presentation was excellent and offered a candid look at Mr. Henley’s career and Oracle’s corporate strategy.

During the Q&A portion of the presentation, one of my classmates asked Mr. Henly about Corporate Social Responsibility and its relevance in a corporation such as Oracle. I have a horrid memory, so I unfortunately do not remember the specific question, nor do I remember all of the details of Mr. Henley’s response. What I do remember is the general lack of enthusiasm he showed for CSR.

To be fair, it was apparent based on his response that Mr. Henley seemed to equate CSR only with charitable contributions, and not in a broader capacity of societal responsibility. This realization came up after the presentation in a discussion with a professor and classmates, however, I don’t think it necessarily justifies Mr. Henley’s response. A director of a corporation the size of Oracle, let alone the Chairman, should have a fairly strong idea of what constitutes CSR. If Mr. Henley thinks CSR is little more than charitable contributions by a corporation, then perhaps a bit of research into the topic is called for. And if Mr. Henley is aware of the broader aspects of CSR, then I am curious to hear what he has to say about them.

In reference to what he did speak about, he seemed to convey that his responsibility, and the responsibility of Oracle, was to generate wealth for the shareholders, and nothing more. He noted that Oracle contributes to charity but does so in a very small amount (again, noting that it is possible that Mr. Henley misheard the question). He went on to make the statement that the corporation should generate wealth for its shareholders whom can then do what they please with that wealth, including donating some of it to charity. In other words, charity, and by extension CSR, should be the responsibility of individual, not the corporation. …”ISR” then I suppose?

Mr. Henley also commented that the majority of CSR efforts are “for show” and to gain positive PR, a point I tend to agree with. I do think that there are a good number of companies that truly believe in the value of CSR and am optimistic that their numbers will grow in the coming years.

So what is Oracle’s corporate social responsibility commitment? A search of their corporate website led me to the “Community” page, but I was unable to view many of the sub-sections without a login and password. Hmmm — that doesn’t seem to be a shining example of transparency.

A search for “CSR” revealed a 2005 CSR publication [PDF] that has some very interesting information in it. CEO Larry Ellison is interviewed and offers a fairly interesting quote early in the publication:

“Q [Interviewer]: Is a company’s approach to corporate responsibility and corporate citizenship at odds with financial success?

“A [Ellison]: Absolutely not. Corporate responsibility and citizenship does not mean inappropriately spending shareholder money. It means finding genuine intersections between the needs of our society and the goals of our company, and making investments that benefit both.

“For example, Oracle’s Academic Initiative has provided technical training in 72 countries around the world—a US$1.3 billion investment in the futures of more than 300,000 students. This program not only lays the groundwork for so many successful careers, but it helps us expand the pool of talent available to support our customers’ Oracle solutions. It’s a great example of how good social investment makes good business sense.

“We’ve made similar changes in our environmental policy. We’ve invested in new equipment and changed our business practices to encourage the efficient, environmentally sound use of energy and resources. As a result, we’ve reduced our energy usage at Oracle headquarters each of the past three years. We’re also powering our main data center on approximately 25 percent renewable energy. We earned back our investment in equipment upgrades in eight months and are now able to reduce our real-time energy use by up to 18 percent in case of power emergencies.

“Our success is magnified by a good relationship with our neighbors: the customers, partners, and residents of the cities where we operate. We should not shy away from supporting the issues that are important to their communities. Investments in the environment and education ensure that our business leaves a positive footprint and improves the lot of the people we work among.”

Interesting. I’m fairly certain that Mr. Ellison and his Chairman have chatted about Oracle’s CSR initiatives at least once or twice, say in a board meeting perhaps? Is it possible that Mr. Henley is simply unaware of all of the neat things Oracle is doing to promote corporate social responsibility, or is it more likely that he was being brutally honest when he made the claim that most CSR efforts are for show? Given his candor earlier today, he did quip questionably, ‘there aren’t any press present, right?’, I think it is difficult not to draw the conclusion that Oracle’s CSR efforts fall into the PR and “puffery” bin.

Is it a shame that Mr. Henley conveyed what he did about CSR, or should we applaud his honesty? Is he part of the problem, pushing for greater and greater shareholder wealth (check out his compensation below), or is he simply adhering to the true purpose of Capitalism and corporations. Should Mr. Henley be subject to criticism for not taking CSR more seriously, or should the system be criticized for creating the problem?

Truthfully, I went to the presentation with fairly high hopes but left feeling a bit cheated. I expect more from executives and powerful corporations. Am I being incredibly naive and idealistic, or is there more that Oracle, Mr. Ellison, Mr. Henley, and the cadre of other $1 million+ compensated executives at the company should be doing to promote CSR?

Here are a few additional resources to check out:

• Information on Jeffery Henley’s compensation and Oracle stock ownership. (Yes, that would be $3 mil in annual compensation in addition to the 12 million exercisable options.)
• The same information for CEO Larry Ellison
• Financial information about Oracle

[Update 1, 5/17/06]: A brief article about the event appeared in the local paper today: Oracle Exec Offers An Upside To Global Economy.

[Update 2, 5/17/06]: Here’s another interesting article about Mr. Henley: Insiders: Oracle Chairman Cashes In. When I was doing a bit of research for the original post, I noticed that he had been selling large chunks of shares in the past few months and thought it was quite interesting. This additional article comments a bit on why he would be selling shares in such quantities and frequency, and I thought it put everything into perspective quite nicely.

TAGS: CSR | Ethics | Oracle | Jeffrey Henley | Larry Ellison | Executive Compensation

This entry was posted on Tuesday, May 16th, 2006 at 10:54 pm and is filed under Business Ethics, Corporate Social Responsibility, Interesting News, Social Enterprise. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.