IEBW: Learning: O'Hara: Frederick

October 15, 2003

Ford executive lectures at ND

Robert Frederick addresses company's corporate responsibility in lecture series

With $162 billion in revenue and 6.9 million vehicles sold in a year, Ford Motor Company has a larger responsibility than ever to be a corporate citizen in the world, Robert Frederick, manager of corporate responsibility, said Tuesday.

As the third in the Cardinal O'Hara Lecture Series in Business Ethics, Frederick spoke on corporate responsibility at Ford Motor Company and the future issues for the automaker.

As the 25th largest economy in the world, "we have power and influence," Frederick said of his company. Being an internal activist, Frederick has "one foot in the company, and one foot out," monitoring Ford's conduct and relationship with society. Frederick emphasized that people want businesses with ethical conduct, ones that can be trusted. "The failing of few has tarnished the trust of many," he said. "This trust issue is very important at Ford."

Frederick focused on how the company works to maintain a relationship of trust with its shareholders and customers. He stressed upholding a reputation that depends on the company's principles and values, quality products, and relationships. Frederick explained that "trust building requires a shift from passive to active transparency." Honest reporting and disclosure of company information is crucial to a good world-company relationship. "We are capable of engaging in honest discussion," he said.

Frederick highlighted a Ford report from a few years ago that had a case study on SUVs. The report discussed people's enjoyment of driving the vehicles, but also mentioned the concern over their poor fuel economy. The media was "perplexed by us telling it like it is," Frederick said. But the consumer response paid off. There was clear support for their honest approach, studies showed, and the corporate reputation was enhanced.

"We are a company willing to change," Frederick stressed. It is only through the concerns of special interest groups and concerned stockholders that Ford is able to take on the challenges of the future. "They are like a canary in a coal mine-a signal for change," Frederick said. "We want to give them the legitimacy they deserve."

Frederick outlined Ford's actions in becoming a more responsible company. They included developments in technology, manufacturing, their social impact, engagement, and transparency and accountability in reporting.

Technological improvements revolved around creating vehicles with better fuel economy and reduced emissions. Frederick said that Ford is one of the world's greatest polluters, creating 1.5 percent of all man-made carbon dioxide gases. The Ford Escape Hybrid and Ford Pzev Focus were two of the vehicles in development that will help them achieve their environmental goals.

A living grass roof on the Ford Rouge Center, a manufacturing facility and natural landscaping with improved water run-off systems were examples of manufacturing responsibility.

Ford also focuses on its Human Rights Strategy, a code of basic working conditions, in its quest for a positive social impact. They have programs for HIV/AID prevention in their plants in South Africa.