Jim Thompson

Email Jim at jim.thompson@ipulpmedia.com

Many years ago, I attended a seminar whose speaker was the CEO of a paper company in a distant land. He spent about an hour telling us how his company exceeded their local environmental regulations by a factor of two or three.

My thought was--why?

When it is our personal time and our personal decision, we can go above and beyond when it comes to how active we should be with environmental actions.

But if we are a fiduciary, and this CEO was indeed a fiduciary, why would he conduct the affairs of the company in such a manner? Maybe, just maybe if the company had highly sensitized customers interested in such affairs it would be justified, otherwise, at least to me, it is suspect behavior on the CEO's part.

Perhaps I am cynical, perhaps you think exceeding environmental regulations by extraordinary amounts are the right thing to do. Yet what if this causes steep expenditures and results in very diminished profits?

Environmental compliance has a cost. None of us want dirty air or water for our families or our communities.

These matters should be set by boards of directors, making informed decisions based on the regulations and the laws.

There is one other matter that may cause one to exceed the laws and regulations. Keeping the local neighborhood's complaints to a dull roar is worth something, just to keep the neighbors from suing you. In fact, neighbors weaponized by lawyers can be a far greater threat than any environmental lawyers.

This takes us back to my column of last week. Your local public relations are very important. You need to work at them constantly. We will talk about public relations more next week as we wrap up the month.

Be safe and we will talk next week.

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Study Guide: "Just Enough" by Jim Thompson

Quiz

1. According to the author, what is the primary concern of a fiduciary in a business context regarding environmental regulations?
2. Why does the author question the CEO's decision to exceed environmental regulations by a significant margin?
3. What potential negative consequence does the author suggest might arise from excessively exceeding environmental regulations?
4. Who, according to the author, should be responsible for setting the level of environmental compliance for a company? What should this decision be based on?
5. Besides strict legal compliance, what other reason does the author provide for a company to potentially exceed environmental regulations?
6. How does the author connect the discussion of exceeding environmental regulations to the topic of public relations?
7. What is the author's implicit definition of "just enough" in the context of environmental action for a company?
8. What does the author suggest about the potential threat posed by local neighbors and their legal representation?
9. What is the author's personal stance on individuals going above and beyond in their environmental actions compared to companies?
10. What is the author planning to discuss further in the following week's column?

Quiz Answer Key

1. The author believes that a fiduciary's primary concern should be acting in the best financial interests of the company and its shareholders. Therefore, they should primarily focus on meeting, but not necessarily exceeding, environmental regulations unless there is a clear business justification.
2. The author questions this decision because it could lead to unnecessary expenditures and diminished profits for the company, potentially without a clear return on investment unless there are specific, highly sensitized customers demanding it.
3. The author suggests that steep expenditures resulting from exceeding environmental regulations can lead to very diminished profits for the company, which might not be in the best interest of the shareholders.
4. According to the author, boards of directors should be responsible for setting the level of environmental compliance, making informed decisions based on the existing regulations and laws.
5. The author suggests that managing local public relations and preventing lawsuits from neighbors can be another reason for a company to exceed environmental laws and regulations.
6. The author connects the idea of exceeding environmental regulations to public relations by suggesting that proactively managing relationships with the local community can mitigate potential negative attention and legal challenges.
7. Implicitly, "just enough" for a company seems to mean meeting the required legal and regulatory standards while also considering potential public relations benefits, without significantly diminishing profits unless there is a strong business case.
8. The author suggests that local neighbors, particularly when "weaponized by lawyers," can pose a significant threat to a company, potentially greater than environmental lawyers in some cases.
9. The author believes that individuals have the personal freedom to exceed environmental actions in their own time, but companies operating under fiduciary duty should have a clear justification for doing so.
10. The author is planning to discuss public relations in more detail in the following week's column, as a continuation of the current discussion.

Essay Format Questions

1. Analyze the tension presented in the article between a company's fiduciary duty and the potential for exceeding environmental regulations. Under what circumstances, if any, do you believe exceeding these regulations is justified from a business perspective?
2. Discuss the role of public relations in a company's environmental strategy, according to the author. How can effective public relations influence a company's decisions regarding environmental compliance and going beyond the minimum requirements?
3. Critically evaluate the author's perspective on the CEO's decision to significantly exceed environmental regulations. Do you agree with the author's skepticism? Provide arguments for and against this approach.
4. Explore the concept of "just enough" in the context of corporate environmental responsibility. How might a company determine what constitutes an appropriate level of environmental action beyond strict legal compliance, considering both financial and social factors?
5. The author suggests that the threat of lawsuits from local neighbors can be a significant motivator for environmental action. Discuss the implications of this perspective on corporate environmental behavior and the role of community engagement.

Glossary of Key Terms

Fiduciary: A person or organization that acts on behalf of another party, often with a legal duty of trust and confidence.

Environmental Regulations: Rules and directives enacted by governmental bodies to control activities that impact the environment.

Environmental Compliance: The act of adhering to all relevant environmental laws, regulations, permits, and standards.

Corporate Social Responsibility (CSR): A self-regulating business model that helps a company be socially accountable--to itself, its stakeholders, and the public.

Public Relations (PR): The professional maintenance of a favorable public image by a company or other organization.

Cost-Benefit Analysis: A systematic approach to estimating the strengths and weaknesses of alternatives; used to determine options which provide the best approach to achieving benefits while preserving savings.

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