MEDP – Mitigating Endemic Democratic Problems

It has recently come to my attention (via an accountability ethics study for governments conducted by MEDP’s College of Masters) that the notion of “accountable accounting” in businesses, organizations, and governments is absolutely necessary if there is a sincere interest about reaching a goal or profit.

Transparency (easy to track/paper, digital trail) in accounting methods ensures that a CEO, manager, MP/MC, investor, citizen, employee, etc. can accurately and confidently understand where money has come from, where it is kept, what profit/service it is making by being kept, and where (by whom/what, why)  it is being spent. At least that is the most basic goal of accountable accounting.

However, there are ways for accountants to – pardon the colloquialism – ‘cook the books’ in a legal manner by simply arranging budgets/procurement/spending in a way that gives the reader a different impression of what is actually happening financially.  It is important to always have an internal/external auditor to verify accounting, and it pays to ensure that the accountant(s) does not know the auditor(s). Furthermore, by staying accountable in accounting, if anything does come up, solid evidence will allow for criminal proceedings to begin unhampered due to your triplicate and meticulous record keeping habit (keep one copy for self, one copy for public, one copy in administrative/project file).

If that rather basic level is achieved, then a perhaps more arduous task is ultimately necessary. Spending must serve a purpose whether you are a CEO, Prime Minister, or deparment/branch/project manager. Recently (in the Paris and Rome conventions concerning effective aid processes) aid money is increasingly targeting developing countries’ programs, peaceful grassroots organizations originating from the culture/society of the country receiving aid, and most importantly, financial feedback regarding effectiveness is conducted in a timely manner. Books, even in aid giving, must be balanced. By asking the basic questions below as often possible, this next step will become easier and the synergy between spending and achieving will create a clearer network.

• What did we spend on?
• Why did we spend this money on that particular project/feature?
• How has the money been used?
• What was/is the overall/current  impact?
• Is there an area that requires improvement, less or more money?
• How can we make spending more effective?

Ultimately, if accounting is based on transparency and accountability, and the accountant(s) work is kept honest with timely (and transparent) auditing, then a spending analysis can be done in full confidence.  It continues to be a wonder for me as to why many governments at all tiers do not correspond this kind of accounting ethic to its citizens, or why transnational corporations/financial institutions can so greatly affect the international economy with irresponsible behaviour. We have useful tools to ensure – this promises to be the final colloquialism – more ‘bang for our buck’.

It could be that governments and multinational companies/organizations are simply too large for a central administrative system to appropriately manage finances. However, I personally think that is something of a lame excuse. Why build a big house if you can’t keep the draft out? Over 200 years ago Alexander Hamilton (US Federalist) wrote that managing the budget of the nascent US government was a difficult task: namely, that is was hard to keep track of money (taxes, tarrifs, etc.). In many instances a similar argument can be made today for both government and business. We need new methods to manage money at whatever largesse they may be found in. Perhaps using accountable accounting tied in with ICTs can finally solve Hamilton’s dilemma.

MEDP’s researchers are exploring this possibility. We are also accepting volunteers (undergrads, postgrads, and graduates) who majored in ICTs to help our policy branch get to the bottom of this and come out with a practical methodology. If interested, please visit med-p.org and contact us with your details quoting “ICTs Accounting Study.”

Legend:

• MP = Member of Parliament
• MC = Member of Congress
• ICTs = Information and Communication Technologies

– Jean-Paul

It has been a busy couple of months! Namely, trying to balance my PhD work with a couple of new MEDP initiatives and some lecturing and tutoring makes for a hectic time. Balancing, however, is a skill most CEOs pick up fast I’m told. It’s really amazing at times to think of the immense pressures that corporate leaders undergo when trying to steer a massive business. Although I am not the leader of an incorporated entity but rather a privately held organization, I have some issues with the ways corporations are run, primarily the fact that most – if not all – by law are required to keep the interest of their shareholders as a primary concern. That means the most important facet of a corporation is profit. Who knows whether ethics will change in regards to this in the future…in other words, will neoliberalism meet its decline? We shall indeed have to see. I for one do not ascribe to any convention whether it be political, religious, or social. The only classification I would be willing to fall into would be that of pure and simple logic, practicality, and reason.  Throw in concern for my fellow humans and the natural environment, along with the principles of equality and you should get a picture of what I am all about and how I run MEDP.

This post is about the initiative MEDP is taking to offer an alternative accord -internationally- to oppose the neoliberal tendencies of the global economy and finance markets. Why? Because trans-national corporations, structural adjustment policies, and much international “development” is subversive to the sovereignty of citizens in the world’s poorest or most troubled nation-states. Most notably it’s the machinations of the global economy which are depredatious to the democratic elements of the poorer countries of the world. Take Bolivia for an example: the mandates given to the government in order to repay loans stipulated the need to privatize public resources owned by the “people” (government). Many of you will know this example from the very popular documentary “The Corporation.” The situation reached its boiling point when a foreign corporation began charging for water (it bought the water provisions rights), apparently including that which fell from the sky. The Bolivians put up with the privatization of their oil and other mineral wealth, telecommunications, health care, etc., but water they said was an inalienable right to the people. It took violence, maiming, uprisings, and death to ultimately topple the government and free the people from what I call the “tyranny of profit.” It really didn’t need to be that way. If the sovereignty of citizens in Bolivia was respected, if structural adjustment programs were dealt with in a democratic fashion with the people deciding how to deal with “their” public debt, things would have gone down quite differently.

It’s interesting to note how a government can rack up a sizable debt and call it the debt of the “nation.” Did citizens give their consent to have money borrowed? Not directly. They elected, in many cases but not all, representatives to do their bidding as is the common practice in democracies around the world. They didn’t however elect representatives on the mandate of going into debt to realize public programs. Honestly calling decisions made beyond the reach and often beyond the comprehension of citizens as legitimate is farcical. Latin America, as can be seen by consulting the UNDP’s publications concerning Latin American democracy, is undergoing a critical re-evaluation of how to include the poor (majority) in the decisions of the nation-state. It is a backlash against neoliberalism and typically American styled developmental practices.  There is no cookie cutter format for developing any nation in the world. Each country is composed of a very unique medley of cultures, groups, and individual interests which cannot be forced to do what multinational organizations or trans-national corporations think is right. That is a clear abuse of their sovereignty and it can no longer be tolerated.

MEDP will be officially launching the International Accord on Regulating the Global Economy (IARGE) on Friday the 19th of September, 2008. There, on our website, countries and organizations can sign-up their delegates to take part in the inaugural gathering  (Geneva, 20-24, April, 2008). Also, individuals from around the world will be able to sign their names on a global petition showing their support for this accord. IARGE’s goal is to create an international and legally binding accord between the world poorest and medium wealth nations on labor conditions. This accord seeks to banish the near slave-labor and unethical pay rates trans-national corporations use to manufacture their products. It simply cannot be tolerated that a shirt selling for $50.00 US costs only 6 cents to make. The accord seeks to finally end child labor which ruins the childhood of millions of children in the world. The accord seeks a guarantee of proper treatment for laborers everywhere in the world. If IARGE is successful, there will be no quarter of the Earth that a trans-national corporation can go to for cheap labor. It is time to stand up collectively for the world’s poor, for those who cannot afford to take part in protecting their rights, for those who spend their days toiling for food and dreaming of a better life.

MEDP stands on behalf of over 5 billion people, will you stand with us?

The conventional neoliberal arguments regarding extremely low wages have been made for well over 30 years and have shown little promise. GDP has increased drastically globally over that time span, but who holds the wealth? It is still concentrated in the top 0.1% of the worlds population. There is talk of a “trickle-down effect” but signs of such are minimal. The case of India as being a success story for neoliberalism and trans-national corporations is laughable. It is not laughable that people have worked extremely hard initially and saved money to give their children a chance to grasp that so very illusive “first-rung” of the development ladder and thus allowing their grandchildren to reach the ever higher ones; that is simply amazing and inspirational. What is laughable is that corporations think they are noble in reaping billions of dollars in profit whilst only giving a pittance to their workers. By guaranteeing an international increase in base wages, the PPP and GDP of the poorest and medium wealth economies will skyrocket and thus allow for greater development and lessen the harsher effects of living poor. What arguments are there against this?

- Jean-Paul

And so the ultimate decision was reached yesterday to not go public at least for the next few years until I can consolidate MEDP further. Our General Council was very encouraging in that she said we should push to have an underwriter take on our application but the terms were not very favorable. Our initial IPO was relatively low and we would have to give up a sizable amount of shares to gain the capital needed for marketing. I suppose it’s back to the drawing board.

An idea at this stage is to personally lobby some strategic people that may aide us in spreading the awareness of our conferences to students and staff of various universities and businesses. We are also looking into a direct mailing campaign which may be more cost effective.

- Jean-Paul

This option is something I am using at the moment due to the astronomical sums required to advertise in conventional ways. Internet advertising (pay-per-click) is a good method to advertise cheaply, but only if keywords are appropriate. If not, people may visit your site under the wrong impression and will often end up costing for nothing. The other difficulty with internet ads is that it is much more difficult to reach specific geographic population centers. That is where TV, radio, and print comes into play. These, however, are often insanely expensive for a growing organization.

MED-P (Mitigating Endemic Democratic Problems) is a semi-commercial international non-governmental organization, with the other half being not-for-profit. We do not sell any products (other than our annual journal, the IADI, in the development stage). What our commercial side does is sell a service.  In overall, MED-P is helping the people of the world make their lives and the lives of their children better simply by facilitating their ideas and guaranteeing their strategic placement in society.

The not-for-profit side approaches the same goals except with targeted projects such as local community development, scholarships, the New Sophist’s Society, etc. See www.med-p.org for further information.

The problem encountered thus for me as the CEO is: how to effectively make people aware of MED-P’s conferences? MED-P used to be a fully not-for-profit body but I decided a more philanthropic route would lead to greater results for our objectives. The difficulty is that capital is not readily available and due to our ‘international’ status it is difficult to gain credit from banks or larger NGO such as the UN or NED. I’m thinking of simply bypassing marketing by focusing on rallying my web-development team to continue improving our website and simply going ahead with whatever we have no matter what. Just make it work, ensure that media bodies know about it before it happens to gain some coverage, and hit the distribution of our delegates’ ideas hard. Perhaps our process will be the ultimate market tool. It’s a risky venture, but when you’ve got no money to play with (and essentially little to lose) risk seems not to be as great. The only thing that I cannot stand to bear is the idea of failure or disappointment. MED-P, in my opinion, is a realistic and practical organization with massive implications for global humanity. How can I get people to know about our conferences?

- Jean-Paul

As the internet developed further, businesses saw the opportunities therein to mobilize information, services, and sales to the virtual world. This movement helped to minimize previous administrative costs such as mail advertisement, tv, radio, etc. Online advertisement is a growing market with (probably) a long profit curve ahead of it. Another notable movement that is giving businesses an opportunity to reduce costs is the “green” or environmental wave.

CEOs should take notice to this and defer the information to their Head of HR and/or infrastructure/business analyst/accountant or take matters into their own hands with a public statement to the company (being “green” reflects good press and may increase sales, not to mention, it saves money in most cases). Some areas that benefit from revamping are staplers, paper, water bottles, paper cups (water cooler), and lighting. There are staplers which now use no staples, saving money and resources, by simply punching a hole in the stapled paper (must be paper) and folding the punched edge over. Recycled paper has been continuing its decline in price as it is more readily purchased by green consumers and can lower costs if your business is near a processing plant. Paper cups at the water cooler are generally a waste of both money and the environment (biodegradable cups are quite costly). What is suggested, is to do away with both paper cups and plastic bottles by encouraging your employees to buy Sigg bottles. These Swiss made metal bottles have been proven to leach no chemicals in water (unlike plastic bottles and other metal containers) and come with a long-life guarantee. These would cut down on paper cups and help the health of your employees. Obviously, a mug is just as good for office drinking, just not as easily portable as a bottle. Finally, if your company is building some edifice where people will be working, it is essential to have as much natural sunlight brought into all working spaces as possible. This not only reduces the cost of electricity during the daytime, but provides everyone with daylight the body needs and could help boost the immune system to reduce sick days. It is much less costly to have this designed by arranging it with your architect prior to construction.

Other long-term areas of consideration should include micro-power, gray water filtering, intensive recycling, on site compost, frame seals/door plans, the latest thermostat, electricity/water saving devices, and fresh air intake ventilation. Micro-power is the idea of using photovoltaics (solar panels), wind turbines, geothermal, or even concentrated sunlight to heat water to make steam to turn turbines to produce energy. If these or other long-term options are considered the initial cost will generally be slightly greater than conventional designs but in the future will definitely reduce administrative costs and perhaps even generate income if surplus energy is sold to the power grid. This surplus can be used in a variety of ways, including paying employees a higher wage, putting it into their pensions, investing in building maintenance, business diversification, etc. Gray water filtering/recycling is something truly being led by the Australians. If all water used in the building were recycled through a filtering process it would reduce the water bill considerably. Australian studies have shown that water recycling produces clean and safe drinking water. On site compost using any ‘hot-composting’ technology available produces a young soil full of nutrients that can be used for indoor plants and outdoor landscaping or gardening to give your office a more vibrant and welcoming atmosphere. Ensuring that windows and doors leading to the outside are properly sealed to keep in heat and moisture is essential to reduce administrative costs. What is the point of heating or cooling your office if all that energy seeps out of cracks or doors? The best option is to ensure your architect and builder guarantee a process of providing these or that you have a fitter come in and check all windows and doors for efficiency. A great technique for doors (used at the Antarctic Center in Christchurch, NZ) is for two doors to be used to outside access, except that once one set of doors has opened, they must close for the second to open, thus preventing a rush of energy being lost.

Everything else is fairly explanatory except for the water and energy saving devices which many people still seem not to know about. Water faucets can be fitted with a small ring that reduces water flow by increasing pressure and oxidation (same goes for shower heads). Many power bars or utilities offer a standby option cutter. Computers, tv’s, printers, etc. even when turned off remotely still use power to remain in “standby” mode. However, some power bars or utilities offer to cut power for a full shut-down thus reducing this waste of money. Another option is to have power outlets with a manual shut down button for easy power cutting.

I employ all of these techniques (and more) and am saving lots on administrative costs. Hope this helps someone.

- Jean-Paul

This argument extends also to the philosophy I have taken for the general environment in a critique I am presently writing on our society. Language and physical behavior is something that must be moderated in the workplace, but not in draconian or secretive ways. Employees (an employee is all under the CEO) must be trained and aware of the value of not using abusive language or intimidating physical language. When considered language is used people generally feel more comfortable and safe rather then when being near a barrage of abuse from a manager or co-worker which raises hostilities. It’s about respect for yourself and respect for others. Why would an educated and cultured person, passionate about human rights, the environment, democracy, etc. debase themselves with inappropriate and foul language? Obviously sometimes these words are so ingrained in our psyche that when we encounter a moment of extreme stress (say right before a car accident, or when you smash your toe against some horribly solid object, etc.) any bad words are probably appropriate, haha. It’s just the everyday use of language and communication between people. The time and effort you put into being nice to someone with clearly chosen and friendly language will come back and create a positive feedback cycle.

The other key to remember is to always have positive, transparent, accountable, and open lines of communication between you (the CEO), managers, and other employees. Everyone has to know that they are very welcome to come and speak about anything on their minds, even if it is turmoil at home, with another co-worker, difficulty on a project, etc., or just a nice chat over a cup of your favorite drink. If you can extend this line of thinking to your dealings with other people online and in public, you will enjoy a much higher quality of social interaction and hopefully teach many ignorant and verbally abusive people online and in public the merits of being courteous, compassionate, thoughtful, and kind to others and yourself.

– Jean-Paul

I find that interacting with employees is something I take quite personally. I really enjoy talking to those working for MEDP and getting to know them is a major step in lowering turnover and improving productivity as people will begin to feel a larger connection and greater sense of importance with the organization.

The only area to avoid, however, is the realm across professionalism. If your employees feel that you may be too friendly they might feel that they can slacken or may even lose respect for you. I don’t think this has happened to me as I generally keep a professional environment at all times, but that doesn’t mean I can’t be nice. It’s about politeness, but with an edge of authority just noticeable with each word. Couple those with the time you’ve spent getting to know your employees, dialogue opens up. Employees may become more willing to approach you about their ideas of how to improve areas you and your lower executives may have missed and such things can make or break a business. Letting your employees know this and encouraging them is a positive step as well.

- Jean-Paul

It has recently become apparent to me that CEO’s have a very specific role within their corporate bodies. I have never been to any kind of corporate training seminar with a major company, so much of what I am learning now is through a process of observation, trial, and probably error. It has always been obvious that in order to be a CEO you must posses excellent leadership skills, great confidence, management know how, mad PR skills, and the overall general drive to keep the corporate body moving forward (whether is be by meeting goals, or profits, etc.). But then there’s the other stuff…technical business matters that really take years of experience to know. For example, should (can?) MEDP go public or stay private? Get a general council and what firm? What are the legal implications for an international NGO operating commercially and non-commercially in over 12 different sovereign states annually? These problem areas and others are a bit annoying but the key thus far has really been to take my time in considering all options and to really try to remain true to MEDP’s constitution and overall goals.

MEDP is not yet a publicly traded company and I’m not sure that it ever will be due to its semi not-for-profit nature. The bottom line is, I would be able to guarantee the kind of growth requirements investors depend on but I don’t think that it can be legal because much of our commercial earnings are fed back into our not-for-profit projects like strengthening democracy on the community level or the New Sophist’s Society (see med-p.org for further details) and such probably can’t be quantified as ‘earnings’. Another problem with going public is that the constitution of the company can be compromised in the effort to meet investor satisfaction.

I’ve been sorting through these problems and trying to read up on them (fyi, corporate magazine subscriptions are choice) for the past few weeks but they haven’t been stressing me. I really feel good about that fact and can enjoy my time with my loved ones and continue following up my social interests without always lingering on these problems. Case and point: went to Picasso’s personal collection exhibit today in Brisbane and completely forgot about the benefits of going public, haha.

- Jean-Paul