IBP1886_12 THE GLOBALLY RESPONSIBLE LEADERSHIP INITIATIVE EXPANSION IN LATIN AMERICA Boechat Claudio 1 Braga Izeusse 2 Gabrich, Rudolf 3

Copyright 2012, Brazilian Petroleum, Gas and Biofuels Institute - IBP

This Technical Paper was prepared for presentation at the Rio Oil & Gas Expo and Conference 2012, held between September, 1720, 2012, in Rio de Janeiro. This Technical Paper was selected for presentation by the Technical Committee of the event according to the information contained in the final paper submitted by the author(s). The organizers are not supposed to translate or correct the submitted papers. The material as it is presented, does not necessarily represent Brazilian Petroleum, Gas and Biofuels Institute opinion, or that of its Members or Representatives. Authors consent to the publication of this Technical Paper in the Rio Oil & Gas Expo and Conference 2012 Proceedings.

Abstract
The Globally Responsible Leadership Initiative - GRLI is the action-oriented arm of the European Foundation for Management Development - EFMD/ United Nations Global Compact - UNGC collaboration which presently involves over 70 learning institutions and businesses from all continents. It is a leading global community of action, practice and learning built on close partnerships. It remains an initiative focusing on capacity building and leveraging the activities of committed partners, that fundamentally addresses the practice of how we develop the corporation of tomorrow with the support of new leadership. The GRLI Foundation, based in Brussels, Belgium, is open to anyone that wants to get down to the practice of his operations with the support of a tight global community of peers from academia and business. GRLIs mission is to be a catalyst to develop a next generation of globally responsible leaders, and its vision is Corporate Global Responsibility and Citizenship. The basic philosophy for making it come true is the 30-year old credo of entrepreneurial forerunners: Think big, Act small, Start now! The expansion of the GRLI's proposals in Latin America has been supported by the oil and gas industry, already having been deployed in companies of Brazil, Costa Rica, Colombia and Uruguay. The Dom Cabral Foundation is poised to expand in other countries the proposals and methodology for the formation and training of "Globally Responsible Leaders", offering a unique opportunity to raise their capacity and enhance their capabilities - in handling global challenges, aiming to create the necessary environment to set up the CORAs Communities of Responsible Action in Latin America.

1. Introduction
In the competitive market economy, our present development model, businesses are the agents of economic and technical evolution. As repeatedly pointed by Professor Phillippe de Woot, Professor Emeritus at the Universit Catholique de Louvain, Belgium, creativity, productivity, growth potential, flexibility, entrepreneurship and innovation are at the heart of this system. He still argues: The required changes demand profound reflection and go well beyond a new coat for an old system. If the movement for global responsibility just sticks new labels onto old practices it will not be taken seriously; if it puts old wine into new bottles it will be reduced to a public relations operation. The movement will only be credible if it reaches into the core of the very purpose of companies, renews the concept of enterprise and reassesses its role in the construction of our shared future. Because recent experience has shown that the current model does not lead to an equilibrium which provides for the global common good, GRLI argues that there is an urgent need for conceiving and implementing a more sustainable and societal development model. Without an in-depth transformation, this hitherto successful model runs the risk of becoming unsustainable, and of losing its moral and political legitimacy. The financial crisis in recent years has shown that the ideal of a self-regulated system has led us to failure on a global level, with long-term implications to economic development and human well-being. At the heart of this failure is a lack of both responsibility and leadership. We need more responsible leadership to implement a more comprehensive model for sustainable development. This requires a profound change in individual mindsets and behaviours as well as overall corporate culture. What is necessary is that both individuals and corporations assume their responsibility towards the Common Good. Globally responsible leadership demands that this cultural change and evolution of mindsets should be based on re-visiting three areas: First, the raison dtre of the firm; second, leadership as embedding and catalysing values and responsibilities in the

______________________________ 1,2,3 Dom Cabral Foundation Teachers

Rio Oil & Gas Expo and Conference 2012 organisation; and third, corporate statesmanship as broadening the debate and dialogue with society at large (GRLI, 2005). This paper introduces and comments on the proposals contained in the basic document that conform the GRLI (Globally Responsible Leadership: the Call for Engagement, 2005; Globally Responsible Leadership A Call for Action), as well as the methodology developed by Fundao Dom Cabral and the Petrobras University, for training globally responsible leaders, contained in document Globally Responsible Leadership Manual (Rev. Dec. 2009)

2. The Globally Responsible Leadership Initiative

The Globally Responsible Leaders Initiative (GRLI), co-founded and supported by the United Nations Global Compact and the European Foundation for Management Development (EFMD), is a pioneering group of business schools/learning institutions and companies representing five continents, over 300,000 students & 1.000,000 employees. GRLI is a global multicultural community of action and learning. It operates with a fully transparent and unique governance model with all partners participating. GRLI identify and act on key leverage points for scalable change through concept development, advocacy and execution of new learning practices and work in partnership as a global community of change agents. Today the GRLI Foundation, based in Brussels, Belgium, has 72 partner organizations and has set a limit of 120 partners for the years to come in order to remain a fully integrated and action oriented global network, and to fulfill its unique role as a leading global catalyst for key challenges and future demands regarding how to develop a next generation of globally responsible leaders. GRLI is a co-convenor, a member of the Steering Committee and an active supporter of the Principles for Responsible Management Education (PRME). The GRLI guiding principles say that whatever we engage in, must: Be result oriented: Whatever the initiative decides to do must clearly increase the capability to deliver visible results on the ground. Have long-term effects: Whatever the initiative decides to do will only qualify if it stands a strong chance to live on, and continuously affect the development of globally responsible leaders. Be unique: Getting things done innovatively, quickly and effectively while honouring and sustaining the unique combination of the partnership of businesses and learning institutions and not done elsewhere. Amongst the GRLIs milestones and achievements so far, publishing A Call For Engagement (November 2005) and A Call For Action (December 2008), we can highlight the following: Creating the platform from which many GRLI partners have presented the message and challenge of Global Responsibility in dozens of forums and organisations around the world; Scoring notable successes in terms of change within a number of GRLI partner organisations; Spurring the United Nations Global Compacts to launch the Principles for Responsible Management Education (PRME) initiative and participating in its governance; Building a strong global community connected by shared values and a profound sense of the need to see change in business education, increasing the reach of GRLI, in an inclusive and progressive process; Since the beginning, focussed on thought leadership regarding the Company of Tomorrow/The Corporation of the 21st Century; Bringing the phrase Global Responsibility into the international business vocabulary as an expression of the role of business in society that is far beyond traditional corporate social responsibility; Continuous development of learning methodology Whole Person Learning; Launching new programmes and curricula in companies and schools. We are currently experiencing the GRLIs second stage - Maximising GRLI Impact (Phase 2 from 2009-2014) - combining our current entrepreneurial and customized approach (encouraging individual, bilateral and group actions wherever individual partners have energy to act) with a greater emphasis on identifying and acting collectively on key lever points to effect systemic change. In this sense we will: Continue to develop frontrunner organizations amongst our own partners who undertake major transformative actions around their own institutions and provide role models and test beds from which others can learn; and Accelerate and scale up our impact through greater collective focus. Within this two-pronged approach, we will continue to work within the broad focus areas of: 2

Rio Oil & Gas Expo and Conference 2012 I. Advocacy The process of advocating for global responsibility as the highest form of responsible behaviour and for the development of globally responsible leaders. II. Concept Development (Thought Leadership) The development of new concepts and ideas as well as the identification of existing ones which assist in identifying what it means to be globally responsible and how to develop/educate leaders with that focus. III. Practice/execution Practical projects that businesses and business schools/learning institutions initiate in pursuit of our goals. However, rather than focusing on these three categories identified above and then identifying actions within them, we are reversing the process and will be focussing on specific initiatives, actions and programmes that have the greatest potential to achieve a broad-based global impact. Some of these are strategic in nature and some are tactical. In every case, we believe that they carry an opportunity for impact.

3. The GRLI philosophy in the 2008 Manifesto The globally responsible leader A Call for Action
In 2008, the world faced the emergence of a new financial and ethical crisis. GRLI decided that it should position itself, as a strong root of the crisis was born, grew up and would certainly involve business community in a global range. After a collective construction, the document was released around November that year. Some parts of that document were crucial for the structuring of the coming approach to be adopted by FDC in the planned expansion of GRLI in Latin America. The following box contains some exerts of the manifesto.

The globally responsible leader A Call for Action

3.1. Re-visiting the raison dtre of the firm The primary purpose of the firm is to contribute to overall well-being through economic progress. Shareholder value is but one of several measures of performance. Entrepreneurial actions are defined in terms of initiative, dynamism, and innovation. We have to come back to the core of entrepreneurial action, which is creativity in a real world of goods and services, as opposed to a logic of purely financial speculation. This concept of progress will allow us to identify the specific contribution that a firm makes to society - the function that it alone is capable of fulfilling, and that differentiates it from other organizations, such as government, unions, universities, NGOs and so on. To re-locate economics in a perspective of common good requires the exercise of global responsibility. Setting out the aims and purpose of economic progress involves aligning this progress with the greater context of societal progress. Economics is only a part of the whole, and it cannot dominate human society by imposing its restricted vision of equating progress with profit growth. Other forms of progress exist in the domains of, for example, culture, society, politics, spirituality, education, and health. While a firms financial progress may encourage some of them, it does not cover the whole field of human progress. We have also seen that deviations of the current system can cause regression and lead to negative or even destructive situations. We must stop asserting that to respond to global challenges we have only to place our faith in technical ingenuity and market indications. We must stop claiming that there is a quasi-automatic convergence between economic creativity and the global development of humanity. The firm will only become responsible if it subscribes to an all-embracing view of societal progress and sustainable development. It is in this perspective that GRLI stands for formulating the purpose of the globally responsible business in the following terms: Create economic and societal progress in a globally responsible and sustainable way. 3.2. Leadership and ethical fitness Leadership is the art of motivating, communicating, empowering and convincing people to accept a new vision of sustainable development and the necessary change that this implies. Responsible leadership implies the grounding of actions in a system of values which recognise societal interdependence and long term sustainable development. If the firm wishes to lend meaning to its actions, if it wants to give a purpose to economic progress by aligning it to societal progress, ethics are essential to enlighten tough choices and guide behaviour. The main ethical question for our time is to choose what kind of world we want to build together with the immense resources we have at our disposal. Humans, societies, and their actions build - or destroy - the world. We are responsible for the future and for the society we create. This responsibility becomes greater as our creativity, resources and power grow. Science, technology and globalization do pose radically new questions that force us to look beyond a narrow framework and to take into 3

Rio Oil & Gas Expo and Conference 2012 account global interconnectedness. To refuse to integrate ethics into the functioning of the firm on the pretext that the economy has its own logic amounts to locking oneself into an instrumental approach (the market ideology) which deprives the firm of its social legitimacy, and can lead to spectacular failures. Ethics are not restricted to convictions or values, but are integral to the long-term sustainability of companies. 3.3. Responsible Corporate Statesmanship Corporate statesmanship is about the organisation as an active contributor to societal well-being and evolution. The responsible firm accepts an open debate whenever its actions can have major social consequences. New types of dialogue, which include representatives of civil society, (such as NGOs, universities, religious organisations) and international institutions, need to be added to the discussion with social partners and governments. Such an approach must obviously go beyond the national framework. Voluntary transformation is necessary, but will no longer be sufficient to improve the system. We also need political will translated into regulations and world governance. Rather than limiting itself to lobbying actions, the responsible company pro-actively participates in preparing and implementing the necessary new global rules in collaboration with all stakeholders. This includes attentive listening and contributing to the public debate. It is in this sense that responsible leaders must develop a new capacity for statesmanship.

4. The Globally Responsible Leadership Initiative expansion in Latin America

Spreading responsible leadership in a global context requires the engagement of businesses and schools at the regional and national levels. As the first initiative to create a methodology based on the proposals presented on the official GRLI document - Globally Responsible Leadership: A Call for Engagement (GRLI, 2005), Fundao Dom Cabral (FDC) and Petrobras were invited to set forth a pilot project for the development of globally responsible leadership throughout the companys value chain. This project gave rise to the Petrobras Globally Responsible Leadership Manual and was the seed of the Latin Americas Community of Responsible Action (CoRA). This manual has been delivered to Mr. Ban Ki-moon, UN General Secretary, at the Global Compact Leaders Summit in July 2010 and today is a public document, available for consultation and use by any company or educational institution. In 2009, this work began to be spread to the oil and gas companies in Latin America, supported by ARPEL (Regional Association of Oil, Gas and Biofuels Sector Companies in Latin America and the Caribbean) and CIDA (Canadian International Development Agency). In June 2009, ARPEL heard about the project developed in Petrobras and became interested in bringing to their affiliates technical assistance based on the GRL principles. To achieve this, ARPEL received financial support from the CIDA. The first three projects were conducted in companies in Costa Rica, Colombia and Uruguay. And, with the goal of developing both companies and business schools in their respective countries, local schools were contacted to join the work. All three companies were interested in defining strategic objectives that could help them act in a globally responsible way. The challenge was to define a specific contribution companies would give to their communities, either local or national. 4.1. Creating the sense of urgency The Positioning Matrix for a Globally Responsible Company One of the most important issues for an executive is to be able to determine where the company is positioned in relation to globally responsible leadership. In order to provide a structured answer to this question, Fundao Dom Cabral has established a simple assessment tool the Positioning Matrix for a Globally Responsible Company, which is based on two axes: the development stages and the areas of Globally Responsible Leadership. 4.2. Development Stages of Globally Responsible Leadership The Globally Responsible Leadership development stage of a company can be divided into elementary, committed or transformative, as show in Figure 1.

Figure 1: The development stages of the Globally Responsible Leadership (Gabrich, Boechat & Braga, 2011) 4

Rio Oil & Gas Expo and Conference 2012 Dimensions of the Development Stages Time Performance area

Elementary Past Individual and Organisational Meets the legal norms aspects. Takes past solutions and suits them to the present reality

Committed Present Society Criticizes and enunciates existing gaps in order to take advantage of the potential that exists in reality

Transformative Future Humanity Creates new realities in order to take ownership of what can be done and generates longevity and sustainability

How companies perform

Companies in the elementary stage pay special attention to individual and organisational performance. They do not pay attention to the aspects of the societies in which they operate or to society as a whole. Knowledge in these companies is limited to legal and normative issues, that is, they live exclusively in the present and survive thanks to past successes. Companies in the committed stage place add attention on their performance for the society in which they function. These companies are concerned with criticising and enunciating existing gaps in order to take advantage of this potential. The companies in the transformative stage add attention to what would happen to the humanity. These companies are concerned with the creation of new realities in order to take ownership of what can be done, thus generating longevity and sustainability. 4.3. Areas of Globally Responsible Leadership According to the 2008 GRLIs Call for Action, globally responsible leadership requires that cultural and mental changes be based on the analysis of three areas. First, the organisations reason for being is to contribute to the general well being through economic progress. Entrepreneurship is defined by initiative, dynamism and innovation, and should be at the heart of companys action to create economic and social progress in a sustainable and globally responsible way. Second, responsible leadership implies basing actions on a value system that recognises societal interdependence and long-term sustainable development. The major ethical issue of our time is how to choose the type of world we want to build together, taking into account the vast range of resources that we have at hand. Third, corporate statesmanship refers to the organisation as an active contributor to social development and well being. A responsible company commits itself to conduct an open debate as long as its actions can bring important social consequences. This includes paying close attention and contributing to the public debate. Crossing the development stages with the areas of Globally Responsible Leadership will result in the Positioning Matrix for a Globally Responsible Company, as shown in Figure 2. This matrix may be used to assess the current and desired (future) position of the company in each of the three areas, thus enhancing the sense of urgency for the change.

Rio Oil & Gas Expo and Conference 2012 Figure 2: The Positioning Matrix for a Globally Responsible Company (Gabrich, Boechat & Braga, 2011) Area Stage Elementary Companys Reason for Being Essentially financial logic. Meets legal norms. Commitment to competitiveness within the value chain to improve its position in the market. Commitment to a global vision of social process and sustainable development. Leadership and Ethics Protects the interests of the company in a market ideology. Recognizes the company as an independent social body and generates value in the present. Supports proactive actions and strategies in a system of values that recognizes societal interdependence and long-term business development. Projects new realities for the future. Corporate Statesman Direct impacts in the stakeholders linked to the presence of the company in the market. Direct and indirect impacts, considering the market and societal agents. Active contribution to social well being. Open debate and political will to change the social regulation and the governance in a local and global scope.

Committed

Transformative

5. Defining the Specific Contribution from the Company The Materiality Map
The Material Map is a tool that enables us to visualize and prioritise the global sustainability challenges, in terms of their importance in relation to the company and to society. It represents a structured image of the most important sustainability challenges, as shown in the Figure 3 below. Figure 3: The Materiality Map

Rio Oil & Gas Expo and Conference 2012 In the Positive Agenda, the challenges that are considered are those that are the most important for the country and the company, and which may serve as a common ground for cooperation. This means that the challenges in this field, being of concern to all, represent opportunities for the companys participation in the drive for common needs. In the area defined as Social Agenda are condensed the challenges considered the most important for the country, even if they are not necessarily the most important challenges for the company. This means that the challenges in this field, being elements of concern for humanity, represent opportunities for the companys contribution to social and sustainable development of external needs, most likely by acting as a pivot between businesses, governmental and nongovernmental organisations. The area defined as Corporate Agenda combines the challenges considered as the most important for the company, but that are not the most important for the country. This means that the challenges in this field present commercial opportunities and are aligned with the needs of the planet, deserving some investment by the company. And, finally, the area defined as Blind Agenda combines the challenges considered as less important for the country and the company. The challenges in this field, being elements of global concern, present opportunities for the company to adopt a vanguard position in relation to the needs of the planet. Costa Rica The first assistance under the agreement was realized in Costa Rica. We helped the company include sustainability in its strategic planning and deploy objectives and an action plan. The local business school was expected to support its implementation in the future. With a strategic plan as the starting point and the challenges that sustainability represents for the company, the companys Sustainability Committee understood that the assistance offered by ARPEL in partnership with CIDA and Fundao Dom Cabral could help them establish strategic objectives to guide the participation of the company in regional and world markets in a sustainable way. The work was thus formatted with this objective and carried out in three principal stages. As a result, thirty-six actions and projects for the implementation of these objectives were established and prioritized. Colombia The second assistance occurred in Colombia along with a local business school. Taking the companys strategic goal as the starting point and the challenges that sustainability represents for the company, the companys Sustainability Committee understood, from our interaction with them, that the company could do much more for the environment and for the Colombian society. We then decided that the first step in this direction would be to perform a participative assessment of three management instruments used to guide the companys action: Strategic Planning, the Leadership Model and the CSR Plan. The work was designed with this objective in mind and carried out in three stages. As a result, guidelines were set for the company's development on the principles of globally responsible leadership, and the management instruments were assessed with proposals raised to aligning them to GRLIs principles. Continuing the project, we worked with the companys Corporate University to provide its continuity and expansion that is, to create a CSR module that cover both the leaders of the company as well as the workers from their value chain. Uruguay The third assistance under this agreement was realised in Uruguay along with a local business school. Taking into the consideration UNDP reports for Uruguay, we assisted the company in defining their specific contribution to the countrys society and in consolidating a plan of action for medium term (two to three years). Also, the company decided to promote an association with the local business school for establishing a Centre of Globally Responsible Leadership, a seed for a CoRA (Community of Responsible Action) in Uruguay. With the companys vision as starting point, the companys Sustainability Committee, Fundao Dom Cabral and the local business school decided that the technical assistance should focus on raising awareness of the Board and senior managers about the concepts of GRLI and defining initiatives that could be included in the companys strategic planning. Also, incentives should be created for the development of training initiatives.

6. The ways ahead

Developing the businesses of the 21st century and the CoRA has proven a major challenge in Latin America, which ultimately depends on the quality and effectiveness of those involved. 7

Rio Oil & Gas Expo and Conference 2012 The partnership with ARPEL and the most important companies of each country in the region has proved to be an excellent starting point to spread the concepts of Globally Responsible Leadership, which we expect to enhance in the near future, aiming to help energy companies in the region to become increasingly sustainable. In order to disseminate widely this innovative project of formation of a new leadership in the Latin America and Caribbean, helping energy companies in the region to become increasingly sustainable, we are seeking to present its recent advancements in the most important Latin American meeting of the industry. Fundao Dom Cabral is ready to disseminate widely this innovative project, spreading out the concepts of GRLI in all Latin American & Caribbean countries, based on prior experiences reported here, on the support given by its Sustainability Center in Brazil for content generation (currently supported by Petrobras) and on the worldwide network of 72 businesses and business schools from all continents belonging to GRLI Foundation.

References
GRLI FOUNDATION Globally Responsible Leadership: A Call for Engagement, 2005 DE WOOT, P. Should Prometheus be Bound? Corporate Global Responsibility, Palgrave, 2005 TAYLOR, B. Learning for Tomorrow: Whole Person Learning, Oasis Press, 2006 PETROBRAS, FUNDAO DOM CABRAL, GRLI FOUNDATION Globally Responsible Leadership Manual, 2009 PETROBRAS, FUNDAO DOM CABRAL, GRLI FOUNDATION Globally Responsible Leadership Development Program, 2009
GRLI (www.grli.org) is a foundation of public interest based in Belgium with the purpose of developing a new generation of globally responsible leaders through the development and support of worldwide projects and initiatives