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Article

28 Feb 2005

Author:
Jeffrey Garten, Dean of the Yale School of Management, in Financial Times

Why Goliaths need to be careful

It is a good bet that the wave of mergers is just starting to build...[a] problem for outsized companies is the public perception that they possess too much political power. Mega-groups are, like all companies, under severe pressure to generate profits. But, as the most visible targets at a time of notable lack of trust in public companies, they could be held to ever higher standards of non-financial performance...multinationals should try to use their "soft power" to pre-empt popular resentment. They should begin by reviewing the effectiveness of the many corporate associations that profess to enhance civil society and redouble efforts to turn rhetoric into concrete actions and results. They could, for instance, enhance the prominence of organisations such as the World Business Council for Sustainable Development and the Global Reporting Initiative...[refers to Honeywell]