One court case in California was causing some consternation in the corporate citizenship profession. 34 The California Supreme Court agreed in 2002 to hear a case against Nike brought by Marc Kasky under the state's unfair trade practice and false advertising law. Kasky argued that Nike's explanations to concerned customers about labour practices in its supply chain were aimed to promote their sales and were, therefore, a form of "commercial speech" which should therefore be subject to the State's unfair trade practice and false advertising law. He argued that the claims made by Nike were false and wanted a court to consider the case.

Nike argued that its pronouncements on the issue were not 'commercial speech' so they should be protected under First Amendment rights on free speech and therefore the court should throw out the case. They appealed to the Supreme Court, which in January agreed to review the California decision to hear the case. This was an unusual move, given that the case had not even come to court, so suggested that the Court considered the issues to be of unusual importance.

This decision pleased the corporate citizenship community as they worried that other companies might follow Nike in suspending their corporate responsibility reporting in case of further legal action. A campaign ensued to try and get different stakeholders, including some NGOs and trade unions, to support Nike on this issue.

However, the reaction of the corporate citizenship community could suggest a lack of historical understanding about the legal development of "the corporation", an absence of concern about power and communication, and a primary interest in protecting their own industry of social reporting. If, as is likely given their judicial history and current political persuasion, the Supreme Court rules that the case can not be heard and, therefore, that all corporate pronouncements of labour issues are afforded the same protection as personal free speech, then there will be no legal mechanism for preventing misleading statements being made by companies on these issues. Worse, such a decision will further extend the legal recognition and protection of corporations as "legal persons" which is considered by many to be inappropriate given their particular power.

The argument that if the Kasky case were allowed to proceed it would scupper social reporting, at least in California, is misleading. Companies could choose to report statistics on their social performance, such as the existence of trade unions, the number of court cases pending, out of court settlements reached, external certifications obtained, and data on the distribution of pay and benefits throughout the supply chain. They could even combine this with reporting on tax payments, as described above. Then, if they wished, they could venture opinions about their performance, which readers would be more trusting of knowing that these would be covered by false advertising laws. Given that almost 70% of experts read less than five social and environmental reports a year, perhaps reducing these reports to key indicators could help managers, consumers and investors make quick and informed decisions. 35

What the Kasky case really shows us is that we need to have reporting mandated and it needs to be guided by indicators agreed by governments. No one says financial reporting is advertising, as it is required and regulated by governments - albeit not to the standards we might want. Only mandating social and environmental reporting in this way will remove it from the realm of public relations and give it a similar standing as financial reporting. To reach such a situation will require some of that contentious stuff our new era requires - leadership. [See 'Go West, then Go Nowhere' for information on how this case was resolved.]