This morning’s Wall Street Journal dedicated substantial attention to corporate responsibility and ethics, issues that are extremely interesting to me.
In an article titled “Does Being Ethical Pay?“, the Journal explores the question “how ethical do you need to be?”. The conclusion series of interesting studies is that companies should be as ethical as the consumer requires them to be.
But I take issue with this bare minimum ethical approach. This is like saying that someone is a “good person”, even if they are greedy, contemptuous, and hateful, as long as they operate within the law. The world is engaged in a dance between good and evil (if you don’t believe that, visit any third-world country). We know intuitively that goodness does not come from the mere observance of the law or obeisance of minimum ethical standards. The law separates criminals from citizens; ethics distances the separation.
How ethical should we be? The flip-side of this question is “how much harm can I get away with” before it becomes unprofitable. People and companies who operate this way would do well to remember that we are stewards of our world. This world will go on long after today’s people and corporations have passed away. We can choose to squeeze as much use out of it as we can before we die. Or we can choose to steward our resources wisely, respect our people, and become the kinds of people and corporations that add value not only to our pocketbooks, but to each other and to the world as a whole.
One of the most exciting things that can happen in the corporate world is when a company takes some socially responsible action even when there is no direct financial payback. Corporate Social Responsibility (CSR) is based on the idea that doing good things pays off in the long run, not just the short, and indirectly as well as directly; in other words, you can do well _and_ do good.
So the question that we should be asking is ”how can we do well and do good”.
When reasonable, companies should do good things because they’re good, and not only because they return shareholder value. Many economists would argue that corporations’ primary responsibility is to their shareholders. And while healthy companies contribute to healthy economies which in turn benefits everyone, in my estimation a strong case can be made that corporations also have an equal responsibility to steward the resources that they use: environmental, human, natural, and otherwise. Corporations, like people, cannot be required to be responsible. But like a good person, a good company is responsible, and acts in socially responsible ways. Not just because it brings any immediate return (though it may), but because it is the right thing to do.
