A New Capitalism, Free of Friedman
For a number of years now I have argued the case for integration of Corporate Social Responsibility (CSR) into the DNA of the corporation. CSR is not a marketing fad, a necessary evil or a “check the boxes” exercise. It is a way of doing business. A company is either socially responsible, or it isn’t.
Whereas most CSR initiatives have historically been stage-managed from the “CSR” or public relations department, a distinctive shift is occurring. Dare I say, companies seem to be “getting it”?
British Brands Group published a study recently that suggests a Corporate Social Responsibility Iceberg. It estimates that billions of pounds of value is currently hidden as branded companies do not measure fully the impact of their CSR activity.
On release of the study, John Noble, Director of the British Brands Group, said:
This report clearly shows the link between branding and responsible business. It also reveals the significant time and resources being invested by branded companies in their CSR programmes as they seek new ways to drive positive change for society, the environment and the communities in which they work. Importantly, they are integrating this activity into the heart of their businesses. However, the impact of such programmes is currently largely unaccounted for, indicating that there is a CSR iceberg hiding the true value and contribution of this work.
But they are beginning to measure it… Does it matter if the enlightenment is only because someone has seen the ROI? I think not.
Nobel Prize winning economist, Milton Friedman, in his book, Capitalism and Freedom (1962), writes, “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”
It was this philosophy that gave us the creeping epidemic of mesothelioma (James Hardie), the environmental devastation of Ok Tedi and Grasberg (BHP and Rio Tinto respectively) and the GFC (thanks to almost the entire investment banking industry).
Friedman consistently argued that businesses don’t have ethics, only people do.
But if people are the greatest asset of an organisation – as rightfully claimed by most – would it not follow that the more ethical and values-driven the people, so too the company? At the end of the day, all decisions are made by people.
In a series of interviews I did in late 2008 with a number of Australian CEOs, the consensus was it was no longer them conducting job interviews, but the candidates were interviewing them on their corporation’s environmental track record, ethics, commitment to community, diversity, equality and human rights.
This employee-driven shift, however necessary or overdue or hard-fought, gives us a foundation for a new corporate future – perhaps even a new “capitalism” – free of the sour greed of a Friedman philosophy.
Ok, maybe that’s too optimistic. What do you think?
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Category: CSR & Sustainability, Reputation Management
Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!