What’s More Important: ‘Social Responsibility’ or Basic Honesty?

Here’s a must-read opinion piece, by Peter Foster for the National Post:

Trading honesty for ‘social responsibility’.

Here are a couple of early paragraphs that give the gist of what he’s saying:

It is surely also intriguing that the current financial crisis should have come after an explosion in the business ethics industry and the steady rise of the corporate social responsibility movement up the corporate hierarchy. You would be pushed to find any financial institution involved in the current debacle who was not dedicated to the very latest in independently monitored and internationally benchmarked governance practices, complete with high-sounding “codes” and commitments to carbon neutrality and fighting child poverty. And wasn’t the regulatory side of corporate governance meant to have been rendered cast iron by Sarbanes-Oxley?

Could that be the problem? Business ethics has become not so much about honesty and fair dealing as about the additional burdens companies should be taking on in the name of infinitely expansive corporate social responsibility and getting out in front of environmental issues.

Another choice paragraph:

There are, of course, cheats and crooks in the business world because there are cheats and crooks in the world more generally. The enormous wealth created by capitalism, and the importance of trust for the system to function, means ripe pickings — indeed astonishing pickings — for the likes of Bernie Madoff. Meanwhile you have flawed geniuses such as Garth Drabinsky for whom accounting fraud amounts almost to sport. But then Bernie Madoff is no more “typical” of capitalism than Enron, and any set of rules that closed all loopholes against Garth Drabinsky would bring the entire system to a grinding halt.

Now please be careful: Foster may be a little too ardent an admirer of capitalism for some of you. That’s fine. His rhetorical flourishes are a bit much at times, and his admiring reference to Milton Friedman will provoke those who see Friedman in a negative light. But get past that. Look at the point he’s making, about the things that really matter in terms of corporate behaviour. Is it possible — just possible — that all this focus on encouraging business to take on lofty social goals has distracted them, and us, from more basic issues of honesty and integrity?

In part, Foster is echoing something I said a couple of months ago, when I wrote this blog entry: Down With CSR! Up With Business Ethics! I offered 3 arguments against “Corporate Social Responsibility” and in favour of Business Ethics. Reason #3 read, in part:

Waste of Public / Activist / Media Attention. In the face of corporate scandals and economic instability, what we ought to be asking of business executives is that they focus on doing their job honestly and diligently….

It might just be a good thing if we could all agree to hold business to one or two clear standards, instead of a few dozen fuzzy ones.

5 comments so far

  1. Diving In on

    Chris,

    I’ve just completed a paper on employee engagement for an Organizational Communication class where my conclusion mirrors your summary. Isn’t it just easier to be honest and authentic rather than having to resort to convoluted means to demonstrate social and employee responsibly?

    Being honest and gaining trust — age old, tried and true basic principles that well work for me.

    J Tomich
    BA Professional Communication
    RRU
    Victoria, BC
    Canada

  2. elaine on

    hi, i think to reduce csr to honesty or ethics is a gross misunderstanding of the concept. Of course people have to be honest and ethical. But csr goes way beyond this. CSR is the assessment of the impacts of the business on all stakeholders and the development of a business strategy to ensure those impacts are as positive as possible. The approach has to be ethics AND CSR, it’s not a trade-off.

    elaine cohen
    http://www.b-yond.biz

  3. Chris MacDonald on

    Elaine:

    As far as I can see, nowhere did I reduce CSR to honesty or ethics.
    I think you may have misread the posting. Or perhaps you can clarify.

    Thanks,
    Chris.

  4. bruchansky.name on

    I think that the term “basic honesty” is missleading because it assumes common sense is enough to guide corporation acts. In reality, ethics is not only about common sense, but also about strong opinions not shared by everyone e.g. importance of environment against immediate social impacts. I prefer the term ‘CSR’ because it better highlights that ethics is about actively making choices. That being said, the practice of CSR is maybe not yet honest.

    http://bruchansky.name/2009/03/17/ethics-power-of-the-crowd-or-corporate-social-responsibility/

  5. Chris MacDonald on

    I don’t see how basic honesty implies or assumes common sense. In some business contexts, achieving basic honesty might be a complicated and controversial matter.

    Nor do I see how the term “CSR” highlights the idea of actively making choices, any more than the term “ethics” does.


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