Corporate America is accountable for what it does and does not do —businesses must be socially responsible (or, at least they should be). Social responsibility is a company’s duty to make the right choices that will contribute to the welfare and interests of society, as well as those of the organization itself. Recent headlines suggest that many companies don’t always meet this goal.
Of course, the firm is accountable to its stakeholders who are people within or outside the organization that have a stake in the organization’s performance. This includes customers, community, creditors, government, owners, managers, employees and suppliers.
Generally we think of an organization’s main responsibilities as economic and legal. Economic responsibility includes producing goods and services that society wants and to maximize profits for its owners and shareholders. Legal responsibility is what society deems important with respect to appropriate corporate behavior—it is the law. Making money and obeying the law is the minimum expectation as far as I am concerned.
A good company must also be ethical which means managing the behaviors that are not necessarily written as law and may not serve the corporation’s direct economic interests. Companies can demonstrate social responsibility by taking corrective action before they have to, by being bold enough to publicly admit mistakes, by embracing social programs which help the environment, by establishing and enforcing a corporate code of conduct for all employees including management, or by taking needed public stands on social issues even when it is controversial.
Business Ethics (http://www.business-ethics.com/BE100_all), a magazine dedicated to social responsibility, has developed a list of the 100 Best Corporate Citizens in 2007. The 100 Best Corporate Citizens list ranks firms based on how well they perform in eight categories: shareholders, community, governance, diversity, employees, environment, human rights, and product.
Green Mountain Coffee Roasters’ first place finish marks the first time in the history of the “100 Best” that a company has ranked first in two consecutive years. Green Mountain has been among the top 10 companies on the list for five years running.
The list is drawn from more than 1,100 of the largest U.S. publicly traded companies and is largely based on the environmental, social, and governance research of KLD Research & Analytics. Rounding out this year’s top ten are Advanced Micro Devices, Nike, Motorola, Intel, International Business Machines, Agilent Technologies, The Timberland Company, Starbucks Coffee Company and General Mills.
This list suggests that being socially responsible is a good thing and has its rewards.
John Bradley Jackson
© Copyright 2008 All rights reserved.
P. S. Check out the full list of the 100 most socially responsible U.S Companies at http://www.thecro.com/files/100BestGatefold.pdf
I concur with your comment about the need for companies to go above and beyond compliance with the law in terms of business ethics.
Full compliance with the law is a pre-requisite for consideration as an equitable company (frivolous or unintentional breaches aside). Governments – representatives of the people – define minimum standards of behavior through legislation. Companies have no mandate not to follow the minimum acceptable standards as defined by law.
But the law sets minimum standards only. Truly ethical companies will take a more proactive approach. They will go above and beyond minimum legal requirements and conduct their entire operations in a manner which reflects fairness, honesty and integrity.
The legal standard is bar that is “required” for firms to meet while there discretionary standards above that—sadly, few aspire to embrace.