Corporate social responsibility in the U.S.: Have we made any real progress in 2009?
Corporate responsibility is a buzz term of the new millennium that has come to mean different things in different rooms. In the living room and the oval office, it has to do with throwing over a well-entrenched way of doing business that rewards individual failure at the highest levels, leaves investors unprotected and forces taxpayers to bear the direct and immediate consequences or risk losing a way of life that once depended only on the strength of their work ethic.
In the boardroom the phrase corporate responsibility is all about opportunity. It is the stuff of press releases and marketing campaigns. One can hardly find an annual report that does not trumpet some social initiative evidencing the corporation's commitment the planet or the underprivileged.
This is, of course, good except to the extent that it diverts attention from executive junkets to Bora Bora, the acquisition of a Rodin sculpture to adorn the powder room of the CFO or windfall rewards to failed and ousted officers. Admittedly, whenever a corporation pours resources into creating, and then promoting efforts to be green, or to meet legitimate needs of a community, everyone benefits, especially the corporation.
Harvard Business School professor and former editor of the Harvard Business Review, Rosabeth Moss Kantner, makes this case in her new book, SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good.
Without a hint of irony, professor Kantner points out that it is a mistake to make social commitments that do not have an economic logic that sustains the enterprise by attracting new resources.
In other words, good deeds sell product.
It cannot be denied that the kinds of good deeds professor Kantner and others advocate benefit humanity. The fact remains, however, that, to the extent that our lives are tied more closely to the overall health of our local, national, and world economies than to the generosity of philanthropists corporate or otherwise there must be another, more fundamental component of corporate responsibility.
In September, on the anniversary of the collapse of Lehman Brothers, President Obama delivered a speech on the subject of corporate responsibility at Federal Hall, just across the street from the New York Stock Exchange on Wall Street.
Andrew Ross Sorkin, reporting for the New York Times attended the speech and observed an audience comprised largely of top executives who averted their eyes and looked uncomfortable as the president called for an end to excesses and reminded the them that they were free to clean up their act voluntarily at any time rather than waiting for Congress and regulatory agencies to get around to tightening the rules.
The only point in the entire address that drew applause was when President Obama noted that Wall Street was not the sole culprit in this economic fiasco.
Across town on the same day, federal judge Jed. Rakoff refused to approve a deal between the Securities and Exchange Commission and Bank of America, which, in his opinion, would have amounted to a mere slap on the wrist for Bank of America for its failure to disclose to shareholders about to vote on the merger with Merrill Lynch that the company had just distributed huge bonuses in the wake of suffering equally huge losses. Judge Rakoff openly accused the S.E.C. of being soft on corporate misconduct.
Back when the truth about the merger first surfaced, the national outcry was deafening. Now, more than a year has passed, and the question has become, what will change if we have forgotten to care?
JD Carr is the co-founder and writer for Greenergy2030.com