In the aftermath of the devastating oil spill in the Gulf and debate around BP's responsibility for the debacle, many corporations and PR practitioners have taken a fresh look at the subject of corporate social responsibility.
Along those lines, I realized this week that it has been five years since The Economist published its infamous cover survey, “The Good Company: A Sceptical Look at Corporate Social Responsibility.”
For those who may have missed it, this was arguably the most influential article ever published on the topic of CSR … and it ruffled more than a few feathers among NGOs and CSR advocates worldwide.
It also prompted a few quiet cheers, no doubt, in boardrooms at many a well-intentioned company across the globe. The global reaction is still worth a read.
As it went, the editors argued that managers of public companies are beholden to their owners, or shareholders, to maximize the long-term value of their owners' assets. Period. Putting those assets to any other use, such as corporate philanthropy, is inappropriate, if not unethical.
Further, The Economist argued that the fundamental premise of CSR - that corporations can advance social causes, such as sustainable development, by supporting policies and organizations focused on these issues - is fundamentally flawed.
Companies that push for global labor standards, or tighter environmental restrictions, or other “socially responsible” mandates usually wind up hurting the very populations they are trying to help by discouraging economic growth and foreign investment, typically in the regions that need it most.
The best way for corporations to improve social welfare is to act in their own economic self interest, so the argument went, by growing their businesses, making investments in lesser developed countries, creating jobs, and encouraging further foreign investment.
The series of articles are as powerful and controversial today as they were then, but may leave you asking yourself a question: In an environment of increasing transparency, and closer relationships between companies and their stakeholders, does this sweeping condemnation of CSR still hold true? It's a discussion worth revisiting.
Paul Jensen is chairman of the North American corporate practice at Weber Shandwick.