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The Good Company
Helen Alford
On its January 2005 cover, The Economist
showed the picture of a white company headquarters with a pair of
angels’ wings on either side, casting a shadow behind with devils’
horns. The title on the cover said it all: “The Good Company: A
Sceptical Look at Corporate Social Responsibility”.
For a journal like OIKONOMIA, The Economist survey of CSR is both
to be welcomed and criticised. It is to be welcomed because it
highlights much of the empty rhetoric associated with CSR, much of which
is little more than another marketing ploy (or what The Economist
calls “good management”). But the survey is to be criticised in its
assertion that CSR is, at best, just management as usual (taking care of
the interests of property owners) or, at its worst, “delusional”,
reducing welfare for everyone. In other words, as far as The
Economist is concerned, there is no positive reading of CSR – it can
only either be superfluous or dangerous.
If we stay within the worldview, - the Weltanschaung, - of The
Economist, then there probably is nothing else to be said about CSR.
OIKONOMIA, however, along with many other businesspeople and thinkers,
does not share this worldview. As several articles in past issues of
this journal indicate, we subscribe to the view that economic wealth has
to be seen as an instrument towards the creation of higher, intrinsic
goods – economic goods provide the essential, crucial foundation of a
good society, but no more than the foundation. The idea of the good
company and of CSR comes in when we start thinking about how the
creation of foundational, economic goods relates to the production of
intrinsic goods. If, for instance, the production of the higher,
intrinsic goods is relegated to a second stage after a first stage of
producing “primary”, economic goods, then we have a problem. The
foundational or instrumental relationship of economic to intrinsic goods
needs to be put into practice throughout society, including within the
business enterprise itself. A business that does this, in which
managers, owners, employees and all its participants aim to respect this
relation, is well on the way to being a “good company” in a real sense –
or, in other words, to being a socially-responsible company.
Once this crucial first step has been taken, there are two others that
are necessary before we can be talking about a “good” company in a full
sense. Firstly, each person and each business always has to think of the
achievement of their own good in relation to that of the community of
which they are a part. Gaining profit at the expense of the common good
on which each one of us depends is like winning a battle which leads to
losing the war. Just as the relationship between foundational and
intrinsic goods needs to be recognised in all circumstances, including
during the day-to-day operation of the business, so too does the
relationship between individual and common good. One of the clearest
ways of thinking about this relationship is to use the model of
friendship. Two friends who really care about the good of each other
search for ways of carrying forward their relationship that is good for
each of them individually and also for the two of them as friends. They
develop what John Finnis calls a “third viewpoint”, that of their
friendship, from which to see what is the best thing for them to do.
Surely, there are power relations in friendships, lots of psychological
wounds and sociological condition-ings and prejudices that get in the
way, but friends who want to build the good of a friendship just keep
trying to get over these problems. This is not a bad way of thinking
about the relationship between the good of each one of us and the common
good, the good that sustains each of us in community, and which business
actors also need to keep in mind when making their business decisions.
Finally comes the third and most simple step to explain and yet the most
difficult to put into practice: raising the question, “is what we are
proposing to do really good?”. The fact that we have extensive court,
police and prison systems in all modern states indicates that it is
quite possible for human beings to make mistakes about what is good in a
real sense. Maintaining health is just as much about educating people as
to what is good for them to eat, the exercise they need to take and the
need, for instance, not to drink and drive, as it is about hospitals,
medical research and training medical specialists. We often find it hard
to know what is the good thing to do, and this is no less complex in the
context of the business. We are all on a journey here and no-one has
easy, straightforward answers even in cases where there are obvious
problems – for instance, even if you know that a substance that
employees are using is damaging to health, you have to be careful not to
replace it with something worse. What we must do is constantly ask
ourselves the question – is what we are proposing to do really good?
Much of the literature on stakeholder dialogue and on communicative
ethics can be helpful here, as there is no doubt that in many
circumstances as wide a dialogue as possible, at least as regards
decisions of major importance, is usually going to make it more likely
that we come to a good decision.
This simple, intuitive theory provides a starting point for
understanding CSR and what it means to talk about a “good company”. What
the theory means in practice can take up a vast array of practical
forms. During the conference “The Good Company: Catholic Social Thought
and Corporate Social Responsibility”, to be held at the Pontifical
University of St Thomas in Rome over October 5-7 2006, there will be
discussion of many of these practical applications. Several papers
discuss empirical surveys and case studies of companies that have
explicitly tried to put into practice the principles of Catholic social
thought, compatible with the simple model of the “Good Company” given
here. Others deal with specific difficult issues, like outsourcing or
just wages in a globalised economy. Another group of papers looks at the
role of cooperatives in promoting a pluralistic, mixed economy and the
particular ways in which cooperatives can be socially responsible, while
a different group is concerned with the role of relationships, social
capital and “we-rationality” or with the dangers of crowding out
intrinsic motivation in incentive payments schemes. A particularly
interesting group of papers looks at the areas of “convergence” between
CST and CSR, one of which argues that this area of agreement can best be
characterised within the tradition of natural law.
In some ways, it could be argued that the most important issue for the
good company is the yawning economic gap between the rich and poor in
our globalising world. Several of the papers in the conference deal with
the contribution of good companies to economic and social development,
and this follows on from the UN Year of Micro-credit in 2005. Although
microcredit, and other forms of microfinance, cannot achieve alone the
kind of integral development needed by poor countries, they have
increasingly shown themselves to be crucial mechanisms in the fight
against poverty. Success brings new issues, and one of these is the
increasing number of commercial banks entering into the microfinance
sector. At a conference of those working in the area of microfinance,
organised in February 2006 by the Pontifical Council of Justice and
Peace, mixed feelings were expressed about this. On the one hand,
estimates are that microfinance over the last 30 years has reached about
90 million people, whereas probably around 2 billion live on less than
$2 a day, indicating that without the involvement of big commercial
banks, like Citigroup and ABN Amro who were represented at the
conference, microfinance initiatives will not be able to satisfy demand
for their services. At the same time, some of those who have been
involved in microfinance for decades are concerned about the arrival of
the commercial banks. They fear, for instance, that the banks will come
in and buy up the intermediary organisations that they have been
developing, using them to serve their client portfolio. The charitable
operators will then need to start working again from scratch to build up
a network, one which is usually aimed at the poorest groups in society,
that is, those which it would be too costly for the commercial banks to
serve. Such fears are not unfounded if one remembers that the earliest
banks, the “monti di pietà”, were founded to help the poor with
micro-loans, as the text of the Pagina classica at the end of
this number of OIKONOMIA indicates, but those that have survived have
become mainstream banks. This is thus a challenging time for the good
company, and its particular manifestation in the microfinance
organisations, and we hope the October conference will contribute to
confronting that challenge.
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