The Economist’s Corporate Citizenship Conference “Doing Well by Doing Good” wrapped up earlier last week and provided a variety of perspectives on what exactly needs to be done, how and by whom to restore our economy, corporate ethics and public trust. It was no surprise that the bleak economic situation was a recurring theme echoed by the speakers, but I was struck by the dichotomy of opinions, with some speakers expressing optimism, while others took a bleaker outlook on the economy and the role of corporate citizenship. One issue all the speakers did agree on was the need to replace failed policies, practices and attitudes, at societal, corporate and personal levels with a truly sustainable approach.
The Road from Ruin
Economist US Business Editor and New York Bureau Chief Matt Bishop kicked off the conference by pronouncing that the economic crisis offers the opportunity to reshape capitalism (no small feat). He admitted that he and The Economist have moved away from their belief that “The business of business is business,” a la Milton Friedman. Given the magnitude of the problems facing our world, Bishop maintains that it is imperative for organizations the size of today’s global corporations to step up to the plate.
Lamenting the terrible problem of Wall Street’s “IBG, YBG” (I’ll be gone, you’ll be gone) obsession with “short-termism,” Bishop pointed to three solutions he advocates in his new book, “The Road from Ruin.” Bishop sees a need for 1) the capital markets to look beyond the short-term to the long-term, 2) improved corporate governance and 3) adoption of socially-responsible investing practices among mutual funds.
Business ethicist Dr. Chris McDonald believes we are in the Golden Age of ethical business. “The world of business has never been more socially responsible, despite the headline-grabbing examples of negative stories,” stated McDonald, Associate Professor at Saint Mary’s University and author of The Business Ethics Blog.
A Murkier Outlook
Others were less hopeful. Our society must shift to holistic, systemic thinking, stated Jeffrey Hollender, Chief Inspired Protagonist, Co-Founder and Executive Chairperson of the Seventh Generation green cleaning product company. While companies often successfully implement commendable CSR efforts (think Walmart and its supply-chain greening efforts), those very efforts may be undermined by a flawed corporate mission (selling products as cheaply as possible which forces suppliers to externalize negative costs). Instead of rebuilding or restoring the system that collapsed, Hollender would prefer to see a new, fundamentally different system emerge–one in which the entire system is sustainable. “The American dream is seriously imperiled,” Hollender concluded.
A sage Peter G. Peterson, founder of the Peter G. Peterson Foundation, pointed to three unsustainable policies: entitlement programs such as Social Security, the budget deficit and health care costs, all of which have an enormous impact on the business community. Urging changes in failed policies, Peterson quipped, “If your horse dies, I suggest you dismount it.”
Speaking on a panel addressing job creation, InterMedia Partners, LP Managing Partner Leo Hindery, Jr., declared that the government fails to comprehend the scope of the problem of unemployment and underemployment. Skeptical of the ability of tax credits to spur hiring, he proffered alternative means of generating the 22 million jobs needed, according to his calculations: create jobs for out-of-school youths and institute a “Buy Domestic” plan.
Given the scope of the problems discussed by participants, there is much room for corporate citizens to “do good.”