What is a Corporate Citizen? Is it a metaphor? A paradox? Or is it real?Decades of corporate social performance and activities beyond profit making as exhibited by many excellent companies – manifest that ‘the Corporate Citizen’ is real.
Corporations who meet the following standards of performance are good Corporate Citizens:
a) They abide by the laws designed to govern their relationships: with employees, the community, consumers, and with other important stakeholders.
b) They care for the preservation of the natural environment, and the Earth in general – beyond making legal compliance a part of their corporate strategies. And they do this from the beginning, and not when the disaster strikes.
c) Are ‘able’ and ‘willing’ to pull its own weight ? generating enough income so that they can:
- Pay a handsome return to investors
- Pay back loans
- Stakeholders and consumers are assured of:
- The continuity, ?sustainability? of the business
- Flow of products and services
- Fairly compensated jobs
- They pay taxes and bills
Thus profit making is not ‘selfish’ or unethical; in fact it is a good corporate citizen’s economic responsibility to make profits.
d) Consider themselves responsible for ethical behavior and practice it.
In so doing, while considering profits as ?sine qua non?, Corporate Citizens accept their responsibility to go ?beyond the bottom line?. They do not consider it a matter of choice, because they think that the ?sources? which were responsible for earning profits must be sustained, taken care of and their condition improved.
It is not amazing to see that corporations which had the vision and the initiative to adopt these policies have established themselves as giants in their fields. See what they had to say:
- Siemens ? Dialogue with society and responsible Corporate Citizenship are more vital than ever before.
- Ford ? Corporate Citizenship has become an integral part of every decision and action we take.
- Glaxo Smith & Kline ? Makes substantial investments in its corporate citizenship programs
“Corporate Citizenship involves corporations becoming more informed and enlightened members of society and understanding that they are both public and private entities. ? they are created by society and derive their legitimacy from the societies in which they operate. They need to be able to articulate:
- their role
- scope, and
as well as understand their full social and environmental impacts and responsibilities.”
The reason for their success is visible ? it is not only the corporation that is striving for success, but its benefitting partners, stakeholders, are solidly behind it and supporting it in generating enough profits.
Why would they let the profits fall?
It?s a win-win situation.
Examine the fall of the ?big corporation? in the recent past. You?ll find that reasons for corporate downfall are rooted in reasons similar to the fall of individuals ? and of course the rise and fall of nations too. Consider:
- Greed ? TIME magazine cover image soon after the great financial meltdown in USA and elsewhere: a Bull with a tear dropping from its eye, with the message, ?Price of greed?.?Get the picture: this is a self-defeating,?self-cannibalizing trait?.
- Unethical Behavior ? Abiding by the law is the minimum level of acceptable conduct. Where the law does not cover a social or environmental issue, a good corporate citizen takes decision based on solid business ethics and rationale. In business, ethical managers are like moral managers. Joseph L. Badaracco, Business Ethics Professor at Harvard Business School emphasizes in his book ‘Defining Moments’ (1997), “managers are ethics teachers of their organizations. He went on to say that this is true whether they themselves are saints or sinners or whether they intend to teach or not. It simply comes with the territory. Actions send signals, and omissions send signals. In other words conscientious managers are concerned about how their decisions and actions
- and shape the character of their?companies.
The CEO of a major corporation is in the role of a leader and a virtuous citizen, whether individual or corporate, and must be virtuous in his decisions and actions. His conduct is determined by ?values? and ?values? make us what we are.
1. “Can Corporations be Citizens?”. 2nd edition. Jerry Moon, Andrew Crane, & Dirk Matten
2. M. McIntosh, R. Thomas, D. Leipziger and G. Coleman, Living Corporate Citizenship: Strategic routes to socially responsible business, FT Prentice Hall, London, 2003, p. 16.
3. Carroll, Archie, B. in journal ‘Business and Society Review’