Home » Busting the Myth: Corporate Responsibility is NOT a New Phenomenon
False. False, and... False.
Actually I will argue that companies -- particularly big companies -- have historically pursued societal goods, that the exclusive obsession with the bottom line is really a very recent phenomenon, and that the "rise" of corporate responsibility is really a return to traditional corporate values. Moreover, what's changed and will continue to drive change isn't policy or legislation from on high, but greater individual social consciousness from below.
Consider the British East India Company, chartered by the British Crown in 1600 to explore and develop -- some would say exploit and plunder -- what became the British Raj in India. With our modern eyes we can look back and deplore many of the things the Company did and stood for, but we cannot deny that it also pursued its own version of societal goods. In his charge to Company Directors, Sir Thomas Munro, Governor of Madras, told them, "You are not here to turn India into England or Scotland. Work through, not in spite of, native systems and native ways, with a prejudice in their favour rather than against them and when in the fullness of time your subjects can frame and maintain a worthy Government for themselves, get out and take the glory of the achievement and the sense of having done your duty as chief reward for your exertions."
Fast forward to America at the turn of the last century. CW Post and John Harvey Kellogg founded what were to become huge food companies, the Post and Kellog cereal companies respectively. But at their core they were founded as much to advocate a lifestyle of clean living and upright morals as sell cereal (to see what I mean, check out Anthony Hopkins' hysterical characteture of Dr. Kellogg and his obsession with colonic cleansing as the key to Christian living in The Road to Wellville). Or think about GM and the large companies of that era. They had a social compact with workers and communities under which they provided lifetime employment and benefits for their workers. Stalwarts of their communities, they underwrote museums, built parks, and made possible generations of social mobility. Even that robberest of robber barons, Andrew Carnegie, underwrote what became the modern American public library system.
Now that the shareholder value obsession has run its course we're returning to the more normal state where societal good is expected to be part of the corporate agenda. What is different today is the origin of that expectation. Before, the societal responsibility or social conscience of companies was paternalistic. The state or the board decided, which also meant that the social agenda could get sidelined or ditched altogether on the whims of a few. Now, it's a groundswell.
Companies will and should continue to pursue the bottom line... but increasingly they will once more do it in the context of their societal responsibilities. And so long as we hold them and ourselves -- as employees, investors, and neighbors -- to account we stand to see a very good and very long-lived revival in corporate responsibility.
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