CSR: fiscal forensics

March 1, 2009 | Galynn Nordstrom

Last month, I hosted my book club at my house to discuss the book “The Gold Coast” by Nelson DeMille, a book I’d chosen specifically for its sideways discussion on what had happened to the United States’ economic elite since 1929 and the Great Depression. At one point in our wide-ranging discussion I mentioned Bud Weisbart’s comments on fostering a corporate culture of excellence, innovation and individual and corporate responsibility, from our February “Perspective” profile, wondering if our current economic crisis and emerging economic stimulus package would encompass a greater focus on what is sometimes termed “Corporate Social Responsibility” (CSR).

“I think it’s only unprofitable companies that focus on that,” commented one of our book club members, genteelly sipping a 2006 zinfandel.

According to the “AsYouSow” organization’s Web site (www.asyousow.org), the term Corporate Social Responsibility refers to operating a business in a manner that accounts for the social and environmental impact created by the business. In an October, 2005 article in Reason (a debate among Milton Friedman, Whole Foods’ John Mackey and Cypress Semiconductors’ T. J. Rodgers), Mackey argues against Friedman’s view that the only social responsibility a law-abiding business has is to maximize profits for the shareholders.

“ … I believe that the enlightened corporation should try to create value for all of its constituencies,” said Mackey. “At Whole Foods, we measure our success by how much value we can create for all six of our most important stakeholders: customers, team members (employees), investors, vendors, communities, and the environment.”

It can be argued that being a good corporate citizen is simply good business, for many reasons. What I was wondering about during our book club discussion, however, is whether the principles of CSR are, or should be, followed even when it may not be good business, at least in the short term. A lot of companies, and a lot of employees, are thinking short-term these days.

IFAI’s market research manager Jeff Rasmussen states in this issue’s “State of the industry, part II” that “In 2009, industry players that achieve market success will do so because they have focused and communicated the value of their products and services to their customers in very clear terms.” Any company’s first fiscal responsibility is to stay in business. After that, how do you apportion your obligations to those six all-important stakeholders?

Often, when I ask for letters to the editor, I receive a minimal response, possibly due to potential contributors’ fear that I will inject random comments about wine into everything. It’s not an unreasonable fear. But if you’re willing to share your views about profitability and social responsibility with other Review readers, please contact me. In 2009, it’s a debate that could become a divide.

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