Title: Corporate Social Responsibility A New Standard
1Corporate Social Responsibility A New Standard
- Presentation to
- Türkiye Kalite Dernegi
- (Turkish Society for Quality)
- Frank J. Navran
- Principal Consultant
2About the ERC
- Founded in 1922
- 501c3 Not for Profit
- Research and educational organization
- Engaged in
- Research
- Education
- Advocacy
- Global Reach
- Ethics centers in Bogota (TPC), Dubai GCEE/
DERC), Pretoria (EthicSA) and Istanbul (TEDMER)
3Agenda
- Role of ethics in corporate social responsibility
- The globalization of ethics and CSR
- The emerging global ethics expectation
4 - Role of Ethics in Corporate Social Responsibility
5The Question
- Question
- Has the Corporate Social Responsibility (CSR)
agenda expanded to include Ethics? - Answer
- It always included ethics
- It has not always articulated that standard, but
it clearly has been there all along
6Defining Our Terms
- To be totally clear let us define ethics
- What does it means to be an ethical person?
- What does it means to be an ethical organization?
7Defining Our Terms
- Values
- The standards against which we measure what is
right, fair and good - Ethics
- Decisions and actions guided by and/or consistent
with those standards of right, fair and good
8Defining Our Terms
- What does it means to be an ethical person /
organization? - A person / organization is deemed ethical when
their decisions and actions meet the standards
set by the values that govern them - That begs two questions
- What are the standards?
- Who sets them?
9Universal Values
- There is general agreement that certain values
are Universal - There is also agreement that the behaviors which
address those values vary considerably across
cultures
10Example
- Universal Values include
- Citizenship, Compassion, Courage, Fairness,
Honesty, Honor (Integrity), Respect,
Responsibility - Consider
- Kyoko Hayashibe (Be) honesty/face
- Americans, Japanese and Inuits - compassion
11The Ethics Trap
- The preceding discussion could lead one to
presume that ethical relativism is the
applicable rule in business - Quite the contrary we are getting closer to
ethical absolutism - The key is to remember that society is the
ultimate arbiter of what is accepted as ethical
in the general business case and that has come
to be globally defined - C.f. Religion, where God is the ultimate
ethical arbiter, for the believer.
12Business and Philanthropy - 1
- The American Business Ethics experience in the
early Industrial Age - Business practices were patently unethical
- Corporate Social Responsibility (CSR), on the
other hand, was quite prevalent - The accrual of great wealth often brought with it
a social responsibility (borne of elitism
and/or guilt)
13Business and Philanthropy - 2
- Social Responsibility took three forms
- Employing the unfortunate (often at miserly
wages) - Charity alms for the poor
- Building Monuments to Ones Compassion
- Cultural institutions such as Museums. Theaters,
Libraries, Universities, many of which carry the
names of what in US history we now call the
Great Robber Barons
14Why For-Profit Business is Allowed
- The question can be asked
- Why does society tolerate for-profit business?
- My response
- Because society has deemed it to be in the
collective best interest
15Corporations and Society
- The Deal
- Corporations have an understanding with society
- In exchange for
- Access to resources
- Natural
- Human
- Access to markets
- Government protections
- They will be Good Corporate Citizens
16What is Good Corporate Citizenship?
- Defined by compact
- A social understanding that presumes good faith
in both parts - Reinforced by law (with law understood as
societys voice) - Today that includes
- Workers right
- Product safety
- Environmental concerns
- Transparency (most recently, in financial
reporting e.g., Sarbanes-Oxley) - C.f., 1900s
17Organizational Ethics
- Minimum Standard
- Compliance with applicable laws and regulations
- Emerging Ethical Standard
- Legal compliance plus fulfilling the expectations
of the social compact
18 - The Globalization of Ethics and CSR
19Whats New?
- What IS new is the ways in which the CSR agenda
is changing - The agenda is
- Expanding
- Dynamic
- Shifting in priority
- Priority seems to be whatever aspect of the
overall CSR agenda is not being met
20The Global Imperative
- More and more society is being defined in
global terms - The influence of the global community
- How the global community defines integrity
- The relevance and immediacy of these issues from
the participants perspectives - Global issues viewed through local culture
21The Influence of the Global Community
- Members of the global community with an overt
integrity agenda - Media
- Non-Governmental Organizations (NGOs)
- Multilaterals
- Multinationals
22The Business Case
- Today there is a business case being made for CSR
- Base argument
- CSR is a means of controlling special interests
by giving them enough to ensure they will not
disrupt business bite the hand that feeds them - Enlightened argument
- Corporations need the trust of society and CSR
builds trust
23The Impact of the Global Community
- The global community has defined the conditions
for admission to the global economy - Technical Standards
- Quality Standards
- And now, Ethical Standards (starting with HSE
standards) - Failure to meet these conditions can lead to
being denied access to the worlds resources and
markets e.g., application to the EU
24The Shifting Balance of Power
- Power is shifting from nation states to include
other entities - If General Electric were a nation it would have
the 25th largest GDP of any nation on Earth - When GE sits down to negotiate with a emerging
market nation, who has the real power? - The European Union can effectively compete with
the US, China and Japan - Individual European nations less so
25Global Integrity
- The agenda is constantly changing to bring those
elements receiving the least attention to the
forefront and to move those receiving
satisfactory attention to the background - The ordering of priority / importance is
determined by the events of the current news
cycle and the significance of the most recent
violation or abuse of someones agenda
26 - The Emerging Global Ethics Expectation
27The Current Global Integrity Agenda
Global Integrity includes at least these issues
(listed alphabetically) with priorities
varying daily
- Good governance
- Health, Safety and Environment
- Human rights including child labor issues
- Integration with national culture
- Rule of law
- Transparency, anti-bribery and anti-corruption
- Acceptance by local communities
- Compliance
- Corporate social responsibility
- Emerging free markets
- Ethics and business conduct
- Fair labor practices
28Sustainable Development The Triple Bottom Line
- Some organizations attempt to capture the global
integrity agenda in what has come to be called
sustainable development or the triple bottom line - Economic performance
- Profit, growth and return to investor
- Environmental performance
- Health, safety and environment
- Social performance
- Diversity, equal opportunity, labor practices,
security, anticorruption and contribution to
community
29The Ultimate Bottom Line
- Commitment by multinational and multilateral
organizations to functioning in such a way as to
ensure that their presence does not contribute to
the diminution and / or eventual elimination of
scarce and / or finite resources - Simply stated, a multinational / multilateral
leaves a country in which it has operated better
off for having allowed the outside interest there
in the first place -
30The Ethical Standard
Social Compact
Individual Values
Law and Regulation
Policy and Procedure
Organizational Values
31Conclusion
- So why is the broader ethics definition of CSR
critical to Corporations? - Because it is the right thing to do
- Corporations exist because society allows them to
exist and the more broadly defined CSR is part of
the deal - Because it is the smart thing to do
- Societys long-term success hinges on all of its
citizens accepting certain ethical standards
and that success is necessary for Corporations
long term viability
32Recap
- Role of ethics in corporate social responsibility
- The globalization of ethics and CSR
- The emerging global ethics expectation