Corporate Social Responsibility (CSR) is an ugly discipline – a perfect example of a secondary market created through the failures of leadership and the shortcomings of the market society.
Ethical behavior – what Aristotle would have called virtuous leadership – should never be sub-contracted to working committees or remote departments.
Since its emergence towards the end of the last century, CSR has supplanted a market of virtue with one of compliance. Instead of asking “what’s the right thing to do?”, an industry of production and conformity has been created. Companies continue to outsource their consciences to those whose own barometers of success are often the self-preservation of influence or budget, rather than the transformation and betterment of society. A “business case” must be made for making money, while “doing good” is otherwise relegated to those running CSR (which begs the question, what happens when “doing good” actually makes money?). Access to leadership is limited, except in times of crisis. A noble cause – ethical leadership – has been reduced to another commercial machine. Intellectually, it is an odd divorce.
Leaders in both business and government have a moral responsibility to create and sustain an ethical behavioural framework. The failure to grasp this principle is what Professor Daniel Nyberg recently called “a moral corruption”. Trusted leadership, in particular, demands not only ethics and values, but also vision; transparency & accountability; democracy & empowerment; transformation & transition; and, above all, deeds, not words. Some global leaders may be grasping this trust agenda (Andrew Witty and Paul Polman are two excellent examples) but, sadly, they remain in a lonely minority.
The irony is that CSR – even as a secondary market – was invented to help engineer a better and more responsible world, even if not by the leaders themselves. Instead, it begat a global behemoth with unreported but undoubtedly huge monetary value and a bureaucracy that enshrined rules and reporting mechanisms over genius ideas for transformational change. The very reason for CSR’s existence became the opposite of what CSR could ultimately achieve. Compliance beat values, hands-down.
I have often given Milton Friedman a pretty rough ride – cheekily distorting his “social responsibility of business is to maximize profits” to characterize all the evils of market fundamentalists and libertarians. In truth, Friedman was not a wholesale evil-doer. He still believed in the need for social good. But many of his followers have twisted his words to place “the market” on the highest altar. CSR is an unhappy and maybe unintended consequence of this. As one academic recently noted, the only thing worse than Friedman, is his blind disciples and their monstrous creations.