Business Looking for Answers, Too

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Various friends from NGOs and fellow students had recoiled in horror when I told them I was attending Ethical Corporation's annual European Conference. What was I thinking of? As a frequenter of events such as the World Social Forum, the European Social Forum, trade justice rallies and anti-war protests, what was I doing going to a corporate event such as this?

In the eyes of my friends, I was switching over to the "dark side," trying to hobnob with executives in suits instead of handing out leaflets under the banner of "Another World is Possible."

But while studying for a Master's degree in globalization and international policy at the University of Bath, modules from the business and community program have sparked an interest in hearing a different side to the debate. Business all over the world is contributing to problems of inequality, environmental degradation and conflict, but how are companies responding to the slurs made by campaigning NGOs and what solutions are being put forward?

I had come to find out whether the "power, purpose, personality, and performance" of a corporation could be channeled into bringing about real change.

For me the most interesting aspect was hearing the contrasting and sometimes conflicting views of the various speakers. Elliot Schrage of the U.S. Council on Foreign Relations dismissed the need to overtly discuss "ethics" or "principles" at all; with a fervor that would have made Milton Friedman proud, he argued that the “business case” is a fully comprehensive pathway to a business model that delivers social justice.

Making decisions on the allocation of resources such that they yield the highest returns automatically includes elements of CSR, as reputational risk and the viewpoints of various stakeholders are considered, said Schrage. In a practical sense, he said, CSR is about competitiveness, “doing good by doing well.”

Environmental philosopher Kate Rawles' views coincided more with my own. She dampened the argument for the business case in quoting Einstein: “you can't solve a problem with the same kind of thinking that created it.” Our current system of over consumption and crater-sized ecological footprints is in need of a major overhaul, but the business case is merely a “stepping stone in the right direction.”

We need to rethink our definition of a “high standard of life” based on ever-increasing consumerism, in order to supplant inequality and environmental devastation with social cohesion and sustainability.

But who can define what is “good” and what is not, and draw up a framework for desirable conduct? Economist and writer John Kay, following his bold opening assertion that “the business of business is business” argued that business does not have a personality, and therefore cannot make normative judgments about what is “good.” This was refuted later with Tomorrow's Company's Mark Goyder claiming that “rules are for moral infants, principles are for moral adults.”

Companies do not operate in a vacuum of ethical and value-laden considerations. But a profit-seeking organization may not be in the best position to define “good” and “moral” conduct. Is Kay’s observation the basis for an argument for stronger external regulation to set the correct standards?

Perhaps greater engagement with NGOs can help set frameworks for what companies should and should not do. Jonathan Berman of consultancy Development Alternatives Inc, in a workshop about companies operating in conflict zones, argued that it may be desirable for companies to collectively work together with a number of NGOs to diffuse the “taint of ownership” that often devalues business-civil society partnerships.

NGO campaigners and business people may have very different priorities, but it seems that business is becoming increasingly aware that inequality and fragmentation in society is unacceptable. Maybe relations between companies and NGOs who monitor corporate conduct that were based on collaboration, rather than conflict, will allow for meaningful dialogue to take place.

John Elkington’s observation that “business operates in a goldfish bowl” is an apt way of describing the surveillance pressure that business is under to ensure that any societal and environmental footprints are not harmful. I had arrived at the conference looking for solutions from a business point of view, yet left with a head-spinning set of new questions to consider.

But I will tell my NGO friends and fellow students that their campaigning efforts are not going unheeded; for I met many people in the business world who are looking for answers too.

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This column has been reprinted courtesy of Ethical Corporation magazine. It was first published on June 13, 2005.

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