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Socially Responsible Business

Occupy From the Inside

The "ethical customs" for corporate behavior are changing and opening up new jobs in CSR.

To some readers, the very notion of working within a corporation is tantamount to selling out their values as advocates for social or environmental justice. While this is a valid perspective, there is another view. Liz Maw, (executive director of the MBA's for social justice group Net Impact) articulated this view in her opening remarks for the 2011 Net Impact conference, when she said, "We are here to occupy Wall Street from the inside." The standing ovation was spontaneous, sustained and genuine. The audience represented a whole new generation of young people moving into the workforce with their sights set on working for societal good from within a company.

But, as the occupy protests drag on, the popular view is far more divided. Are all corporations greedy and self-interested? Can corporations really be a force for good? These are questions that have been pondered for some time. The legendary economist Milton Friedman authored a New York Times op-ed in 1970 titled "The Social Responsibility of Business Is to Increase Its Profits." Friedman pulled no punches in the opening to this piece:

"The businessmen believe that they are defending free enterprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are -- or would be if they or anyone else took them seriously -- preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades."

Is corporate social responsibility "undermining the basis of a free society?" Should companies have any role in protecting people and the planet? Should the excesses or externalities that can result from the pursuit of profit be the sole province of government and/or civil society to monitor and regulate? Friedman and a line of followers (see "The Case Against CSR," 2010 Wall Street Journal op-ed) have articulated the popular perspective that companies have no obligation to people and the planet. Their only obligation to the world is to generate profits for their shareholders.

BUNK!

Such black and white distinctions only make sense in the academic ivory tower. In the shades of grey that color the real world, companies must make trade-offs everyday on where to invest and how to conduct their business. High profile cases of corporate misconduct mask the less sexy, but no less important, cases of companies choosing to do the right things right. Even Friedman admits that business leaders must conform to the basic rules of society and ethical norms in his 1970 article:

"(The) responsibility (of the business executive) is to conduct the business in accordance with (the owners) desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom." (Emphasis added)

The "ethical customs" of society have changed a bit since 1970 when this article was published. On December 2nd of that year, President Richard Nixon created the Environmental Protection Agency (EPA) in response to public outcry over corporate pollution disasters such as the near extinction of songbirds from the insecticide DDT (unveiled by Rachel Carlson's 1962 book, A Silent Spring), the Cuyahoga river fire in 1969 (yep, the river actually caught on fire), and the first Earth Day in April, 1970.

So, by following the "ethical customs" before 1970, rivers caught on fire and songbirds were driven to the brink of extinction. Thank goodness today's ethical norms are more enlightened. Society expects more from corporations and, as these expectations increase, there is a growing need for people work for social and environmental justice from inside companies.

By effectively working within a company you can influence decisions that can have massive societal benefits across the globe. And there has never been a better time to work on these changes. The race to be the greenest most responsible company on the planet is a full bloom (e.g., last year, more than 5,500 companies around the world issued sustainability reports, up from about 800 ten years ago) and appears to have substantial staying power. Companies of all types are looking for people to help improve their environmental, social and ethical performance. By learning the skills and strategies of working for good within a company you can create large, immediate and lasting change.

Instead of empty rhetoric, this point of view is the essence of my own career choices. I have done more for people and the planet working within corporations than I could have ever expected to achieve had I stayed in the government (I worked at EPA and the U.S. Senate in the first 10 years of my career). While government regulators and non-profit activists are very important drivers for social and environmental justice, they must work from the outside to cajole corporate behavior. The threat of enforcement or activism as a tool for change pales in comparison to the sweeping implications of, for example, leveraging a multinational corporation's buying power to transform working conditions in a global supply chain.

To a certain extent, being a corporate treehugger is a line-walking exercise. Corporations are indeed focused on profit and being an activist within a company is a very different than being an activist for a non-profit organization. But as expectations and transparency increase, the "ethical customs" for corporate behavior are changing. These macro-level changes are opening up new jobs in CSR and changing "mainstream" roles across almost all corporate functions.

I wonder if Milton Friedman would think that the inmates have taken over the asylum if he could witness 2,600 enthusiastic MBA students and professionals cheering for corporate responsibility at the 2011 Net Impact conference. As these business leaders of tomorrow increasingly occupy Wall Street from the inside, even Friedman might have to concede that the profit motive and social justice can be mutually supportive.

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