Socially responsible businesses are prospering – What Matters Most: How a Small Group of Pioneers Is Teaching Social Responsibility to Big Business, and Why Big Business Is Listening

A sentence at the bottom of the copyright page, before the reader even reaches the table of contents of What Matters Most, screams volumes about what is most important to one of its authors: "This book is printed on chlorine-free paper."

Jeffrey Hollender, president and chief executive officer of Vermont-based Seventh Generation, undoubtedly derives some satisfaction from knowing that his thoughts about corporate social responsibility are not being disseminated on a medium whose manufacture and disposal contribute to pollution.

By Jeffrey Hollender and Stephen Fenichell (Basic Books) $26

http://www.sltrib.com/2004/Feb/02222004/business/140999.asp

Hollender is an unabashed environmentalist. His company makes ecology-friendly household cleaners, and he believes that companies must take responsibility for what their manufacturing processes do to the environment.

But Hollender is not just an environmentalist. The cause he espouses in this well-written treatise is corporate social responsibility, the idea that companies, rather than focusing solely on profits, should take responsibility for what they do to and for people — employees, other businesses, communities, other nations and other cultures.

In What Matters Most, Hollender, with writing assistance from prolific nonfiction writer Stephen Fenichell, details how many small and medium-size businesses have prospered primarily because of their socially responsible policies and how hundreds of nongovernmental organizations are prodding corporations concerned only about delivering profits to stockholders to broaden their vision to include all stakeholders.

That view, Hollender makes clear, flies squarely in the face of the economic theories of conservative economists like Milton Friedman, who, according to Hollender, "somewhat hysterically criticized" any attempt to make businesspeople responsible to society as "socialist" and "collectivist."

Under corporate social responsibility, Hollender quotes Friedman as saying: "The external forces that curb the market will not be social consciences, however highly developed, of the pontificating executives; it will be the iron fist of government bureaucrats. Here, as with price and wage controls, businessmen seem to me to reveal a suicidal impulse."

Hollender interprets Friedman as meaning that business should be free to make products and profits and let government clean up the mess.

"Which would be all very well if government did or even could clean up the mess. But these same voices also argue strenuously for smaller government and oppose most efforts to address social and environmental problems," Hollender writes.

One of the organizations that has evolved from the corporate-social-responsibility (CSR) movement is Businesses for Social Responsibility (BSR), which, according to Hollender, was originally intended to be an alternative Chamber of Commerce. It never achieved that status. But it evolved into a prestigious forum where large American and foreign businesses can learn the fundamentals of CSR from panels of experts.

Among BSR’s 700 corporate members are Levi Strauss, Polaroid, AT&T, Chiquita Brands, Agilent Technologies, Ford Motor Co., L.L. Bean, Eddie Bauer, The Gap, Federal Express, Hallmark, Hasbro, Starbucks, Nike, Reebok, Coca-Cola, Wal-Mart, Monsanto, McDonald’s and Philip Morris (Altria).

Although it is criticized for not being selective enough in its membership, Hollender writes that the organization aims only to encourage change in heavily criticized companies.

"What matters is that McDonald’s takes the issue of CSR seriously by signing a deal with Newman’s Own to supply dressings for its new salads, opening a non-ozone-depleting restaurant in Denmark and issuing a CSR report.

"That its French fries clog arteries is, from BSR’s point of view, a problem that McDonald’s evidently has the desire to solve, but it’s up to McDonald’s to decide on how and when to solve it," Hollender writes.

Just as it gets criticized from the right by people who think like Friedman, CSR, Hollender writes, also catches flak from the left.

"From the left-wing perspective, CSR is often regarded as ‘greenwashing’ — promoting a ‘green’ image and a good corporate citizen by adopting a few measures as window dressing to deflect public attention from deeper shortcomings. In this view, CSR is a lot of hype and PR — a fig leaf for the fundamentally destructive and rapacious character of unbridled free-market capitalism," Hollender writes.

Although government must play a major role in making corporations behave in more socially responsible ways, Hollender does not look to government as the ultimate answer to the problems that corporations externalize into the environment and the world community. He suggests that the solution may rest with consumers, who, as corporations are forced to become more transparent about their practices, will buy from companies with socially responsible values. He admits that he does not have all the answers to how to bring about the changes. But he writes that gross domestic product and profits are not adequate measures of human happiness.

© Copyright 2004, The Salt Lake Tribune.

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MBAs look at ethics in business

Mike Cote

http://www.dailycamera.com/bdc/business_columnists/article/0,1713,BDC_2466_2671589,00.html

picture: Martha Stewart. Qwest. Tyco. Enron.

Timing couldn’t be better for a student business ethics competition set for this week on the University of Colorado campus.

A quick replay from last week courtesy of the Associated Press:

Trial continued for Martha Stewart over charges she lied to investigators about the December 2001 sale of her ImClone stock. Prosecutors say she received insider information that ImClone founder Sam Waksal was selling his shares due to the expected release of a negative government report.

Opening arguments are expected to begin Monday in the federal criminal trial of four former Qwest Communications executives charged with inflating revenues and then lying to auditors and regulators about it.

Trial continued for the fifth month for ex-Tyco executives Mark Swartz and L. Dennis Kozlowski, accused of stealing millions from the company by hiding unauthorized pay and secretly forgiving loans.

Former Enron Corp. chief executive Jeffrey Skilling was charged Thursday with nearly three dozen counts of fraud, insider trading and other crimes. He faces up to 325 years in prison and more than $80 million in fines if convicted on all counts, prosecutors said.

Such cases mean MBA students will face a corporate climate that more than ever needs to address ethical issues. On Friday, CU will kick off the fourth annual Leeds/Net Impact Case Competition, drawing students from more than 20 business schools in the United States and Canada to focus on the societal impact of business decisions.

"The competition gives MBA students a real, concrete opportunity to address a case that takes more than just a bottom-line perspective and looks at the larger implications on business and society," said Renaud Des Rosiers, a first-year MBA student who is co-chair of the committee organizing the event.

Des Rosiers, 26, said he hopes to secure a job upon graduation that allows him to deal with social responsibility in business.

"For me, this is really the most pertinent issue in business today, looking not just at the dollars but our role in earning those dollars, our interaction with the community and our effect on the environment," said Des Rosiers, who also noted the challenge of remaining profitable while dealing with those issues.

This year’s case involves pharmaceutical company GlaxoSmithKline, which is grappling with the high cost of drugs and their availability to people in developing countries. Students will learn the details of the case when the competition begins. Team presentations are at 2:30 p.m. Saturday in Room 150 the Humanities Building. They’re free and open to the public.

Ethical issues have commanded a greater role in business schools in recent years, said Diane Dimeff, assistant dean and director of MBA programs at the Leeds School.

"In many MBA programs now, the administration and faculties are attempting to weave the topics of ethical decisions into each of their courses," Dimeff said. "This case is about business strategy as much as business ethics."

Contact Mike Cote at (303) 473-1362 or at [email protected].