HOT TOPIC

CORPORATE CITIZENSHIP


» Context

Are there risks associated with promoting corporate philanthropy and social responsibility?
(a) for corporations,
(b) for communities.

» In the News [please contact us for further archival references]
08Sep07 In search of the good company. The debate about the social responsibilities of companies is heating up again. “[I]n a new twist to the debate, a powerful critique of CSR has just been published by a leading left-wing thinker. In his new book “Supercapitalism”, Robert Reich denounces CSR as a dangerous diversion that is undermining democracy. [...] He now believes that [....] CSR activists are being diverted from the more realistic and important task of getting governments to solve social problems. The Economist @ p.65.
29Apr05 Alcan comes under fire by activists. Company’s social responsibility a target. Alcan Inc.’s image as a socially responsible corporation was challenged at the annual meeting yesterday by activists, workers and municipal politcians angry about overseas expansion plans, job losses and the company’s sale of surplus electricity. G&M @B7.

 

» Briefing Notes - © The Governance Counsel™ (2007)

Corporate philanthropy is a tax-driven exercise, with collateral benefits if manipulated for market branding and community profile. It can run counter to shareholder interests if distracting to the primary stated purposes of the corporation [generally, along the lines of making money]. Public policy purveyors, are also starting to be concerned about corporate philanthropy detracting from (a) individuals’ obligations to be personally engaged with their community (if it is now handled by the “CSR Committee”), and (b) political agendas to download public interest responsibilities for balanced funding onto the corporate sector.

The Principle behind the Practice?
The principle behind CSR is that corporations and the market system exist as an ephemeral web of public policy, but it is a countervailing principle is that the leaders of capital are not actually driven by the public interest. To (1) avoid abuses of “corporate philanthropy” or “corporate social responsibility”; (2) avoid public policy-makers downloading their responsibilities onto an unwilling corporate sector, and, (3) balance shareholder concerns in many profit-driven corporations, recommended options to promote similar principles would be as corporate branding and corporate citizenship.

[Governance Literacy: see corporate philanthropy; corporate social responsibility; corporate branding; corporate citizenship; business interest; public interest.]