Beyond Compliance or Meddling In Government’s Role?

The response from corporations to WikiLeaks raises important questions about the boundaries of corporate responsibility. In many ways in refraining from accepting WikiLeaks related financial transactions, companies like MasterCard and PayPal have had a more immediate impact on WikiLeaks than government is able to have.

I define corporate responsibility as ‘beyond compliance’ and that is where I try to spend most of my time. But I also realize that there are limits to how far that approach can be applied. The challenge for a company is identifying the boundary between appropriate action ‘beyond compliance’ and inappropriate meddling in the government’s role.

NPR’s report identifies the dilemma “… Still, she[Marcia Hoffman] and other observers are troubled by the implications of private companies deciding to cut off services to an organization that publishes controversial material”

Here are a couple of other examples of different perspectives on the boundary between CR as ‘beyond compliance’ and governments role;

At an EDF organized Solutions Lab earlier in the year I participated in a discussion about CFLs.  One participant in the discussion was enthusiastic in his support for Walmart for their commitment to moving aggressively to selling only CFLs.  Much later in the session, someone else voiced her frustration that government had not legislated strongly for a move to CFLs. The Walmart supporter was incensed and made a strong pitch for freedom from government intervention. At the time, this surprised me, the implication being that it was more acceptable for a large corporation to determine a consumer could no longer buy an incandescent light bulb than for government to do the same.

More recently, at an informal meeting of BSR members in DC, insights were shared into the ethical dilemmas and challenges facing companies doing business in emerging and developing economies. In particular, we discussed how to improve conditions within communities where bribery and military intervention is widespread. I wrote about one such dilemma in this post. A participant from a well known NGO asked whether corporations shouldn’t be taking on a broader component of the public protection role from government, in countries that had weaker government control.

Although I believe that corporate responsibility is defined by a company’s obligations ‘beyond compliance’, this seemed to me to be a troubling direction to take. Companies are not democratically elected. How do we have the right to impose our ethical and social norms?  I was reminded of a speaker at BSR’s conference last year Zhang Yue, who I wrote about in this post. Zhang Yue is a well established proponent of sustainability through his successful Chinese business. He caused a major stir in his excellent keynote when he said that he fired workers who had more than one child because of the negative sustainability impact. Is that a corporate ‘norm’ we want introduced in the USA?

While I still believe passionately that corporate responsibility is about a company’s actions beyond compliance I realize that there are limits to that. There is no bright line around this and I don’t have a good answer to getting it right, although I would suggest that one important component is broad and deep stakeholder engagement.

Do you have any suggestions on ways to get his balance right?

  1. Comments 3

  2. Joe Starinchak 12:54 pm on December 21, 2010

    Kevin: Thanks for this posting. I believe I was the person you referred to who made the comment at the EDF Solutions Lab about Walmart. I incensed is a bit strong, but the bottom line is that I believe Americans are more accepting as a group to support commerce and capitalism for green products than they are for government intervention. This country was founded on "not liking tyrannical government" and I think this still holds true today - just look at the results from the most recent election.

  3. KevinMoss 2:56 pm on December 23, 2010

    Hi Joe, thanks for stepping in there and my apologies, 'incensed' was too strong a word. I do think your perspective is an important one and as you note, probably represents a significant proportion of people. I appreciate that you were willing to articulate it at that meeting, even though it was not the mainstream view for that particular audience, and again here. As for the founders not liking tyrannical government, as a Brit, I cannot imagine what country they were thinking of :-) Happy Holidays

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