In the past, law and society formed a fixed background for business operations. A business simply conformed to legal requirements and established social practices, while providing its distinct product or service to the marketplace. That time is past. Now both law and society are in flux, and whether they like it or not, business organizations cannot escape exposure to social controversy. Their operations on several levels constitute “taking a position” on a variety of contested issues, and stakeholders of various kinds are watching and interpreting corporate policy in this light. In many cases, not taking a position will be viewed as taking a position. Much as business leaders would like to avoid it, corporate policy increasingly resembles public policy on such matters as:
- codes of ethics—candor, transparency and protection for “whistleblowers”
- human resource practices—benefits for same sex partners, religious liberty in the workplace, racial, religious and moral diversity
- philanthropy—which “social change” organizations deserve support; what is the constituency and customer “cost” of corporate donations?
- environmental guidelines—sustainable practices, how “green” is enough?
Publicly-held companies face expectations in all these areas from increasingly aggressive “socially screened” investment managers, through which investors associate into pressure groups based on political and social affinities. Privately held companies face comparable scrutiny and pressure in subtler forms. Since such issues distract corporate leaders from their primary, hands-on business responsibilities, they are tempted to ignore the issues and hope they will go away. When they do face them, they often react by placating various constituencies on an ad hoc basis.
In order to maintain integrity and stability of operations, companies large and small now need to operate with reference to a clearly articulated corporate philosophy to back up business policy and practices. Such a philosophy must encompass professional codes of ethics, but must anchor such codes of ethics in a defensible philosophy of society and the common good. In other words, corporate success now requires a public policy mindset.
A clearly framed corporate social philosophy prevents erratic, ad hoc reactions to pressure. It also minimizes exposure to litigation, or at least establishes a clear position from which to deflect it or, if necessary, defend against it.
To my many friends in the business and corporate worlds, I say this: Whether you like it or not, you’re a participant in the “culture wars.” Operate with your eyes open. Get out ahead of the inevitable corporate philosophy challenges. Identify your company’s social philosophy and articulate it in a coherent, attractive and defensible way. By establishing clearly written positions, and assisting in consensus and team-building efforts, you will fortify corporate responsibility, deepen your corporate ethos, and protect your enterprise.
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Copyright © 2015 by Graham Walker