Can Corporations Be ‘Good Citizens’?

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The idea of ‘good corporate citizenship’ has become popular recently among business ethicists and corporate leaders. You may have noticed its appearance on corporate websites and CEO speeches. But what does it mean and does it matter? Is it any more than a new species of public relations flimflam to set beside terms like ‘corporate social responsibility’ and the ‘triple bottom line’? Is it just a metaphor?

The history of the term does not promise much. It does indeed seem to have evolved out of corporate speak – how corporations represent themselves rather than how they view themselves – selected, perhaps, for sounding reassuring but vague. Its popularity has far preceded its definition; ‘corporate citizenship’ is still evolving, looking for a place to settle.

But what it is about is important. For it represents a political turn to the old question, Who are corporations for and how is their power to be managed? Are corporations bound to serve society’s interest, or are they free to follow their own? Are they public institutions, part of the governance of our society and publicly accountable to us for their actions, or are they private associations accountable only to their managers and owners?

Invisible Hand Ethics

"[B]y directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention….By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good." (Adam Smith, The Wealth of Nations, IV.2.9)

Doing right by others is difficult and time-consuming. Hence the attraction of what I call Invisible Hand Ethics, in which we mind our own business and the ethics takes care of itself.

This is modelled on Adam Smith's famous account of how the overall outcome of lots of self-interested actions in the economic sphere can be good for society as a whole. Bakers just want to make a buck, but their self-interest produces the bread that feeds the people. Their competition for sales keeps prices down. The customers in turn just want the cheapest best bread, but wind up helping the best bakers make a good living. You get the idea. Smith argued that in the economic domain this could be a far more reliable mechanism for achieving good outcomes than good intentions.

Productivity is the Wrong Argument for Diversity

If you look around your workplace and everyone, or least all the managers, look the same - same sex, skin colour, social class, age - then your company has a diversity problem. But why is it a problem?

Because the most obvious explanation is a failure of meritocracy. Such features as the colour of one's skin or sex are arbitrary and irrelevant to people's ability to do a job. Therefore the fact that people of certain skin colours or sex are missing from your workplace relative to the wider society presents a prima facie challenge to the fairness of your company's criteria for employment and promotion. To assume otherwise - for example that people of certain colours, sex, class, age, happen to have different (inferior) career preferences or different (inferior) talents has no credibility. It is to assume the exact set of facts most convenient to make a problem someone else's, rather than to take responsibility for investigating and fixing it.

Call this the negative argument for diversity: If you don't have internal diversity in line with the wider society then you are probably treating people unfairly and you need to investigate and try to fix it. For example by identifying and mitigating biases in how job applicants are evaluated and structural impediments to their career progress. It leaves a lot of details still to be argued out, but I think it is the right way to go.

But there is another kind of argument that is now much more common, the positive argument that organisations should promote diversity because it pays off. This is the argument I want to criticise, on the grounds that it jeopardises the negative argument from fairness; reduces individuals to stereotypes about groups; and perpetuates unjust stereotypes and social relations.

This Christmas, give the gift of a blameless life to someone you love

Do you want to be a good person but find yourself always falling short?

It may not be your fault. These days it is difficult to feel like a good person. In fact the harder you try, the more you may feel like a failure.

The calls on our moral attention are multiplying at an extraordinary rate. We are living through a perfect storm of social justice movements, activist NGOs, an unusually plausible pope, and a flood of academic moral philosophers trying to write for the public. Globalisation means that we have to take account of the furthest implications of our actions. The internet and social media spread the news of our ever increasing obligations and strike down those who sin without mercy.