With our next edition, we complete ten full years of publication. The first Briefing rolled off the production line (actually a rather cranky photocopier) in December 1991. In the last decade, we’ve seen huge changes in this field and have reflected them in this publication. Indeed we’re planning a few more to mark the anniversary, such as making available on-line a searchable database of all the news and articles we’ve ever published, some 6,000 stories in all.
The realisation that I’ve written, edited or reviewed about a million and a half words set me thinking about the early days. The subscribers were a small band, many knowing each other personally, fighting an often lonely battle to get their firms even to take community contributions seriously. Today, the much bigger issue of corporate social responsibility, if not yet centre stage in our companies, is at least moving forward firmly. For most, the question is no longer whether, but how and when and where.
In those early days, our concern was to rebut those like Milton Friedman who argued business had no responsibility for society’s problems; its duty was to do its own job properly and create wealth for the owners. He was wrong, because business was itself part of the problem, by polluting the environment or neglecting communities or allowing subcontractors to mistreat employees. Today some (but by no means all) of the world’s leading companies are on the way to fixing many of these internal problems. The greater challenges are external, so it’s a good time to revisit Friedman’s fundamental question – what is the role of business in society?
I have argued before that those who protest about global capitalism by attacking individual companies are barking up the wrong tree. Companies operate only because parliaments around the world have allowed incorporation, granted limited liability and permit free trade. The market economy is almost universally accepted as the most efficient way to provide the goods and services and create the wealth essential for a civilised society. Companies are allowed to exist because they have a job to do for society. Corporate managers have its scarce capital resources in their hands and must deploy it wisely. Destroying shareholder value also wastes value for society, if only because millions of people’s retirement depends on pension funds getting a good return.
By all means, protesters can argue we should trade current wealth for future environmental sustainability and Western prosperity to alleviate Southern poverty (and I would agree). But they need to persuade ordinary people to change the rules of the game, as consumers through their wallets or as voters through the ballot box – not expect some of the players voluntarily to depart the field.
Protesters are not alone in missing a fundament point. Too many of the growing army of consultants, advisers and analysts are measuring CSR through ‘do good’ indicators alone, not asking whether firms do a good job for their customers and make a good return for investors. Among them is FTSE4Good, whose launch index is covered in this issue: its formally stated aim includes everything laudable except actually helping companies to prosper. Check it out – surely a revealing oversight.
So a decade after we started, more than ever our role in Briefing is to help companies be better at what they are here to do – create wealth in a sustainable way
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