Corporate Social Responsibility – Can companies do well by doing good?
November 17, 2008

RADIO 2CBA FOCAL POINT COMMENTARY BROADCAST ON FRIDAY SEPTEMBER 17 1999 ON RADIO 2CBA FM.

Can a company do well by doing good? Or should a company focus only on profit at any cost?

Last week I attended a seminar put on by the Australian Social and Ethical Accountability Centre. The Centre was formed last year in response to the growing interest by business and not-for-profit organizations to introduce social and ethical accountability. The Centre’s founders come from a range of business and community organizations and each is committed to providing a high level of integrity and discipline in the emerging profession referred to as “social auditing”.

There is a growing interest in the “triple bottom line” approach as a way of assessing and comparing companies. The first “bottom” line is the traditional way of assessing how a company’s finances are going. The second “bottom line” is the company’s environmental record. The third “bottom line” is the company’s social record.

The problem for unscrupulous companies is that there is a need for ethics to grow out of a company’s basic nature. You cannot fake integrity. Eventually, a company’s sins will catch it out. For example, a disgruntled employee will become so sick of what they see in the company that they go to the media.

Therefore, there is a need for a good value base to start with. Many companies and community organizations are coming around to this point of view – hence the interest in the “triple bottom line”.

But even if there is an interest in the “triple bottom line”, there may not be the tools automatically available to implement this desire. Hence the need for organizations such as the Australian Social and Ethical Accountability Centre.

Four points occurred to me during last week’s seminar. First, there is a reformation underway in the business world. It seems as though some people have become so appalled by the excesses of some companies, that there is now greater public demand for higher standards in businesses and community organizations.

Second, companies themselves now realize that they can do well by doing good. For example, people will buy products from companies they trust in and in which they have confidence. They will feel good in doing so.

Third, workers work better when associated with companies in which they feel pride. They have less interest in their work if they are working for companies they are embarrassed to admit to their relatives and friends that they work for. An ethical company has high morale.

Finally, it is important that the general public rewards companies that do follow the “triple bottom line”. Every time a person spends a dollar, they are voting for a company and a product or service. Make your dollars count.

You can only vote for a politician once every three or four years. But you vote for a company every time you spend a dollar. Make sure you vote for an ethical company.

If the ethical companies are going to flourish, they need our business.