Beyond Ethics: The Challenge of Strategic Corporate Responsibility

By Dana Radcliffe 

January 2011

We live in a perilous time. The future of our communities and institutions-and even of society itself-is clouded by a multitude of growing threats. This dreary list includes (among many others) global climate change, depletion of natural resources, technological dangers, drug-resistant diseases, entrenched poverty and, in the world's poorest nations, pervasive corruption that stifles economic development.

Business, like every other part of society, has a vital stake in efforts to address such problems and reduce the risks they pose to our long-term welfare. In some cases-e.g., global warming and dwindling natural resources-business is a main contributor to the problems. Moreover, the challenges are so large and complex that we cannot hope to meet them without the active involvement of business, providing critical expertise, innovation, and capital. For many people, including prominent business leaders, these facts strongly support the claim that companies have an obligation to help resolve those larger societal and environmental issues. This obligation is often referred to as a firm's "corporate social responsibility" (CSR).

But, for top executives and boards of directors who agree that their companies have such an obligation, what are they supposed to do to fulfill it? What actions does their firms' corporate social responsibility require of them? When business leaders commit their companies to "pursuing CSR," that entails identifying possible projects and policies, evaluating them and executing those that meet the relevant criteria. What should those criteria be?

Should the company focus on the needs of its local communities, or should it identify itself with broader causes-or both? Should it partner with a nonprofit, or perhaps with several, or rely only on its own resources? Should it concentrate on what appear to be the most urgent problems, or should it confine itself to those on which it is likely to have the most impact? Should responsibility for CSR initiatives be assigned to one designated department or to operational units throughout the company?

For whatever issues the firm takes on, which possible goals are both substantive and feasible? And what time frames should be used in determining "results"? The point is: A corporation's accepting that it has a general responsibility to "do its part" in the work of dealing with problems we face collectively, as a nation or society, leaves unanswered the question of what that responsibility entails in practice.

To be sure, there are organizations that formulate guidelines and "performance indicators" that numerous firms, especially multinationals, employ in disclosing their CSR-related activities in public reports. The assumption is that, by publishing detailed data about specific types of corporate conduct and outcomes, companies-and other interested parties-will be able to see where they are "doing well" and where they need to "improve" their social and environmental "performance."