Friday, May 7, 2010

A New Kind of Corporate Responsibility Emerging?

I’m feeling optimistic.

Amidst the many stories that cross my desk daily about bosses behaving badly, corporations shipping jobs overseas, and frustration in the workplace, recently I have seen some stories that give me hope that we could see a shift in the way the leaders of corporations view their responsibilities.

For example:

On February 18th, ABC World News reported that Bob Moore, founder and owner of Bob’s Red Mill was turning over ownership of the multi-million dollar company he founded, to it’s employees. Surely Moore could have pocketed (more than) a bundle by selling to a large food producer looking to expand in the organic, health food and gluten-free segments – the markets that Bob’s Red Mill serves. But instead, this leader felt an obligation to the people who helped him build his company for the past 30 years. This wasn’t an obligation served by typical corporate responsibility. Instead, in his own words, Moore believed that this was, “The only business decision that (he) could make."


And let’s also look at the new socially minded corporations emerging known as ‘B corporations’. The ‘B’ stands for ‘beneficial’. Companies certified by B Labs as ‘B corporations’ must demonstrate that they benefit all stakeholders (employees, communities, and the environment), not just shareholders. That’s right, they must be socially responsible. Two hundred eighty five companies have certified including Seventh Generation, Uncommon Goods, and King Arthur Flour. They are for profit businesses, but they believe they answer to more than just Wall Street and their shareholders.

Altruistic? Perhaps. Nonetheless, remarkable.

Is it possible, that coming off of a decade where we have too many examples of corporations behaving badly, that we will see a return of ethics to the workplace? Is it too much to hope for that instead of sending jobs offshore, over-working employees, cutting benefits, and answering only to Wall Street, that we will see businesses once again focusing on their responsibilities to their employees?

What do you think?


Dave said...

I think that when it comes to social responsibility to the workforce , small companies will lead the way. In fact I doubt that large corporation can ever achieve it, there's just to much distance between the workers and those at the top.
A small company is like an extended family. A large corporation is like a country.
people in a small company will make sacrifices for others because it's personal. People in a large company are all fighting for their own survival whilst those at the top are looking to the bottom line.

Large companies may be able to make more of an impact because they have bigger budgets but unless the man at the top REALLY embraces social responsibility to the workforce I doubt they would do a lot of the posturing that they do do unless it had some benefit to the bottom line.

Colette said...

Dave, you make a terrific point about the 'man' at the top. This kind of change will have to come tops down.

zanne said...

The Watson family managed to run a large corporation as if it were an extended family. They created a company that was known for excellence in all things - including the way its employees were treated.

So, it can be done. But Dave is right - it can only be done with the right kind of leader.

Anonymous said...

It would be great if the world was full of "Bob's" but I fear it is not. The system is set up to give stockholders returns each quarter and that's what many CEO's appear to paid on (yes there may be long term incentives as well.) This drives short term, greedy behavior. Much of the financial crisis appears to have been built on greed and power (see your discussion of Gideon.)

But I'm really glad you posted this. It does show there is hope and if person assumes moral responsiblity the world would be a much better place.

Colette said...

Zanne, yes, Watson was a terrific example of a great leader, wasn't he?

Anonymous, yes, more Bob's would be good for the corporate world. Most days I agree that it's too much to hope for, but these stories touched me.

Ann Best said...

Yes. If there are enough good people . . . And I believe there are: men and women who will keep trying, who ARE responsible - the small companies, the "extended families." I have hope.

Thanks for an excellent post on the subject.

Alex said...

There is a lot of interest in the moral dimension of business in the UK at the moment.

Some of this is undoubtedly because some of the best performers in the recession have been retailers like John Lewis, Waitrose and the Co-Op Stores, which are both employee owned and profitable, national businesses. They have also outperformed many of their shareholder owned competitors.

Big companies can do Corporate Responsibility, but for it to last I believe the founder needs to build it into both the organisations culture and into its ownership structure.

Thank you for a thought provoking post.

Colette said...

Alex, thanks for sharing your perspective from the UK -- that IS encouraging.

kanishk said...
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