10.15.2008

THINKING LONG-TERM

I've banged on the drum of corporate social responsibility for awhile now, so it was natural that my eyes perked up at this article: "Where Businesses Fall Short." Notwithstanding one statement I think is misworded - at least I interpret it that way, that given the rest of the article, he doesn't really mean this but rather chose his words poorly - I agree with what is being said here.

The one statement I furrowed my brow at was: "Corporate social responsibility is the idea that business leaders ought to broaden their perspective from a narrow focus on profitability. It holds that they should also consider the social and environmental implications of their conduct. But it does not require that organizations swear off profitability."

This is somewhat incongruous with the tenor of much of the rest of the article, which (correctly, in my book) doesn't pit financial profit against social and environmental; the real dichotomy is between short-term financial profit and long-term shareholder value. Here's the money quote:

" But real corporate responsibility stems from the realization that organizations and their stakeholders are dependent on each other. It is in their mutual interest to build a partnership. Such productive relationships require organizations to consider the long-term consequences of their behavior. Short-term thinking is destructive to a relationship that should be based on mutual trust and joint value."

Now we're talking. The social and environmental implications of doing business are neither irrelevant to a for-profit business, but nor are they alternative goals that one needs to choose instead of profit from time to time. Rather, they are part of the context in which business operates; and a truly worthy company thinks not about making a quick buck at the expense of people or the planet, but rather about doing things that make sense (and cents) in the long run.

As a Christian, I believe in the eternal - now that's truly the long run! With this perspective in mind, contemplating a business' social and environmental impacts becomes all the more important. After all, we are called to be stewards of our natural resources, to love our neighbor, and to seek the "shalom" of our communities. In an era in which awareness of business' intersection with social and environmental issues is at an all-time high, shouldn't such a perspective be the best path - the only path - to profitability?

The article is right in saying that as CEOs go, so go their firms: if a CEO is willing to preach and then practice a philosophy of long-term shareholder value, make tough decisions in that direction, admit where her company has not previously lined it up right, and pledge to get it right in the future, her employees will fall in line. So may we pray for the leaders of our businesses, and so may we in such positions be such leaders.
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