Economist Milton Friedman said back in the 1970s that all we should ask of corporations is that they make as much money for their shareholders as possible. Forget 'corporate social responsibility' or a 'social license to operate'; the sole objective of the corporation is profit-maximisation.
According to Friedman, corporations shouldn't be required to 'give back', because by pursuing profits at all costs they are already doing their very best for society.
But those were different times. The 'pure' capitalism underpinning America's neoliberal expansionism has since given way to a more nuanced understanding of the interdependent relationship between corporations and the marketplaces in which they operate.
'Sustainability' is the new corporate mantra and directors go to sleep with a well-thumbed copy of Good Corporate Citizenship under their pillows. At least that's what they would have us believe.
Peruse the websites of any of the companies that make up the ASX 200 and you will find a seemingly endless stream of 'our commitment to the community' and 'our vision for a sustainable future'. It is clear that savvy corporations and their senior executives and managers understand the reputational value-add that flows from positive exposure.
The problem is that corporate social responsibility has become a moniker for window-dressing and 'greenwashing'. Corporations talk the talk, but when it comes down to it, they aren't walking the walk.
This isn't some lefty conspiracy theory. In a recent survey of Australian senior managers published in the Asia Pacific Business Review, 82 per cent of respondents said a commitment to corporate responsibility was outside their corporations' core products or services.
In a similar study by McKinsey Consulting Group, almost nine in ten executives agreed their companies' corporate social responsibility programs were motivated by public relations or profitability.
Where did it all go wrong?
The view that acting in a socially or environmentally responsible way is a 'trade-off' for financial success is based on the idea that private economic goals like profit maximisation can be neatly distinguished from public social goals, like the reduction of greenhouse gas emissions. But as any economist will tell you, the simple demarcation of public and private concerns just doesn't hold up.
The most basic understanding of a healthy marketplace reveals as much. Demand for products and services increases when the social and natural environment in which consumers find themselves is a healthy one. The increase in demand leads corporations to produce more and, of course, to grow.
It stands to reason that