January 2, 2014, by ICCSR

In Conversation – Revisiting Corporate Citizenship

Why?  Isn’t corporate citizenship just another term for corporate social responsibility (CSR) and part and parcel of corporate green-washing? 

Well, yes and no.

Yes, in that many companies and commentators simply use it as an equivalent term for CSR, and often use it as fig-leaf rather than as a core value.

No, if we take the meanings of words we use seriously: citizenship brings human connotations about membership of a society.

Hang on a minute, how can you equate corporations with humans?  Surely corporations are really simply a nexus of contracts, particularly between owners and managers, or a mechanism for efficient and effective transactions in producing and selling goods and services!

Interesting point.  But corporations are created by people, staffed by people, for people?  The first clue is in the name: ‘corpus’ means a body or a body of people.  Moreover, companies and their critics alike describe them in human terms (e.g. ‘neighbours’ and ‘psychopaths’, respectively).  Moreover, corporations are legal persons and can be held accountable for manslaughter, human rights violations and fraud.  Their economic interactions are with humans (investors, employees, customers, communities) and have human consequences.

So, if corporations have human legal and economic personalities, why not political personalities, which is what the term corporate citizenship brings to CSR.

Surely, corporations are not political actors.  They leave politics to voters, parties, pressure groups and governments – or they should do, anyway!  If corporations stick to obeying the law and behaving according to ethical custom, that is sufficient responsibility, isn’t it?

My argument is, first, that they do not remain aloof from politics.  Indeed some companies have recently adopted more pronounced political roles in campaigning for their interests (e.g. the mining sector in Australia).  Nor should they stay aloof.  It is important that such important organisations are heard in politics, and that policy-makers understand the values, interests and imperatives of business.  The point is that their involvement should be transparent and reflective of wider democratic values such as freedom, equality, self-restraint, deliberation.

Secondly, privatisation of utilities has brought some companies into responsibility for ‘public goods’ (e.g. in water and energy markets).  Others engage in maintaining penal systems, personal security, and defence: all services conventionally associated with collective goods and, therefore, politics.  All these services offer enabling conditions for wider citizen flourishing.

Thirdly, corporations are responsible for other sorts of public infrastructure on which not only economic and social welfare, but also political stability, depend.  This became obvious in the wake of the financial crisis which brought catastrophic political, as well as economic and personal costs.  These ranged from threats to governing capacities and deteriorating democratic legitimacy (e.g. Greece).  Similarly, corporations which provide social media are not simply supporting new forms of communication but also systems for political contestation, including in authoritarian regimes (e.g. China) and for challenges to corporate power (e.g. the Greenpeace campaign against Nestlé’s sourcing from palm oil forests).

Ironically, corporations also increasingly act like NGOs in boycotting what they perceive to be socially unacceptable products of other companies. Numerous UK companies withdrew advertising from the News of the World paper following revelations of ‘phone hacking’. The Co-operative Group explained: ‘These allegations have been met with revulsion by the vast majority of members who have contacted us.’  Lego recently ended its marketing partnership with The Sun newspaper.  Though Lego denied that this was due to the on-line parental petition to engage Lego against The Sun’s Page 3 topless girls feature, a company representative stated that: ‘we listen carefully every time a consumer shares a concern and thank you for bringing to our attention that this partnership has been something a lot of people were concerned about’.  Most recently, UK banks and credit card companies have threatened to withdraw their services from companies whose websites fail to stop children accessing pornography.

Finally, debates about the payment – or non-payment – of taxes by companies enjoying publicly provided educational, health, communications, law and order, and national security have brought the commitment and neighbourliness of corporations to societies in which they operate and make profits into question.  Whilst some companies insist that they have obeyed the letter of the law, others realise the potential damage to their community credentials and one, Starbucks, even offered to ex gratia payments in compensation.

Yes but what has all this got to do with corporate citizenship?

Well, although conceptions of citizenship differ, they all presume that citizens have some shared commitments to the good of the polity – and act accordingly.  This usually extends to some participation in the governing of the polity, or as Aristotle put it, ‘ruling and being ruled’.  The actions and governing activities cited above seem to be consistent with these roles of governing and being governed.  Moreover, some of these examples also fit a third element of corporate citizenship, implicit in those identified by Aristotle, that citizens enable the citizenship of others.[1]

So, getting corporations to think and behave like citizens is crucial to their managing their political, as well as their economic and social impacts.

But how?  What about the uncitizenly corporations? What about globalisation? What about corporations operating in non-democratic polities? How does all this relate to the purpose of the firm?

Great questions.  Let’s discuss them further.

[1]  See Crane, A., Matten, D and Moon, J. (2008) Corporations and Citizenship Cambridge University Press


By Prof Jeremy Moon, Director of the ICCSR and 2013 Gourlay Professor of Ethics in Business, Trinity College, University of Melbourne


Image by City Year, reproduced under creative commons licence CC BY-NC-ND 2.0
source: http://www.flickr.com/photos/cityyear/6208492079/sizes/l/

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