Discussion

By drjoewebb on Mar 01, 2008

You should know that corporate responsibility is not what it is cracked up to be and is quite the flawed concept to begin with, and begets numerous unintended consequences. This short article from the Cato Institute explains many of the tradeoffs involved. http://www.arduinlaffermoore.com/PDF/Does Corporate Social Responsibility Enhance Business Profitability -- Summary.pdf This article about stakeholder theory may be helpful as well. http://www.cato.org/pubs/policy_report/v22n3/cpr-22n3.html My favorite one in the printing industry is the huge sales of timberlands to governments and environmental organizations, the two groups who seem unaware that paper use and printing ar dropping dramatically. They're buying these lands, which paper companies are not likely to get to use, and supplying income to the paper companies. International Paper recently had a profits decline because --- not because they didn't sell enough paper --- but because they couldn't close enough sales of the land. This bailout makes everyone feel really good about saving the environment, but what it does is actually save International Paper from the consequences of its malinvestment. Corporations have first a duty to their stockholders to produce a return. In order to do that they must delight the marketplace and comply with laws and regulations in doing so. That should be enough. If the company is unethical, their customers and competitors will force them out of business. Instead, by adopting CSR techniques they can win the sympathy of the public and through sleight of hand and checkbook, avoid the punishment of the marketplace.

By Ron Robins on Mar 03, 2008

Studies show that companies with superior corporate social responsibility policies also have superior financial results!

I agree that a corporation's primary responsibility is to produce a good return to their shareholders. However, I believe that if everyone does invest according to their personal values, then, since so many of core values are alike -- and are supportive of higher ideals -- that in the long run, only companies employing these higher values will truly prosper.

Incidentally, I've been following socially responsible investing for forty years. For readers interested in the latest socially responsible investing news and research, they might find my site quite helpful. It's at http://investingforthesoul.com/

Best wishes, Ron Robins

By Samuel Fogell on Mar 03, 2008

Hello, Your article is interesting as is the response from Dr. Joe Webb - unfortunately the link to the Cato institute paper on corporate responsibility is incomplete. Would you be able to repost the url (http://www.arduinlaffermoore.com/PDF/Does Corporate Social Responsibility Enhance Business Profitability — Summary.pdf)? Thank you, Sam

By drjoewebb on Mar 05, 2008

Here's the link again http://www.arduinlaffermoore.com/arduinlaffermoore/PDF/Does Corporate Social Responsibility Enhance Business Profitability -- Summary 01_05.pdf

By Cory Smith on Mar 05, 2008

Here is a TinyURL for the PDF
http://tinyurl.com/23nl6x