Conscious Capitalism as a Movement
August 10 2015
Two weeks ago, I mentioned in my blog posting that the U.S. Secretary of Labor, Tom Perez, has advocated a return to the Sullivan Principles, which were developed by Reverend Dr. Leon Sullivan in 1977 as a sort of code of conduct for companies. Secretary Perez has also suggested that these principles be updated, and he's advanced the following six ideas as additions:
- Reject false choices. Perez suggests that deciding between treating workers with dignity and growing your business is a false choice. Many companies have shown that it's possible and profitable to do both.
- Shareholder return is not the only metric of a successful business. Perez suggests that we need a stakeholder model rather than a shareholder model, and that companies have a responsibility to the common good, not just to quarterly earnings.
- Lifting up worker voice. "Worker voice," which Perez states can be defined in many ways, is indispensible to business competitiveness and a growing economy - whether that takes the form of profit-sharing or works councils or employee stock ownership.
- Fair pay leads to "countrywide prosperity." Perez suggests that if you work full-time in America, you should be able to support your family without being on public assistance. He asserts that higher wages actually reduce employer costs in the long run, and the benefits reverberate throughout the economy.
- Respect work-life balance. Perez states that companies should help people meet their obligations at work and at home, and that 21st Century workers, in order to be productive and add value, need the same paid leave enjoyed by their counterparts in every other advanced economy on earth.
- The most important word in a democracy is "we." Finally, Perez asserts that the nation became great and can only become greater when we work together, strive together and overcome hardship together.
Clearly, the principles that Secretary Perez is advocating are central to the way that businesses operate, how they treat their workers, and how they develop their products and services - a classic definition of corporate social responsibility in the modern world.
Not mentioned are other classic forms of corporate social responsibility, including getting employees engaged in supporting and volunteering for causes in their communities, investing in nonprofit organizations that are critical for delivering services and enhancing the quality of life in communities, and being stewards of the environment by reducing a company's carbon footprint and developing products and services in an environmentally friendly way.
In a recent article in Toronto's Globe and Mail [July 25, 2015] entitled "How Some Companies Are Trying to Get More ROI from CSR," several business leaders were quoted as advocating for "policies and operating practices that enhance a company's competitiveness, while simultaneously advancing the economic and social conditions in the communities in which it operates."
"As the world continues to take on more and more of a social viewpoint, my sense of where we're headed and how we'll be judged as corporations in the future is by the whole package of what we do," said Josh Blair, executive vice president for Telus Health and Telus International.
According to these business leaders, "To be seen as credible, corporations will need to have a clearly defined social purpose and to assess the ways in which business priorities such as hiring also contribute to this purpose through better health, better education, lower social-welfare costs and other social priorities."
Some common denominators for businesses that want to take a more holistic approach include: a leadership-level commitment to helping solve a specific social problem, an ability to develop innovative products or services that contribute to social change, a culture that values diversity and inclusion and an understanding that working in partnerships with nonprofits, government and other corporations including competitors is essential.
If you have a question or comment, please follow me on Twitter at @timmcclimon and let's start a conversation there.
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