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Ethics, the foundation of corporate social responsibility

By Jorge Emilio Sierra Montoya

There is no question that, ethics is the great foundation of Corporate Social Responsibility (CSR). Why? Let’s discuss it piece by piece. First of all, let’s see what CSR means. As it is known, responsibility is related to the obligation, or moral duty that in fact is underlined by the Dictionary of the Royal Spanish Academy.  Responsibility is by definition, an ethical value that is applied within a reasonable judgment by a person while fulfilling with dignity all his duties, whether it is students, professors, workers, businessmen or housekeepers.

Now, Social Responsibility – in order to continue and clarify the concept – pertains to the duties towards the society and its ability to fulfill its mission on behalf of any individual or organization. As a consequence, you and me are socially responsible when we accomplish our duties with the society, it also means to be a good citizen. Social Responsibility is not a prerogative to enterprises and companies. It is yours, mine, belongs to the family, university (Social Responsibility of Universities SRU), to the government and so on.

As a result, Corporate Social Responsibility is referred to the specific attitude of social responsibility in a corporate and the moral obligation that it has in order to execute its responsibilities within a society. In other words, the company is viewed here as a person and, the same as each one of us, it is included within the moral obligations that it should implement.

There is a short summary on what is CSR, without any tedious descriptions.

The need to go beyond the Law

What are these duties that we have already outlined? This would be a legitimate question; the answer is simple, according to what is articulated: these ethical or moral norms that we should accomplish. The Christian Ethics or morals, for example, norms and requirements are contemplated in its Decalogue, on how to love others, not to kill or steal, not to lie…, in many cases it is converted in judicial norms, enforced by the law, where there are contemplated drastic sanctions for their violation (punishment for homicide, robbery and others).

In CSR, it is evident that the commitments of companies are with the society, especially with the very same social groups that have more relations with its production activity, as a result it has a major interest in these groups: groups of interest (known as stakeholders in the specialized terminology), those who possess their respective interests with other groups, including the very same company where they work. Nonetheless, it is worth noting that these social commitments of companies are of moral character and not legal, as a result they are fulfilled or left behind voluntarily and this is not obligatory. A company is free to be socially responsible, without having the law exerting pressure in doing so, even less imposing juridical sanctions when not being socially active. This is a characteristic drive of the CSR, a very complex and controversial topic.

There we find other elements, that ought to be considered: in the CSR, that can only emerge from the individual liberty and the healthy conscience of capitalists, board of directors and other workers of the organization, there is a consensus in a sense that the law must not be a barrier, just as the ethical norms and mores have the same major importance as the legislative obligations.

Let me be clear: in order to have an effective Corporate Social Responsibility, an entity should obey the law (pay taxes, salaries, amid other legal obligations), but this is not enough. Even if this condition is necessary within the framework of Corporate Social Responsibility, it becomes even more important in countries where the illegal entrepreneurship reaches exorbitant levels, there is not enough ethics and is unacceptable.

One example is enough: even though a company respects completely the enforced labor laws of its workers, this is not a responsibility within the strict sense of the word because it is dealing with the legal obligations that a company must always comply in a country where the rule of law prevails. The CSR, on the other hand, attempts to go beyond these legal obligations, to improve the living conditions – in education, housing, recreation parks…– that would benefit these workers, their principal interest groups.

To conclude, the Corporate Social Responsibility (CSR) is born from the depth of our conscience, from the authentic individual responsibility, that goes beyond all the requirements defined by national and international laws.

A World in Crisis

It is accepted by all that CSR has emerged above all during the last decades, since the 1980s, due to the globalization of the economy and the corresponding adoptions of open economic models in numerous countries.

There we find other elements that ought to be considered: in the CSR, that can only emerge from the individual liberty and the healthy conscience of capitalists, board of directors and other workers of the organization, there is a consensus in a sense that the law must not be a barrier, just as the ethical norms and mores have the same major importance as the legislative obligations.

Let me be clear: in order to have an effective Corporate Social Responsibility, an entity should obey the law (pay taxes, salaries, amid other legal obligations), but this is not enough. Even if this condition is necessary within the framework of Corporate Social Responsibility, it becomes even more important in countries where the illegal entrepreneurship reaches exorbitant levels, there is not enough ethics and is unacceptable.

The concept of CSR has emerged, let’s say all in one time, in order to outweigh the negative effects of globalization, such as the growing divide between the developed world and the developing world or between rich and poor at a national level, questioned by authors such as Joseph Stiglitz, who in their occasion embrace the exaggerated cult of free markets, a market without checks, without ethics, without moral values, that is aiming only to strengthen economic growth without paying attention to the concentration of wealth and terrible inequality that are counterproductive and negative characteristics.

The tip of the iceberg, nonetheless, is the corporate scandals mainly due to corrupt practices in companies such as Enron and Parmalat, whose descent has taken down the international financial system, the same as it happened later on in the United States with the loan crisis generated by the fraudulent use of speculative documents. All these affairs shaped a new set of standards and needs for CSR, it means, from an authentic Social Responsibility, with an ethical criteria, in order to stop corruption in public-private companies and their terrible economic, political and social consequences.

In reality, the CSR pretends to be the in-depth solution of a global crisis without precedents, in which the future of humanity and of life in general is in great danger.

Or is there someone who would deny that we are in a crisis? It is enough to have the eyes wide open in order to view it in specific areas, even though it does appear as the lights of constant progress are around us, in order to find ourselves at a point of ruling the universe, make the Earth a paradise and in before all the extraordinary advancements in medicine, win the war against death and why not be able to reach eternal youth.

No. Today, there are economic crises of global proportions that are repeated with a major frequency due to the free capitals flow, in the middle of a financial speculation mentioned above; there are political crises, whose manifestations par- excellence are the weakening of Democracy in the world, with numerous party leaders or government leaders in jail; there is a social crisis, reflected in the great levels of poverty, unemployment and violence, and finally there is a crisis of leadership, well, such leaders that can overcome such a decadent wave of our nations are unfortunately inexistent.

As if it were insignificant, such critical circumstances reveal a much darker landscape, perhaps apocalyptical, when there appears a new phenomena, with a devastating power, such as the global warming, that originates at a greater length from the way in which industrialization has taken shape (use of fossil fuel such as petroleum, the so called greenhouse effect) and the threat of a nuclear war, through which –according to a popular phrase– we are doomed to go back into the age of bows and arrows …if anyone will survive in order to launch them!

To conclude, the Corporate Social Responsibility (CSR) is born from the depth of our conscience, from the authentic individual responsibility, that goes beyond all the requirements defined by national and international laws.

A Solution at its Roots

What is –we ask– the principal cause of this crisis, are they political or economical, social or cultural, collective or individual? This cause is not precisely a moral crisis, of values, that surges from the envy of the corporations, in the corruption of politicians, in the lack of moral authority of our leaders, in the inequality and anti-values that are so popular, in the imminent annihilation of life in the planet, a significant risk to ensure that the actual crisis of men overshadows threefold what has been happening since a few years ago, with the uttermost depths of World War II, by existential philosophers who no one remembers?

Without moral values, which constitute the foundation of a social organization, of a culture or civilization will be terribly disappointed, according to a consistent historical research of Toynbee which is acquiring a growing popularity.

The conclusion is becoming logical: if the general crisis is provoked by the loss of moral values, it will not be over ruled, only if these values are reinstated again, on ethics, social responsibility of each person, of each enterprise or social organization, of each government or country, without exception.  It is required, therefore, a worldwide ethics, for the ongoing globalization, ethics that is formulated precisely by Hans Küng, a German thinker of the end of XX century, and later supported by the United Nations in the famous Global Compact, an entrepreneurial Decalogue that constitutes the essence of CSR, as we will see in continuation.

This is an excerpt of “Main Topics on Corporate Social Responsibility” written by Jorge Emilio Sierra Montoya; translated into English by Peter Marko Tase.

This volume may be purchased here:
http://www.lulu.com/shop/jorge-emilio-sierra-montoya/main-topics-on-corporate-social-responsibility/paperback/product-22643297.html
http://www.lulu.com/shop/jorge-emilio-sierra-montoya/main-topics-on-corporate-social-responsibility/hardcover/product-22647862.html

Jorge Emilio Sierra Montoya was director of “La República”, the first business daily newspaper in Colombia and was the first director of the Latin American Institute of Leadership. Currently he is an Advisor on Social Responsibility at the Universidad Simon Bolivar (USB) of Barranquilla, Colombia (after serving earlier in the same capacity in the Colombian Association of Universities -ASCUN-) where he is the director of “Desarrollo Indoamericano” a renowned journal of Colombia, one of the most important publications on social issues in Latin America and the Caribbean.

Translation from Spanish by Peter Tase

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