Taking Corporate Citizenship Seriously – by Jeremy Moon

Elgarblog: Taking Corporate Citizenship Seriously

How and why should corporations take their social responsibilities seriously? Professor Jeremy Moon explains.*

Business history, and even responsible business history, is littered with cases of irresponsibility which re-energise ethical principles, invite new conceptualisations of business responsibility (think Brent Spa and ‘environmental sustainability’; abuses of human and labour rights in international supply chains and ‘ethical trade’) and invite new forms of regulation, be it self, social or governmental regulation.  But equally, companies are adept at managing their communications and their regulatory environment such that some fundamental aspects of business irresponsibility continue under the radar.  In my view there is a set of such responsibilities which fall into the category of ‘corporate citizenship which not only illustrate this point, but also require serious consideration and action.

The term corporate citizenship is useful because it entails a bit more than just ‘corporate social responsibility’ with which corporate citizenship obviously also overlaps.  Corporate citizenship denotes membership of society and of their political communities and systems.  This brings corporations into questions of political participation and of roles in societal governance and these I have explored since the 1980s.

I was therefore delighted that Dirk Matten and I were invited by Edward Elgar to put together a Reader to cover key works in the field of corporate citizenship (Matten and Moon 2013).  Our ‘Introduction’ to the Reader is re-produced in the Research Papers of the International Centre for Corporate Social Responsibility.  Our collection of papers is divided into the following sections:

PART I ORIGINS which explores how the term entered the business and society lexicon, its meaning and broad implications;

PART II DEVELOPING LINKS BETWEEN CITIZENSHIP/POLITICS AND BUSINESS which explores the political nature of business and of corporate social responsibility;

PART III CITIZENSHIP AND THE PRIVATE CORPORATION AT THE NATION STATE LEVEL which explores the constitutional and political roles of corporations in national politics; and

PART IV CITIZENSHIP AND THE PRIVATE CORPORATION AT THE TRANSNATIONAL LEVEL the emergence of governance roles for business between and across countries.

Looking over the collection it is rewarding to see how far this field of research, and the practices that it reflects, has developed.  Yet I also have a sneaking feeling that there is more to be done.  This is as a result of recent developments which have brought the question of corporate citizenship into sharper than usual relief.

I briefly comment on three such topics here in the expectation that I will focus individually upon these and more in future blogs.

  1. Can corporations campaign responsibly and legitimately? The interventions of business in the recent Scottish referendum on independence proved tricky.  They were sometimes ill-timed, suggesting that they were as much a function of the interests of other political players, rather than of companies.  Equally importantly, many of these interventions were not treated as legitimate by other political players.  If companies wish to participate in such ways – and I see no a priori objection – then they need to have this better worked out and managed in the context of clear guiding principles of participation.
  2. If companies are claiming corporate citizenship, then shouldn’t this be reflected in their taxation returns? Revelations of legal tax minimization are disturbing when it appears that companies can make large profits in a national economy but conspicuously avoid fiscal contributions to the upkeep of that country’s educational, welfare, health, communications infrastructure, and law and order systems.  These public goods are usually fundamental to the business environment which underpins the success of the firms’ strategies.  Free-riding here looks conspicuously uncitizenly.
  3. Shouldn’t companies licensed to operate in areas of critical infrastructure be expected to demonstrate over and above the minimum citizenship? This issue has been raised by UK security chiefs regarding ICT companies supporting national anti-terrorism security efforts (which do raise difficult questions about freedoms of communication).  It also arises in the latest iteration of corruption by banks, now in the operation of the foreign exchange systems.   These systems are not simply to make money but to enable reliable systems of transactions for human citizens, other companies, and governments.

In future blogs I expect to further explore both the concept of corporate citizenship, and its applications in such issue areas.

 

 

web2Jeremy Moon is Velux Professor of Corporate Sustainability, at Copenhagen Business School.

 

 

 

*This article first appeared on the CBS ‘The Business of Society‘ blog.  Reproduced here by kind permission of the author.

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