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Finding Humanity Amid Profits: Widening the CSR Aperture Beyond Compliance

Published: Tuesday, January 31, 2012

This is the first in a four-part series based on The Power of the Dragon: 2012 is the Year for Change in which we ask corporations to deliver on the Dragon’s Four Blessings of the East. In this post, Wealth.

"(The) erosion of societal values has progressed particularly in the business world, and is also one of the primary reasons of the current economic crisis. The enterprise has transformed from a purposeful unit to a functional unit: the purpose of an enterprise - to create goods and services for the common good - in society has been replaced by a purely functional enterprise philosophy, aimed at maximising profits in the shortest time possible with the aim of maximising shareholder value."

These words were written by Klaus Schwab, founder of the World Economic Forum, not this year, not last year, but back in January of 2010 and they still ring true two years later. At the time, Mr. Schwab was referring to excessive corporate bonuses that he felt were symbolic of a deeper and troubling degradation of communitarian spirit within corporations.

Profits vs. Stakeholders

Many stakeholders are affected by a company's operations. When profit becomes king, every expenditure is measured, analyzed and potentially replaced by lower cost options, often without regard for the social impact of doing so. A reduced workforce or low wages may result with far-reaching consequences.

This thinking in developed nations, where many corporations are headquartered, affects the unemployed who can't find work, the underemployed who may not make a decent living wage, and the employed who may be asked to do more than ever before at the same wage. By extension, it also affects the developing nations represented within their supply chains, where all too often workers toil under gruelling conditions for long hours for dismal pay.

Going Beyond Compliance

Of course, a corporation and its suppliers are not required to do more than comply with local labour laws but mere compliance is often not enough, especially if workers are left impoverished or worse. In addition to low wages, workers in developing nations may be forced to migrate far from their homes just to find work, leaving families interrupted and their children increasingly vulnerable to abuse and neglect. Workers, particularly female workers, may themselves suffer abuses that they are reluctant to reveal for fear of losing their job.

Corporations need to widen their aperture for a fuller appreciation of their footprint. We need more visionary organizations willing to push beyond current practices and harness their financial and social wealth to advance humanity. By supporting, protecting and advancing the people and environments on which they rely, significant gains can be realized along both profit AND stakeholder continuums.

Photo via Flickr via vargklo