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The Three Laws of Corporate Responsibility 23 February , 2007

Posted by eugene in 6 Use Rights as Citizens & Consumers.

Some skeptics might be doubtful of a company’s self-proclaim corporate responsibility because a company’s responsibility is to seek maximum profits for its shareholders. If the company spends some of its budget or profits on social or environmental responsibility, does that mean that the company is not being responsible to its shareholders?  

The company is justified in spending on social and environmental responsibility only if it helps to improve the bottom line in whatever way. A company then spends on that not because it is being altruistic but because it hopes to gain something, which will improve their profits in the long run. There is no free lunch in this world.  

When a company does not practise environmental sustainability or pollutes the environment, it is not wrong because the company is an institution created by humans that does not take into account the environment. It is only concerned with making profits; it was created to do so. In his book, The Corporation, Joel Bakan described a company or corporation:

“As a psychopathic creature, the corporation can neither recognise nor act upon moral reasons to refrain from harming others. Nothing in its legal makeup limits what it can do to others in pursuit of its selfish ends, and it is compelled to cause harm when the benefits of doing so outweigh the costs. Only pragmatic concern for its own interests and the laws of the land constrain the corporation’s predatory instincts, and often that is not enough to stop it from destroying lives, damaging communities, and endangering the planet as a whole.”

Therefore, while we are getting more companies to embrace corporate social and environmental responsibility, we also need to examine how we define and regulate the company. Perhaps there should be some rules for companies on corporate responsibility, similar to the Three Laws of Robotics that robots have to obey in Issac Asimov’s science fiction books. The Three Laws of Corporate Responsibility could be:

1. A corporation may not harm the society and environment, or, through inaction, allow the society and environment to come to harm.

2. A corporation must practise corporate social and environmental responsibility, except where such practice would conflict with the First Law.

3. A corporation must maximise its profits, as long as such profit undertakings does not conflict with the First or Second Law. 

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