Shareholder Value versus Corporate Responsibility

Roger L. Martin - Shareholder Value Versus Corporate Responsibility

Corporate Responsibility

Article on the delicate balance: Can companies provide good returns to shareholders while being socially responsible?

Roger L. Martin, the Dean of the Rotman School of Management at the University of Toronto, thinks they can and should, stating that corporate responsibility can actually increase shareholder value.

Many consumers and investors, as well as a growing number of business leaders, have added their voices to those urging corporations to remember their obligations to their employees, their communities, and the environment, even as they pursue profits for shareholders.

But executives who wish to make their organizations better corporate citizens face significant obstacles. If they undertake costly initiatives that their rivals don't embrace, they risk eroding their competitive position. If they invite government oversight, they may find themselves hampered by regulations that impose onerous costs without generating meaningful societal benefits in return. And if they insist on adopting the wage scales and working conditions that prevail in the world's wealthiest industrial democracies, they may succeed only in driving jobs to countries where less stringent standards are the norm.

More on Corporate Responsibility:

de Jonge, The value of a corporation: shareholder and stakeholder thinking

Kennedy, The End of Shareholder Value

Freeman, Corporate Strategy and the Search for Ethics

Shareholder Value Magazine

Center Economic Social Justice CESJ employees, labor unions, company

Governance responsibilities accounting standards

Global Corporate Governance Forum standards governance corporations, enterprise accountability fairness transparency responsibility

CSR Europe corporate social responsibility stakeholder dialogue

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