The following piece about corporate social responsibility is chapter 13 in the book Values & Ethics: From Living Room to Boardroom (itself based on an Internet-based talk radio show of the same name I did in times past). My enterprising and astute partners in dialogue are Mallen Baker and Scott Farrell. Mallen’s words are indicated by the initials MB, Scott’s are SF, and mine are JM. For paragraphs with no initials, assume they are a continuation of the speaker who was speaking in the previous paragraph. I highlight words having to do with values and virtues by placing them in boldface type. Get ready for an interesting interview with Mallen Baker and Scott Farrell about this critical topic in modern society.
JM: Hello, you’re listening to Values and Ethics: From Living Room to Boardroom, on World Talk Radio. Today, I aim to facilitate dialogue, ask the right questions, and try to get to the bottom of ethical issues and values inherent in workplaces and the business world. Today we discuss corporate social responsibility – encouraging and/or requiring business to do the right thing for workers, consumers, employees, communities, and the planet.
To that end, Mallen Baker is joining me. He’s the development director for Business in the Community, which is a unique movement in the United Kingdom comprising 700 member companies employing almost 16 million people across 200 countries. The purpose of the organization is to inspire, challenge, engage and support business continually improving its positive impact on society. Business in the Community is the largest and longest-established independent business-led charity, having over 30 years’ experience. The website is www.bitc.org.uk. Mr. Baker is responsible for developing the organization’s approach to how companies manage issues arising from products and services. He’s also the editor of an email newsletter and website dedicated to corporate social responsibility, Business Respect. He’s a regular columnist with Ethical Corporation, and the Book Reviews Editor of the New Academy Review.
“Imagine a business that is born out of a dream about how the world could be and should be. Picture a business built on love and care rather than stress and fear, whose team members are passionate and committed to their work. Think of a business that cares profoundly about the well-being of its customers, seeing them not as consumers but as flesh-and-blood human beings whom it is privileged to serve. They exist in the real world by the dozens today, but soon to be by the hundreds and thousands.” ~ John Mackey & Raj Sisodia
Corporate social responsibility is an important topic for us to discuss because Alan Sloan of Newsweek noted: “Watching corporate America these days is like watching drunks at a revival meeting vowing to sin no more.” With that, let me bring Mallen Baker on the line. Hello there!
JM: Thank you for joining me.
MB: You’re very welcome, Jason. It’s an honor to be here.
JM: Wonderful. I don’t know if you heard that Alan Sloan quote that I just shared?
MB: Yes, indeed.
JM: It’s an interesting perspective he has; I think he’s referring to some of the attempts that America is making to ensure that business not only makes a profit, but does the right thing as well. Tell me what corporate social responsibility is all about.
“For the key practitioners of America’s brave new game of ‘corporate socialism,’ failure has its own lush reward. It’s enough to drive one back to the invisible hand of Adam Smith.” ~ Robert Scheer
MB: It’s a worldwide movement, but it means different things in different parts of the world, as you might expect. I think where corporate social responsibility is most advanced, it has become about the relationship between business and society. So, how the company creates wealth is as important as what it does with it.
I think it’s fair to say that the U.S. has a fantastic “personal citizenship culture” – where individuals, say, volunteer in their communities. Corporate America has dealt with social responsibility in the past whereby it has been about community involvement, very local, very much about getting your employees involved with corporate volunteering, etc. I think it’s been relatively late that corporate America has started to grapple with some of the more challenging areas of its agenda that, say, it isn’t just about what you do with your resources – it’s also about “the business of business.”
JM: Howard Schultz of Starbucks said: “We want to tell the story in a way that other companies can see: you can make money and do the right thing by taking care of your people.” I surmise that for many companies, it is too little, too late. Let me give you another quotation, as an example of my not being how sure I am that we are in fact getting this idea in the time allotted. At least on this side of the pond. Robert Hinckley says: “Corporations are set up to make money; the corporate system has no conscience, no obligations of citizenship; in fact, it’s encouraged to take advantage of the public interest.” Can you shed some light on that? Do you think it’s because we’re not quite as advanced as the U.K.? Do we simply need more time to really enumerate and enforce what corporate social responsibility corporations have?
“Corporate social responsibility starts with corporations paying their taxes. Multinationals continue to pay tax attorneys huge amounts of money to seek out tax shelters for them. As a result, the tax burden is heavier for ordinary citizens.” ~ Susan George
MB: There are all flavors of opinion in this. What you see now that corporate social responsibility has entered into common parlance is that there has been a bit of a backlash among the classical economists who have always held that “business is business,” and if everyone just rushes around to make as much profit as they can, it will all be fine.
I have to say, the majority of senior business leaders that we deal with simply do not see it that way. They understand that they are managing a business for the long-term. Short-term pressures exist, but they aren’t the be-all and end-all of success.
The people who often opine, “Well yes, that’s all very well, but what they are essentially are guardians of shareholders’ money.” What they aim to do is benefit from ownership. But of course, in every other aspect of life, the benefits of ownership of something come with responsibilities of ownership. It is the management that’s held to account if a company breaks the law, or creates unwelcome social consequences, or damages its reputation. And that’s right, because they are the people who are the “controlling mind” of the business.
Therefore, the people who want the ownership have to understand that if they don’t take responsibility, then they either delegate to the people who run businesses, or they choose to invest somewhere else. Those who would like to claim that, “Yes, of course business is only there to make profit” are ignoring the license a business needs to operate; the consent of society that it needs in order to be able to produce, market, and sell products. The managers of the business ignore that license at their peril.
JM: Ok, let me just ask you specifically: Is it true that “times are a-changin’” and that it’s becoming harder and harder for corporations to ignore this fundamental idea? For example, if you pollute the waterways, not only is that bad for your company ethically, but that there might be consequences in the future to you personally or to the company, and that eventually you’re not going to be able to hide, say, by taking the business off-shore and other tricks.
“Pfizer, the world’s largest drugmaker, has been fined a record $2.3 billion as a civil and criminal penalty – yes, that’s criminal, as in fraud – for promoting prescription drugs with the subtlety of the Russian mafia. It’s the fourth time in a decade Pfizer’s been called on the carpet.” ~ Bill Moyers
MB: There are “sticks and carrots,” here. The stick is that in “the Internet Age,” wherever you operate in the world, if you get caught out doing something which the majority of your customers and other key stakeholders think is reprehensible, then it can be a matter of seconds before people start to find out about it. And various flavors of that, whether it’s the rather litigious approach in the States, or simply some of the reputational damage that can happen elsewhere. Managers are very aware now that there is no place to hide.
I think on the “carrot side,” many senior business leaders have been inspired by the fact that there is a group of their peers – and many of the most successful, most influential business leaders are amongst them – who bring positive benefits to their business in terms of building the brand/reputation. Moreover, making their employees feel that they can value the company they work with – and that the company shares their personal values. Indeed, there has been a certain amount of research in the U.K. and other places to show how that affects workers’ inclinations to support and stay with the company. Retention of talent is one of the biggest priorities companies have.
Of course, it’s not always obvious what a responsible business should do under any given set of circumstances, and sometimes the old adage: “For every complex problem there is a solution which is easy, straightforward, black-and-white – and wrong” is apt.
Businesses are operating in areas where there is weak governance, depending on the country in question, so campaigners are holding them accountable as though they were “quasi-governmental actors.” It would be convenient if human rights were universally protected across the world, and they could just focus on the positive aspects of doing business. But, they can’t. It’s something that they are grappling with, and it’s quite tough.
“Corporations have 35,000 lobbyists in Washington and thousands more in state capitals that dole out corporate money to shape and write legislation.” ~ Chris Hedges
…Let me give you an example. A number of companies – quite rightly, most of us would agree – have taken the position that they would not support the use of child labor in their supply chain. It should be a fairly fundamental thing that you would not expect the products you’re wearing in the street to be stitched together by a 10- or 12-year-old person in a village. Now, when some of those companies introduced such measures what consumers did was, they simply said, “Right. Any company that can’t guarantee this, we will vote with our dollars (or pounds!).” However, you had the unfortunate consequences that, for some children, the alternatives to working in those factories were working in situations of hard, manual labor or prostitution, and obviously that wasn’t a positive outcome for those individuals.
There are ways of addressing that while still upholding the principle; you can say as a company: “Okay, we won’t use children in the supply chain but we will invest in that community so that children who were previously employed are paid to go to school for a couple of years, after which point they then come into the workforce.” But the company has to be prepared to look into the problem, to see the consequences of a proposed action, and to be prepared to invest that little bit of extra time to understand, and money to invest, in order to ensure that there aren’t unintended consequences of well-intentioned actions.
JM: Mm-hmm. Could you help us understand the degree to which an individual who is at the helm of the corporation has complete autonomy to observe conventions (or aspirations of) corporate social responsibility (versus the board of directors and the shareholders)? I’m thinking of Phil Knight, Nike’s CEO. I remember Michael Moore going after him in one of his television shows, I think The Awful Truth, where he was pursuing Mr. Knight to say to him (paraphrasing): “You shut down a factory in the U.S. and you opened it up in Bangladesh or wherever, and not only are you employing kids, but the people in my hometown of Flint, Michigan really need jobs – would you be willing to come back to Flint again?” He replied (paraphrasing): “I’m not willing to do that because we need to stay competitive” – the defense they always seem to use. I’m wondering, is such a strategy simply Phil Knight’s decision? What if you get a leader who is malevolent, can they do what they wish? Or will they have adequate oversight and accountability?
“I have an idea for all these corporate CEOs who want to outsource American labor to cheaper foreign countries: outsource the CEOs as well.” ~ John Cullen
MB: It’s very rarely down to one person now because there is a “controlling mind of the company” which, at the very least, begins and ends with the Board. The Board is there to have oversight on the material risks to the business. So, the board is responsible, and if they allow a CEO to do whatever they want without scrutiny, that’s a board that is abnegating its responsibility.
The example you’ve just given raises all sorts of interesting questions. Nike of course would say that it doesn’t have children in its supply chain – they do have workers who are paid considerably less compared to what U.S. workers would be paid, which is absolutely the issue. Just about every manufacturing process now is in that part of Asia or the equivalent. There is a real problem here.
You have a certain number of companies who describe themselves as “fair trade” – who sell on the basis that they pay a higher rate to the on-the-ground producers, and there is a certain number of consumers who are happy to pay more in order to get those products. But it’s a tiny number. These companies know that actually, the customer loyalty that they have doesn’t survive a significant price differential. People will pay for quality products; they won’t pay for ethical products. It would be great if they did; I’m sure standards across the world would be raised faster if everybody shopped on the basis of their conscience and their values. So, Nike could take a stand on that and go out of business, in which case a lot of people lose their jobs, and competitors effortlessly move into that market share.
JM: Yeah, that’s a wrinkle.
MB: The question is: What is the inherent value of a job? Why does a job in a developing country where people are desperate to earn two dollars a day – why is that less socially responsible than a job in the U.S. or the U.K. or any of the developed nations? People are people. Actually, there is a very difficult question about whether social responsibility means jobs at home, but we don’t care about poverty abroad – and that’s not an easy one to resolve, actually. For global companies meeting global markets, who is to say that the revival of fortunes in Bangalore – very good jobs – is not adhering to standards of corporate social responsibility? It comes down to how you do these things as much as it is what you actually do.
“Never mind that inanimate corporate constructs have no tongue, brain, heart, or soul — the five judicial fabricators breathed unprecedented legal life into corporations, decreeing the vast wealth held in their treasuries is their voice.” ~ Jim Hightower
JM: Acknowledged. I’m been speaking today with Mallen Baker about corporate social responsibility. He has a wonderful website and newsletter and so on. Check him out on LinkedIn, or www.MallenBaker.net.
We are talking about how a business can do the right thing while still making a profit; how corporations can enjoy all of the benefits that they have legally and culturally instituted for themselves while being responsible to the country of origin: the people, and the polis.
Mallen, Enron was very explicit about its code of ethics, yet did all those dastardly things that “feathered the nests” of the managers while essentially defrauding the people of California, company shareholders, and the workers who depended on the pensions they earned. I think when you have a system where “might makes right,” and one which is “winner take all,” and government doesn’t hold power-mongers’ feet to the flame, you get a culture of cheating, of disregard for the other, and of selfishness.
Indeed, when those at the top of a corporation, university, or some kind of public office “look out for No. 1,” it perniciously encourages and licenses those below to act in accord with those values – to avoid feeling “left behind.” At its worst, a corporation – its leaders and its high-level workers – act in a way that if they were being diagnosed by a psychiatrist, would be considered sociopathic. What do you make of Enron’s high-minded ethics code vis-à-vis its negligent and atrocious conduct? Where was its corporate social responsibility?
“The idea that American business is at a big disadvantage against the rest of the world because of high corporate taxes is baloney. In the 50s and 60s, corporate taxes were 52%, and we were making all kinds of [job] gains.” ~ Warren Buffett
MB: Well, there are good and bad in all walks of life, and all of us know some individuals who have come across initially as charming, but you find that actually, they are rogues. The fact is, businesses are cultures of people; they are groups where people come together. They depend on a couple of things in order to perform their work with any real form of integrity.
One is the integrity of the people at the top. There is no doubt that it is perfectly possible for rogues to project one kind of approach in the way that they run a business, and actually be operating in a very different way. What happened with Enron was illegal; it was neither here nor there about corporate social responsibility – what they did was just criminal.
The other aspect of how you develop this in a company is how one sets “the corporate culture.” Some of the most enduringly-successful businesses over the last 100 years have been companies that have based the way that they work on a set of values which can motivate and bind together the people who work for those companies. That can be a very powerful thing. But, for every company for whom a values basis changes the decisions that are made, there are probably 20 others for whom the values statement is merely something that hangs on the chairman’s or president’s wall.
I’ve done a number of corporate social responsibility reviews for companies and one of the things I always do is talk to people in the call centers or the shop floor or whatever it may be and asked them if they know what the values of the business are. At the best of those companies, you hear: “Oh yes, it’s this, that, and the other – and it really does affect the way I’m treated around here, and am encouraged to treat other people.” I have to say, more often than that I hear: “I have no idea.” That doesn’t necessarily make those companies “budding Enrons,” but they don’t get the benefit of genuine corporate social responsibility embedded in the values of the business. Such principles would motivate the employees to go that extra bit further if they were working for a company they value and support – not just one that pays their bills.
“Adopting the ‘might makes right’ perspective, it’s perfectly okay for corporate management to lay off thousands of workers, economically ravage entire cities, and pay executives astronomical salaries. It’s okay because if you can do so, you will increase your profits.” ~ Judith Barad
JM: That’s an interesting point you bring up, and it seems to me that it’s just plain good business to do the right thing, to make your employees happy and eager to stick with you, put in a productive eight hours a day, and not miss work due to a sense of futility about the job. In the U.K. you have Anita Roddick of The Body Shop – do you respect her as a business leader, and think that her model is a good one? Her employees seem happy working there and, at least to the untrained eye, the company appears to have intact values and be very explicit about what they are. They claim to be fair trade and that they don’t do animal testing, for example.
MB: There are a number of extremely dynamic, often smaller businesses, usually led by vision-driven people at the top who produce what might be described as “a social product.” The Body Shop’s whole premise is that they produce good-quality products, but you also know that the way they were manufactured and sourced was in a very strongly ethical way. And you get ethical banks and financial institutions; you get ethical niche players such as Ben & Jerry’s Ice Cream – people who wear their hearts on their sleeve. They can be very inspiring, and they can be very successful, although The Body Shop has stumbled on occasion, due to its business management.
But at the same time, they are not big. We have a very successful niche player – by no means tiny – called the Co-operative Bank in the United Kingdom which is very good at what it does. It is, nevertheless, not looked to as an example by the mainstream banks whereby they can copy what that company is doing largely because Co-operative Bank has cornered the “ethical market.” What those banks need are things that they can do while selling to a mainstream, broader audience but which, nevertheless, are the right things to do – and which make economic sense for their segment of the market.
“My father was never particularly interested in making money. And neither am I. He always said that if you do the right thing, and build your bridges strong, it will come automatically.” ~ Philip K. Wrigley
…There is room for both. When Ben & Jerry’s was bought by Unilever, a number of people were outraged that a quirky, individualistic enterprise such as Ben & Jerry’s could be swallowed up by this sort-of “dreadful corporate shark.” Initially, they were going to turn this approach down, but Niall Fitzgerald, a passionately-committed man (at that time, the head of Unilever), was just totally convinced that Ben and Jerry hadn’t realized the strong “values base” that was behind his company.
For example, the kind of approach it had toward developing products that met social needs in what is described as “the bottom of the pyramid economies” (where people are living on less than $2 a day). As well, the way the company was innovating to try to address those social needs – and using its power to do that. He was obviously able to persuade them that this was a “values-driven” company, and the sale went ahead.
It’s not simple when you’ve got an economic system that may encourage bad behavior – which is why developing a culture that values corporate social responsibility is part of what you need to do. Sensible regulation that establishes minimum standards to change the overall corporate culture of business is critical as well.
JM: Right. So let me use that as the first part of the answer to the question I’m about to ask, namely: What else besides a good list of values being prominent – core, in corporate parlance – would you suggest companies do to bring about greater corporate social responsibility?
MB: You start with the nature of the product: what are the issues around the product (positive and negative)? So, for instance, we have companies that sell timber products that, 10 years ago, were identifying the move towards sustainable production – meaning, they needed to be much clearer about where their timber was coming from – whether it was sustainably managed. They couldn’t do it on their own, so they innovated and set up an independent body – the Forestry Stewardship Council – that could then accredit well-managed forests. They could, in turn, use the FSC’s seal of approval to guarantee the integrity of their supply chain.
Then, look toward the interests of “the stakeholders,” which are effectively the people who are affected by and can affect the business. See what issues they care most about. So, when a company like Southwest Airlines says that its people come first and customers come “a very close second,” you can see a corporate culture where values actually affect how decisions are made.
“In order to achieve true sustainability for all life forms, we must put our primary needs of fresh air, clean water, and biological and cultural diversity above corporate profit.” ~ Julia Hill
…So, if you start off with a very simple values proposition that says: Do right by the customer; Do right by your own people – and you are determined not to let that merely be a statement which adorns the chairman’s wall – then you have to start working it through the whole process of what you do. For example, asking: What does that value mean in regard to how we run our call center? What does that value mean in regard to how we’re going to have to change this product? If it becomes “embedded,” that should mean that the people “on the ground” who are making day-to-day decisions know that they’ve got a “guiding light” whereby they know that if they face a dilemma, the culture of the organization determines how they should choose.
I think the final thing I’d say is that it should be led from the top whilst drawing from the support at the bottom; you shape your behavior around what your people feel are their values, and you show top-level commitment to it. The chief executive and the president and the vice-president should be out there showing that they live the values, getting involved with supporting community projects, getting involved with employee initiatives, and really leading from the front. All this shows that they shepherd the business to meet its core responsibilities. That’s how you start to make the differentiation between businesses committed to corporate social responsibility and “the Enrons” – where it’s everywhere but at the top; where they don’t really live the values.
JM: Mallen Baker, I appreciate your time and your expertise. These are some interesting ideas we have talked about and I think I’m going to work these ideas into shows in the future. I am clearer having dialogued with you that corporate social responsibility and business ethics are indispensable parts of what corporations here in America and throughout the world should adhere to.
My takeaway is that better behavior by corporations is not just “the right thing to do” from a moral perspective, but also these standards of employee, environmental, and societal respect can pay financial dividends. Having “corporate character” encourages customer loyalty, preserves reputations, retains employees, and (hopefully in the future) adheres to regulations.
MB: Jason, thank you.
“I’m certain that we’d see far fewer press conferences with a corporate spokesperson or government appointee spinning a whole new brand of ‘truth’ if their mothers were standing just off camera, arms folded and eyes fixed!” ~ Lisa Graham Peterson
JM: I hope you learned a few things about corporate social responsibility and business ethics because I certainly did. Let’s do what we can to ensure that leaders of businesses, especially corporations, do right by us. It’s our world. Much power rests with consumers and citizens if we understand that fact, are not distracted, and organize and speak with a loud voice. It is not a foregone conclusion that the love of money should dictate and influence as it has for so long.
I’m joined now by Mr. Scott Farrell. He pioneered the website and approach to values, history, ethics, and the like, Chivalry Today. (www.ChivalryToday.com). His approach is to explore the history, literature, and philosophy of the Code of Chivalry.
Indeed, from medieval knights, Church dogma, and the legends of King Arthur, to the modern ideals and prescriptions that influence politics and lawmaking, business and finance, teaching and education, medicine and charity, relationships and romance, right and good have been socially-constructed and upheld by community, religious, and ethical standards and norms. For example,
For example, honor was clearly present and highly regarded in ancient societies – none perhaps more so than Sparta and Arabia and the Holy Roman Empire – and is related to concepts such as character, reputation, and prestige nowadays. Though it has a dark side (blood feuds come to mind, as does the idea of the United States foreign policy being as militaristic as it is due to the need to ward off potential attacks on Americans), the concept has always been lofty and ideal – e.g., good conduct, proper behavior, reputation preservation, pride, and self-restraint.
“There is nothing noble about being superior to some other person. True nobility is in being superior to your previous self.” ~ Hindustani proverb
…The most intense and prescriptive statement I think I have ever heard about honor actually came from my late and dear friend, John A. Marshall. One day he noted: “If you’re forced to the decision between death, or surrendering your honor to live and raise your children, choose death. If you surrender your honor, you won’t be fit to raise children.” Wow. However, he has also left the world with these gems: “You cannot just decide or claim that you have honor – or loyalty, or courage. You have to pay for it.” And: “Not acting because it would be extremely difficult to act is not a reasonable reason for not acting.” And: “Legal obligations have escape clauses; moral obligations do not.”
There are thousands of quotations on honor vis-a-vis corporate social responsibility. Actually, I recall that a quote on the subject which was just slightly beyond recall was the impetus to digitize my haphazard, paper collection of words of wisdom and pithy insights. It has now grown to 25,000 as of this writing! Well, suffice it to say, honor is something prized, won, earned. Not such as virginity – I think that is a provincial and Victorian and narrow-minded view. It is bought over time through consistent right action and good conduct. A reputation is built through repeated demonstrations of excellence.
My stepfather has been known to make significant business deals with a handshake, and it is a good model for me. Once I let him down, due to a moral dilemma I found myself in – the dénouement of which he did not approve. He told me in no uncertain terms, and considering who he was, and my relationship with him, I did feel regret. My father also tried to raise me to be good and do the right thing. My maternal grandmother always seemed to have a dignified and high comportment – at least to my young eyes.
My mother has often been a good role model to me, as well. Once I disappointed her in a big way, but I believe I chose the honorable path despite her disapproval, and I think she sees a sense of honor in me today in part because of decisions of that type. Perhaps not the possession of it, but at least, a recognition and an aspiring to it. She has lauded me as one of the most dedicated persons to one’s values and moral code she knows, and that will stay with me.
“We need to be open to new ideas and unexpected perspectives. Openness is a form of intellectual humility, and it is an important human virtue. …We need to be teachable by others. No one knows it all. And everyone we ever meet has something to teach us.” ~ Tom Morris
…The problem with moral decision-making is not when the big issues are on the line, but rather during the countless, little decisions we are continually faced with. The majority of people can make the right decision if an interlocutor turns on a spotlight, holds a mic to them and asks, What are you going to do?! The real question is: What has one been doing from day to day when no one was watching?
Most people are not particularly conversant with the term honor, let alone uphold it. However, Scott Farrell believes the Code of Chivalry is still alive and well in the 21st century. The medium of Chivalry Today is live, interactive classroom presentations, an informative monthly podcast, and many articles, reviews and links. Scott is an experienced actor and published author. His articles and opinions on matters of history, Arthurian legend, and the ideals of chivalry have appeared in many publications, including the Renaissance Magazine, Chivalry Sports, Men Today, Military History, Police Magazine, Tournaments Illuminated, and Word San Diego. I’m proud to report he has also written as a contributing editor for my second book, Living A Life of Value and he also contributed to Martial Arts And Philosophy. His work on stage includes leading roles in productions of Camelot, The Music Man, Oklahoma!, and The Reduced Shakespeare Company’s comedy, The Complete Works of William Shakespeare (Abridged).
I think what he and his colleagues are doing is a significant and modern look at chivalry, trying to make it relevant to today’s world. In the New York Times, Mr. Farrell is quoted as saying, “Interestingly enough, knight originally meant ‘servant.’ Chivalry’s modern interpretation should emphasize duty, outreach, and service, not self-serving behavior to impress others like bringing flowers or paying for dinner.” Here is another quote I have from him:
“Current events and front-page headlines have made us all aware of the importance of ethical conduct and personal integrity. In the wake of terrorist attacks, corporate scandals, and betrayals of public trust, people are recognizing that duty, heroism, honesty, and self-respect are more valuable today than ever before.”
…That’s a damned fine quote, and shows how relevant some of the chivalric ideals can be, even today. I’m happy to welcome Scott Farrell to the show to discuss corporate social responsibility and proper behavior with me. Hello, sir!
SF: Hello, Jason, how are you?
JM: Doing well. Yourself?
JM: Nice to talk with you. Why don’t you let the listener know something about The Seven Knightly Virtues you expound and how they can be applied in the business world. I see that they are courage, justice, mercy, generosity, faith, nobility, and hope.
SF: That’s absolutely correct. Those components of the Code of Chivalry go together to create what I think of as a moral or ethical or honorable code of conduct that really does apply in just about any kind, and for any level of workplace – from the boardroom right down to the production or sales floor. It really ties in very well with what your previous guest was talking about: that sense of responsibility with which any executive, business person, or entrepreneur should conduct themselves in a very competitive environment.
“Competitive” is what chivalry, in its authentic sense, was all about. You know, medieval knights, back in the 12th and 13th centuries, were not gentle, kind, poetic souls – they were fierce, courageous warriors. The Code of Chivalry was created to foster that sense that strength has to go along with responsibility, and that authority and power have to have limitations. Without self-restraint and virtue, very destructive results can come about.
“More than 10,000 working people a year (about 30 every single day) die on the job. Ours is the deadliest workplace in the industrialized world. Other industrial nations simply do not put up with such corporate laxity….” ~ Jim Hightower
JM: I hear you. I think it was funny on your website you show a name placard on an upper-level corporate manager’s desk reading: “Knight in Shining Armor”! That might not only kick off some interesting conversations, but also kind of “reframe” the way that one’s coworkers and the people that one supervises think about them. I assume that you feel that knighthood is a kind of a metaphor for corporate social responsibility when it comes to the leaders of organizations conducting business.
SF: Yes, absolutely, and that phrase, “lead from the top” is very appropriate in the sense that what we do in our environment, including our work, really has a big effect on the people around us. It takes a deliberate effort to reconnect with those helpful, compassionate, and chivalrous instincts — to break through the shell of “It’s all about me,” and start asking: “What can I do for you?” You may have heard of the concept of “servant leadership,” which made a splash in the business world a while back.
Indeed, I’ve worked with hundreds of companies and you can see that even the people out there in the trenches, as it were, who set an example really can have a huge impact on coworkers: that they create ripples throughout the entire company that the unmistakable message that a business needs to send (including corporations) is, “Hey, we expect more than myopic focus on the bottom line, or getting the next sale – we expect a code of business that has honor to it, as well as effectiveness and success.”
JM: Can you tell a corporate manager – let’s say the person who is going to be writing a check to you for a presentation – can you honestly tell them whether such conduct is going to have a negligible or significant impact on their bottom line?
“It’s time for corporate crime to be treated like street crime – as a dangerous affront to an organized, law-abiding society.” ~ Ralph Nader
SF: Yes, certainly. It’s a matter, again, of what Mallen was talking about, of taking that “long-term view.” I try to make it very clear that when we talk about a code of honor in the workplace, we’re not talking about something that would probably create significantly higher profits in the next fiscal quarter. What a sense of honor in the workplace does mean is creating a healthy, stable, long-term environment for doing business. So in that sense, yes, there is a measurable, positive impact, but it manifests more in the sense of having customers/clients who trust you; making sales to happy customers.
To continue the example of a salesperson, when he or she makes a big sale, they may be a “star” for a day or two, but when that customer comes back and says: “Hey, this product didn’t do what you told me it was going to do – it didn’t fulfill the promise you made to me,” the customer has lost faith not only in that salesperson but in the entire company.” So, a short-term gain resulted in a monumental long-term liability. Having a sense of honor, fair play, respect, and other workplace virtues will create rapport and trust. Those are bounties that can’t easily be bought, but are indeed tremendously valuable to a company. That is corporate social responsibility.
“All men are liable to error; and most men are, in many points, by passion or interest, under temptation to it.” ~ John Locke
JM: Right. So, do you believe that to have a sign on the wall reading, “Our company’s virtues underlie everything we do” will make for a successful and effective listing of “core values” for a company?
SF: Well, certainly it would be a good first step! Unfortunately, we have all seen companies that have those kinds of signs on the wall, but then don’t take the next step – to do the things required to demonstrate that those values, those “knightly virtues” have been internalized.
So, it’s going to take courage on the parts of one, or two, or three of the main leaders running the business to say, “No really – this IS how it is, and you can tell from my behavior, and I’m going to be able to observe in your behavior, whether we actually do believe in courage, respect, honesty, etc.”? That is interesting to think about consistency and integrity. Ethicist Michael S. Josephson wrote that: “It’s not enough that we discern the ethical and effective course; we must follow it. This often takes willpower or moral courage: the willingness to do the right thing even when it is inconvenient, scary, difficult, or costly.”
SF: Yeah, absolutely. That’s a very good point in that most executives today aren’t going to need to demonstrate courage in its “traditional sense” – one needn’t put themselves at personal risk in order to do business. Rather, courage today comes largely from having the willingness to take a stand, having the ability to contemplate and to make hard decisions, to take uncomfortable courses of action when you know they’re right – rather than caving in to the desire to make a quick profit or sweep something under the rug, so to speak.
It’s interesting, one of the quotes I often turn to when I’m giving my seminars is from Sir Ramon Llull, who was a knight and an author from the 12th and 13th centuries who, when he was talking about the principles of leadership, said: “A bad Baron or Prince is surrounded by advisers who will not tell him when he is doing wickedness and committing evil deeds.” To me, that’s a good example of the kind of courage that someone needs to have in business: the willingness to hear bad news; the ability to accept critical advice. It takes guts to hear, “Hey, you’ve messed up; you’ve done something wrong, and now we need to do something to fix it.” That’s what principled leaders do.
JM: So, service, humility, honor…these are more indicative of a religious person, and/or one with high morals and solid character – a real mensch, as it were. Yet, we think of corporate leaders (typically, men) as being more about the sword and the almighty dollar than kind words and good deeds. You referenced humility in a piece I read on your website. What is humility about? I have psychologist Rollo May saying: “…humility does not weaken the strength of one’s stand for one’s own beliefs, but keeps the door open for new learning and the discovery of new truth on the morrow.”
“Bragging begins where wisdom stops.” ~ Japanese proverb
SF: Many people associate this quality (quite incorrectly) with the notion of humiliation. It’s seen (again, incorrectly) as the quality of being a loser, a failure, someone who doesn’t have self-confidence, or one who has suffered an embarrassment. In contemporary views of leadership, humility is generally considered a liability, not a benefit.
In fact, humility is the quality of being humble, which is a function of being confident and self-assured. This fusion of personal strength and quiet self-assuredness is definitely part of the decorum and manners characteristic of the chivalric knight (in addition to valor).
JM: Yes. I too see it as a virtue. I call it modesty in the scheme of values of the wise. Perhaps humility is an even better term to capture this state of mind. Indeed, no less an astute user of the English language than Maya Angelou, noted: “Modesty is a learned affectation. As soon as the world shakes the modest person against the wall, that modesty will drop off them. But humility comes from the inside, out.”
I will say goodbye with this from pastor Rick Warren: “Humility is not thinking less of yourself; it is thinking of yourself less. Humility is thinking more of others.”
SF: Thank you Jason, farewell.
Footnote:  I aim to use the word in the manner of “self-approval” and “high self-appraisal” more than one of the Seven Deadly Sins
Check out the podcast of this dialogue on corporate social responsibility HERE. In the beautiful book Values & Ethics: From Living Room to Boardroom LINK you can find Chapter 13, from which this discussion was excerpted.