More Than Charity
Corporate responsibility assures transparent and sustainable corporate management
Which company has the greater value for society and investors: the one that boosts sales by 25% in the next quarterly report through an enormous expenditure of resources, or the one which has its eye on the prospects for the lives of the next generation and realizes sustainable profits? Corporate responsibility proves to be a meaningful alternative to shareholder value over the long run.
Is business facing a crisis of trust? According to the latest poll by the Edelmann Trust Barometer, 73% of the surveyed opinion leaders in Germany are of the opinion that their trust in business has declined since last year.1 This loss of trust can be seen daily on the world stock exchanges and in the statements proclaimed by banks and issuing banks.
The list of banks which have become synonymous with the economic crisis is a long one: it starts with Lehman Brothers and AIG in the USA and continues to Hypo Real Estate and the Landesbanken (public-sector banks) in Germany. The effects of the economic crisis continue to spread, increasingly driving industrial corporations such as General Motors or Arcandor into desperate straits. The World Bank assumes there will be a decline in the world social product of 1.7% in 2009; in comparison with the long-time trend to growth of 3% annually, this represents an actual loss, caused by the financial crisis, of about 4.5% in economic performance – corresponding to US$ 3.2 trillion, more or less the equivalent of Germany’s entire economic performance last year. Are we still prepared to redeem this bill of exchange? Or would it not make more sense to reduce the risks and effects of such crises by rethinking our shareholder orientation?
Social responsibility has a future
Economists are already speaking about the “Lehman turning point”: there is the conventional economic order “before Lehman”, and now positions are being rethought and a modified economic system “after Lehman” is crystallizing. But what are the key points of this transformation and the important lessons learned from the economic crisis so that we do not repeat the mistakes of the past?
According to the statements made by the respondents to the Edelmann Trust Barometer, the strict implementation and realization of a transparent corporate responsibility (CR) structure is one of the most effective survival strategies in the economic crisis. Instead of returning to business as usual and maintaining an exclusive fixation on shareholder value, the emphasis after the crisis will be on the establishment of a new financial order with transparent social responsibility.
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