This one-sided focus has inherent risks which are now coming to light during the crisis. Until today, the social costs paid by the companies – e.g., consumption of resources, destruction of the environment, rising national debt, and opportunity costs to governments for propping up companies on a downward slide – have not been considered adequately or at all and made transparent. Raw materials are purchased and measured in the balance sheet at current market prices, but the long-term environmental evaluation is not incorporated into these prices. 

The lopsided orientation of stock markets to the short-term ­value increase has kicked open the door to convoluted schemes and short-sighted behavior. The willingness to accept ­irresponsible risks and the corresponding weakness in risk management as long as this goal is achieved has permanently shaken trust in this economic system. The many business scandals since the 1990s such as Enron, WorldCom, and Nortel Networks or today’s Lehman Brothers and Hypo Real Estate are simply the most prominent examples. 

While these spectacular cases may be isolated incidents, they nevertheless demonstrate that the structure itself suffers from faulty design and is in need of modification. We must examine the causes of this latest economic crisis and learn how we can broaden economic focus in the future from the single point of shareholder value to a number of dimensions. There is an ­entire series of other important criteria besides a company’s stock market value and balance sheet figures which should serve as guideposts to the commercial actions of companies, thereby creating a more stable foundation for our economic system. Above all, it appears advisable to take off the blinders which prevent us from seeing beyond the next quarterly report and to give a trans­parent view of the companies’ situation. Business activity which is more strongly oriented to the long term will undoubtedly consider these CR criteria of non-financial performance: employee satisfaction and commitment, customer satisfaction, social and community involvement (at the local sites of the company, for example), environmental compatibility and sustainable economic activity, careful use of resources, long-term corporate goals. 

CR criteria reveal the true value of a company 

The assessment of companies as practiced up to today has ­taken only marginal notice of these criteria. This is where the CR ­model with its CR scorecard comes into play. The one-dimensional orientation to shareholder value is expanded to include multiple dimensions. Overall review of all of the CR criteria reveals the actual value of the company.