Socially responsible businesses

Earlier this year the National Standards Authority of Ireland (NSAI) launched the world's first standards on social responsibility for businesses. I had hoped that Ireland's actions would not spread around the world, but it's too late. On Nov. 1, the American National Standards Institute (ANSI) announced that "Guidance on Social Responsibility" is now available for dissemination to businesses. Expecting business to morally form socially responsible executives, boards of directors, and employees is a direct consequence of secularization. In a secular state, citizens tend to turn to business or government to perform tasks properly. Formerly, virtuous men and women lived this out by pursuing the common good while being formed and shaped by the applied teachings of the Christian church.

ANSI oversees the creation, promulgation, and use of thousands of norms and guidelines that directly impact businesses in nearly every sector of the market. The guidance document originated from the work of the International Organization for Standardization (ISO), which recently convened an international team to outline "the issues organizations need to address to operate in a socially responsible manner, and what the best practices are for implementing social responsibility effectively and efficiently." The problem, of course, is that social responsibility is a moral category and is the responsibility of a community's citizens. Business is a theater where morals are lived out not formed. Europeans and Americans want socially responsible citizens but they do not want Christianity, which specializes in forming individual and social virtues.

In the working draft of the guidance document there are standards outlining the core subjects for businesses to concern themselves with, including "social well-being," "citizenship awareness," "promotion of peace," "promotion of culture," "promotion of universal education," and "promotion of democracy." In terms of action steps, businesses are told to consider "investment in basic infrastructure-schools, hospitals, roads, housing, education," "social services," "community cohesion, stability, social and spiritual well-being," and more. These social responsibility expectations confuse the nature of business with other institutions in society like the church and the state.

It seems that secularist Europeans and North Americans would do well to read again Milton Friedman's 1970 essay "The Social Responsibility of Business Is to Increase Its Profits." Friedman reminds us that business leaders have a responsibility to keep companies owned by shareholders profitable:

"In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.

Profit provides the jobs and capital that enable individuals to meet their basic needs and make contributions to the common good by participating in churches, schools, charities, educational institutions, and other civil society institutions. You can't get more socially responsible than by providing the primary means through which society is advanced: ennobling and dignifying work. Conducting virtuous business practices is the socially responsible way of empowering people to care for their communities. Instead of turning to business for moral guidance, Europeans and North Americans would do well to return to the teachings of the Christian church, which specializes in the human virtues that render the "Guidance on Social Responsibility" unnecessary.