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AUTO-APERTURA FACILITADORA Y ADECUADA DEL TERAPEUTA.
The question of social responsibility of a company has been under much debate in recent times, but arguably also as much in the past as now. The attempt to define the obligations of business beyond profit-making has taken several forms – business ethics, environmental health and safety requirements, community relations, and to a larger extent corporate social responsibility. Though
14 Muthuri & Gilbert op cit note 7 at 477. 15 Ibid at 476. 16 Ibid at 474. 17 Ibid. 18 Ibid at 477. 19 Ibid. 20 Ibid at 476. 21 KPMG op cit note 8.
the meaning is arguably elusive,22Corporate Social Responsibility (CSR) is seen by many companies as encompassing their duties with regard to stakeholders, and there have been varying levels of acceptance and different views on the approach to these duties. On one side of the debate are those who support the pure profit-maximising motive and are completely against the idea of a social responsibility for business; they believe that the company, by definition, has one primary purpose and that is to promote the interests of the shareholder as the owners of the business. Some accept the idea of social responsibility, but struggle to find an ideal measure that may be applied to strike a balance between concern for shareholders and meeting the needs of the general public outside the business entity.
Corporate social responsibility is the behaviour of corporations or companies recognising their role as ‘persons’ within the societies in which they operate. Like the responsibility attributed to a natural person, social responsibility of a corporation arises from ethical considerations that compel the ‘person’ to move beyond the realm of strict compliance with the ends of the business, to applying its resources in a manner that is not purely business-minded. The EU Commission defines CSR as ‘a concept whereby companies decide voluntarily to contribute to a better society and cleaner environment.’23
Social responsibility is seen as ethical behaviour, a somewhat general obligation to society which can be interpreted in very broad terms.24
22 Capital Markets Advisory Committee (CAMAC) The social responsibility of corporations Report (December
2006) available at
http://www.camac.gov.au/camac/camac.nsf/byheadline/pdffinal+reports+2006/$file/csr_report.pdf, accessed on 18
January 2015. The vagueness of the concept has haunted corporations and those trying to create an enforceable obligation out of it from early times. An apt observation regarding CSR reads: ‘The term [social responsibility] is a brilliant one; it means something, but not always the same thing, to everybody. To some it conveys the idea of legal responsibility or liability; to others, it means socially responsible behaviour in an ethical sense; to still others, the meaning transmitted is that of “responsible for,” in a causal mode; many simply equate it with a charitable
contribution; some take it to mean socially conscious; many of those who embrace it most fervently see it as a mere synonym for “legitimacy,” in the context of “belonging” or being proper or valid; a few see it as a sort of fiduciary duty imposing higher standards of behaviour on businessmen than on citizens at large.’ (see Votaw D ‘Genius becomes rare’ in D Votaw & S P Sethi (eds) (1973) The Corporate Dilemma 11).
23 Cited in J Dine Companies, International Trade and Human Rights Cambridge University Press 2005 Cambridge
227.
24
The definition of CSR of the International Organization for Standardization is: ‘Responsibility of an organization for the impacts of its decisions and activities (products, services and processes) on society and the environment, through transparent and ethical behaviour that contributes to sustainable development, including health and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated throughout the organization and practised in its relationships (within its sphere of influence).’
Initially, definitions of CSR sought to bring to light the interconnected nature of corporations with society, dispelling the presumption that they operated as autonomous entities independent of the social environment in which they existed.25 At the beginning of the attempt to define the concept, CSR was given wide interpretation and corporations a generous role of contributing to the socio-economic welfare of society, allowing its activities to be dictated by the socio-cultural system in which they operated. One such attempt defined CSR thus:
In this approach, social responsibility in business is the pursuit of socio-economic goals through the elaboration of social norms in prescribed business roles; or, to put it more simply, business takes place within a socio-cultural system that outlines through norms and business roles particular ways of responding to particular situations and sets out in some detail the prescribed ways of conducting business affairs.26
CSR was envisioned as an obligation of business to the public for “broad” social ends, a contribution beyond the interests of private persons, shareholders.27 The future of corporations was pegged on their response to the changing nature of society’s expectations under a perceived role that was not merely confined to the production of goods and services.28 In this context, it is highly unlikely that the corporation would have continued to exist as it was traditionally envisaged, as an entity created to maximise the wealth of its shareholders. Also curious is the apparent assumption that society dictates expectation of business entities, even though it had no perceived role in the corporation.
ISO (International Organization for Standardization) is an independent, non-governmental membership organization and the world's largest developer of voluntary International Standards. It is made up of 165 member countries who are the national standards bodies around the world, with a Central Secretariat. ISO standards aim to give world-class specifications for products, services and systems thus facilitating international trade and relations in the standardized areas.
25 One such definition reads: ‘In short, the new concept of social responsibility recognizes the intimacy of the
relationships between the corporation and society and realises that such relationships must be kept in mind by top managers as the corporation and the related groups pursue their respective goals’. (see Walton C C, Corporate social
responsibilities Belmont, CA: Wadsworth 1967, 18).
26 Johnson H L Business in contemporary society: Framework and issues (Belmont, CA: Wadsworth 1971) 51. 27 In one of the early definitions of the concept we read: “[Social responsibilities] mean that businessmen should
oversee the operation of an economic system that fulfills the expectations of the public. And this means in turn that the economy’s means of production should be employed in such a way that production and distribution should enhance total socio-economic welfare… Social responsibility in the final analysis implies a public posture toward society’s economic and human resources and a willingness to see that those resources are used for broad social ends and not simply for the narrowly circumscribed interests of private persons and firms. (Frederick William C ‘The growing concern over business responsibility’ (1960) 2 California Management Review 54, 60).
28 The Committee for Economic Development in America noted that business entities were ‘… asked to assume
broader responsibilities to society than ever before and to serve a wider range of human values. Business enterprises, in effect, are asked to contribute more to the quality of American life than just supplying quantities of goods and services. Inasmuch as business exists to serve society, its future will depend on the quality of management’s response to the changing expectations of the public’. See Committee for Economic Development (1971) Social
The liberal definitions of social responsibility initially adopted can be attributed to the attempt to respond to the novelty of the concept, which then met with the reality of corporations and the profit making purpose they were created to serve. The liberal definition was modified with time to reflect a less generous concept. If companies are ‘creatures’ of the law which defines them and provides for the elements that make them up, the social obligation of the company, if any, will be interpreted only to the extent provided by the law. The objects of the company are prescribed in its constitutive documents, the memorandum of association, which state for what purpose the company is formed, what it can do and what it cannot engage in. If the constitutive documents were to be given a strict interpretation, the discretion to engage in social obligations would be limited in many cases for the reason that many socially responsible ends fall outside the strict mandate of the company.
In subsequent years, the argument of the place of social responsibility in the corporation took the form whether a ‘conscience’ could be attributed to a business in order to justify the apparently “non-business related” expectations made of it. Does the fact that a company is a separate legal entity, independent from the persons who own it, give the right to proponents of CSR to attribute to it a conscience (corporate though it be) in the same way as ‘conscience’ is attributed to a natural person? Does the fact of separate personality ascribe to the company a duty or obligation to the community in the same way a natural person has the duty to be a good citizen? In refuting these possibilities, it has been argued that:
… we cannot and must not expect formal organisations and their representatives acting in their official capacities to be honest, courageous, considerate, sympathetic or to have any kind of moral integrity; such concepts are not in the vocabulary of the organisational language of the game….29
In furthering the view against social responsibility, Milton Friedman, a celebrated CSR opponent asks ‘What does it mean to say that a business has responsibilities? The social responsibility of business is to increase its profits.’30
In his view, only people have responsibilities. He further argues that the corporate executive, being an employee of the owners of the business, has a direct responsibility to conduct the business according to their wishes
29 J Ladd ‘Morality and the Ideal of Rationality in Formal Organisations’ The Monist (October 1970), 499, cited in K
E Goodpaster & J B Matthews Jr. ‘Can a Corporation Have a Conscience?’ (January-February 1982) Harvard
Business Review 133.
30 M Friedman ‘The Social Responsibility of Business is to Increase Its Profits’ New York Times Magazine 13
‘which generally will be to make as much money as possible.’31
Expecting the businessman to carry out social responsibilities in his capacity as corporate executive would be tantamount to defying the interests of his employers and spending money belonging to other people for a general social interest.32 This expectation, he concludes, amounts to a ‘fundamentally subversive’ doctrine, in a society where business has only one social responsibility, to maximise profits.’33
However, concepts attributed to persons can also be attributed to organisations in as much as they are ‘persons’ operating in a wider community and exercising their functions within society; the company is made up of persons who can be held responsible for breach of social obligations.
Whatever definition is adopted, CSR is seen as an acknowledgment by corporations that they do not exist for the sole purpose of making profits. It can be a good tool to get corporations and business entities to think of their impact on society, and has been applied positively in areas such as environmental management and in labour law to ensure compliance with the minimum wage.34 To the extent that it leads corporations to have greater care for their employees and other stakeholders, CSR is a very positive concept and ought even to be compulsory. But its limitations curtail its usefulness. Voluntary requirements are unenforceable; without an enabling environment, without laws or structures that can remedy the results of the social irresponsibility of corporations, CSR remains an ineffective concept for full corporate accountability.
In seeming agreement with the voluntary nature of social obligations, majority of proposals to legislate CSR requirements have been unsuccessful. Some failed attempts at regulating the role of business in areas the area of corporate social responsibility are reviewed below with the aim of analysing whether the ultimate rejection of regulated CSR says something about the business entity and its mission that cannot be ignored.
31 Ibid. 32 Ibid at 2. 33 Ibid at 6. 34
Peter Utiing, UN Research Institute for Social Development, ‘CSR from a Development Perspective: Trends, Debates and Policy Implications’ available at
http://www.unrisd.org/80256B3C005BD6AB/%28httpAuxPages%29/7A2FAD29DD049C1AC125754C0039375D/$f ile/CSRfromaDevPers.pdf, accessed on 23 January 2015.