On Corporate Responsibility

Corporate responsibility represents a decision-making process where financial goals, personal values, social and environmental concerns are given equal consideration when making a business decision. To enforce or encourage socially and environmentally conscious behaviour, governments enact corporate, employment, environmental and social (e.g. equal opportunity or affirmative action) laws and regulations. However, not all aspects of business can be regulated. In such cases behaviour can be encouraged through pressure on corporate conscious by civil society, public opinion, and shareholders.

To assist in this process, the international community has developed guidelines that define corporately responsible behaviour. The generally accepted guidelines were developed by the Organization for Economic Co-operation and Development (OECD). The OECD Guidelines for Multinational Enterprises cover areas such as: general business practices, transparency and disclosure of business information to the public, employment and industrial relations, environmental protection and conservation, combating bribery, defence of consumer interests, scientific and technological issues, competitive practices, and taxation.

Although few governments have incorporated these principles in their law systems, unfortunately, the majority remain only guidelines and are self-enforced by Multinational enterprises (MNE). Most MNEs meet or slightly exceed local regulations or generally observed standard in developing countries in order to keep good relationships with local governments. But those national standards are often below international or even generally acceptable standards.

More needs to be done by the international community to encourage and enforce socially and environmentally responsible behaviour by Multinational corporations. This could entail applying public pressure on MNEs to factor in environmental and social costs to the community when calculating return on investment, or making sustainable development indicators a mandatory performance measure for businesses.