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Occupy Wall Street and its coast-to-coast offspring have catalyzed public disaffection with the gulf between the banking industry’s health and its millions of home foreclosures.Philanthropy experts say corporate giving has ticked up recently, possibly in response to signs of public discontent.But the former can be achieved only by serving, not merely exploiting, your customer base.
(“We have listened to our customers very closely,” a spokesman said.) Then there are the CEO statements collected by Harvard Business Review for an online forum titled The CEO’s Role in Fixing the System, some of which carry the whiff of the heebie-jeebies experienced by ancien regime dandies facing down a torch-bearing mob of Jacobins.
For example, Raymond Gilmartin, the former chairman and CEO of Merck, acknowledged in the forum that corporate behavior in the economic slump had “deepened a widespread public distrust of corporations and capitalism.” He proposed that CEOs and boards start acting “as agents of society, rather than shareholders.” Starbucks founder Howard Schultz used the same forum to promote his public campaign urging CEOs to step up job creation efforts across the board.
This is a digitized version of an article from The Times’s print archive, before the start of online publication in 1996.
To preserve these articles as they originally appeared, The Times does not alter, edit or update them. He had been taken to the hospital after collapsing at his home in north London, a spokesman for the hospital said.
Viewing the entirety of social responsibility as the pursuit of profit “within the rules of the game” damaged millions of lives because the rules of the game didn’t leave room for a social conscience.
Social conscience is what tells a CEO that long-term growth is more important than short-term profit.In this post-meltdown world we know better, don’t we?His latest book is “The New Deal: A Modern History.” Reach him at [email protected], read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.But the danger is that if it’s seen chiefly as a PR device, then corporate giving — currently a minuscule one-tenth of 1% of revenue among major corporations, according to the committee’s latest survey — will be first on the chopping block in economic downturns.Moreover, the giving-for-giving’s-sake model always runs up against the notion that the only constituency that counts in corporate management is the shareholder.Corporations are integrating philanthropy into their business strategies, say, by supporting charitable programs serving their suppliers, customers or markets — Pepsi Co paying to train the Mexican farmers who provide it with its corn syrup or Novartis delivering health education in rural India to residents who might end up buying its drugs.The question always is whether companies undertake these ventures because they’re the right thing to do or because they want to look altruistic for marketing purposes.Let’s not forget that the flow of corporate wealth to CEOs and shareholders has helped drive the middle class into income stagnation and debt, impoverishing corporate America’s customer base.So much of the debate today about corporate social responsibility misses the point.Today’s issues tilt more toward corporations’ responsibility for the financial meltdown (obviously the focus of Wall Street protesters) and how income inequality comes from endowing CEOs with lavish pay while laying off rank-and-file employees by the brigade and hammering flat the wages, health benefits and retirement plans of those who are left.That’s just one way the world has changed since Friedman fired his broadside.