Influential Citizens Have Mixed Feelings About Global Corporate Practices

On Tuesday, public relations giant Ketchum announced that according to a recent global survey of 2,750 "influential" citizens in developed and developing nations, non-political public activists have mixed feelings about the standards and practices adhered to by most corporations.

"Ketchum commissioned the study to explore the expectations influential citizens have of corporations and CEOs," said John Weckenmann, director, North American Corporate Practice, Ketchum.

These "influentials", who in the context of the survey were defined as the top 10 to 15% of a nation's "movers and shakers" and those who work to make changes in society (but not including any politicians), say that corporations' practices usually have too much of a gap between making money and being socially and environmentally responsible. However, at the same time, they feel that it is private industry and the corporate world, not the government, that can rise to the occasion and make the changes that people want and need.

The survey talked to "influentials" in 11 different nations. Most influentials overall expressed distrust of all big institutions including major media, religious organizations, government and nongovernmental organizations (NGOs) and, most especially, large corporations.

However, in the developing nations, the influentials put greater trust in NGOs, major media outlets, and corporations than they do in religion or government.

CEOs are very distrusted by developed nations, especially because of their huge amounts of pay, and most influential people would never want to be a CEO. However, in the developing nations, people tend to see CEOs as great leaders and many would love to run a company as a CEO.

Influentials in the U.S., Canada, and Germany favor positions that protect local employment and enhance employee benefits, even if this means raising consumer prices 15% to keep a corporation from moving production to countries that pay low wages. In addition, they would prefer that employees receive a 10% wage hike in place of corporate donations to education and would rather see a stock price fall 10% than have10% of a company work force laid off.

However, in the other nations surveyed, the preferences were for corporations to invest more in R&D, socially and environmentally friendlier technologies, and the creation of new jobs instead of increasing the financing of pensions or benefits for their employees.

Another independent survey recently conducted found that 94% of investors are now looking for some measure of social responsibility when they are choosing which companies to buy stock in.

Corporations have been responding dramatically to the increased call for social and environmental responsibility for nearly 20 years. They spend great sums of money on CSR consultants, departments, officers, and initiatives. The huge chemical industry in the United States has, since 1990, been reducing its "greenhouse gas" emissions such that it has already lowered them more than would have been demanded by the Kyoto Protocol, which the United States would not join because of what was viewed as ungainly economic restriction to achieve precious little gain. Most developed nations that did sign on to the treaty do not plan to re-sign when it comes up again in 2012.

Some economists point out that it is in the best interests of everyone if corporations still stick to the core philosophy that their first and primary responsibility is to their shareholders. Sticking to that philosophy gives a corporation the focus, drive, and profitability to have the power to make the changes that society wants, they say.

Others express concern that "CSR" has become too much of a buzzword that will attract too much political motivation and government interference which will be needlessly costly and do little to solve genuine problems or address genuine concerns.

In his famous work The Wealth of Nations published in 1776, economist Adam Smith wrote, "every individual...generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it...he is in this, as in many other cases, led by an 'invisible hand' to promote an end which was no part of his intention...By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good."

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