A convincing case is made in the Jan/Feb Foreign Affairs – Global Corporate Citizenship – that pulls out some really good concepts related to a company’s role sustainable development.
Five core concepts — corporate governance, corporate philanthropy, corporate social responsibility, corporate social entrepreneurship, and global corporate citizenship — define the different types of business engagement. Corporate governance is more than the way in which a company is run. It means that a company complies with local and international laws, transparency and accountability requirements, ethical norms, and environmental and social codes of conduct. Every company is subject to some form of governance; otherwise, it would not have the basic license to operate. The central issue is the quality of this governance. An enterprise either complies or does not comply with the laws and standards that apply to it. Good corporate governance means that the company’s conduct meets or exceeds what is required on paper — not doing any harm because it is following the rules and possibly even doing good by going beyond the mandated minimum. Corporate governance is how a company behaves when nobody is looking. Without good corporate governance, no other form of corporate engagement is credible.
I appreciate that idea of corporate governance being what a company does when nobody is looking. This idea of governance is what excited me about Paul Collier’s book that I mentioned in November.
