The Four Faces of Corporate Citizenship

Abstract

Some observers call it corporate social responsibility (CSR). Others refer to it as corporate ethics. More recently, businesses’ social performance has been framed as “corporate citizenship.” But, what does corporate citizenship really mean? What is business expected to be or to do to be considered a good corporate citizen? Is corporate citizenship compatible with or hostile to corporate growth and profits? A significant boost to corporate citizenship initiatives was given in 1996 when President Clinton called to Washington a group of leading business people to discuss the notion of corporate citizenship and social responsibility. At this conference, President Clinton exhorted the business leaders to “do well” by their employees as they make money for their shareholders. He and then–Labor Secretary Robert Reich announced the newly created Ron Brown Corporate Citizenship Award, named for the late commerce secretary who died in 1996 along with a group of business executives on a trade mission to Bosnia. The award was to honor American companies each year deemed to best exemplify efforts to support its workers. President Clinton’s five criteria for the Ron Brown Award for “good corporate citizenship” boiled down to companies exhibiting the following practices: “family-friendly” policies, such as allowing family leave; good health and pension benefits; a safe workplace; training and advancement opportunities; and policies that avoid layoffs. In 1998, the 1997 winners were announced: IBM Corporation, for its diversity programs, and Levi Strauss & Co., for its antiracism initiative “Project Change.” One could not argue with these criteria nor these winners; however, one cannot help but note that the criteria all involve the relationship between companies and their employees, with no mention being made of shareholders, consumers, the community in which the business is located, or other important stakeholders. Surely corporate citizenship extends beyond relationships between companies and their employees and includes the business responding to and interacting with these other vital stakeholders. Decades of studying businesses’ corporate social performance, their activities that extend beyond profit-making, and their contributions to the community lead one to conclude that corporate citizenship is real—it is expected of business by the public, and it is manifested by many excellent companies. Further, corporate citizenship addresses the relationship between companies and all their important stakeholders, not just employees. The full gamut of corporate citizenship includes its four faces. Each “face,” aspect, or responsibility reveals an important facet that contributes to the whole. Just as private citizens are expected to fulfill these responsibilities, companies are as well. Corporate citizenship has an economic face, a legal face, an ethical face, and a philanthropic face. Stated differently, good corporate citizens are expected to: