Corporate governance models
There are a number of variations of the CSR model in practice around the world. If we can imagine a linear scale moving from left to right, with stakeholder interests (not including shareholders) on the far left and shareholder interests on the far right, it becomes easier to understand the different models. . The difference is the extent to which these two often competing interests are served.
Lefties and neoconservatives
This left-right divide is also applicable in the political and philosophical context. The ideals of the RSC have been considered “leftist”, “leftist” or liberal in their philosophy from the beginning. Many conservatives (right), “neoconservatives” are now coming to understand that the best interests of the shareholders are aligned with the best interests of the corporation and that is sustainability. If the corporation and the planet do not survive, then there is no point in making a profit.
Definition of Non-Profit and For-Profit Organizations
It is necessary to define exactly what a “For Profit” organization is. It is a business or commercial companies whose sole reason for being is to generate profit. A “nonprofit” organization (NPO) is one whose raison d’être is for some higher purpose, such as famine relief, religious mission, or educational outreach. They are often referred to as non-profit organizations; however, this is not strictly correct. NPOs will often go out of their way to make a profit to finance their “charitable” works. The essential difference is that in the NPO the profit is retained within the organization, while the “intent” of the for-profit organization is to distribute its profits to its shareholders. A quick summary is that an NPO exists for its works, while a for-profit one exists for its profits.
The “for-profit” motive
It has been a corporate maxim, in less enlightened times, that “the end justifies the means.” Looting and polluting, exploiting workers and the environment for profit is fine. This is no longer acceptable or tolerable in modern western commerce. A profit without due reference to other stakeholders is not a sustainable ethos. CSR is driving investment to “the means justify the ends”. What you did for profit is more important than profit.
Cultural Imperatives
There is a correlation between shareholder propensity for bias and culture. For example, Anglo-American (Anglosphere) corporations tend toward the shareholder bias (right), while Western European and Japanese corporations tend toward the stakeholder bias (left). However, the movement is inexorable, albeit apparently glacially fast, to the left.
conclusion
There are a number of variations of the CSR model in practice around the world. The difference is the extent to which the interests of the Stakeholders and Shareholders are recognized and favored. These conflicting interests can be described as a division between left and right. CSR ideals have been considered “left”, “left-handed” or liberal in their philosophy. The maxim that “the end justifies the means” is being diluted in the corporate world and is moving towards the belief that if the corporation and the planet do not survive, then there is no point in generating profits.
