Kiến thức

Responsible: For what, towards whom, and who indeed is?

Questions
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Emily Morter

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Corporate responsibility, business ethics, sustainability, ESG. Whatever the terminology there are three fundamental questions that underpin all decisions, actions, strategies in this regard.

These questions are particularly strategically relevant for any board of directors. Because they are the basis upon which fiduciary duty, much beyond its legal definition, is constructed. And: they outline the framework within which the fiduciary duty of a board is bound to evolve over time. Also in its legal incarnation.

Very specifically in a corporate context – as the terminology suggests – but actually also much beyond that and reaching into the private realm of inter-personal interaction, families and so on.
But also as topics emerge that influence, shift, expand the range of challenges discussed within the topic of future fitness of our society. Some triggered by innovation, some triggered by shifts in the social make up, and some triggered by market interests.

It is indispensable to keep therefore these three key questions always front and centre of mind, and revisit their answers periodically as new topical issues arise.

These three key questions are:

  • Responsible for what?
    This question not only refers to the type and ‘content’ of decisions and actions taken, but also their immediate, direct and also indirect consequences and impact.
    Given the role and coverage – or not – of commercial contracts, this question evidently is much broader than the reach of formal commercial relationships.
    To take an example: In supply chain terms it is the question of ‘how far up and downstream’ does a company’s responsibility reach?
    Unsurprisingly hence, this question is more than anything a moral question. One about both the reach of moral impact of actions, as well as the morality of actions given their reach.
  • Responsible towards whom?
    In the current global discourse this evidently points at the collective of stakeholders of any organisation, and in this case of corporations. In other words: parties – individuals as much as collectives of some type – that are impacted and/or affected by the above (moral or immoral) actions. Both, directly or indirectly.
  • Who is responsible?
    To complement the point on stakeholders, this question refers to those who do take the action. Individuals as much as any organisation in question.
    In many cases, this is the most common discussed question, and can get quite fine grained.
    Is a brand responsible for all that happens of any decision taken within its operations? What about the responsibility that the supplying manufacturers have to assume? And the legislator? Private citizens as both employees but also consumers of many such goods?
    Who is ‘the source of origin’? And are there ‘repeater’ entities along the way with their own share of responsibility?

Together, these three key questions allow to cover all the relevant players and concerns in all matters sustainability. As high-level as they may sound, the answers can cover the breadth from high-level strategic answers through to rather fine-granular operational ones.

What answers are there available for a dominant topic of the present?
In one of the upcoming posts we’ll be summarising

an academic paper by INSEAD researchers

who used these precise three angles to look at the interface between digitalisation and corporate responsibility.

Pamela Ravasio

Rules

Previous ‘Rules of Procedures’ of a Corporate Board: In the best interest of …?

Toshiba Robot

Next Digitalisation in the age of Corporate Responsibility

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